As a second-generation Irish American, I was a huge believer in the American dream as a kid. My parents quoted Walt Disney at the dinner table, and taught us that anyone could achieve whatever they wanted to in life, as long as they worked hard enough. Abraham Lincoln's rise from a one-room log cabin in Kentucky all the way up to the White House seemed to me like the perfect illustration of my parents' teaching. 

Photo: Wikipedia

It appears that my early faith in rapid social mobility in the United States might not have been entirely justified, according to a recent study. Gregory Clark, author of "The Son Also Rises: Surnames and the History of Social Mobility", has found that the pace of social mobility is much, much slower than we previously thought. According to his research, you may eventually succeed in raising the status of your family, but in some cases, it could "take 10 to 15 generations (300 to 450 years), much longer than most social scientists have estimated in the past."

What car did your great grandfather drive?
Clark has conducted a rigorous analysis of surnames in order to track the rich and poor across the generations in England, the United States, Sweden, India, Japan, Korea, China, Taiwan, and Chile. Instead of just looking at one aspect of social mobility, he considers a wide array of factors such as wealth, income, occupational status, and education. His research focuses on surnames inherited by fathers because most of the societies he studied were characterized by this form of surname inheritance. Clark doesn't think the results would be any different by studying the matrilineal lines.

This is how he concisely summarizes his main thesis:

To a striking extent, your overall life chances can be predicted not just from your parents' status but also from your great-great-great-great grandparents'.

While believing that success depends very much on individual effort, Clark's findings seem to indicate that "the compulsion to strive, the talent to prosper and the ability to overcome failure are strongly inherited."

Lessons from my family's history
"The Son Also Rises" is a highly complex book, and its findings are based on an impressive amount of research. I'm not qualified, however, to weigh in -- one way or another -- on some of the more controversial arguments put forward by Clark. Instead, I'm more interested in what his work might mean for investors. For me, I was intrigued by his view that time horizons are longer than we think, and the idea that maybe you won't achieve the status you were hoping for, but your grandchildren might.

In order to further explore this idea, I decided to take a closer look at my own family over the past 151 years. Are there any long-term lessons there about social mobility in America?

In the table below, I've included information relating to five generations of my family (I'm the fourth one listed). For consistency, I followed the patrilineal line, as Clark does in his book.

Our particular story seems to support Clark's findings about the slowness of social mobility. During the course of one and a half centuries, you can see a very gradual improvement in my family's fortunes. Charles Reeves was an uneducated, unskilled immigrant, who worked for a railroad in central Massachusetts in the 19th century. His great-great-grandson (my sixteen-year-old son, Maxim), however, is now securely established in the American middle class with a promising future ahead of him. What accounts for this remarkable turn of events?

A gradual, but important shift in fortunes began with my dad who became the pivot for the family's rise into the middle class. First of all, he wisely married my mom who came from a relatively prosperous family. Secondly, he obtained a college degree by going to night school.

"Remember the ladies..."
The role of my mom and her parents in this tale shows how much information might not be visible by looking solely at surnames inherited by fathers. Despite being the daughter of two Irish immigrants, my mother had been comfortably in the middle class her entire life. Unusually for a first-generation Irish-American woman raised in the 1930s, my mom had earned a four-year college degree, and worked as a teacher before getting married. Her father had graduated with a classics degree from Holy Cross in Worcester, Mass., before getting a job at Procter & Gamble during the Great Depression. And her mother was a savvy investor who was able to grow her husband's wealth tremendously over a period of 60 years or so. So my mom's family succeeded in injecting some much-needed financial security into the Reeves line.

The second step taken by my dad was also significant. By working hard to get a college degree, he provided himself with more income and greater opportunities. Perhaps most importantly, he and my mom instilled a love of learning in their children that would be passed down to subsequent generations.

Obviously, all families are different, but I do think our experience underlines two important principles for the long-term success of any family. The first principle relates to the importance of building up a pot of capital through saving and investing. The availability of capital can bolster a family when tragedy or misfortune strikes. It also allows you to pass on wealth to your children and grandchildren, which can provide them with significant advantages and opportunities. The capital built up by my grandmother's investing activities provided a considerable amount of stability to my family over the years. When I think of why I invest, this is the primary reason that comes to mind.

The second principle is how important education is to the long-term prospects of a family. I realize there's currently a big debate about the value of a college degree in America right now. Looked at in the context of my own family, however, I can confidently say that a college education has meant a great deal.

Working on the railroad
One big takeaway from both Clark's research and my family's experience is that the "rags to riches" metaphor may not be the best way of thinking about social mobility in America. Instead, we may want to think more along the lines of "rags to fewer rags" or "some riches to greater riches." The pace of improvement might be slow, but it can still be very gratifying. I bet Charles Reeves would feel pretty good about the material condition of the family he helped create many years ago.