David’s Articles

David has been writing and publishing since 2006.  

This post was written and published prior to September 2023 when David and his prior firm, Family Capital Strategy, merged with Greycourt.  Views expressed reflected David’s personal views at the time and do not necessarily reflect the views of Greycourt.  Posts and information may be out of date and should not be relied upon for investment advice.

Sibling Rivalry and The Atrophy of Family Wealth – Part 2

Feb 5, 2021 | Family Wealth

We are in the second part of a series exploring the contributing factors to the Shirtsleeves to Shirtsleeves in Three Generations proverb.  Last week, we look at the long-term atrophy of the family due to spending and profligacy – dynamics commonly associated with the third generation and beyond.  We concluded that while excess spending leads to an unrecoverable level of assets, the foundation for these issues can often lies in very normal process of looking to your parents to define your standard of living.

This week, I would like to consider how the second generation may contribute to family atrophy – namely the fraying of family ties at the sibling generation.  Hell may hath no fury like a woman scorned, but a close second must be the tensions that can exist between brothers and sisters.

Two weeks ago, the NY Times featured a great article called “The Psychology Behind Sibling Rivalry.”  The authors highlighted interesting research that while growing up, siblings may conflict with each other up to 8 times an hour!  But most importantly, that “sibling rivalry serves a developmental purpose: It helps children figure out what is unique and special about themselves, otherwise known as differentiation.”

Long time advisor to families, Tom Rogerson, has been apt to point out that our relationships with our siblings are formed before the rational part of our brain develops (i.e. prefrontal cortex).  His conclusion is that it is not surprising then how quickly our siblings can get under our skins – a lot of our neurological reaction is conditioned by our most elemental fight/flight part of our brains.

So how does sibling rivalry contribute to the shirtsleeves to shirtsleeves in three generations proverb?

Most obvious, of course, is the large scale ‘blow-up’ between siblings.  The inability to work together comes to a head and leads to a break in the family. 

Yet, there is an equally dangerous, but less visible sort of sibling tension that sets in motion a slow moving train wreck – namely sibling apathy.  When business owning siblings reach a place of defeated resignation on their sibling partnership, this sets the table for future atrophy of the family.

Dinner table conversations will either overly focus on the negatives of being in business together or the business will not be discussed at all.   The impressionable next generation either gets a one-sided view of the family business.  Or they  see mom and dad distancing themselves from the business, further marginalizing the importance of the business in their eyes.

By the time adulthood arrives, the third generation will be populated by cousins with different life experience (from being raised in different households), potentially different values, and a baseline skepticism of the business and family.   This forms an extremely unstable foundation for the next generation to stay invested together – and leads to the likely dissolution of things as soon as the family system experiences some kind of stress. 

The great challenge then at the second generation is for the siblings to build a working partnership together.  They must learn to manage the inevitable tensions that come from having been raised in the same home.   Finding ways to learn to relate to each other as adults, building on a foundation of mutual respect and strong communication, can over time help to re-frame acute rivalry that may have present during adolescence.


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Nashville, TN