Recently, that wily university called Facebook was abuzz with a moot post that questioned how much financial assistance a person’s “whole family” was entitled to if one “suddenly became a billionaire”. Not unexpectedly, there were many points of departure. However, it seemed to me that people were positing answers from a point of raw emotion rather than from any real understanding of finance.

Just to be clear, nobody usually “suddenly” becomes a billionaire. The former is a once-in-a-blue-moon fantasy that favours just a handful of people who might strike it mega-rich playing the lottery; even then, as was the case in Illinois, Chicago, earlier this summer, where a lottery winner won the $1.28-billion Mega Millions jackpot. He walked away a millionaire, not a billionaire, as the figure would be significantly whittled down by taxes. The odds of winning it were roughly 1 in 303 million. Per an article in Forbes magazine, this lower cash value would be further lessened by the IRS’ entitlement, as well as more state and federal taxes, leaving the winner with approximately $430 million, making him a millionaire, not a billionaire. I know that’s a mere technicality, but you get the point.

The truth is, though, winning the lottery can never be an effective strategy for wealth creation. The odds for that happening are simply not in the ordinary person’s favour. Nor will magical thinking about a wealthy benefactor leaving you a tidy life-altering sum. Because, while the odds of this happening are better than those of winning the lottery, the fact is, this, too, is still a longshot for the majority of people. Too many people are willing to sit back and daydream about their life circumstances being altered on the possibility, the mere chance, really, that they could someday “suddenly” hit it rich.

Money doesn’t fall from the sky, and building a foundation of enduring wealth is not an overnight endeavour. For the majority of people, it takes hard work, sacrifice and financial agility. Even trust fund babies and scions of the one per cent who inherited their amassed wealth from the hard work of their forebears will see their wealth being eaten away if they don’t manage their finances properly. I know I have said this in previous articles but it is an appropriate reminder that wealth is often lost by the third generation.

In the 1990s, the Rockefeller family, whose name is synonymous with unimaginable wealth, began to worry that their future generations might not be in a position to enjoy the family’s much-vaunted wealth and influence derived from interest made on billions of dollars’ worth of investments, over many years. So they started an aggressive campaign to bolster their fortune, which initially came from oil, to rebuild their legendary wealth, which at the time was estimated at around $5 to $10 billion, by making substantial private investments in Asia, Latin America and Europe. Why? Because they understood that money, even great sums, will disappear if not properly handled. Which was certainly what their family had begun to experience then as members of successive generations began to increasingly splinter the family fortune.

Bringing us back to the aforementioned FB post. What is at the heart of it, to my thinking at least, is: What is someone’s responsibility to their relatives in the event that they come into a bit of money from wise investments? Sadly, history has shown that there is nothing like one’s “whole family” to make a significant dent in amassed fortune. Again the age-old saying goes, wealth is offen made and lost in three generations.

According to a New York Times article, entitled “Rockefeller Family Tries to Keep a Vast Fortune from Dissipating”, dated February 16, 1992, the new approach to maintaining their wealth involved, among other things, creating “a structure that could provide direction, sophisticated advice and option for family members as they prepared for the 21st century”, as their wealth was being diluted by children and their children’s children.

There is also a focus, importantly, on philanthropy, the thinking being: to whom much is given, much is expected. Family members are expected to be involved in charity and foundations, making giving the centre of the family’s identity. Make no mistake about it, charity is often a part of a well-thought-out and efficient tax structure.

There aren’t many people around with money like the Rockefellers’, which has defied the odds and lasted through seven generations. But if they understand that boundaries need to be established when generational wealth is involved, isn’t that a lesson for average and above-average investors today? It’s called financial responsibility. Entertaining family members’ every need for assistance is simply unwise. Invariably, what happens is that the money will be blown on trivia and the same people will return to hit you up for more. Better to teach a man to fish. The hard truth is, reaping successful investments does not automatically qualify you to be some sort of Santa Claus responsible for the livelihood of everyone. (Even Santa Claus only bestows gifts on children who are nice, not naughty!)

The prerogative of building generational wealth is to provide assets that will be passed down to your family; that is, your children and grandchildren. You are under no obligation to financially enable long-lost relatives and “friends from when” with any substantial gains you may make. Of course, this doesn’t mean that you can’t help a relative in dire need, or even an organisation; I actually encourage paying your blessings forward. But this is really discretionary and not compulsory.