We all know those people who seem somehow to have it all. They went to the best schools, they have that family holiday home in the South of France, and they run a successful business.

How did they get it so good? Of course: it’s their parents!

But how did their parent become rich? Were they always rich? Sometimes, yes money goes back many generations. But we’ve all heard the expression “from shirtsleeves to shirtsleeves in three generations” - according to an article in the Economist, only 4% of family businesses stay in the family into the 4th generation (2001, The Economist).

It usually isn’t just family wealth, and when it is, it also always comes from somewhere.

What is really interesting and unexpected is that sometimes it takes something very small, as small as say R2 000, and a bit of time, to make a huge difference.

Sometimes, the story is often more like “from Shirtsleeves to the Marseille in three generations”.

What you are about to read is “based on a true story” as they say in the movies: the names and details have been changed, but the numbers in the story are very much real:

In 1963, Mark and Roxanne Williamson used to hang out a lot with their next door neighbours Clive and Susan Van Zyl in their home in Bellville. Having moved to Cape Town recently they didn’t have a lot of their own circles, so it was convenient that a Mark and Clive also knew each other from their work at a textile manufacturing firm in Wynberg. Two of their kids, Stephen and James were also born a month apart (not long after Mark and Roxanne moved to Cape Town) and were good friends who were in High School together and both studied Commerce degrees at UCT.

James did slightly better in varsity and graduated First Class honours, and was generally expected to do very well in the corporate world.

Stephen and James’ lives ran on almost parallel tracks: or almost parallel. They both started work a financial services firm but after 5 years of work, they started to drift apart.

Stephen today at 53 runs his own motor parts manufacturing business which he’s had for about 20 years now. He lives in a beautiful home in Constantia furnished with some art he’s been collecting over the years. His two kids are studying their undergraduate degrees at Harvard and are expected to finish in the next couple of years.

Oh yes, and he owns a holiday home in Marseille, in the South of France where he and his wife spend 4 weeks every year during the crazy parts of the Cape Town winter, when the weather in Marseille is rather splendid.

James is not doing too badly - he is a senior manager at a Consulting firm in Cape Town, and he and his wife live not far from where their parents lived - still in Bellville. The area is a bit more upmarket these days. They sometimes see each other, but James of course really really gets annoyed when people say he’s not doing ‘too badly’.

Where did the parallel tracks diverge? Did Stephen win the lottery? Did he marry into some really rich family?

There was only one thing that the Williamsons didn’t really discuss with the Van Zyl’s at their regular dinners. The Williamsons started, from when Stephen was born, to put away R2 000 (in today’s money equivalent) every month for his education. Of course, Mark and Clive earned the same amount of money, so what did Clive do with his money?

Maybe it was the odd dinner at that overpriced restaurant with mediocre service. Maybe it was spent buying some of the stuff that still sits in his attic that no one knows whether or not to throw it away. Or maybe it was spent on one too many cappuccinos, wherever it went, nobody really remembers. They, just like most of us, don’t really remember where it went.

The essential difference here was commitment: The Williamsons committed to a plan, the Van Zyl’s didn’t.

So Stephen’s university was fully paid for by these savings when he started. James couldn’t get a full bursary so he took out a student loan. When they were 31, Stephen who didn’t have a loan to pay off, had R500 000 in savings. James who had finished paying off his student loan a few years earlier was doing quite well. They spoke about starting a business together at the time, but with no savings and the prospect of starting a family in a few years, James declined.

That R500 000 savings allowed Stephen to take the plunge and start his manufacturing business with an engineer friend he met at varsity.

It took a while, but 5 years after they started they were on their way. The business did quite well - we’re not talking Silicon Valley here, but it did a bit better than what you might expect if you put your money in the stock market or if you invested in property. It did as well as other businesses that had a good niche in the manufacturing sector and that were started by people who didn’t have to take on debt.

Maybe Stephen got lucky with his business doing so well? Maybe. The point is that James was not even in a position to get lucky in the first place.

Stephen doesn’t really consider himself rich, and when you ask him about his holiday home in France, he tries to change the subject. Most people assume his parents were rich and that his family has always been rich.

When he says “It started with saving R2000 a month”, that his parents started when he was born, well, nobody quite believes him.