How Much Money to Leave to Your Children?
This question is relevant to wealthy parents ‘How much money to leave to your children?’
Most wealthy parents are concerned regarding impact of too much unearned wealth on lives of their children. They want their children to lead significant, meaningful and productive lives. They don’t want their wealth to come in the way to hurt them. They want to help their children and provide them with adequate financial security but too much wealth can hurt their productivity – it is a very fine and difficult balance.
Most of the super-rich are leaving only fraction of their money to their children. Warren Buffet when asked this question offered a good rule of thumb: ”enough money so that they would feel they could do anything, but not so much that they could do nothing.”
Other rich parents take a completely different view. “Shark Tank” investor and self-made millionaire Kevin O’Leary’s has taken a more severe approach. According to him, “I’m not planning on giving my kids any of my wealth. They know when their education is over; I’m pushing them out of the nest. You want to prepare your children for launching their own lives. I tell wealthy parents that if they don’t kick their kids out of the house and put them under the stresses of the real world, they will fail to launch.”
How much money to leave to the kids is a very philosophical question which each parent has to address individually depending upon their situation. No single rule is applicable. One has to understand the nature and capability of their children. Are they wealth creators? Can they handle money? Will they put money to good use or destroy your hard-earned wealth? Will too much money has a corrupting influence or will they use it wisely to enhance their lives and those around them? Parents must ask these questions of them before deciding on the amount of wealth they leave to their children.
