Shirtsleeves to Shirtsleeves

Building Wealth, Expanding the Wealth, and Spending the Wealth

The Shirtsleeves to Shirtsleeves proverb is very real. While American industrialist and philanthropist, Andrew Carnegie (1835–1919), is often given credit for this saying, the same concept resonates with families all over the world. In Italian it is “dalle stalle alle stelle alle stalle” (“from stalls to stars to stalls”). The Spanish say, “quien no lo tiene, lo hance; y quien lo tiene, lo deshance” (“who doesn’t have it, does it, and who has it, misuses it”), The Chinese say “rice paddy to rice paddy, and in Lancashire, England, it’s “there’s nobbut three generations atween a clog and clog.”

The Gist of the Proverb Goes Like This

The first generation, rolled up his/her shirtsleeves and got to work building his/her family fortune. They understood the value of risk-taking and the powerful gains that could occur. Most creators of wealth thrived on the excitement of pursuing their dreams, and reveled in the thrill of victory and the agony of defeat. Their vision and dream was so big that they were willing to do almost anything to achieve it.

Members of the second generation were young children when the family had very little. As they mature, some recognize that life has become easier; however, the knowledge that their parents have accumulated tremendous wealth comes slowly. As they become young adults, their parents send them to the finest colleges where they secure an excellent education. Some pursue a career, others do not. Some suddenly find that they do not have to work, and are confused as to how to spend their time, energy and money.

The third generation arrives with no experience of this hard work ethic, little internalization of the value of work, or the driving passion that their grandparents exhibited. Many have not learned the value of risk. In fact, the concept of great risk-taking is scary. While they have heard that making mistakes is good, many do not understand what that really means. Many parents and grandparents unwittingly spoil their children/grandchildren, with the unfortunate consequence of entitlement. They have been told that they do not have to work and can pursue any dream they want. Yet, because they haven’t had to, and accountability is lacking, they never develop the discipline or skills to figure out what that means.

Add to this the confusion as to what it means to “steward” the family wealth. Does it mean pursuing someone else’s dream or your own?

For the generations following the first generation, there is almost awe at what their parents (or grandparents) accomplished. Many have no confidence that this is something they too can do. Fear of failing in the eyes of their parents and grandparents is huge. When fear of loosing it all, coupled with lacking the wherewithal to replace or earn it back becomes an underlying or overarching theme, families begin to make fear-based or uninformed choices.

Which leads us to the fourth generation, when the bulk of the financial wealth often disappears, and even more sadly, the family finds itself disconnected and in disarray.

They key to avoiding this cycle, is to shift the primary focus from the financial capital onto growing and developing their humanity, their intellectual and social capitals. It should be noted that we’re not saying “no focus on financial capital,” rather a concentrated focus on cultivating the qualitative side of the family. This shift in focus places the financial capital where it should be … as a pedestal or support upon which the family itself and each family member can develop the human traits and skills that enable people to make wise decisions. With this shift, families and individuals are able to grow into productive members of society who develop the confidence and understanding of what it means and takes to pursue their passion.

Designing Family Gatherings that people want to participate in, creating its own family university of lifelong learning, developing a foundation upon which a family can govern itself and make joint decisions, and committing to the personal growth and development of each family member is the best insurance policy in which a family can invest.