Over at Financial Samurai, I read a fantastic post titled “The Downside of Financial Independence.” If you’ve never read his blog, I suggest you check it out. It was the first site that really got me thinking about net worth, financial independence, and personal finance in general. It has been instrumental in my knowledge building on personal finance, but it was something written in this post that got me really thinking about my financial journey. He writes about the idea of the “Three Generation Cycle,” and uses a Chinese saying – “From rice paddy field to rice paddy field in three generations” – to make his point. This is one of my biggest fears.
Sam goes on to explain the three cycles:
“The First Generation comes from a life of hardship. This generation takes the most risks, works the hardest, and makes the most sacrifices to break the cycle of poverty.
The Second Generation grows up a witness to their parents’ struggle and understands the importance of hard work. Because of this awareness, they make good financial decisions and build upon the foundation their parents worked so hard to create.
The Third Generation, however, has no recollection of hardship. They only know a life of abundance. Without an awareness of the work needed to build build wealth, the third generation squanders their good fortune their parents and grandparents worked so hard to build.”
I was born in the Philippines and moved to the US in 1990. I was seven. However, my story is a little different from your traditional immigrant story because my dad was an American Marine that happened to be stationed in the Philippines. He met a poor farm girl from Pangasinan, and the rest is history.
I’m not sure if I would be considered the First or Second Generation based on the traditional definition of immigrant, but I certainly feel more connected to the description of the First Generation.
And that’s what leads me to one of my biggest fears about money and family.
I have worked my tail off, from being the “apartment kid” throughout my childhood to living in the middle class neighborhood we live in now. I took considerable risks to get to this point, and I hope my children see that. As a dad, I struggle with the desire for my children to take risks, work hard, and make sacrifices on their path to success against my desire to help them and give them everything I never had.
What I have come to understand as I learn more about being a man and a dad is finding balance between allowing my children to struggle and giving them a helping hand when they need it. I think by modeling the positive aspects in all of the three generations, my legacy can last more than that because my children, grandchildren, and their children can build from what I have started.