The 70% is said to be an estimate. Now it's true that they don't get into detail about the estimate (and that's a red flag for this kind of article - I'd prefer to hear more details - the article's pretty light on substance as it is), but just to explain: it's considered bad form to give more precision in an estimate than is meaningful. People might be mislead if they said 73.25345% of families for instance, as it gives an undue semblance of certainty and accuracy (even if that's the number that your method of estimation came up with, you'd be better off zeroing the part of the number that's just noise). Giving a round number is considered more honest and a better communication of the uncertainties involved. Though if you're not familiar with these conventions it might seem odd.
That's one way to put it. I would say they declare it and offer no basis or detail whatsoever!
I agree with your point that stating 70% vs some made up precision is a (small) sign of integrity in conveying uncertainty, as opposed to the parent's comment coming to the opposite conclusion.
The commenter one up is correct, the number is complete BS which is why no one is ever able to explain how it was estimated or where it came from.
Note how it urges them to employ a "Financial Planning Professional" near the end. Googling suggests this puzzlingly capitalized phrase is an umbrella marketing term for CFPs and other people with financial planning certifications.
Source: I work for a company that is constantly marketing to the wealthy and I know it when I see it.
A family say of a doctor or small business owner with a shop and three houses in their name (which could easily lose during some economic downturn, family issue, etc, not to mention have to divide to children)?
Someone like Rothchild, Rockefeller, Bezos, etc, or at least, families with 100s of millions in their name?
Those two cases have quite different survining characteristics...
E.g. "The richest families in Florence in 1427 are still the richest families in Florence"
https://qz.com/694340/the-richest-families-in-florence-in-14...
Wish there would be more research into this.
It doesn’t take any of that to grow existing wealth. You just invest it. You pay someone to do it, but honestly even just an ETF does the trick.
The U.S. is fairly exceptional in the fact that it is isolated from the world's woe. This stability is what helps you grow.
You would need to get a record of who was wealthy 300 years ago, track down their descendents, and see who among those descendants is "wealthy" by some measure today.
You might also need to take into account things like inheritance and birthrights. I imagine first born sons of first born sons might preserve more of the wealth.
Also, what proportion of the rich today are "new rich", and how newly rich are they?
It's not unusual by any means. There was a study on, I think, Genoese families that showed that wealth had more or less stayed within the same families for 300 years.
So it's true that some families that were wealthy 500 years ago are still wealthy today, but this was not the norm.
I share your skepticism because there's no source, and indeed the burden should be on the author of such an article, but you seem to be making strong unfounded statements yourself.
Probably Piketty has some relevant data?
Also based on my Uncles experience the family Bookkie business (Birmingham UK) did not last to the 3rd Gen - ok the transition to legalization wasn't handled well by generation 2.
Some articles attribute the source to the Williams Group Wealth Consultancy. Of course, they are selling their wealth management services so they have an incentive to "juice" the numbers by leading questions and nonrandom samples.
I've never seen the actual "study" so their methodology can't be subject to scrutiny. I suspect it's an informal survey of a specific population.
Financial articles in general tend to be extremely low effort and low quality. I wouldn't attribute anything more than shitty writing, which is basically 90% of financial articles.
So coming up with “70% lose their wealth” amounts to choosing a threshold on inheritance where people are inheriting good money, but not extreme sums.
It’s easy to burn a 2 million dollar inheritance, and pretty much impossible to lose a billion dollar inheritance.
This article serves two purposes. Puffing up currently wealthy people as only being that way from pure grit and determination. No inheritance here. If you're wealthy it's because you've worked hard for it because we've already established that inherited wealth is a losing proposition.
Secondly, it tries to establish that there is no generational wealth which reinforces the first premise that all wealth is due to hard work. It's a wonderful bit of circular reasoning. All wealth is gained through hard work, generational wealth might exist but it's fleeting, so the multigenerational wealth that you do see must be due to multigenerational exceptionalism.