Honor Your Ancestors

When we think of our ancestors, typically think of all of the hard work that they put in in their daily lives. Whether that was working on a farm, a factory or any other physical labor.

A particularly eye opening exercise that I’ve suggested a number of times is to imagine having a discussion with one of your ancestors. It could be a grandfather, a great grandfather or even further back. The main question I ask in this exercise is:  What would this person think of me and the life that I have created?

What would they think of the person that I had become?

Would they be proud of me or would they wonder about my work ethic?

The reason this exercise is so powerful is because of the context of the world that your ancestors grew up in.  Almost without exception, our ancestors worked very hard their entire lives often for little pay and personal possessions.

Just think back to all of the stories you heard from your parents and grandparents if you were lucky enough to know them. They may not have gone into excruciating detail about their day-to-day hardships, but most of their stories involve some manner of hard work and ingenuity.  Even if you do not know who your ancestors were, society’s hard work for the greater good and improving all of our lives has benefited you greatly.

In most cases it is their hard work that got you to the place where you are today.  Keep in mind that as little as 50 years ago there were very few or no government benefits, wages were extremely low, and there was the real possibility of young people having to go to war.

Contrast that with today where we have strong government benefits in most cases, much better wages and the likelihood of fighting a war is very low.

The Catastrophic Loss of Family Fortunes

There is an interesting statistic regarding families that have a large amount of wealth. It has been found that 70% of the second generations of wealthy families lose the entire family fortune. That number goes to 90% by the third generation.

Now what does this have to do with a hypothetical discussion with our ancestors? The surprising result is that the reasons for a lost family fortune so quickly are probably the same reasons why our ancestors were able to accomplish so much. Experts estimate that in 60% of cases, family fortunes were lost because there was absolutely no communication about it at all!  The original person who made all of the money in the family did not discuss money estate planning or successful money management with the family members that they left the money to. The heirs just got the money and didn’t know what to do with it.

The second reason, responsible for 20% of cases, is that the skills that made the original person wealthy were not passed on to the second or third generations. Entrepreneurial skills in particular we’re not passed on.

These two factors account for 80% of the reasons that wealthy families lose their fortunes so quickly. The other 20% Include the state being diluted by being given to a larger family, the second and third generations feeling that their job was to maintain the money rather than make it, and simple money mismanagement. In other words, the lowest 20% seemed to be the most obvious, but the top two reasons are much more important.

So, what can we do with this information? The odds are you are not the heir to a large family fortune. We are however the heirs to a long line of hardworking ancestors whose decisions in the past have led us to where we are today.

While we cannot communicate with our ancestors about hard work or making money, we can make a study of it on our own. Books, blogs, online articles or hired professionals, the resources are there for us to learn as much as we want. As we learn these things, we can make sure that we are putting the information to use and learning the skills to be successful.

By doing these things, we will acquire the 80% of skills and knowledge that would keep a family fortune.  I strongly believe that our ancestors worked so hard because they believed they had an obligation to their descendants, and that we have the same obligation to future generations. 

Then, if we want to have a “discussion” with a long-gone ancestor, we will feel that we are more prepared with our bank of knowledge of how to make and grow our resources.

We can then show them that we are honoring them by working hard and standing on the shoulders of their long ago sacrifices and work ethic.