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Retired Military Finances 301: Generational Wealth Thumbnail

Retired Military Finances 301: Generational Wealth

Estate Planning Managing Your Finances

By Joseph Brown, PhD, CFP®

Have you ever heard the Scottish proverb “Three generations shirtsleeves to shirtsleeves”? It refers to the theory that most wealth is lost by families within 3 generations. The other day I was reading some articles and came across the story of the Stroh family. For those of you who don’t know it was a rather large beer company until about 1999 based out of Detroit and was my grandfather’s favorite beer. Their family went from owning one of the largest breweries in the United States to losing over $700 million dollars and decimating its fortune.[i] John Stroh III, was the one who eventually had to make the decision to sell the company off. Interestingly, enough – the third generation responsible for the family wealth.

This situation is not unusual, in fact studies have said that 70% of wealthy families will lose their wealth in the second generation and 90% will lose it by the third generation.[ii] These statistics correlate to Dave Ramsey’s study that found 8 out of 10 millionaires came from middle-income level families or below and 79% did not inherit any money before becoming a millionaire.[iii]

So why is this important to you? Well, there are some simple things that we will be covering in the coming months to help stack the odds in your families favor to ensure that you build generational wealth and equip them with the tactics and techniques to give them a fighting chance to beat the odds because what helped you build your wealth will not hep future generations keep the wealth.

So, what are the tactics and techniques that we will cover in the coming months? Here is a preview of a few of the topics.

  1. Teaching about the three things you can do with money: Spend it, Save it, or Give it Away.
  2. Creating a family mission statement.
  3. Covering the Estate Plan: Ensuring your bequest is a blessing and not a burden to your family.
  4. Using 529’s as a generational wealth planning tool.
  5. Incentivizing Roth IRAs for your children and grandchildren.
  6. Having a family meeting.

Military Finances are Different

As an Active or Retired Senior Military Officer or NCO, you've worked hard to build your wealth and secure your family's financial future. However, the unique aspects of your military finances, such as government benefits and special tax treatment, can add complexity to your generational wealth planning. To ensure that your wealth lasts for generations and that your family is equipped with the tools and knowledge to manage it effectively, it's crucial to work with a financial advisor who understands the intricacies of military finances. By partnering with an expert who deals with military-related benefits and special tax treatment every day, you can create a comprehensive plan that takes advantage of the unique opportunities available to you and your family. If you'd like to learn more about how we can help you build and preserve your generational wealth, use the button below to schedule a free initial consultation.

If you found this article useful, you might like the following blog posts:

One Reason to Consider Moving Your Assets Out of TSP - Estate Planning


Retired Military Finances 101: A Brief History of Estate Taxes


Retired Military Finances 401: What Are Grantor Retained Annuity Trusts (GRATs)?


[i] Meyer, Zlati (February 6, 2010). "Stroh's beer tapped out in Motor City". Detroit Free Press. Retrieved 2011-02-06

[ii] https://www.nasdaq.com/articles/generational-wealth%3A-why-do-70-of-families-lose-their-wealth-in-the-2nd-generation-2018-10

[iii] https://www.ramseysolutions.com/retirement/the-national-study-of-millionaires-research



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