If you blow your last dollar and leave the next generation $0, how is that generational wealth?permabull said:
Zero, hope my last check bounces.
I believe generational wealth is created by education, teaching them early on about the importance of saving and investing and not taking on unnecessary debt so compounding interest can work for you not against you.
I hope my children will be retired and financially independent before I die so they shouldn't need any more from me other that what I already gave them.
How much to leave your kids
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Last: 27 days ago by The Silverback
He just said. The real wealth is giving your children a great financial education.
Yeah, my dad was the first in his family to attend/graduate from college and put himself through undergrad and eventually grad school. There were years when he hitchhiked from his parents in Greenville TX to get to school in Austin for the semester. He paid for me and my sister's college as well as instilled a ton of financial knowledge/discipline in us, with his only repayment requirement being that we do the same with our kids with them agreeing to the same generational deal in return. So like above, that's the main thing I'm passing on. But again, to ensure that my wife and I are not a burden, they are likely going to get a healthy nest-egg by default vs purposeful intent
My family has owned the same farm for over 100 years. People that own land view things differently. My Dad would save up money and add to his holdings as the years rolled by.
I plan on doing the same.
We can live on the income generated and will pass the land to the next generation. I am simply a steward for a short while.
I plan on doing the same.
We can live on the income generated and will pass the land to the next generation. I am simply a steward for a short while.
Just not seeing anything generational about thatBrian Earl Spilner said:
He just said. The real wealth is giving your children a great financial education.
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You're overthinking it.
Generational wealth typically means lots of money so people don't have to work hard for it and can just spend.
He's talking about the wealth of knowledge and grit that helps someone work for their own money to spend.
It's not anymore complicated than that. Now whether you agree or not is a different story.
Generational wealth typically means lots of money so people don't have to work hard for it and can just spend.
He's talking about the wealth of knowledge and grit that helps someone work for their own money to spend.
It's not anymore complicated than that. Now whether you agree or not is a different story.
I think he might actually be underthinking it.
Whatever is left when me and the wife die.
There is no plan to leave the kids anything, however, I don't plan on squandering it either or giving it to charity.
Any way to create a trust that gifts the kids the money at whatever the max for each year is so it's tax free?
Theoretically could run forever on dividend income.
There is no plan to leave the kids anything, however, I don't plan on squandering it either or giving it to charity.
Any way to create a trust that gifts the kids the money at whatever the max for each year is so it's tax free?
Theoretically could run forever on dividend income.
The kids will get whatever is left when we die. I want to teach them how to navigate the road to success, not clear away all the obstacles on the road for them. I don't want them thinking they stand to receive some future windfall and build that into their life plans. I'm definitely not expecting my parents to leave anything behind.
You can get financial knowledge in a few hours on Youtube is my point.chrisfield said:
You're overthinking it.
Generational wealth typically means lots of money so people don't have to work hard for it and can just spend.
He's talking about the wealth of knowledge and grit that helps someone work for their own money to spend.
It's not anymore complicated than that. Now whether you agree or not is a different story.
Generational implies that what you are giving (money, a business, land, knowledge, etc.) impacts multiple generations. Giving your kids $0 but knowledge on how to save and use compound interest isn't generational IMO. Just my $.02 though.
Interesting thread. I have four small children and really have struggled with this. I have always wondered what the right thing here to do is, and my problem is a good problem to have. I don't know if what I am doing is right, or if it will backfire. I pray it's the former. I'm sure there will be many who disagree with me but here is what I'm doing (Feedback appreciated):
Preface with i am 35, come from divorced parents, and I do not believe I will inherit any money.. nor do I expect it.
- All of my kids have 529s. Family (grandparents, aunts, uncles) like to put in small amounts for birthdays and holiday gifts. I also contribute monthly and always match whatever gift they are given. This I think will take care of some of their higher education if they choose that route if not, we can roll it over to a Roth IRA.
- I plan on teaching them financial literacy, and encouraging them to take risks early to try and become business owners or passion pursuers rather than chained to a desk (if this is what they want), helping them start their lives, but not gifting houses etc. Maybe help with weddings, a partial down payment for a first home, their kids private education, etc.
