Post: #1

Let's say your grandpa has built a company that has been doing well over the last decades. Grandpa is gone, but the second generation does a good job managing and expanding it.

Daunting Chinese proverb: 富 不过三代 “Wealth does not pass three generations” .

The third generation forgets the importance of hard work. If you are in early-twenties in the given situation with this in mind, would you work in another company in the same field to gain specific knowledge in order to apply this knowledge in the family business later? Or would you rather build a business to gain wider entrepreneurial knowledge instead? Are there specific skills that you want to pursue?

Post: #2

I come from the third generation from that context.

I don't believe in that notion as long as the proper upbringing has been instilled. Financial education is priceless in this situation. I keep all my family's wealth invested conservatively and consistently feed the golden goose (never drawing from the principle).

That said, I have started business on my own, failed, and tried again without using a single cent from the coffers. I believe in hard work yes. Although having a solid family networked probably helped out a lot, it is still up to you to make use of it wisely.

If you sit on your arse all day waiting for the day you inherit that $50million when the parents die then yeah. You're gonna lose it all. So get out there, fail, and learn the ropes.

Post: #3

I agree with DA that if the kids are brought up right then you should be ok.

But if I were you, I would go do your own thing for a while and then come back.

Get the job on your own merits. And make your own way for while.

I don't have exactly the same situation, but up until a few years ago, I always felt like I didn't earn my way. Parents paid for both my degrees (even though I wanted to take on loans), my parents are always willing to back stop me, but I try to work with the idea that I have no backstop.

Earn your way, so you can look yourself in the mirror and know that you can stand on your own two feet. There is tremendous emotional value in that. I finally feel like I have earned all the success that is here and coming over the next few months because I bet my "fortune" (assets I earned through jobs) and got my teeth kicked in many times over the last few years. To the point of tears in the darkest moments. But we (business partner and I) have turned the corner and I will never doubt I earned it.

Post: #4

It really depends on your situation. The best advice I can give is that it is ALWAYS worth a try to work in the family business. Your parents/grand-parents will always try their best to impart their wisdom.

The hard part isn't the business- its managing the expectations of your family and not letting nagging emotional baggage come to the surface. Which is true in ANY family.

I am in a family business now, and its tough dealing w/my parents everyday, but the salary and knowledge I gain from it are incomparable to starting out on my own.

Post: #5

(10-27-2013 06:02 PM)mastauser Wrote:  Let's say your grandpa has built a company that has been doing well over the last decades. Grandpa is gone, but the second generation does a good job managing and expanding it.

Daunting Chinese proverb: 富 不过三代 “Wealth does not pass three generations” .

The third generation forgets the importance of hard work. If you are in early-twenties in the given situation with this in mind, would you work in another company in the same field to gain specific knowledge in order to apply this knowledge in the family business later? Or would you rather build a business to gain wider entrepreneurial knowledge instead? Are there specific skills that you want to pursue?

Be an employee of a competitor or start your own business?

Naw B, Choice C.

The 3rd generation loses the family business because Grandson wants to keep tradition alive, and doesn't want to see that the marketplace has changed.

But even if you've got smart grandson, who's up on all the trends, social media, new techniques, new marketing -

Grandson has to change the cultural environment of entire company.

From his senior execs down to the outsourced janitorial service.

Few executives, few managers, few owners, are able to change the DNA of a corporation.

Read the Innovator's Dilemma by Clayton Christensen.

WIA

Post: #6

If there has been such a change in technology and culture from grandfather to grandson, wouldn't it make more sense to seek an exit strategy (assuming there is one) and allow the third generation to profit from investments and other similar strategies?

One thing to take into account is that unless the family business grows at a considerable rate during all three generations, you have siblings and cousins to share it with, which will often lead to bitter clashes and can cause the entire company to dissolve.

Post: #7

I thought Grandson just didn't give a shit any more since he wasn't the one that created the Company, just wants to live it up.

I have heard stories every now and then when someone passes the kids just want their money. Don't care how the family got there or the traditions.

I do agree failure to innovate and change culture can destroy a company. But I really believe that by the third generation the people just don' have a huge attachment to the family' financial origins.

Post: #8

Yeah an exit strategy does seem more viable from the third generations point of view as they would think that the first and second generation could use some rest and change of pace by now.

But being human, the older generation, after all, are attached to what defined them over those years, and the respect they got from the business. The young ones haven't walked in those shoes, adored and bathed in the pseudo-respect those other people give to them. Then again, they might be just too lazy to give a fuck.

For them third generation fellas, might be a good idea to try and fail out in the real world before taking over the family biz.

Post: #9

The company spoken about is a company renting/flipping mainly residential real estate. The knowledge in my family regarding this is built up over several decades.

