GENERATIONAL WEALTH: Do you worry about your kids?

Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes

Over the last decade or so, my wife and I have put together a nice little rental portfolio, we've really grown as landlords and property managers, and we have a nice little life that's just getting nicer. Net rental income has almost completely replaced what we used to make in our jobs. We can see the finish line, when we call it quits, sell and put out money into more stable assets, retire to a nice sunny place far from Pittsburgh, and enjoy our lives.

Our one regret is that we didn't have children. It just wasn't in the cards for us. In the beginning, we didn't really know what we were missing, but later, as the assets started to grow in place, we both realized that if we did have children, and we left them what we had, we would more or less be inviting destruction and misery on their heads in most cases. Raising kids when rich is a hard, thankless job, and most rich parents fail miserably at it. I can only imagine in stark terror the mistakes I would have made as a young man if I had had the money to make them.

For those of you who have met with some success and have children, what's the end plan? I know there are some guys here who stay up nights figuring out how to pass generational wealth to their children successfully, looking at you, @Steve Vaughan.

What are the rest of you doing?

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Steve Vaughan

Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes

Ha @Jim K.. Nobody is supposed to know I stay up nights thinking about generational wealth.😎

Interesting enough, my wife and I just did some basic estate planning for the first time recently.

So our 2 young adults (now) grew up around landlording and have been members of our main commercial apts LLC since they were babes. 2%. We used to joke that 50-cent's got nothing on their 2%. They'd rap while they picked up the parking lots. Some things you just do as owners.

Yard work, cleaning, painting, mowing, etc though were paid. They always knew where a dollar came from and they grew with us.

I never use the term 'rich' and honestly don't feel we are. We have had freedom from day jobs for a long time, but mostly because we have so few payments. They don't have payments either and when their car or motorbike needs something, their first action is to get out their own tools and pull up a YT video.

So I think the answer to prevent large sums from wrecking kids is that they are grounded. They have worked for money and appreciate it. They understand money comes in 3 forms- labor, business equity/LLC membership and investment earnings.

One fuels the other, which fuels the other- but the source and foundation is work.

We also enjoy playing 401 Uncle. We seed Roths for our motivated nieces and nephews and plan to establish college and 1st home purchase funds for our future grandkids and grand nieces and nephews. Won't be such a 'burden' on our kids.

Another great source would be @Arlen Chou. I know of him especially on other platforms and his young adult kids are actively buying RE and DiYing like you and I do so much. If anyone can mention him, he would be an awesome resource.

I'll also mention @Jerry W. @Bjorn Ahlblad @Scott Price. and @Bill F.. @JD Martin as excellent candidates for great kids and wealth advice👍

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Jim K.
OP
Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
2y
Quote from @John Underwood:

@Jim K.
We have a trust that owns a Master LLC that owns many other LLC'S that own properties.
Our kids will automatically own the Real Estate Empire if something happens to me and my wife without going through probate. Hopefully that don't realize the value of this and knock us off early!

Read The Millionaire Next Door for some amazing horror stories...
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JD MartinBusiness Member
Moderator
Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
2y
Quote from @Steve Vaughan:

Ha @Jim K.. Nobody is supposed to know I stay up nights thinking about generational wealth.😎

Interesting enough, my wife and I just did some basic estate planning for the first time recently.

So our 2 young adults (now) grew up around landlording and have been members of our main commercial apts LLC since they were babes. 2%. We used to joke that 50-cent's got nothing on their 2%. They'd rap while they picked up the parking lots. Some things you just do as owners.

Yard work, cleaning, painting, mowing, etc though were paid. They always knew where a dollar came from and they grew with us.

I never use the term 'rich' and honestly don't feel we are. We have had freedom from day jobs for a long time, but mostly because we have so few payments. They don't have payments either and when their car or motorbike needs something, their first action is to get out their own tools and pull up a YT video.

So I think the answer to prevent large sums from wrecking kids is that they are grounded. They have worked for money and appreciate it. They understand money comes in 3 forms- labor, business equity/LLC membership and investment earnings.

One fuels the other, which fuels the other- but the source and foundation is work.

We also enjoy playing 401 Uncle. We seed Roths for our motivated nieces and nephews and plan to establish college and 1st home purchase funds for our future grandkids and grand nieces and nephews. Won't be such a 'burden' on our kids.

Another great source would be @Arlen Chou. I know of him especially on other platforms and his young adult kids are actively buying RE and DiYing like you and I do so much. If anyone can mention him, he would be an awesome resource.

I'll also mention @Jerry W. @Bjorn Ahlblad @Scott Price. and @Bill F.. @JD Martin as excellent candidates for great kids and wealth advice👍

Such esteemed company!