- I am W2 employee and I own my own business. I allow my young children to work for me starting at 7 years old. I pay them a salary of around 14k per year and they don't have to pay any taxes on that. With their salary, I fully fund a Roth IRA for them. By the time they are 18, I estimate each account should be worth around 125k. If they don't add another penny to that account, or any other account they should be able to retire at 60 years old with around 8 million in these accounts due to long term compound interest.
Now, I fully expect them to do more, but this should be the bare minimum. I do not plan on telling them about these accounts until they are well grounded in their lives, careers, fully supporting themselves, and on the right path.
I have no idea if this is the right thing. I understand it could backfire, but I pray everyday I will be a good father to them, that my wife and I can teach them to be good human beings, and that the rest will take care of itself.
Preface with i am 35, come from divorced parents, and I do not believe I will inherit any money.. nor do I expect it.
- All of my kids have 529s. Family (grandparents, aunts, uncles) like to put in small amounts for birthdays and holiday gifts. I also contribute monthly and always match whatever gift they are given. This I think will take care of some of their higher education if they choose that route if not, we can roll it over to a Roth IRA.
- I plan on teaching them financial literacy, and encouraging them to take risks early to try and become business owners or passion pursuers rather than chained to a desk (if this is what they want), helping them start their lives, but not gifting houses etc. Maybe help with weddings, a partial down payment for a first home, their kids private education, etc.
- I am W2 employee and I own my own business. I allow my young children to work for me starting at 7 years old. I pay them a salary of around 14k per year and they don't have to pay any taxes on that. With their salary, I fully fund a Roth IRA for them. By the time they are 18, I estimate each account should be worth around 125k. If they don't add another penny to that account, or any other account they should be able to retire at 60 years old with around 8 million in these accounts due to long term compound interest.
Now, I fully expect them to do more, but this should be the bare minimum. I do not plan on telling them about these accounts until they are well grounded in their lives, careers, fully supporting themselves, and on the right path.
I have no idea if this is the right thing. I understand it could backfire, but I pray everyday I will be a good father to them, that my wife and I can teach them to be good human beings, and that the rest will take care of itself.
That's awesome!
For those that will have a sizeable nest egg at retirement / death, but don't plan to give it to your kids, what do you plan to do with it?
It has to go somewhere.
It has to go somewhere.
Great layout! Very impressed you have the discipline to set aside $56K of cash flow each year for the kiddos.
I feel like I've read every post and I haven't seen anybody say that is their plan.Aggie71013 said:
For those that will have a sizeable nest egg at retirement / death, but don't plan to give it to your kids, what do you plan to do with it?
It has to go somewhere.
Same. Just because I'm not specifically planning for what I'm leaving them, doesn't mean I don't plan to leave them everything (whatever that is).Quote:I feel like I've read every post and I haven't seen anybody say that is their plan.Quote:
Aggie71013 said:
For those that will have a sizeable nest egg at retirement / death, but don't plan to give it to your kids, what do you plan to do with it?
It has to go somewhere.
Maybe I worded it poorly. The general sentiment I'm reading is people don't want to spoil their kids and make them lazy by giving them a large sum of money (maybe intent is gifting too early in life). If someone ends up with $5, $10, $20 MM at death I've been assuming giving a child $5MM+ is off the table.
A similar thought that I've had and has been expressed is if the child gets inheretence at 50+ and already has a sizeable nest egg for retirement, how useful is the inheritance at that point in their life.
A similar thought that I've had and has been expressed is if the child gets inheretence at 50+ and already has a sizeable nest egg for retirement, how useful is the inheritance at that point in their life.
Appreciate it. Not there yet, as I only have two of the kids on payroll now. Two are still younger than 7, but I get to write off all that $$ paid to them so it's helpful to my business for that. And another thing is that I live off my W2 job and my side business basically exists to help pay their salaries and just reinvesting in the business to grow (hopefully to where I can eventually quit w2).
My hope is that the kids never feel tied down to a job they hate.
My hope is that the kids never feel tied down to a job they hate.
There are a lot of great responses and thoughts on here.
I have thought a lot about this. If I were able to what is the max I want to leave my child? I strongly believe that too much money can corrupt, especially if given. At the same time I want my child to have more than I did growing up.
