The Most Overrated Goal in Personal Finance? Generational Wealth

When I tell people I’m a financial therapist, they often assume I spend my days helping clients build generational wealth.

And yes it comes up. A lot.

But here’s the truth: Generational wealth is one of the most overrated goals in personal finance.

Not because it’s inherently bad. But because it’s often pursued without asking the harder questions:

• Why do I want to pass this money on?

• How will it actually serve the people who inherit it?

• And what happens to them, and to me, if it doesn’t?

• 
  

The Instinct to Provide

From an evolutionary psychology perspective, the desire to pass resources to the next generation makes perfect sense. For much of human history, survival depended on it.

• Food storage in times of scarcity.

• Land and tools for children to continue farming or trade.

• Networks of obligation and reciprocity to ensure protection.

Our brains are wired to secure our offspring’s future — it’s an ancient survival mechanism dressed up in modern financial terms.

The problem? Survival no longer hinges solely on inheritance. In fact, unearned abundance can sometimes do the opposite of what we intend.

The Hidden Risks of Passing Everything On

Neurofinance research shows that effort changes the brain’s relationship with rewards. When people work for something, they build neural pathways linked to competence, resilience, and self-worth.

When wealth is handed over without preparation, heirs can lose that link between effort and reward. This can manifest as:

• Reduced motivation to pursue independent goals.

• Heightened anxiety about “not measuring up” to the fortune they’ve inherited.

• Conflict within families over entitlement, fairness, and control.

This is why some families see wealth disappear within a generation, not because the money was mishandled technically, but because it was mishandled emotionally and culturally.

Culture Shapes the Goal

Around the world, cultural norms dictate not just how wealth is passed on, but whether it should be passed at all.

• In some Scandinavian countries, modest inheritances are the norm, with a focus on strong social safety nets.

• In parts of Asia, family wealth is often tied to business succession — passing on not just assets but a role and responsibility.

• In some Indigenous cultures, wealth is distributed across the community during life, rather than hoarded for an inheritance.

These differences highlight that generational wealth isn’t an absolute good — it’s a cultural choice.

A Better Goal: Generational Preparedness

Instead of fixating on the size of what you leave behind, consider:

• Financial literacy: Can your heirs make informed decisions independently?

• Value alignment: Do they understand why you’ve built wealth and what you expect it to serve?

• Emotional readiness: Can they handle the responsibility — or will it overwhelm them?

When we prioritise preparedness over provision, we shift from simply transferring assets to transferring capability, confidence, and purpose.

Questions to Ask Before You Pursue Generational Wealth

1. If my children inherited nothing, would they still thrive?

2. Have I modelled the values I want them to live by — not just told them?

3. Am I leaving them a net worth figure, or a life worth living?

   
   

The Legacy That Outlives Money

Money can be spent, lost, invested, or squandered. But skills, values, and resilience compound for a lifetime — and often for generations.

Generational wealth without generational preparedness is just a windfall. But preparedness with or without wealth is true security.

What’s your take is leaving money the ultimate gift, or is there something more valuable you’d want to pass on?