Shirt sleeves to shirt sleeves in three generations is the American version of a Lancashire proverb, “there’s nobbut three generations atween a clog and clog.
Many have attributed Andrew Carnegie, the famed 19th century industrialist from Scottland, with bringing the proverb’s message to America. Investigation shows that the adage is ancient and not unique to any one country or culture. 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”). Even non-western cultures, including the Chinese, have a similar proverb, “rice paddy to rice paddy.” Shirt sleeves to shirt sleeves is a proverb that describes human behavior’s natural tendency in terms of creating long-term families as financial failures.
The theory of the proverb is that the first generation starts of in a rice paddy, meaning that two people with an affinity for one another came together and worked from the bottom to create a financial fortune. The original generation usually builds their wealth without making significant changes to their values, customs or lifestyle. The second generation moves to the city, embraces the hottest fashions, patronizes the opera, runs large organizations and the fortune plateaus. The third generation, with no experience in building or maintaining wealth, consumes the financial fortune, and the fourth generation goes back to the rice paddy. This is the classic formulation of the shirtsleeves proverb, which remains as true today as it has proven to be throughout documented human history.
When considering long-term legacy planning, what is often referred to as seventh-generational thinking comes into play. Seventh generational thinking can be illustrated by an antidote from an old Iroquois tribal elder, who begins the tribal council meeting by saying,
“Let us begin our work here today with the hope that the decisions we make will be honored by our tribal members seven generations from today.”
James E. Hughes, Jr., an attorney, author and multi-generational family advisor, defines a family as two or more people who by either genetic lineage or bonds of affinity consider themselves related to each other. The core of his philosophy is the belief that a family that sees itself as linked not only by blood but by affinity and acts from that philosophical base has the greatest chance of successfully enhancing the individual development and growth of its members and thus of dynamically preserving the family as a whole for at least five generations. A family of affinity maintains open systems that welcome new members, giving the family a better chance of survival. These outsiders represent the new energy the family needs to overcome what it will lose through natural attrition.
Note that Attorney Hughes suggest that relying solely on the biological constituents of a family will lead to attrition and a weakening of the family unit and wealth over time. Creating an open-source family unit enthusiastically embracing new members through marriage and other bonds of affinity are vital. When counting a family’s assets they are represented by the individual members of the family of affinity:
• The family’s human capital
• The family’s intellectual capital
• The family’s financial capital
• The family’s social capital
A family with long-term seventh generational thinking will have a 100-Year Plan to manage and capitalize on the family’s core assets listed above.