I like to think the best lesson we've taught the kids, and grandkids, is that hard work and a plan will get you further than any amount of money that lands in your lap. The other part of it is that no one should expect something for nothing. Case in point: daughter needed to replace her car, which she's had for 8 years. She had some money saved but nowhere near enough to buy a new car. I can afford to buy a new car and just give it to her but I'm not going to do that. Instead, I gave her a no-interest loan; she wanted to get a new car and never had one before, so I bought the car outright (a sensible Kia Forte) and essentially gave her a no-interest loan. She pays me $200 a month until it's paid off. I know she will pay it back because I've loaned her money plenty of times before which was always paid back. She can feel independent because she is independent - I didn't give her anything, she bought it herself.

Same thing goes for the grandkids. Bought them each a car ($4k limit) when they graduated high school (getting ready to buy the last one), they have to pay for maintenance and insurance. If they wreck the car, well they'll have to figure it out.

On principal, I am against "generational wealth". If I had my way in society, everyone would start out with the same amount of money when they hit 18 - maybe 100k, I don't know - and you make whatever you make of yourself until you're dead. Then all the money goes back into a pot and we do it again. But this of course is Utopia, which is never going to exist, so you end up taking care of your own and the issues and charities that are important to you. I expect to leave all of my money to the kids and charity when I step off into the cosmic unknown :)
Also: the question was do you worry about your kids? I don't, because if they manage to piss away the empire after I'm dead then they deserve to be poor!
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Becca F.
Rental Property Investor · San Francisco Bay Area · Member since 2022 · 1k+ posts · 1k+ votes
2y
Great thread! I have set up a trust and am leaving my kids everything. I'm worried about home affordability for them in the future since prices are very high right now - if they choose not to rent out the properties they could live in them (probably not the apartment building) however they want to divided the estate out, although the Indiana SFH is not an equitable property compared to the California ones in terms of property value. They've heard me talk about real estate investing, house hacking, walked a property with a contractor with me and I would hope they would continue with the RE path. I would hope that they don't sell the CA properties to take the cash with the step up basis - I think they've witnessed enough family members who aren't RE investors vs those are are and which ones are doing financially well.
I've also talked about the power of compound interest and other investing strategies. I was not taught anything about investing or tax strategy as a child/teen, only to save money and don't buy unnecessary things (which is an extremely slow way to build wealth). A few of my friends said to not sabotage my own retirement to set up my kids for success later on. It's trying to find that balancing act.
2 Reply
Austin F.
Investor · MI · Member since 2015 · 227 posts · 478 votes
2y
I'm currently 34, but have thought about this topic a lot from the viewpoint of someone who had a privileged upbringing, and how that affected who I have become.
I wouldn't say I grew up rich, in fact we were a decidedly middle class family in a very affluent part of the midwest. I had friends who always had nice cars, or credit cards their parents paid off, but I remember I had the oldest car at school, and boy I let my parents know it.
They bought me my second car, which I still drive to this day, and have helped me many times in the past, but I don't think I asked for anything too outlandish, though compared to some folks whose comments I have read here I was very fortunate.

I think the biggest thing they gave me was the knowledge that someone was in my corner. I could make a mistake and they would help me, this allowed me to find my way into rentals. They loaned me the money for my first down payment, and then the second. I showed them my capabilities, and they have expressed that even as I have found success they would lend to me again should I need it for a deal. This is invaluable, and not without strings, it allows me to pursue deals that would otherwise be out of reach.

As they have retired we have discussed their plans, and I have told them that I would rather have $10,000 now than 100,000 in 30 years. I have also told them my number one desire is that they go and enjoy what they spent their life earning. I love seeing them taking cruises, or buying a fishing boat, focusing on themselves when I know they have sacrificed in the past to help me.
3 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
2y
Quote from @Becca F.:

Great thread! I have set up a trust and am leaving my kids everything. I'm worried about home affordability for them in the future since prices are very high right now - if they choose not to rent out the properties they could live in them (probably not the apartment building) however they want to divided the estate out, although the Indiana SFH is not an equitable property compared to the California ones in terms of property value. They've heard me talk about real estate investing, house hacking, walked a property with a contractor with me and I would hope they would continue with the RE path. I would hope that they don't sell the CA properties to take the cash with the step up basis - I think they've witnessed enough family members who aren't RE investors vs those are are and which ones are doing financially well.
I've also talked about the power of compound interest and other investing strategies. I was not taught anything about investing or tax strategy as a child/teen, only to save money and don't buy unnecessary things (which is an extremely slow way to build wealth). A few of my friends said to not sabotage my own retirement to set up my kids for success later on. It's trying to find that balancing act.

