inheritance
Now, I expect there will be quite a bit left when we’re dead. I’ll probably keel over in my 80s but I fully expect my wife to be a centenarian. So that means by the time she goes the kids will hopefully be retired and financially independent before they get any kind of final inheritance from us.
The Millionaire Next Door, spend an entire chapter describing how wealthy people ruin their children, both morally and financially, by giving them money as adults. So the key for me is to help my children without ruining them. I have spent a lot of time thinking about this, and this post demonstrates the plan so far.
One of the very best ways I will help my children is to pass along financial knowledge. My 11-year-old has known that interest should be received, not paid, for years. She knows how a Roth IRA works. She tells her friends that she wants to either be a back surgeon or a financial advisor because she knows both of those careers make a lot of money.
Most well-to-do parents try to save something up for their children’s educations. I expect them to contribute in a number of ways: – Choose a reasonably priced school for their goals and abilities – Earn merit scholarships – Work during school and in the summers
For the professional student, there might be nearly a decade spent without a significant income. So we have decided to save up some money for this important decade to help our children. Not only will this fund provide them some unique opportunities and help them not start out life heavily in debt
Every dollar my kids earn as children and teenagers goes into a Roth IRA thanks to the “daddy match.” What’s a daddy match? That means the money (babysitting, mowing lawns, teen summer jobs etc.) they earn goes into the Roth IRA and I give them an amount equal to it to spend on whatever they like.
There is no reason someone can’t be a high-income professional (or an artist, or a teacher, or whatever) AND an entrepreneur on the side. I hope to plant those entrepreneurial seeds early in my children.