Shirtsleeves to Shirtsleeves or Clogs to Clogs in Three Generations

By: William Mehserle


In the early 1700s, a phrase became an aphorism.  It came from manual workers in North England (in the Lancashire area) that were shoe manufacturers – – at that time, shoes were called “clogs.”  The saying is “clogs to clogs in three generations.”[i] Around the same time, in Scotland, another phrase became popular: “the father buys, the son builds, their grandchild sells, and his son begs.”  This philosophy was not exclusive to Europe. Similar sayings can be found in Asia, South America and around the world.

The meaning of the saying is that a patriarch or matriarch of the family builds a business — the next generation (sons and daughters) witness the toil, sweat, and tears that go into building their wealth. However, the following generation (the grandchildren) did not witness all that it took to accomplish the financial success of the family. Due to this, the grandchildren tend to not appreciate the lifestyle they are gifted with. As an example, The Times of Britain conducted a significant economic study of Britain’s 1,000 wealthiest individuals and found that “the wealthiest individuals and families are a revolving door.” The study, conducted by Douglas McWilliams, the executive chairman of the Centre for Economics and Business Research, revealed that two thirds of the richest individuals in Britain entered the ranks since 2000 – – legacy wealth often is squandered.[ii]

At Homrich Berg, we have a focus on multi-generational planning. Our team is focused on ensuring that the legacy that is built by one generation can impact the lives of children, grandchildren, and great-grandchildren — as well as having an impact on the world through philanthropic organizations. There are a host of techniques that Homrich Berg utilizes to help with this centuries-old dilemma.

First, it begins with education. One method that we utilize is a Donor Advised Fund (DAF) or Private Family Foundation. These vehicles allow us to have deep conversations with the next generation and following generations while permitting open conversation regarding the values of the family. As an example, we encourage the grandkids of the matriarch or patriarch of the family to bring suggestions about a cause that they are passionate about. Often we find that families enjoy listening to the presentation prepared by their grandkids to decide whether to donate money to a cause or not. This serves two purposes:

  1. It allows the grandchildren to practice life skills like speaking in front of an audience.
  2. Provides an opportunity for the family to instill their values with generations following them.

In addition, there are important principles that we attempt to instill.  This starts with the basics: having an emergency fund, budgeting (if applicable), savings rate, etc.

Our goal is to help ensure that generational wealth serves the families’ objectives and goals.  It may be philanthropy, it may be leaving a legacy, or a combination of both.  Once we understand the objectives, we can move towards designing a plan to help arrive at the destination.

About Homrich Berg

Founded in 1989, Atlanta-based Homrich Berg is a national independent wealth management firm that provides fiduciary, fee-only investment management and financial planning services, serving as the leader of the financial team for our clients, including high-net-worth individuals, families, and not-for-profits. Homrich Berg manages over $9 billion for more than 2,000 family relationships nationwide.