This is why I also think best investment location is where they are going to settle , and also where I am going to retire , both can be executed when we are 30 and it is not that difficult ….
It is no longer about cash flow and/or appreciation…
If kid wanna settle in Arizona then buy in Arizona etc etc , the target of investment should follow our own future trajectory rather than financial needs alone.
1 Reply
Jill F.
Investor · Akron, OH · Member since 2016 · 2k+ posts · 4k+ votes
2y
Our son (32) is a partner in our business. Right now he spends his weekends helping us renovate (our family has always bonded by working together). He is also our succession plan. It is my hope that the income from this business will prevent him from having to support us in our old age if we live to the point where we need care and I'm pretty sure that's his hope as well ;) . This business may also need to help support my 94 yr old mil should she live long enough to run out of money. Our son has a good software career that he enjoys but I hope this business will provide him the option of retiring early should he want to. I am hoping my husband and I can semi-re-retire and spend next winter sailing.
2 Reply
John MorganPro Member
Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
2y
My two college age kids will inherit generational wealth from all the RE I’ve acquired since I started investing 9 years ago. We pay everything for them so they won’t have any college debt when they graduate. They don’t work and just focus on school and enjoying being 19 and 20 years old. My parents paid for all my expenses and college for me and it helped immensely to not ever have any debt. Same with my wife’s dad, he paid for all her college and monthly expenses while she just focused on college. So we were both fortunate to have never really had to struggle financially. We survived and appreciate everything we have earned or accomplished. We will return the favor for our kids and hope they find good careers. And eventually inherit all our real estate and large stock market portfolio.
2 Reply
Eric James
Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes
2y
Quote from @Dan Marriggi:
I'll be spending every cent I have on me and my SO - Happy to help out the kids while I'm alive, but they need to learn to be self sufficient, independent and productive members of the planet.

There is being self sufficient, as in earn what one needs. But then there are "thousand year floods". Extreme calamities that may require significant resources to survive. Many people who are "self sufficient" don't survive those events.
1 Reply
Eric James
Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes
2y
Quote from @JD Martin:

Quote from @Steve Vaughan:

Ha @Jim K.. Nobody is supposed to know I stay up nights thinking about generational wealth.😎

Interesting enough, my wife and I just did some basic estate planning for the first time recently.

So our 2 young adults (now) grew up around landlording and have been members of our main commercial apts LLC since they were babes. 2%. We used to joke that 50-cent's got nothing on their 2%. They'd rap while they picked up the parking lots. Some things you just do as owners.

Yard work, cleaning, painting, mowing, etc though were paid. They always knew where a dollar came from and they grew with us.

I never use the term 'rich' and honestly don't feel we are. We have had freedom from day jobs for a long time, but mostly because we have so few payments. They don't have payments either and when their car or motorbike needs something, their first action is to get out their own tools and pull up a YT video.

So I think the answer to prevent large sums from wrecking kids is that they are grounded. They have worked for money and appreciate it. They understand money comes in 3 forms- labor, business equity/LLC membership and investment earnings.

One fuels the other, which fuels the other- but the source and foundation is work.

We also enjoy playing 401 Uncle. We seed Roths for our motivated nieces and nephews and plan to establish college and 1st home purchase funds for our future grandkids and grand nieces and nephews. Won't be such a 'burden' on our kids.

Another great source would be @Arlen Chou. I know of him especially on other platforms and his young adult kids are actively buying RE and DiYing like you and I do so much. If anyone can mention him, he would be an awesome resource.

I'll also mention @Jerry W. @Bjorn Ahlblad @Scott Price. and @Bill F.. @JD Martin as excellent candidates for great kids and wealth advice👍

Such esteemed company!

I like to think the best lesson we've taught the kids, and grandkids, is that hard work and a plan will get you further than any amount of money that lands in your lap. The other part of it is that no one should expect something for nothing. Case in point: daughter needed to replace her car, which she's had for 8 years. She had some money saved but nowhere near enough to buy a new car. I can afford to buy a new car and just give it to her but I'm not going to do that. Instead, I gave her a no-interest loan; she wanted to get a new car and never had one before, so I bought the car outright (a sensible Kia Forte) and essentially gave her a no-interest loan. She pays me $200 a month until it's paid off. I know she will pay it back because I've loaned her money plenty of times before which was always paid back. She can feel independent because she is independent - I didn't give her anything, she bought it herself.

Same thing goes for the grandkids. Bought them each a car ($4k limit) when they graduated high school (getting ready to buy the last one), they have to pay for maintenance and insurance. If they wreck the car, well they'll have to figure it out.

On principal, I am against "generational wealth". If I had my way in society, everyone would start out with the same amount of money when they hit 18 - maybe 100k, I don't know - and you make whatever you make of yourself until you're dead. Then all the money goes back into a pot and we do it again. But this of course is Utopia, which is never going to exist, so you end up taking care of your own and the issues and charities that are important to you. I expect to leave all of my money to the kids and charity when I step off into the cosmic unknown :)
Also: the question was do you worry about your kids? I don't, because if they manage to piss away the empire after I'm dead then they deserve to be poor!

