Earlier this week, I wrote about the inheritance theory of wealth. This is the notion that family background strongly determines how wealthy one is. The main idea behind the inheritance theory is that early socialization and access to resources found in rich families improves the life changes of their offspring. The second idea behind the inheritance theory is that in later life, the children of the well off receive larger transfers of wealth, thus ensuring that the next generation remains rich.
I’ve talked about the psychological reasons why you shouldn’t buy into this theory, so I won’t harp on it here. I did however want to point out that many of Americas’ wealthiest families have been built on building exceptional businesses – families like the Mars in candy, the Wrigley family in chewing gum, and the Coors and Busch clans in beer. All of these families made their wealth not from inheritance, rather they got it from building successful businesses over time.
The final point here is: the inheritance theory of wealth should be taken with a grain of salt.
Best,
James
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