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  • #61
    Originally posted by F0017S0 View Post

    My late father worked in private wealth management; his minimum AUM for him to work with you at the firm he was employed at was $10m. That said, the vast majority of his clients had AUM in the $100m-$2500m range. He told me sanitized stories of one of his wealthiest clients (family patriarch was in his 80s at the time) whose kids were fighting tooth and nail over $2.5m, really a pittance compared to the family's overall net worth. If we assume for the sake of argument that money gives you power, and power changes you (https://www.theatlantic.com/health/a...-mind/277638/; https://www.theatlantic.com/magazine...damage/528711/), then money can essentially function like a drug.

    Now, as far as why I save: I save so that I am in control of my own destiny. We live in a country that requires individuals to take charge of their own destiny; no "system" is there to save you when the SPAM hits the fan. Systems that were imperfect, but generally worked well (like pensions), are long gone. White collar employment is becoming as precarious as some lower level work, so I had better have resources to support me for the inevitable day my boss says "your services are no longer required."

    I save for my own security, becasue I learned from my late father's issues what happens if you live large, but don't have much in the bank.
    pensions never really worked well, they just had more people entering the pyramid than cashing out. Make a bunch of unreliable promises on future payout and become drastically underfunded in essentially all cases for a reason.

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    • #62
      Originally posted by AR View Post

      I don't know, man. Have you really never met children of extremely wealthy parents who are just overall terrible, entitled, generally useless people? It happens quite a lot and one reason people don't like generational wealth is that they don't want to inadvertently turn their own kids into anything remotely resembling that.

      If you really never have met such people first hand, consider watching Succession on HBO. Obviously, it's fictionalized, but there are people in real life who are almost exactly like Logan's kids. The people who created the show captured that perfectly. Obviously the wealth isn't the only reason they turned out that way, but it was a necessary condition.
      I mean, those are exactly stories because you hear about them. When there are awful people who don’t inherit anything, you just say they’re awful and it has nothing to do with their inheritance.

      I know a family with an astounding NW - multiple private jet money - one kid is awesome, one is awful. I don’t think money ruins people. And if any of my kids are awful, they won’t get much.

      And don’t take this as something I’m saying about you (because I have no idea how you spend your money), but I feel like people saying they are going to give away their money when they die is a cop out. It costs you nothing. Giving while you’re alive actually costs you something.

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      • #63
        Originally posted by VentAlarm View Post

        I mean, those are exactly stories because you hear about them. When there are awful people who don’t inherit anything, you just say they’re awful and it has nothing to do with their inheritance.

        I know a family with an astounding NW - multiple private jet money - one kid is awesome, one is awful. I don’t think money ruins people. And if any of my kids are awful, they won’t get much.

        And don’t take this as something I’m saying about you (because I have no idea how you spend your money), but I feel like people saying they are going to give away their money when they die is a cop out. It costs you nothing. Giving while you’re alive actually costs you something.
        It may also related to the parents being in the picture like someone referenced before. I tend to think that having 2 professional parents is generally not great for kids upbringings(again as someone who will be in this situation as a parent).

        I just don't see the point of grinding to accumulate 50M and make sure my kids never have to work, just because physicians are well compensated and I have some basic financial literacy. I don't really see nobility in that. You can do both like help your kids out and help out charitable causes but I feel like there is an interesting undertone of people who are basically working to create an empire for their family.

        I don't know what you mean by cop out in terms of giving out near death? I plan on giving out plenty while I'm still alive as well.

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        • #64
          Originally posted by Panscan View Post

          It may also related to the parents being in the picture like someone referenced before. I tend to think that having 2 professional parents is generally not great for kids upbringings(again as someone who will be in this situation as a parent).

          I just don't see the point of grinding to accumulate 50M and make sure my kids never have to work, just because physicians are well compensated and I have some basic financial literacy. I don't really see nobility in that. You can do both like help your kids out and help out charitable causes but I feel like there is an interesting undertone of people who are basically working to create an empire for their family.

          I don't know what you mean by cop out in terms of giving out near death? I plan on giving out plenty while I'm still alive as well.
          I would say "never have to work" is a little hyperbolic. Money becomes worth less and less every day. And who knows, maybe AI or robots will replace most work and there will be even fewer workers. It's just providing security, augmented by the kids' own efforts.

