Why 90% of Family Fortunes Vanish by the Third Generation

Alux.com
May 7th, 2025

Statistically, 70% of wealthy families lose their wealth by the second generation, and 90% lose it by the third.

You know when people think about generational wealth they imagine building a fortune so big their kids, grandkids, and great grandkids never have to work again, but most generational wealth doesn’t survive past the third generation.

It’s called the “shirt sleeves to shirt sleeves phenomenon” and it doesn’t matter if you made your money in business, real estate, or tech— the cycle repeats itself, almost everywhere. The dream of leaving a legacy is powerful, but the reality is a lot more complicated.

This video breaks down exactly why this happens, what different stages generational wealth passes through, and how long you can actually expect it to last… if you don’t take serious action.