Building great wealth is never easy. It takes strategy, discipline, and patience. But even more challenging than accumulating wealth is keeping it. Studies show that roughly 90% of wealthy families lose their wealth by the third generation.
As someone who has spent years building a real estate investment firm from the ground up, I’ve seen firsthand how wealth can be made, preserved, and unfortunately, lost. That’s why I always emphasize learning from history. By understanding the mistakes of once-great American families and individuals who squandered enormous fortunes, we can ensure that our own financial legacies remain intact.
The Astors: From Real Estate Royalty to Lost Legacy
The Astor family was once one of the wealthiest in America, thanks to John Jacob Astor’s keen eye for real estate investments in New York City during the early 19th century. His empire, worth billions in today’s dollars, positioned the Astors as one of the most powerful families in the country.
However, the generations that followed did not share his discipline or vision. Instead of growing the fortune, they became notorious for extravagant spending—lavish parties, massive mansions, and unchecked luxury. By the mid-20th century, poor financial decisions, mismanagement, and excessive spending had eroded the family’s wealth. The Astors, once titans of real estate, are no longer among America’s wealthiest families.
Lesson:
Howard Hughes: A Fortune Lost to Isolation
However, Hughes’ downfall came not from bad investments but from personal isolation and a lack of trust in others. As his paranoia grew, he withdrew from the world and refused to delegate responsibility, leading to the deterioration of his businesses. Worse, he had no clear succession plan. After his death in 1976, the fight over his fortune became one of the most infamous legal battles in history, with over 30 claimants stepping forward.
Lesson:
No matter how brilliant you are, you can’t do it alone. Building a strong team and having a solid succession plan is critical for wealth preservation. I’ve made it a priority to surround myself with trusted advisors and ensure that my company is built to last beyond my own leadership.
The Stroh Family: Failing to Adapt
The Stroh family created one of the largest beer empires in America, growing Stroh Brewing Company into a multi-million-dollar business over more than a century. At one point, it was the third-largest beer brand in the U.S.
However, in the 1980s and 1990s, the family failed to recognize the changing industry landscape. Instead of modernizing their marketing and operations to compete with Budweiser and Miller, they overextended themselves by acquiring struggling breweries. These poor investments drained the company’s resources, and by 1999, Stroh Brewing Company was sold off in pieces. The family fortune was gone.
Lesson:
No industry or market stays the same forever. To preserve wealth, you must be willing to adapt and make strategic decisions. In real estate, I’ve seen how failing to pivot during market shifts can spell disaster. That’s why I always stress the importance of staying informed and agile in investment strategies.
Final Thoughts
- Financial literacy: Teach future generations how to manage and grow wealth responsibly.
- Strategic planning: Have a clear estate and succession plan to ensure continuity.
- Adaptability: Stay ahead of market trends and be ready to pivot when necessary.
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About Ellie Perlman
Ellie Perlman is the founder and CEO of Blue Lake Capital, a woman owned multifamily real estate investment firm focused on partnering with family offices and accredited investors to build and preserve generational wealth. Since its founding in 2017, Blue Lake has successfully acquired and operated multifamily assets across high-growth U.S. markets, completing $1B+ in transactions.
At Blue Lake Capital, Ellie and her team work exclusively with family offices and accredited investors, offering carefully curated investment opportunities that emphasize long-term wealth creation, stability, and risk-adjusted returns. A defining aspect of Blue Lake’s investment strategy is its integration of advanced AI-driven analytics and data science into the entire lifecycle of acquisitions and asset management. By leveraging cutting-edge technology, the firm executes data-driven forecasting on market trends, asset performance, and tenant behavior, ensuring strategic decision-making and optimized returns.
In addition to leading Blue Lake Capital, Ellie is the original founder and host of "REady2Scale - Real Estate Investing" podcast, which provides insights into multifamily real estate, alternative investments, and finance.
Ellie began her career as a commercial real estate attorney, structuring and negotiating complex transactions for one of Israel’s leading development firms. She later transitioned into property management, overseeing over $100M in assets for Israel’s largest energy company.
Ellie holds a Master’s in Law from Bar-Ilan University in Israel and an MBA from MIT Sloan School of Management.
You can learn more about Blue Lake Capital and Ellie Perlman at www.bluelake-capital.com.
*The content provided on this website, including all downloadable resources, is for informational purposes only and should not be interpreted as financial advice. Furthermore, this material does not constitute an offer to sell or a solicitation of an offer to buy any securities.