If everyone should start at zero and not inherit anything that would mean starting out living out in a cave and having to invent fire for themselves, lol. The advancement of humanity has included passing many things on to our children to helo them survive and make their lives better.
1 Reply
James Sebastian
Member since 2021 · 56 posts · 27 votes
2y
Quote from @Peter W.:

Quote from @Steve Vaughan:

Quote from @Peter W.:

I don’t really worry about it. If no disasters happens I will end up with a large chunk of money to pass on, but the reality is they won’t see it until they are in their 40s or 50s at which point they will have already learned most of their lessons about money and work ethic.

Most people do this. 'Kids' inherit in their 60s.

A book that resonated with me regarding wealth transfer was Die With Zero. It does our kids the most good, placed strategically, especially if it helps reduce or eliminate debt, up until about age 34.

Bill Perkins, the author, mentioned giving his 80 yo grandma $10k. Go enjoy yourself he said. All she wanted or needed was a sweater. Extreme example of gifting to those that don't need it.

I still remember $1000 given us when my wife's grandma died 22 years ago. It lasted us for months and was so helpful. We were a young family of 3 kinda just starting over.

My parents gifted me something for the 1st time when I was 34. $5k to help with our home purchase. It wasn't easy for them and meant so much to us. We still have the house and paid it off a few years ago. A seed that grew and honestly meant more than $200k would today.

The point is- if we have the means and the kids are humble and worthy, gifting a bit at their big younger milestones will have a 20x-40x+ the impact vs a pile in their 60s.

My grandma left me 50k when I was in middle school, ended up being part of college, my wedding and honeymoon, downpayment on primary, down payment on my first and second rental properties, and I still have 50k left over.
I’ll probably help them with down payments for their first houses, college, I will probably even find their retirement accounts in their early 20s. I’ll have enough to retire when I am 50 but will likely work to 65 to give them more. But even then they will probably end up with the bulk of it when I pass.

This is GOLD! I've ruminiated on this topic a bit, we are 50 now and in good financial shape and stand to inherit in 10-20 years when we absolutely will have no need for more money. But with 4 kids in their teens/twenties now, seems like that money would be far better used if one of them has entrepenurial ideas (and energy and time). Could be a low-cost loan or seed money equity stake rather than a gift to be more "fair". Otherwise I guess for me generational wealth just looks like passing it down too late to be useful until it either dilutes a bunch or ends up in the hands of a spendthrift who blows it all. Anyone have experience with this dilemma?
4 Reply
Edgar U.
Real Estate Agent · VA · Member since 2008 · 420 posts · 175 votes
2y
I've started from nothing, my family comes from a "small town" in the remote part of my country. We struggled during my teen years, and this affected me into my adult life meaning that I had to fend for myself. Which in turn created a fire that I haven't been able to let go. I worked my way to sales/own business and haven't looked back. I would say that having kids has only ignited the fire even more, however, one thing is important amongst all else mentioned here (i.e) living kids this, or create a trust fund for kids. I have personally seen and lost count on how many times I have been reached out by that kid who inherited a property cashing out just as quickly as the inheritance came.

The BEST THING one could do for there kids aside of leaving them well prepared for there future is JUST BEING there for them. Don't worry about leaving your rental portfolio, trust fund, 'X' amount in the bank, 401ks... Kids and event ADULT kids want you to be there for them. Listen to them, play with them, hug them, make them laugh, and amongst all else tell them that you LOVE THEM!

At the end nothing else that you leave your kids will matter if you don't enjoy those precious moments.
3 Reply
Marcus Auerbach
Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
2y
Quote from @James Sebastian:

Quote from @Peter W.:

Quote from @Steve Vaughan:

Quote from @Peter W.:

I don’t really worry about it. If no disasters happens I will end up with a large chunk of money to pass on, but the reality is they won’t see it until they are in their 40s or 50s at which point they will have already learned most of their lessons about money and work ethic.

Most people do this. 'Kids' inherit in their 60s.

A book that resonated with me regarding wealth transfer was Die With Zero. It does our kids the most good, placed strategically, especially if it helps reduce or eliminate debt, up until about age 34.

Bill Perkins, the author, mentioned giving his 80 yo grandma $10k. Go enjoy yourself he said. All she wanted or needed was a sweater. Extreme example of gifting to those that don't need it.

I still remember $1000 given us when my wife's grandma died 22 years ago. It lasted us for months and was so helpful. We were a young family of 3 kinda just starting over.

My parents gifted me something for the 1st time when I was 34. $5k to help with our home purchase. It wasn't easy for them and meant so much to us. We still have the house and paid it off a few years ago. A seed that grew and honestly meant more than $200k would today.

