I think the realistic number is is more like 2-4% if it’s not supplemented by working (and sometimes even working) I also think when you add in things like paying for private school/ college, divorces, taxes, carrying cost of real estate, etc. luxury travel/clothes/meals/vacations it’s a big number.
I’m not saying it’s not possible, but I suspect the vast majority of grandchildren of a wealthy couple have meaningfully less than the original couple did, as well as less than their parents did.
2-4% of the wealth you mean? That surely depends on the wealth... If you need 200k a year that's 2% of 10 million, but 1% of 20 million.
If you manage 1% then the real value doubles after 15 years. If you need 2% annually, the real value doubles after 18 years. The moral of the story is the same, with enough wealth you can live comfortably while your wealth grows.
The tough part is someone with 20 million "in the bank" will have a hard time constraining themselves to 200k/yr expenses. It seems like a lot but next to 20 million the temptation to spend a little, like 1m on a house, 100k on a car seems like nothing and a potentially reasonable purchase. But it drastically changes the trajectory of that balance.
And you wouldn't feel as good spending 1m on a house or 100k on a car with a 200k salary and zero in the bank.
and the further you get from the actual work that created the nest egg the greater the temptation - because no one treats found money like earned money.
I’m not saying it’s not possible, but I suspect the vast majority of grandchildren of a wealthy couple have meaningfully less than the original couple did, as well as less than their parents did.