Although I really want to feel more independent instead of being a frustrated spoiled 26 year old, I don't want to hurry too much with university. I have opportunities to get my masters in Real Estate Finance for example and intern in a real estate company to gain another perspective regarding the market (next to the knowledge within my family.
I do not, however, want to work a really long for another real estate company, which feels like wasting my twenties. I want to learn skills, languages, travel and continue with working on projects. Working on projects can be done in free time, next to studying, so studying for me (until I go to my masters) is not a bad idea the next years.

One guy in my family works in another country in the private equity. It is a good way to gain knowledge, but my gut says that, as good as the investment might be to work in such a company, it would feel too much like following a laid out path, disabling opportunities to pursue my own creative ideas. The thing is, that I don't meet much people in real life that have a similar situation,outside of my family. Some are building businesses as well in my family, so there is experience in startups and real estate investing.

I think it is not a bad idea to fill the next years with travelling, studying, projects, and perhaps real estate internship.

-I want to have some sense of independence (preferably need my own business for it)
-But in the future I will come to a point where I will control a lot of real estate.

What shall I do?

Post: #10

Wish I could give you more answers, but its on YOU. The only thing I caution you against is making an irrevocable decision and spending too much time out of your core competencies, aka jumping from job to job.

Sounds glamorous to "grind" and start from the bottom, but its a huge slog.

As for myself, I am in a position of "golden handcuffs". Ill make a good salary, but I am landlocked to 1 city. I've made the decision to ride it out for a few years, then re-evaluate. Nothing wrong w/having a money buffer. =).

Post: #11

(11-02-2013 11:00 AM)DVY Wrote:  Wish I could give you more answers, but its on YOU. The only thing I caution you against is making an irrevocable decision and spending too much time out of your core competencies, aka jumping from job to job.

Sounds glamorous to "grind" and start from the bottom, but its a huge slog.

As for myself, I am in a position of "golden handcuffs". Ill make a good salary, but I am landlocked to 1 city. I've made the decision to ride it out for a few years, then re-evaluate. Nothing wrong w/having a money buffer. =).

Thank you and the others for the input. Currently I'm expecting to finish my undergrad this year, so I'm in a phase of planning the years to come right now. I'm inspired by this piece of writing:

Quote:Let 1,000 young men, at the age of 30 years, enter into business with a given amount of capital, all acquired by their own hard earnings, and let them pursue their business 30 years faithfully; that is, till they are 60 years of age. Let 1,000 others commence at the age of 20, with three times the amount of capital possessed by the former, but at the same time either inherited, or loaned by their friends, and let them pursue their calling till they are 60 years of age; or for a period of 40 years. We will suppose the natural talents, capacity for doing business, and expenditures—in fact every thing,—the same, in both cases. Now it requires no gift of prophecy to foretell, with certainty, that at 60 years of age a far greater proportion of the 1,000, who began at 30 and depended solely on their own exertions, will be men of wealth, than of those who began at 20 with three times their capital. The reason of these results is found in the very nature of things, as I have shown both above, and in my remarks on industry.
But these views are borne out by facts. Go into any city in the United States, and learn the history of the men who are engaged in active and profitable business, and are thriving in the world, and my word for it, you will find the far greater part began life with nothing, and have had no resources whatever but their own head and hands. And in no city is this fact more strikingly verified than in Boston. On the other hand, if you make a list of those who fail in business from year to year, and learn their history, you will find that a very large proportion of them relied on inheritances, credit, or some kind of foreign aid in early life;—and not a few begun very young.

As such, I don't believe that (although I started off a bit and quite like the concept) I should spend my twenties on building 'bullshit businesses' when I have all the opportunity to spend the next years with college, internships and meeting people, making friends fucking girls and travelling.
In a lot of forums college is bashed: but for me, my parents will pay everything and debt or USA-like tuition fees are no concern at all. I think it would be better to get some degree in Real Estate and internships via family connections (not within the family).
Lot of people say here 'college is a waste of time' and everything but for me it is a nice institution now. Doesn't necessarily brainwash me into a worker drone -or does it?

I prefer to go on exchange programs and switch within studying local and abroad the coming years, get some interships here and there.

and, DVY, for your point: nearly dead-end jobs and core competencies: Maybe a 'dead end job' within a firm for a year or two and a half should perhaps be part of my education. Would not be something I like the most in my life, but gives me a lot of credit within the family and legitimation for myself regarding my foundation of knowledge. I believe you should 'earn' your way into a family business: could be with building a business or study and quite a bit of work. But like the piece of writing from the books says: Better to start business when I can take care of myself. and it might be true, but it might not.

Regarding this thread, I am just hoping for some fresh perspective because I feel a little bit overwhelmed in this phase of lots of decision making.