Right now the number I have in mind is 5 million in todays dollars. I would break that up:
-full college paid
-car
-house purchase assist
-invest in his business
I know that many will think that is still too high and maybe it is.
The rest I would not tell him he is getting. In fact I tell him all the time he is not getting anything so he has the drive to succeed himself.
I plan to leave the rest to charity. I was blessed to go to A&M for free on a PES and so it is really important to me to pay it forward. I have endowed 3 scholarships to A&M and hope to do more.
I have thought a lot about this. If I were able to what is the max I want to leave my child? I strongly believe that too much money can corrupt, especially if given. At the same time I want my child to have more than I did growing up.
Right now the number I have in mind is 5 million in todays dollars. I would break that up:
-full college paid
-car
-house purchase assist
-invest in his business
I know that many will think that is still too high and maybe it is.
The rest I would not tell him he is getting. In fact I tell him all the time he is not getting anything so he has the drive to succeed himself.
I plan to leave the rest to charity. I was blessed to go to A&M for free on a PES and so it is really important to me to pay it forward. I have endowed 3 scholarships to A&M and hope to do more.
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About how much does it cost to endow a scholarship? Legit question,
you can start at 50kchris1515 said:
About how much does it cost to endow a scholarship? Legit question,
No material on this site is intended to be a substitute for professional medical advice, diagnosis or treatment. See full Medical Disclaimer.
This question, I think, depends on how old your child is, and what situation they are in.
I am leaving everything (8 figures) to my daughter. It is one of the reasons that I worked so hard in life, knowing that I could pass it on to her and her kids (at least what the government doesn't try and take). I don't worry about it "spoiling her". She's 34 and successful on her own. Now if she were a small child, and I had this kind of money (I didn't when she was young), I might think differently. As one of the Vanderbilts once said, "wealth is the enemy of ambition". It's very possible that, if she knew what she was to inherit, she wouldn't have had nearly as much determination to do well.
I am leaving everything (8 figures) to my daughter. It is one of the reasons that I worked so hard in life, knowing that I could pass it on to her and her kids (at least what the government doesn't try and take). I don't worry about it "spoiling her". She's 34 and successful on her own. Now if she were a small child, and I had this kind of money (I didn't when she was young), I might think differently. As one of the Vanderbilts once said, "wealth is the enemy of ambition". It's very possible that, if she knew what she was to inherit, she wouldn't have had nearly as much determination to do well.
$25,000 at A&M.Dr T and the Women said:you can start at 50kchris1515 said:
About how much does it cost to endow a scholarship? Legit question,
northeastag said:
This question, I think, depends on how old your child is, and what situation they are in.
I am leaving everything (8 figures) to my daughter. It is one of the reasons that I worked so hard in life, knowing that I could pass it on to her and her kids (at least what the government doesn't try and take). I don't worry about it "spoiling her". She's 34 and successful on her own. Now if she were a small child, and I had this kind of money (I didn't when she was young), I might think differently. As one of the Vanderbilts once said, "wealth is the enemy of ambition". It's very possible that, if she knew what she was to inherit, she wouldn't have had nearly as much determination to do well.
Awww, thanks Dad!!! ... and OMG!
I am really enjoying reading the responses, thanks to all of those who have written them. As for myself, I am looking at retirement dates and thinking of what I have being divvied up into three separate "buckets": what I plan to live off of/spend, what I plan to give to my son, and what I play to give to charity. This past year has been the first time I have ever really thought much about it at all. I love the idea of giving to your kids "as you go", rather than leaving it for them when you pass. That being said, my son has no idea how much money I have, and I really don't want him to know. I don't want him to think he has something coming down in his future and think he doesn't need to work hard, strive, invest in his own future, save for his future, etc. I received no help from my parents with educational costs, starting off in work, purchasing my home, etc. Not that they withheld from me, it just wasn't there. I am pretty good at letting my son be aware of that fact, often to his chagrin. That being said, I have every intention of paying for every ounce of education he endeavors and will probably help with a first home, etc., as long as I see he isn't being profligate and is moving in the right direction.
