The Millionaire Next Door has chapters titled “Economic outpatient care” and “Affirmative action, family style”, where continuing large financial gifts to adult children increase the risk of them failing to “launch” into fully independent (of parental financial support) adults. While not exactly the same as giving by inheritance, that is a risk that Stanley and Danko seemed to think was significant enough to write about, and one that some who are “ordinary” rich (as opposed to plutocrat rich) and their children apparently fall into.
“I have no need or desire to die rich or broke.”
Well said.
I want the best for my kids and have done my best to prepare them to lead productive independent lives, and it seems to be working out well.
And “wanting the best” for them includes hopefully being able to help them build their nest eggs.
Thanks, @ucbalumnus. But aside from trust fund kids or kids being gifted $$$ as they grow up and building their nest egg, would the kids become lazy waiting for their potential inheritance? Seems unwise. That said, prior to his death my father-in-law used to bail out my lazy {##+# brother-in-law when he would continue to live outside his means. Made me crazy but wasn’t my choice.
I should have finished my thought…
PhD Math/teacher is obviously neither bad or lazy.
Bill G once said he would leave his kids enough to to “anything”, but not “nothing”. That’s where I was going. If we had enough to do anything, he would follow the academic path without any worry about cost or future job availability. The 1% can easily do that. He has no desire to live a nomadic academic life looking for the elusive tenure track position. He might do the PhD anyway, but it will be fully funded and will be monetized in industry or government.
He is well aware of the rich/upper middle/ middle middle/ lover middle/poor divide. It was on display in the HS parking lot daily. His rich friends had the BMW or fast sporty cars (think Subaru WRX or that stupid 150 MPH Volkswagen), the upper middles were a mix of late model regular cars/SUVs, lower middles had beaters, and the poor kids took the bus. FWIW, we are middle-middle. He took my 10+ year old truck (old but not quite a beater yet) and was just happy he didn’t have to ride the bus. He also volunteered to tutor 4th graders common core math in a real inner city school freshman year of college. That was quiet an eye opener for a sheltered suburban kid. He realized our town’s poor kids were not quite as poor as the inner city kids!
The HS parking lot oddly relates to the original topic of the thread in a Dante’s Circles of Hell kind of way of who is rich.
Perhaps not lazy, but some of the stories about family discord over wills and inheritances suggest that some people’s personal finances are such that they are counting on inheritances to bail them out.
In some of the stories around these forums, the parents actively used money to manipulate their adult kids, which is presumably only possible when the adult kids’ personal finances were not strong enough to be able to say “don’t care about your money and the strings attached”, and then leaving a will and family discord when they died. But then those parents may not have had the goal of “launching” their kids to full independence, as opposed to wanting to control them even through adulthood.
We’ve already paid it forward by providing our son with a fine education and teaching him how to build wealth—because we “want the best for him.” His future kids will be his responsibility to raise and provide for, not ours, but we’ve contributed by raising a strong, loving, intelligent father for them who already has an impressive start on his nest egg. We’re pretty sure he’s going to end up wealthier than we are because he’s starting early and has internalized principles and practices that will help him toward early financial independence. Our work here is done.
It is actually possible to raise hard working, responsible kids while still providing for grandchildren and making financial security generational (the assumption that money automatically turns kids into losers is not true in many cases). Also, I guess it depends on what you have to give. I’m not advocating eating hot dogs to leave more for the kids - my comments were about the .1% and above who can live well, donate, etc., and plan for future generations.
A child of poor immigrants. Took some business risks, worked 70 hours per week for many years, made enough money and decided to partly retire before 46 to spend more time with family. Could have made more money but I figured there was no point in damaging my body to make more money. But even after partly retiring, I made enough money to pay for living expenses while assets continued to increase. My tastes are not expensive so I buy and drive a car below 25k. But I am not cheap; it’s just that daily things I do are not expensive. But I do take somewhat slightly expensive vacations and business class seats when I want to.
The thing I like the most about having money is I don’t have to kiss anyone’s butt and I don’t have to work if I don’t want to, and I do take pride in the fact that I earned my money through my own efforts and taking risks. I am not envious of Bill Gates or Mark Zuckerburg or anyone who made way more money. In the grand scheme of things, we all die as our bodies deteriorate, and IMO the level of comfort is not that different: the super rich drink the same tasting coffee, wines, and living in the 10 million dollars house and 1 million dollar house is not that different. I also tell my kid not to do things for money but do something that will help people, i.e., that they have opportunities to do more than I did.
But relative to many of my neighbors, I am not a lot richer, but I am rich enough for my needs and desires.