Last but not least: I don't dig being an employee... Not so much of a competitor but more in the firms that provide services that my relevant company uses or something.. Perhaps I could start my own business after I did my one or two year 'educational working' because I don't depend on money from the employer, and that is what puts me apart from most other people. You could call me a trust fund kid...

I like buying and selling stuff, but I see those 60 year old 'hustlers' everywhere and thats not what I want with my life does sound like wasting my opportunities

Post: #12

^^^Bro, your engaging in mental masturbation. Let these thoughts go until you at least work for 6 months.

Post: #13

(11-02-2013 11:00 AM)DVY Wrote:  Sounds glamorous to "grind" and start from the bottom, but its a huge slog.

What do you mean with this? 'Grind' while being an intern or employee , or the grinding in building your own business?

Post: #14

Mastauser,

I'm a few years older than you, third-generation and working in family business. Believe me when I tell you that I understand the desire for independence and to move past that "spoiled 26-year old" identity.

It's not the forum or the red-pill's fault, but one of the difficult things for someone in your position is that you're reading about all of these guys living in Thailand, Eastern Europe, Toronto (j/k) while still being stuck in the family business matrix. It's a fucking tease-and-a-half when you're, for all intents and purposes, still dependent on family.

A few points. Nothing about what's below is a personal attack or an attempt to ridicule:

1. Shit or get off the pot regarding school. For all the shit we talk about university, it is a class marker, you don't have to pay for it, and completing your studies will be the first (and easiest step) to breaking down this "spoiled" identity. Please don't waste your time on a master's degree. NOTHING screams third generation more than the late 20's - early 30's guy with all of his bitchass credentials - especially when Dad has his bachelor's and grandpa graduated from the school of hard knocks.

2. Now the life decision. I suggest you re-frame this upper-class dilemma into a postive, because - if you really think about it - this is a problem that 99.9 percent of world would love to have:

You can go all in on the family business. Nobody says you have to own it, but you start from "family business scratch" which - assuming the company is healthy and profitable - is the best opportunity to learn. You're in real estate too, which is fucking dope because you can grind (almost) like an investment banker, make your money, and have all the experience in the world on your side to buy and (rent or flip) your own property. Passive income from property you own that funds your travel, your lifestyle... You're 26, not 46, so you still have time to make these moves and enjoy many good years with your own money.

You could get a little money together and go abroad. Here's the problem, there's an almost 100% chance that you're not ready. Take it from a fellow third-generationer who was also born in the 80's: We are sheltered even by suburban standards. Home or abroad, we love to fritter away our potential with alcohol and drugs (not saying you do, but for example...) only to get second, third and ninth chances. While I don't ply my trade in real estate, I deal with enough people in that industry to know that the good ones have a well-honed instinct for people's intentions, i.e. shady contractors trying to fuck you. Just doing real estate deals in 2014 will put your feet to the fire, so to speak.... so long as you're a proactive worker/student of the real estate game.

Think about it: You have the opportunity bust up that "spoiled" image while getting paid to do it! You're not the only person with this opportunity, but there aren't many others who have it.

A couple other points:

Once you're working your ass off and have earned respect at the company past your last name (this will take a couple years... relax, you won't even be 30 yet), tell your family about your plans to be a world traveler from passive income at home. If they're cool they'll understand and you don't want to be duplicitous by making them think you're going to own the thing when you don't want to. Of course, if they're not cool then don't tell them. At the same time, if they're not cool then - family or not - you should get out of any financial dealings with them ASAP.

In conclusion, reframe your problem as an opportunity to live the life that heretofore only exists on a computer screen. Just understand that you need to truly want it an you need to work like psycho. Start as soon as possible because you'll never have more energy than you do right now.

TL;DR Easier said than done, but combine the two choices into a solution.

Post: #15

My take on this is that it completely depends upon what field this business is in. For example if your family business is in landline phones when the trend it towards that of mobile devices now, you're gonna have a bad time. However, if the business is timeless (maintenance, trades, production, etc.) the field WILL change, but the degree of change is far less drastic, and in my case, boilers and mechanical rooms have not really changed since the 80s. I feel like it also depends on the drive of the individuals of the generations. If your dad took the business and made it better than when grandpa had control, you should also aim to make it better rather than riding the wave. There is a saying that a real man makes his own wealth, so if he inherits a million dollars, he makes it into five million.

As Baldwin said above, this is hardly considered a problem. You have an opportunity to learn the ropes and use those ropes to bring in even more wealth, I sure as hell wouldn't take it as an issue opposed to a chance to prove yourself. Of course, its has to be something you want to do, and if its not, then get out. If the company is small, expand it. Upon expanding, look for opportunities in other cities and such. You eventually want a company to run by itself without you there, and when it does, then you are free to do as you please.