The point is- if we have the means and the kids are humble and worthy, gifting a bit at their big younger milestones will have a 20x-40x+ the impact vs a pile in their 60s.

My grandma left me 50k when I was in middle school, ended up being part of college, my wedding and honeymoon, downpayment on primary, down payment on my first and second rental properties, and I still have 50k left over.
I’ll probably help them with down payments for their first houses, college, I will probably even find their retirement accounts in their early 20s. I’ll have enough to retire when I am 50 but will likely work to 65 to give them more. But even then they will probably end up with the bulk of it when I pass.

This is GOLD! I've ruminiated on this topic a bit, we are 50 now and in good financial shape and stand to inherit in 10-20 years when we absolutely will have no need for more money. But with 4 kids in their teens/twenties now, seems like that money would be far better used if one of them has entrepenurial ideas (and energy and time). Could be a low-cost loan or seed money equity stake rather than a gift to be more "fair". Otherwise I guess for me generational wealth just looks like passing it down too late to be useful until it either dilutes a bunch or ends up in the hands of a spendthrift who blows it all. Anyone have experience with this dilemma?

People can thrive when their daily necessities are met. This is why it takes any culture a while to reach a level of prosperity where some individuals can dedicate themselves to music, art, philosophy or science. You can't do that when you are in a fight for food and survival.
Paying for college, rent, maybe a cheap car and gas can help them focus on other things and develop their potential. Give them too much and they stop being hungry.
Even seed money can be too much, because it can prop up a stupid idea that would not live otherwise. As we know here on BP - if the deal is good enough, money will find you.
1 Reply
Mark Cruse
Investor · Fort Washington, MD · Member since 2014 · 1k+ posts · 1k+ votes
2y
For me, itś something I think about daily. Traditionally in the Black Community, in the past we were prevented from building wealth through multiple angles. My parent´s generation is where some started laying the tracks to pass stuff down. For most, nothing was passed down but some parents were in the position to provide stable households, first generation real estate and send the kids go college. Now, that the baton was passed to me I was allowed to build on it. Iḿ focused on passing down a functioning business that I assume will be sold for the wealth. Also, there will be many other assets passed down (i.e primary home, insurance, stocks). It means so much to me. Just as that white man places his kids on the track for success with several hurdles cleared, so am I. I provide the free and clear education, upper-middle environment and great upbringing. What they do with it is on them. Not sure what is meant by inviting destrution or whatever but one thing I dont care for is their entitled nature. I feel this entire generation of young people are entitled, lazy and complaint consumed. I try to steer my kids away from that but I still see the entitled nature which some times leads to the other sht. Hopefully it will not present major problems but it is what it is. Generational wealth is my number one goal currently. Great topic!
6 Reply
Marcus Auerbach
Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
2y
Quote from @Jay Hinrichs:

I hope you went fly fishing when you drove your cycle down through flying fishing nirvana :)

this is a great point you make about health insurance.. I see all these younger investors when you ask how much do you need and your done.. and many will answer 7 to 10k a month.. but as you age out health insurance ( if you want the best like we do) is going to take a huge bite out of that.
our medicare and supplemental is right at 2k a month for both of us total so If we though we could live on 10k well thats really 8K.. I had a home in BC CA for years and spent a lot of time there and have a lot of Canadian friends and they like to talk about how cheap they get insurance.. but god forbid you really get sick..

Yeah, I know!! Some of the rivers we have crossed looked absolutely amazing! Flyfishing on the next trip there in December I hope, did not have the gear or time: we did 3000 miles mostly offroad on motorbikes with a group, guys from all over the world. We had a crazy South African tour guide and a mechanic with a support vehicle follow us. It was a proper adventure, some days really pushed us to our physical limits. Like had to ask the waiter to cut my steak, did not have the grip strength left in my hand to hold a knife LOL - rideexpeditions.com if anyone is interested

About getting old and needing help.

I have seen my grandpa go through that part of life, he ended up having 24/7 help living with him at home. She was gone one day and I had to help my grandpa go to the bathroom and then wipe... neither of us two enjoyed that experience very much. I hope I'll have a service robot like figure1 to help me when the time comes to spare me the humiliation. And household help if I need it. Those are the things that drive me. Because you are right 10k a month does not go very far if you need to pay others to take care of things for you..

2 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
2y
Quote from @Marcus Auerbach:

Quote from @Jay Hinrichs:

I hope you went fly fishing when you drove your cycle down through flying fishing nirvana :)

this is a great point you make about health insurance.. I see all these younger investors when you ask how much do you need and your done.. and many will answer 7 to 10k a month.. but as you age out health insurance ( if you want the best like we do) is going to take a huge bite out of that.
our medicare and supplemental is right at 2k a month for both of us total so If we though we could live on 10k well thats really 8K.. I had a home in BC CA for years and spent a lot of time there and have a lot of Canadian friends and they like to talk about how cheap they get insurance.. but god forbid you really get sick..