Oh, forgot to mention another thing really great about having money: I bought a nice house and a luxury suv car for my parents who enjoyed these things before they passed away 12 years later. Felt good to repay them in some measure for what they did for me. It felt good to cut $400k check without blinking an eye to buy my parents the house they really wanted. Nothing I ever bought made me happier.
I don’t understand why people wouldn’t want to leave much of anything for their children to inherit. The wealth passed down from the previous generation(s) can be life altering. We can provide our kids with a great education and give them a good work ethic, but so many things are out of their control. Corporations downsize, the economy fluctuates, marriages end, people become sick or disabled, children are born with special needs, people die leaving minor dependents. We can’t prevent those things, but we can leave some wealth behind to create a cushion in case they do.
Absolutely no one has complained about the work ethic my lads have. We’ve received tons of compliments.
What I don’t want for them is to join the rat race just to get money. Both H and I want them doing things (jobs) they enjoy that also hopefully make the world a better place. As my middle lad told us, “It’s not work when you enjoy what you’re doing.” Finding the niche that fits is important.
It’s worked for us. We expect to be passing down any wealth left when we’re gone (our wills are written), though I told my mom if she dies with a penny in the bank she’ll have had figured things out perfectly as far as finances are concerned. She saved for her retirement - enjoy it!
Not many people are able to pull that off, timing wise. But I’ve said the same to my Dad. I want him to enjoy his money. He was VERY frugal for most of his life. Now he is a widower with a lady friend who is healthy (my stepmom was housebound for years), so he is traveling quite a bit and I’m happy about it.
Both H and I have tried. We can’t get FIL to spend his money and he has a fair bit. He’ll still choose one fast food place over another because the coffee is 10 cents cheaper and won’t buy various healthy foods he likes (like grapes) because they are too expensive - even when they really aren’t for today’s prices. He was a young lad during the Depression and it left a huge impression in his mind.
Yesterday, I had a suprise $500 plumbing bill. No one likes that kind of thing. I imagine even the 1% are upset by shellingout $500. However, as I was writing the check, I thought about this thread and it occured to me that I could handle the bill without having to scrimp on anything important. That actually made me feel a bit rich.
In our case it’s not complaining, more explaining. People often make an assumption that the parents are taking fancy vacations, driving fancy cars, or just not trying hard enough. For my husband and I, big college debt was the reason why we we were behind on things - late in buying that first home, having kids very late, etc. Income only tells a small part of the story. If you don’t have the details, it can look like there should be no reason why a family earning between$200-250K per year can’t set aside large amounts of money per child.
Income only tells a small piece of the story, as it’s a single point in time, especially for college funding purposes.
I know for me, personally, in 2008, I was making about half of what I am making now. I made even less between 2001 and 2005 when I was out on maternity leaves. I’m the main bread winner in our house. So yes, my income TODAY looks awesome, it’s only been at this level the last 5 years or so after I got a significant promotion at work. Definitely not anywhere near long enough to have built the massive amount of money that the EFC says I should.
@elodyCOH There is a world of difference between complaining about a bill and resenting those who are given help based on low income. I think everyone has the right to moan about the high cost of college. It is damned expensive. Even in a high income household, payinng full price at a private university for a few kids can be truly daunting. I complain about the high cost all the time.
My only issue is when high income people begrudge the help given to those who have far less.
Your family and mine are a lot a like, except we squeezed one more bedroom into the 2000 sq ft. Our cars are 2007 and 2008 models. We live in one of the outer suburbs of one of the largest metropolitan areas of one of the states at the top of the list. We also have a high achieving son who had a 34 ACT, will have 13 AP, 2 PLTW, and 2 dual enrollment credits under his belt before he graduates, and we are chasing merit for him out of necessity. He’s absolutely fine with it - the kid is amazing. He’s just happy he can go to college. Many in his school will end up at the CC and then nothing. I don’t begrudge the kids who can get the full scholarships to HYPS (and there are a few of them from his school who will get them).
LOL - live parallel lives down to the 34 ACT and the college credits @elodyCOH
May we all win the merit game next spring!
I don’t think the HS parking lot relates to anything…S drove my Volvo XC90 to HS because he attended a magnet school 20+ miles away and the drive involved the DC beltway. Meanwhile I was driving the pre-owned Civic we bought when D was in HS because I had a short commute and it was easier for me to park. A neighbor bought his child a Mercedes when she started driving because he felt it was a safe car. He didn’t ask me to pay for it so not my business.
This is the kind of judging that was referred to upthread.
If a high school kid has a Mercedes, the family is most definitely rich and their conspicuous consumption is available for all to see.