The Rise and Fall of Great Fortunes: Lessons from History

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:

Wealth isn’t just about making money, it’s about managing and growing it. Without financial literacy and discipline, even the largest fortunes can disappear. I’ve built my company with long-term sustainability in mind, and I encourage every investor to do the same.

Howard Hughes: A Fortune Lost to Isolation

Howard Hughes was an incredibly talented entrepreneur, aviator, and filmmaker who amassed a staggering fortune worth around $11 billion in today’s dollars. He was a true innovator who took risks that paid off in his early years.

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

The Astors, Howard Hughes, and the Stroh family all had immense wealth at one point, yet their fortunes vanished due to poor management, lack of planning, and failure to evolve. If you want to build lasting wealth for your family, focus on:

• 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.

  
  

At Blue Lake Capital, we don’t just talk about building wealth—we talk about keeping it. By learning from history, we can make smarter decisions that set us up for long-term success. The best investment you can make is not just in assets, but in knowledge and planning for the future.

P.S. If one of your priorities, like mine, is building and preserving your wealth through multifamily real estate investments, click here to download my new eBook: The Ultimate Guide to Creating & Preserving Your Wealth.

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About Ellie Perlman

Ellie Perlman is the founder of Blue Lake Capital, a commercial real estate investment firm specializing in multifamily investing throughout the United States. At Blue Lake Capital, Ellie partners with both institutional and individual investors to grow their wealth by achieving double-digit returns by investing alongside her in exclusive multifamily deals they usually don't have access to.

A defining factor of Blue Lake Capital’s strategy is founded in utilizing machine learning/artificial intelligence throughout the course of all acquisitions and asset management. This advanced technology enables the company to produce accurate and data-driven forecasting for all assets on a market, property, and even tenant basis. In doing so, Blue Lake is able to lead commercial investments with the full capabilities of today’s technology.

Ellie is the founding host of REady2Scale, a podcast that highlights the assets, processes, and strategies for the multiple approaches to successful real estate investing.

She started her career as a commercial real estate lawyer, leading real estate transactions for one of Israel’s leading development companies. Later, as a property manager for Israel’s largest energy company, she oversaw properties worth over $100MM. Additionally, Ellie is an experienced entrepreneur who helped build and scale companies by improving their business operations.

Ellie holds a Masters in Law from Bar-Ilan University in Israel and an MBA from MIT Sloan School of Management.

You can read 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.