EP324: Give Me 11 Minutes, and You’ll Learn How to Avoid Going Broke Like 90% of Rich Families
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You ever wonder why some families stay wealthy for generations… while others go from billionaire to broke in just three?
We did.
So we dug into the stories of two of America’s most legendary dynasties.
One still thriving. The other, a cautionary tale wrapped in designer silk.
And friend, what we found? It’s not just history. It’s a mirror. A warning. And a roadmap.
➡️ Because the truth is this: 90% of wealthy families lose their fortune by the third generation.
We’re Palmy and Nancy Kitti. We’ve built a $400 million real estate portfolio and helped hundreds of families not just build wealth, but keep it.
Here’s what you need to know—before the next generation takes the wheel.
A Tale of Two Legacies
Let’s rewind the clock.
In 1877, Cornelius Vanderbilt dies with a fortune so large, it could’ve bought the U.S. Treasury. We’re talking $200 million back then, or roughly $5.8 billion today.
He built it the old-school way: ships, trains, grit.
Then came John D. Rockefeller. Different lane. Same ambition. But instead of moving people, he powered the movement itself. Oil. Infrastructure. Industry.
Two men. Both titans. But what happened after their deaths?
Couldn’t be more different.
The Vanderbilt Decline: Riches to Rubble
We like to use nature metaphors in our house, so stick with us here:
The Vanderbilts were like locusts. They consumed. Lavishly. Endlessly.
Estates that would cost tens of millions to build today. Parties that made Gatsby look reserved. But here’s the kicker: they weren’t reinvesting. They weren’t thinking about the future.
By the third generation, the wealth was outpaced by spending. At a 1973 family reunion? Not one Vanderbilt was a millionaire.
From billions to barely anything. That’s not just poor luck. That’s poor planning.
The Rockefeller Blueprint: Honeybees in Pinstripes
If the Vanderbilts were locusts, the Rockefellers were honeybees.
They engineered. Structured. Collaborated.
John D. didn’t just leave money. He left a system. A family constitution. Trusts. Values. Education. He made sure wealth was paired with wisdom.
He created a culture where inheritance came with responsibility. Not entitlement.
Their assets didn’t just sit pretty. They worked. They grew. They compounded.
The result? A family hive that still hums with influence and impact today.
So How Do You Make Your Wealth Last 100 Years?
You don’t need a billion-dollar oil empire.
You need these three pillars:
Pillar 1️⃣ Create Your Wealth Container
If you’ve never heard of probate, trust us—you don’t want to meet it the hard way.
Probate is what happens when someone dies without structure. The courts get involved. The process is slow, painful, and expensive. Sometimes, families walk away with pennies on the dollar.
That’s why you need the right legal container:
- Living Trust: Avoids probate, distributes assets cleanly
- Irrevocable Trust: Protects wealth from taxes and creditors
- Family LLC or LP: Holds assets like real estate and investments
Don’t wait. This isn’t just paperwork. It’s peace of mind.
Pillar 2️⃣ Write Your Family Financial Constitution
Money conversations can feel awkward. But silence? That’s the fastest way to sabotage the next generation.
We’ve seen it firsthand: families who worked hard to create wealth, then tiptoed around it like it was taboo. The result? Heirs who never learned to manage it.
A Family Constitution solves this. It’s not complicated. It just lays out:
- Your financial values
- How decisions get made
- What inheritance looks like
- How conflicts get resolved
It’s the playbook for long-term legacy. We even made a free, ad-lib style workbook to get you started.
Because the best inheritance? Isn’t the money. It’s the mindset.
Pillar 3️⃣ Adopt the Investor Mindset
Growing wealth is great. Keeping it? That takes strategy.
And one of the biggest threats? Taxes.
That’s why we don’t just talk about how much you make. We teach you to think like an investor:
- Use legal tax shelters
- Choose cash-flowing investments
- Reinvest intelligently
Here are four ways we see people building generational wealth:
- Other People’s Money + Your Business (raising capital for your vision)
- Your Money + Other People’s Business (stocks, real estate, startups)
- Other People’s Money + Other People’s Business (our favorite: private credit, syndications)
- Your Money + Your Business (bootstrapping your way to scale)
But whatever path you choose—do it with tax efficiency in mind.
Because it’s not about working harder.
It’s about being a better steward.
Final Word? Legacy is Built, Not Hoped For
The Vanderbilts didn’t fail because they were bad people.
They failed because they had no plan.
The Rockefellers didn’t win because they were lucky.
They won because they prepared.
Friend, your wealth deserves a seat at the table for generations to come.
You don’t need perfection. Just intention.
And we’re here to help you build it.
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