Yeah, I know!! Some of the rivers we have crossed looked absolutely amazing! Flyfishing on the next trip there in December I hope, did not have the gear or time: we did 3000 miles mostly offroad on motorbikes with a group, guys from all over the world. We had a crazy South African tour guide and a mechanic with a support vehicle follow us. It was a proper adventure, some days really pushed us to our physical limits. Like had to ask the waiter to cut my steak, did not have the grip strength left in my hand to hold a knife LOL - rideexpeditions.com if anyone is interested

About getting old and needing help.

I have seen my grandpa go through that part of life, he ended up having 24/7 help living with him at home. She was gone one day and I had to help my grandpa go to the bathroom and then wipe... neither of us two enjoyed that experience very much. I hope I'll have a service robot like figure1 to help me when the time comes to spare me the humiliation. And household help if I need it. Those are the things that drive me. Because you are right 10k a month does not go very far if you need to pay others to take care of things for you..

not to get totally off track here but there is a Motorcycle ride from Oregon to I think MO or Kansas that is all off road.. at least the wild parts of the US west might be the JV compared to what you did.. that looks like a great trip. WOW.
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Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
2y
Quote from @Mark Cruse:

For me, itś something I think about daily. Traditionally in the Black Community, in the past we were prevented from building wealth through multiple angles. My parent´s generation is where some started laying the tracks to pass stuff down. For most, nothing was passed down but some parents were in the position to provide stable households, first generation real estate and send the kids go college. Now, that the baton was passed to me I was allowed to build on it. Iḿ focused on passing down a functioning business that I assume will be sold for the wealth. Also, there will be many other assets passed down (i.e primary home, insurance, stocks). It means so much to me. Just as that white man places his kids on the track for success with several hurdles cleared, so am I. I provide the free and clear education, upper-middle environment and great upbringing. What they do with it is on them. Not sure what is meant by inviting destrution or whatever but one thing I dont care for is their entitled nature. I feel this entire generation of young people are entitled, lazy and complaint consumed. I try to steer my kids away from that but I still see the entitled nature which some times leads to the other sht. Hopefully it will not present major problems but it is what it is. Generational wealth is my number one goal currently. Great topic!

I have started to see that "Generational Wealth" is the source of instability for a lot of immigrant families as well, it's very different even when a legal immigrant has no "generational wealth" compared to a family that's illegal but has vast generational wealth (doesn't matter where the wealth is located because wealth is very transferable these days).
Also what you mentioned above is true and it's why sometimes upward mobility class can't happen.
... I can see that family that don't have 'generational wealth' tend to have more instability/insecurity of their future. This issue like you said is even more important for people who are not in the majority because the current generation then need to work harder (or like they said, a sandwich generation).
2 Reply
Account Closed
Investor · FL · Member since 2024 · 7 posts · 2 votes
2y
Hi @John Underwood, interesting response. I recently established an ownership structure similar to you with the help of a lawyer. One mistake we made was not bringing in a CPA upfront with the structure. I am curious to understand how you go about preparing and filing your taxes for the structure that you have? Do you have all your properties in the same state?

Are there lessons that you have learned from your current structure that you could share at this point? Thanks

0 Reply
V.G JasonPro Member
Investor · Member since 2022 · 3k+ posts · 3k+ votes
2y
Quote from @Mark Cruse:

For me, itś something I think about daily. Traditionally in the Black Community, in the past we were prevented from building wealth through multiple angles. My parent´s generation is where some started laying the tracks to pass stuff down. For most, nothing was passed down but some parents were in the position to provide stable households, first generation real estate and send the kids go college. Now, that the baton was passed to me I was allowed to build on it. Iḿ focused on passing down a functioning business that I assume will be sold for the wealth. Also, there will be many other assets passed down (i.e primary home, insurance, stocks). It means so much to me. Just as that white man places his kids on the track for success with several hurdles cleared, so am I. I provide the free and clear education, upper-middle environment and great upbringing. What they do with it is on them. Not sure what is meant by inviting destrution or whatever but one thing I dont care for is their entitled nature. I feel this entire generation of young people are entitled, lazy and complaint consumed. I try to steer my kids away from that but I still see the entitled nature which some times leads to the other sht. Hopefully it will not present major problems but it is what it is. Generational wealth is my number one goal currently. Great topic!

