Almost two decades ago, in my mid-20s, I saw a documentary about the lifestyle of heirs to very large inherited fortunes made by Jamie Johnson- himself an heir to the Johnson & Johnson family fortune. I found that documentary, known as ‘Born Rich (2003)’ interesting for many reasons- but one stuck out more than any other. The heirs to these billion dollar fortunes were, to put it mildly, rather mediocre. If they hadn’t been born into a super-rich family, they would have almost certainly have ended up working in some generic office in a nondescript office park or high-rise.

In other words, they did not posses any abilities which would have allowed them to replicate the success of their ancestors and this got me thinking.. how did their ancestors end up becoming so rich? The more I looked into this issue, the more it became obvious that the most important factor for becoming very rich (or even moderately rich) was some combination of luck and chance. In this rest of this post, I will explain this view with multiple examples so that you too can see the obvious.

Let me start with an interesting anecdote about most of my cousins and classmates who stayed on in India, while I moved here after my undergrad. As it turns out, the majority of them now enjoy a lifestyle and wealth equivalent to or better than the median upper-middle class person in this country. Notably, the amount of money they make (inflation adjusted) is far more than their parents- even though they were often involved in similar professions. So how did this occur? Why was there such a large increase in the amount of wealth between those two generations, even when they had roughly comparable educations? The simple answer is ‘their year of birth’.

READ MORE