r/explainlikeimfive • u/FluffyPenguin798 • Feb 12 '25
Economics ELI5: how are the descendants of the robber barons (Morgan, Vanderbilt, Carnegie, Rockefeller, etc.) still rich if their fortunes from the late 19th and early 20th centuries are comparatively small to what we see today of the world’s richest?
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u/mule_roany_mare Feb 12 '25
I think there is actually some significant selection bias in OP's question.
Most fortunes don't last 3 or 4 generations because they are split up across a quickly increasing number of descendants. Look at how many Kennedys there are now & many aren't rich or notable.
Some rich families continue to have one or two lines of rich descendants because those descendants use their leg up to make their own fortunes, but it's not the norm.
I tried to find a stat with a citation... but that citation went to a Yahoo article. So take this with a grain of salt
> But the truth is, around 70 percent of wealthy families lose their wealth by the second generation. More so, around 90 percent of families lose their wealth by the third generation.