Just don't encourage the behavior. Trust me, I get **** from all angles by standing firm. Wife, parents in laws, etc., but the lessons of delayed gratification is too paramount. I can withstand their nonsense, I know I'm setting mine up with a fundamental belief in things are earned, patience, and everything in between.
3 Reply
Eric James
Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes
2y
Quote from @James Sebastian:

Quote from @Peter W.:

Quote from @Steve Vaughan:

Quote from @Peter W.:

I don’t really worry about it. If no disasters happens I will end up with a large chunk of money to pass on, but the reality is they won’t see it until they are in their 40s or 50s at which point they will have already learned most of their lessons about money and work ethic.

Most people do this. 'Kids' inherit in their 60s.

A book that resonated with me regarding wealth transfer was Die With Zero. It does our kids the most good, placed strategically, especially if it helps reduce or eliminate debt, up until about age 34.

Bill Perkins, the author, mentioned giving his 80 yo grandma $10k. Go enjoy yourself he said. All she wanted or needed was a sweater. Extreme example of gifting to those that don't need it.

I still remember $1000 given us when my wife's grandma died 22 years ago. It lasted us for months and was so helpful. We were a young family of 3 kinda just starting over.

My parents gifted me something for the 1st time when I was 34. $5k to help with our home purchase. It wasn't easy for them and meant so much to us. We still have the house and paid it off a few years ago. A seed that grew and honestly meant more than $200k would today.

The point is- if we have the means and the kids are humble and worthy, gifting a bit at their big younger milestones will have a 20x-40x+ the impact vs a pile in their 60s.

My grandma left me 50k when I was in middle school, ended up being part of college, my wedding and honeymoon, downpayment on primary, down payment on my first and second rental properties, and I still have 50k left over.
I’ll probably help them with down payments for their first houses, college, I will probably even find their retirement accounts in their early 20s. I’ll have enough to retire when I am 50 but will likely work to 65 to give them more. But even then they will probably end up with the bulk of it when I pass.

This is GOLD! I've ruminiated on this topic a bit, we are 50 now and in good financial shape and stand to inherit in 10-20 years when we absolutely will have no need for more money. But with 4 kids in their teens/twenties now, seems like that money would be far better used if one of them has entrepenurial ideas (and energy and time). Could be a low-cost loan or seed money equity stake rather than a gift to be more "fair". Otherwise I guess for me generational wealth just looks like passing it down too late to be useful until it either dilutes a bunch or ends up in the hands of a spendthrift who blows it all. Anyone have experience with this dilemma?

I see a lot of problems coming from our culture in which children live their lives completely disconnected from their parents/grandparents economic and professional lives. People get "jobs" that make them wage slaves, instead of growing family businesses.
2 Reply
Mark Cruse
Investor · Fort Washington, MD · Member since 2014 · 1k+ posts · 1k+ votes
2y
Quote from @V.G Jason:

Quote from @Mark Cruse:

For me, itś something I think about daily. Traditionally in the Black Community, in the past we were prevented from building wealth through multiple angles. My parent´s generation is where some started laying the tracks to pass stuff down. For most, nothing was passed down but some parents were in the position to provide stable households, first generation real estate and send the kids go college. Now, that the baton was passed to me I was allowed to build on it. Iḿ focused on passing down a functioning business that I assume will be sold for the wealth. Also, there will be many other assets passed down (i.e primary home, insurance, stocks). It means so much to me. Just as that white man places his kids on the track for success with several hurdles cleared, so am I. I provide the free and clear education, upper-middle environment and great upbringing. What they do with it is on them. Not sure what is meant by inviting destrution or whatever but one thing I dont care for is their entitled nature. I feel this entire generation of young people are entitled, lazy and complaint consumed. I try to steer my kids away from that but I still see the entitled nature which some times leads to the other sht. Hopefully it will not present major problems but it is what it is. Generational wealth is my number one goal currently. Great topic!

Just don't encourage the behavior. Trust me, I get **** from all angles by standing firm. Wife, parents in laws, etc., but the lessons of delayed gratification is too paramount. I can withstand their nonsense, I know I'm setting mine up with a fundamental belief in things are earned, patience, and everything in between.

Yea, that´s probably the best way to go about it depending on the situation. Itś more complicated in the African American Community. Many in the last generation had nothing. They had nothing to give to their kids but bills while they could see others putting their children ahead of the curve. Now, in my generation so many have wealth and assets and they dont wont to see the kids denied anything. For me, I try to provide some sense of balance and hope it works. If everyone else can send their kids to school and the only thing they have to worrying about is grades, so can I. If other kids are starting off with passed down homes and trust funds, so are mine. However, I try to build discipline and work ethic with it, while they are still handed free sht all the time. Its a struggle. LOL
1 Reply
John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
2y
Quote from @Account Closed:

Hi @John Underwood, interesting response. I recently established an ownership structure similar to you with the help of a lawyer. One mistake we made was not bringing in a CPA upfront with the structure. I am curious to understand how you go about preparing and filing your taxes for the structure that you have? Do you have all your properties in the same state?

