Tuesday, February 20, 2007

Inherited Wealth - Don't Give It To Your Children...

With a little over 2 months before our first baby is due, my mind has been swirling with tons of financial issues. From "how much is that crib?!" To "holy crap I have to research all of the possible college savings plans out there, I'll be up all night!" From "how much allowance should we provide" to "how and when will I teach our child about money and finance?!" While searching for help on these questions, I came across and interesting quote by one the greats of science, Alfred Nobel.

I regard large inherited wealth as a misfortune, which merely serves to dull men's faculties. A man who possesses great wealth should, therefore, allow only a small portion to descend to his relatives. Even if he has children, I consider it a mistake to hand over to them considerable sums of money beyond what is necessary for their education. To do so merely encourages laziness and impedes the healthy development of the individual's capacity to make an independent position for himself.


This quote was brought on by his decision to leave his wealth for the establishment of the Nobel Prize instead of his children. Only a small portion of his wealth was left to any of his relatives. My philosophy on money pretty much reflects ideas like this one...

3 comments:

Quang said...

Very interesting... I am against leaving a lump sum for the kids, not sure if i'm against leaving a 'legacy' though, a large trust fund for generations to come...

When in doubt, give to charity, I don't think a kid should inherit more than 2 million.

Bernard said...

Instead of giving your children the fishes, teach them how to fish.
Leave them a legacy of financial knowledge instead. If the next generation knows how to build wealth, it does not matter if they inherited 1 million of 100 million.

moneymonk said...

I must agree, inherited wealth can cause laziness.

Warren Buffet said he will not leave all of his fortune to his 3 kids. The majority is going to his educational foundation.

I believe once you equip your child with the right financial tools and information, you need not to worry about them having money.

As said you can feed a man for a day or teach him how to fish and feed him for a lifetime!