Aspire | Action | Acquire
Aspire | Action | Acquire

The Curse of Inheritance

Lewis H Lapham, author of Money and Class in America, followed around fifty families that had inherited wealth over a sixty-year period. He is cited by Vance Packard for saying: “I noticed that with notable but relatively few exceptions … the lives of heirs were market by alcoholism, suicide, drug-addiction, insanity and despair.”[1] Clapham’s words could have prefaced a more recently published biography about the “band-aid” family heirs to the Johnson & Johnson fortune.

As told by Oppenheimer, “Drug addiction, alcoholism, overdoses, adultery, homosexuality, child abuse in the form of molestation, suspected kidnapping, a murder plot, a shooting, tragic accidents, suicide, attempted suicides, and other mayhems – all were part of the ongoing drama and soiled fabric of one of the richest and most powerful families in the world.”[2] Oppenheimer tells the story of the descendants of Robert Johnson (1845-1910), one of three brothers who founded the Johnson & Johnson health products empire in 1886.

Most notably, the first son and namesake of one of the original founding brothers, Robert II, would take control of the business from his siblings and sensationally fire his own son, Robert III; thus, ending executive control of the business by future generations. Today, the Johnson family’s ownership doesn’t rate mention among the top shareholders. The Johnson family experience contrasts to that of the du Pont’s. According J D Gates, who married into the family, the du Ponts are encouraged to do their own thing and not make waves.

A family insider to the Du Pont Company fortune, J D Gates, described the heirs as a “phenomenon of declining achievement.” “So brightly shone their stars that today their descendants appear dim in that earlier light, even those who success has smiled.”[3] To be fair, the richest surviving branch are not direct descendants of the three cousins who bought out their uncles and laid the foundations of a multinational chemical conglomerate.

The leading great-grandson, Pierre, had no children. T Coleman, a successful businessman in his own right before joining his cousins, sold his stake to Pierre. T Coleman also did what many descendants of wealth do and entered politics. Alfred, with direct first son lineage to the founder, was pushed out of the business and bequeathed his wealth to a charitable foundation.

Gates explained generations of declining achievement in terms of lack of motivation. “When you have everything from birth, your acquisitive instincts and competitive drive tend to be retarded,” he wrote. A psychologist’s take is that children “learn to interpret failure as a cue to try harder” rather than a lack of ability to succeed.[4] At an early age the need to achieve is robbed from descendants of wealth. Willie Vanderbilt, a third-generation descendant, described inherited wealth as certain as death to ambition as cocaine is to morality” with “nothing definite to seek or strive for.”[5]

Billionaire Warren Buffett, the twentieth century’s most savvy investor, seems to have understood this proposition very well. Buffett has repeatedly been quoted for his intention to leave his children “enough money so that they could do anything but not so much that they could do nothing”[6] Buffett’s individualist approach to wealth is in stark contrast to those desiring to leave or continue a family financial dynasty.

The progression of once family managed businesses into large professionally managed corporations often results in a dilution of ownership. The resulting financial dilution is also compounded by an increasing number of entitled descendants whose operational involvement is no longer required to sustain the business. Psychological disassociation may not, however, accompany financial and operational disassociation.

A tenth-generation descendent in the Astor dynasty, albeit along a much-diluted line, identified a sense of entitlement that prohibited family members from day-to-day work and taking orders from others.[7] By contrast, the son of the late Kerry Packer, who was Australia’s wealthiest billionaire, sold off the family’s third-generation media empire. In the book The Price of Fortune[8], James Packer tells of his pursuit of his own personal and financial identity; which involved several early and failed attempts to cross from traditional to new media.


[1] Vance Packard, The Ultra Rich: How Much is too Much (Boston: Little, Brown and Company, 1989), 315.

[2] Jerry Oppenheimer, Crazy Rich (New York: St. Martin’s Griffin, 2014), 2.

[3] John D. Gates, The du Pont Family (New York: Doubleday, 1979), 19, 99.

[4] 4. A. Duckworth, Grit: The Power of Passion and Perseverance (London: Penguin Random House, 2017), 179.

[5] Arthur T. Vanderbilt, Fortune’s Children: The Fall of the House of Vanderbilt (New York: Morrow, 2013), 280.

[6] 5. Richard I. Kirkland, Jr., and Gottlieb Carrie, “Should You Leave it All to the Children?,” Fortune, September 29, 1986, accessed November 03, 2020, http://archive.fortune.com/magazines/fortune/fortune_archive/1986/09/29/68098/index.htm.

[7] Alexandra Aldrich, The Astor Orphan: A Memoir (New York NY: Ecco, an imprint of HarperCollinsPublishers, 2013), 185.

[8] Damon Kitney, The Price of Fortune: The Untold Story of Being James Packer (Sydney NSW: HarperCollinsPublishers, 2018).