Are there lessons that you have learned from your current structure that you could share at this point? Thanks

So I did put my CPA and attorney together to create this structure.
Everything rolls up under my personal tax return and there is a schedule E for every property. No need for a seperate bank account for each property. The Master LLC pays all the bills and receives all the money.
Since the lower Level LLC don't have bank accounts do seperate returns they don't need EIN numbers either.
This is how my attorney and CPA structured everything.
0 Reply
Eric Bilderback
Real Estate Agent · Sisters, OR · Member since 2014 · 1k+ posts · 1k+ votes
2y
I hope my kids will be self sufficient enough not to need me to leave them much. I'd like to give them a little something but good kids to this world is what I hope to be my life's legacy.
"Instead of giving your children everything you never had, teach them everything you wish you would have known."
Great thread,
2 Reply
Jim K.
OP
Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
2y
Quote from @Mark Cruse:

Quote from @V.G Jason:

Quote from @Mark Cruse:

For me, itś something I think about daily. Traditionally in the Black Community, in the past we were prevented from building wealth through multiple angles. My parent´s generation is where some started laying the tracks to pass stuff down. For most, nothing was passed down but some parents were in the position to provide stable households, first generation real estate and send the kids go college. Now, that the baton was passed to me I was allowed to build on it. Iḿ focused on passing down a functioning business that I assume will be sold for the wealth. Also, there will be many other assets passed down (i.e primary home, insurance, stocks). It means so much to me. Just as that white man places his kids on the track for success with several hurdles cleared, so am I. I provide the free and clear education, upper-middle environment and great upbringing. What they do with it is on them. Not sure what is meant by inviting destrution or whatever but one thing I dont care for is their entitled nature. I feel this entire generation of young people are entitled, lazy and complaint consumed. I try to steer my kids away from that but I still see the entitled nature which some times leads to the other sht. Hopefully it will not present major problems but it is what it is. Generational wealth is my number one goal currently. Great topic!

Just don't encourage the behavior. Trust me, I get **** from all angles by standing firm. Wife, parents in laws, etc., but the lessons of delayed gratification is too paramount. I can withstand their nonsense, I know I'm setting mine up with a fundamental belief in things are earned, patience, and everything in between.

Yea, that´s probably the best way to go about it depending on the situation. Itś more complicated in the African American Community. Many in the last generation had nothing. They had nothing to give to their kids but bills while they could see others putting their children ahead of the curve. Now, in my generation so many have wealth and assets and they dont wont to see the kids denied anything. For me, I try to provide some sense of balance and hope it works. If everyone else can send their kids to school and the only thing they have to worrying about is grades, so can I. If other kids are starting off with passed down homes and trust funds, so are mine. However, I try to build discipline and work ethic with it, while they are still handed free sht all the time. Its a struggle. LOL

Mark, for what it's worth, the same sort of thing happened with the Greeks. The history is kind of complicated, but after the mess of the Greek Civil War and the junta, so many Greeks had nothing starting out in 1974 with the Third Hellenic Republic that by the time we were in the runup to the debt crisis, most Greeks really didn't want to see their children denied anything. It was a giant cultural movement. And it bred way too much entitlement with our young people in the home country.
1 Reply
Jeremiah Dunakin
Member since 2022 · 186 posts · 192 votes
2y
Quote from @Theresa Harris:

I'd also add that I think generational wealth is about more than money-it is the values you teach others that matters the most.

This a 100%. We as a society have become obsessed with the word generational wealth. It’s not the wealth but the culture and mentality that it encompasses that I don’t agree with. I am not saying I am a good parent I struggle and have ups and downs just like every parent that has ever lived. That said there are some steadfast profitable things that all kids can be taught and cultivated regardless of any excuse I mean social or economical challenges that they face.
The lessons you teach them far outweigh any buisness we give them. Work hard, take accountability, accept coaching, do the best job job you can regardless of whose watching, invest in yourself with knowledge and self worth, spend less than you make, stay out of bad debt, keep your hands with calluses, give cheerfully both time and money, count your blessing being born in America, be the person who will take the risk and don’t be ashamed whether you strike out or most definitely hit a home run.many more principles but values trump degrees any day of week
1 Reply
Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
2y
Quote from @Mark Cruse:

And this is the fine line we walk. But.....if we can navigate this issue and not give in to the instant gratification concept some are talking about...imagine the good that can be done with the passing of generational wealth.

I had a conversation once with a very smart Dr. who stated that this concept does not exist in all cultures and was/is more prevalent in certain cultures in centuries past. I don't know if this is absolutely correct or not, but this passing of generational wealth has immense power for good - if handled correctly.
1 Reply

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