          Edit: From an earlier comment, I didn't mean to imply pensions were "perfect", and yes, the managers made some outlandish promises. But, it is far "riskier" for every individual to navigate investment choice risk, allocation risk, and withdrawal risk. Every individual needs to get all three correct in order to have a decent shot of not running out of money in retirement. And that excludes considering black swans...

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          • #65
            https://www.pnas.org/content/117/1/251

            The correlation between parents' incomes and those of their children has been a field of careful study by economists for many years. There is an extensive literature on the subject. The paper cited above was concerned with changes in correlation between parents' and childrens' socioeconomic status over time. However it includes a nice current review of the topic. They and others find that there is a large correlation between parent and child SES. There is a branch of the literature that focuses on the specific occupations and their correlations- it is high.

            Children of parents with high SES are far more likely to end up with high SES themselves than are children of parents with median SES. This is true, no matter what someone may put in a TV show or what examples one may have of kids from high SES families who do not follow the trend.

            If there is evidence, not anecdote, fiction, or rumor, of the harmful effects of inherited money, I would love someone to cite it.

            Comment


            • #66
              Originally posted by afan View Post
              https://www.pnas.org/content/117/1/251

              The correlation between parents' incomes and those of their children has been a field of careful study by economists for many years. There is an extensive literature on the subject. The paper cited above was concerned with changes in correlation between parents' and childrens' socioeconomic status over time. However it includes a nice current review of the topic. They and others find that there is a large correlation between parent and child SES. There is a branch of the literature that focuses on the specific occupations and their correlations- it is high.

              Children of parents with high SES are far more likely to end up with high SES themselves than are children of parents with median SES. This is true, no matter what someone may put in a TV show or what examples one may have of kids from high SES families who do not follow the trend.

              If there is evidence, not anecdote, fiction, or rumor, of the harmful effects of inherited money, I would love someone to cite it.
              I want my kid to be a good person far more than I want them to have high SES. I don't think anyone has contended that kids of rich parents don't do well career wise.

              Comment


              • #67
                Originally posted by afan View Post

                The person who suggested watching a fictional TV show to see the putative risks of leaving money to children.
                I think your reading comprehension could use some work. Do you really think you're posting with a bunch of 5-year-olds who think everything on TV is real?

                The fictional TV show was just an example for someone whose sample is such that they have never witnessed such a person.

                It depicts people very similar to people I have seen in real life (i.e. not fictional). I know those people exist because I have seen them with my own eyes. There is no easy way to introduce other posters to people I know in real life. So, that was the best substitute I could think of.

                Hopefully, now that it has been explicitly explained to you, you won't be making that mistake again.

                Comment


                • #68
                  Originally posted by afan View Post
                  https://www.pnas.org/content/117/1/251

                  The correlation between parents' incomes and those of their children has been a field of careful study by economists for many years. There is an extensive literature on the subject. The paper cited above was concerned with changes in correlation between parents' and childrens' socioeconomic status over time. However it includes a nice current review of the topic. They and others find that there is a large correlation between parent and child SES. There is a branch of the literature that focuses on the specific occupations and their correlations- it is high.

                  Children of parents with high SES are far more likely to end up with high SES themselves than are children of parents with median SES. This is true, no matter what someone may put in a TV show or what examples one may have of kids from high SES families who do not follow the trend.

                  If there is evidence, not anecdote, fiction, or rumor, of the harmful effects of inherited money, I would love someone to cite it.
                  Um, no one is disagreeing with that study...

                  Comment


                  • #69
                    Originally posted by VentAlarm View Post
                    I mean, those are exactly stories because you hear about them. When there are awful people who don’t inherit anything, you just say they’re awful and it has nothing to do with their inheritance.
                    It's not just the inheritance, it's the lifestyle that leads there. It the whole enchilada. And if we're really talking generational wealth levels, then you personally don't sound like you're there yet and it's not clear how much applies to you specifically.