One of my roommates, during my education, is now worth hundreds of millions. He is very purposeful about continuing to work (not in a field in which he acquired his wealth), and doing so in front of his children, as much as he can so as to teach them that living off of an inheritance isn't an acceptable form of life. That is most certainly not a problem I have, but it is interesting watching him navigate the perils of raising "entitled" children.
Again, thanks for the responses and differing perspectives.
One of my roommates, during my education, is now worth hundreds of millions. He is very purposeful about continuing to work (not in a field in which he acquired his wealth), and doing so in front of his children, as much as he can so as to teach them that living off of an inheritance isn't an acceptable form of life. That is most certainly not a problem I have, but it is interesting watching him navigate the perils of raising "entitled" children.
Again, thanks for the responses and differing perspectives.
I used to worry a lot about my kids' future when I was younger. Now that we've put them all through college debt free and they're in their 30's with successful careers, that concern is almost moot. I plan to fund a comfortable retirement on the dividends/earnings of our savings and not touch the principal. It's always there, plus real estate equity, if we get into a tough spot with old age care. They will inherit whatever's left over, but hopefully by that point they're well into their 60's. Looking forward to retirement just around the corner, where we do whatever the heck we want do, whenever we want to do it, and not worry about money.
FTAC2011 said:
I fully fund a Roth IRA for them. By the time they are 18, I estimate each account should be worth around 125k. If they don't add another penny to that account, or any other account they should be able to retire at 60 years old with around 8 million in these accounts due to long term compound interest.
just for sake of accurate perspective what avg return are you estimating, I'm getting closer to 3M at 8% for 42yrs
Rule of 70 gets you there. At 10%, money should double every 7 years. There are (6) 7-year periods in the 42 year accumulation phase mentioned.
I'm calculating 10% return.
The best I can give is financial literacy, a debt-free education, a home, and money for my grandkids education.
The rest is up to them to handle. It is important that they have some autonomy and drive to make a good/better life for themselves and their kids. In that way the sweat equity they put into will make be rewarding and impactful in the big picture.
The rest is up to them to handle. It is important that they have some autonomy and drive to make a good/better life for themselves and their kids. In that way the sweat equity they put into will make be rewarding and impactful in the big picture.
Class of '91 (MEEN)
My wife wants to leave them zero. And not pay for college.
I want to pay for college. For sure.
And I'll die before my wife, so she can decide if she wants to leave anything. Not like we will have much to leave them.
I want to pay for college. For sure.
And I'll die before my wife, so she can decide if she wants to leave anything. Not like we will have much to leave them.
Are the accounts in their names, or yours?
The reason I asked is we opened accounts for our kids, but they are in our names because from what I understand if it's in their names, they can immediately draw out of it upon being 18 years old. Which my oldest child is. We don't want him to know about it.
The reason I asked is we opened accounts for our kids, but they are in our names because from what I understand if it's in their names, they can immediately draw out of it upon being 18 years old. Which my oldest child is. We don't want him to know about it.
JMac03 said:
Are the accounts in their names, or yours?
The reason I asked is we opened accounts for our kids, but they are in our names because from what I understand if it's in their names, they can immediately draw out of it upon being 18 years old. Which my oldest child is. We don't want him to know about it.
They are Roth 401ks so they have to be in their name. And that's the only way to take the most advantage of it rather than the government stealing from it.
However, not sure I have to "tell them" about it. But test they will own it after 18 no matter what
This makes no sense to me. If you have no extra money to pay for education (mine didn't), then them's the breaks and the kid works and takes out loans (as I did). And if there is nothing left when you die to pass along to your kids, so be it. But it's hard for me to imagine a more worthwhile investment than your children's educations.El Chupacabra said:
My wife wants to leave them zero. And not pay for college.
I want to pay for college. For sure.
And I'll die before my wife, so she can decide if she wants to leave anything. Not like we will have much to leave them.
That's a good way to break a family cycle of being educated and successful. Trust me, life is gonna throw them enough curveballs and knock them down on its own. I think it's good to put parameters around what is expected if you are going to pay for college like requiring them to study a real profession, not take a break, go somewhere affordable, maybe requiring them to contribute some of their own $, etc. But just making them bootstrap it stands a good chance of not teaching them the life lesson your wife may be hoping to, especially at the current cost of college.
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