                    I know a family with an astounding NW - multiple private jet money - one kid is awesome, one is awful. I don’t think money ruins people. And if any of my kids are awful, they won’t get much.
                    I wouldn't say money ruins people. I would say that it can ruin people. So can a lack of money. Both of things can ruin people in different ways, though. I don't know what the optimal amount of money is, but I'm pretty sure it is not at either extreme.


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                    • #70
                      Originally posted by AR View Post

                      You (and I guess vent alarm) are conflating two separate things.

                      1. A lot of wealth can spoil a kid (The important word here is "can". It s not a certainty.)

                      2. The government should take away that wealth for that reason.
                      But there are 2 other possibilities which are likely to be as ,if not more, common

                      1. A lot of wealth may not spoil a kid. Especially if the upbringing is good.

                      2. A lack of wealth does not preclude a spoiled kid, if they are not well brought up. This is something I have seen a lot in my daughter's former school.
                      Last edited by Kamban; 12-12-2021, 12:56 PM.

                      Comment


                      • #71
                        Originally posted by Kamban View Post

                        But there are 2 other possibilities which are likely to be as ,if not more, common

                        1. A lot of wealth my not spoil a kid. Especially if the upbringing is good.

                        2. A lack of wealth does not preclude a spoiled kid, if they are not well brought up. This is something I have seen a lot in my daughter's former school.
                        I'm not sure who you think is disagreeing with those things, but it is definitely not me.

                        Comment


                        • #72
                          We live in one of the best zip codes for livability, education and crime....yet the level of 'spoiled kids' acting badly is relatively high. Most are not of the top 5% or even top 1% salary kids. Many are simply single child's given everything. We see this phenomena in China with the current upbringing 1 child policy and it's pretty well documented.

                          Money amplifies underlying issues. It always has. So generational wealth simply magnifies the inherent troubles of what the upbringing occurred.

                          My contention is that you start parenting at birth. Not in the last will and testament.

                          Comment


                          • #73
                            Originally posted by F0017S0 View Post

                            My late father worked in private wealth management; his minimum AUM for him to work with you at the firm he was employed at was $10m. That said, the vast majority of his clients had AUM in the $100m-$2500m range. He told me sanitized stories of one of his wealthiest clients (family patriarch was in his 80s at the time) whose kids were fighting tooth and nail over $2.5m, really a pittance compared to the family's overall net worth. If we assume for the sake of argument that money gives you power, and power changes you (https://www.theatlantic.com/health/a...-mind/277638/; https://www.theatlantic.com/magazine...damage/528711/), then money can essentially function like a drug.
                            But don’t you think that was a function of their upbringing, not their rich-kid DNA? Have also known wealthy people who focused on raising their kids to be kind, compassionate, and generous. And one client who raised both kinds of kids, but who stepped in to pull the h3ll-raiser out of every mess he got in and he turned out, of course, simply worthless as an adult. Of course, the dad knew it, but wouldn’t admit it.

                            This is an excellent thread. I cannot post why I save because that is not a focus at age 64 and never has been a huge priority. But I also raised the kids to be independent and college used to cost a pittance compared to today. Things just aren’t that meaningful, although I like my Volvo and the engagement ring my hubs gave me.
                            Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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                            • #74
                              It has been reported through surveys by wealth management groups that approximately 70% of wealthy families will lose their wealth by the second generation and 90% will lose it by the third. I don't know if that's because the children are entitled, spoiled, inept, or just poor with money. But surely squandering an 8 or 9 figure net worth in a century means the children are not paragons of excellence when it comes to money management.

                              Now whether that trait extends to other aspects of their personalities is unknown, but I would guess there is probably a significant overlap between inherited wealth and certain attributes such as increased narcissism, lack of work ethic, and decreased empathy compared to someone who comes from new money, earning it through their own volition, through hard work and sacrifice.

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                              • #75
                                ive always wanted to be rich because who doesnt want to be rich?

                                As soon as i learned about investing i realized how powerful it was; i also realized that being rich was the way to go because rich people have more control over their lives. Although i will admit I like nice stuff too.

                                Other than that, I find learning about investing so interesting partly because, like WCI says, i cant imagine a more well-paid hobby. I also like learning for learnings sake and i feel very lucky that i find investing interesting. Managing a portfolio seems downright fun. cant wait until i have real money to do that!

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