Anonymous wrote:

Anonymous wrote:This thread is evidence that the world is pretty messed up. This kind of weath should not be concentrated in the hands of so few. So called generational wealth is a poison to our society. The current wealth gap will not end well.

What's your proposal? What should be the cap for annual income? And what should be the cap for overall wealth?

There are places you can go live if you want a "cap on annual income and wealth". The beauty of the USA is that we don't live like that. Many wealthy people got their on their own. I know we did. It's the years of hard work, owning a business, working for a small company with lower pay with the hope that stock options are eventually worth something (for us it took over 20 years for the long hours to pay off)

Anonymous wrote:This thread is evidence that the world is pretty messed up. This kind of weath should not be concentrated in the hands of so few. So called generational wealth is a poison to our society. The current wealth gap will not end well.

So if you had $10-20M, you would just donate it all and tell your kids and grandkids they are on their own?

Interestingly, most would not do that, they just make the above statements because they can only wish they had it.

Those of us with "generational wealth" are typically also very generous with our charity choices. But we earned our money (we are the start of the "generational Wealth" in our families) and we definately want to ensure our kids and grandkids are supported in life to do great things

Anonymous wrote:This thread is evidence that the world is pretty messed up. This kind of weath should not be concentrated in the hands of so few. So called generational wealth is a poison to our society. The current wealth gap will not end well.

What's your proposal? What should be the cap for annual income? And what should be the cap for overall wealth?

This thread is evidence that the world is pretty messed up. This kind of weath should not be concentrated in the hands of so few. So called generational wealth is a poison to our society. The current wealth gap will not end well.

Anonymous wrote:I believe I have generational wealth.
My college was 100% paid for by my parents.
I also started life with about $200k in stock from a grandmother, which enabled me to buy a house early.
I therefore have been able to plow my salary into retirement accounts and 529.
When my parents die, I will likely inherit more money.
My kids will have their college paid. We can help them get a house. They will therefore be better able to save, etc. They will likely inherit money when I die.
With all this comes a philosophical approach to money. You invest for the long term. You are careful with spending. You take advantage of tax advantages. You teach the next generation all of this. So every generation starts life with a little push.

That’s not what’s considered generational wealth but it sure is nice to get help when you’re just starting out.

Anonymous wrote:Using our lifetime exemptions we have set up generation skipping irrevocable trusts (Almost fully funded) so that our children will receive the income and ultimately our grandchildren will inherit the principle. Or maybe our great grandchildren as it get very confusing. The amount will definitely benefit future generations but it’s designed so that the principal is only used for things like big medical expenses and not to buy a Ferrari at age 21. I won’t be around to see how it fully plays out. We’ve also put a lot into 529s and we will put in more once the trusts are fully funded. A lot has already gone into a donor advised fund and whatever is left over in our estate will go to charity and not the IRS. I only inherited a very small amount so I hope what we are doing doesn’t demotivate anyone from working hard.

You shouldn't be this confused about how your own irrevocable trusts work.

We have $9.7 million which is not quite there. 15 or 20 million?

(Number of children + number of grandchildren) X $5 million = generational wealth.

Anonymous wrote:Generational wealth means enabling the next generation to live beyond their income.

Generational wealth means not having to panic when an unexpected expense pops up.

Generational wealth means enabling the next generation to live beyond their income.

I believe I have generational wealth.
My college was 100% paid for by my parents.
I also started life with about $200k in stock from a grandmother, which enabled me to buy a house early.
I therefore have been able to plow my salary into retirement accounts and 529.
When my parents die, I will likely inherit more money.
My kids will have their college paid. We can help them get a house. They will therefore be better able to save, etc. They will likely inherit money when I die.
With all this comes a philosophical approach to money. You invest for the long term. You are careful with spending. You take advantage of tax advantages. You teach the next generation all of this. So every generation starts life with a little push.

Using our lifetime exemptions we have set up generation skipping irrevocable trusts (Almost fully funded) so that our children will receive the income and ultimately our grandchildren will inherit the principle. Or maybe our great grandchildren as it get very confusing. The amount will definitely benefit future generations but it’s designed so that the principal is only used for things like big medical expenses and not to buy a Ferrari at age 21. I won’t be around to see how it fully plays out. We’ve also put a lot into 529s and we will put in more once the trusts are fully funded. A lot has already gone into a donor advised fund and whatever is left over in our estate will go to charity and not the IRS. I only inherited a very small amount so I hope what we are doing doesn’t demotivate anyone from working hard.

Anonymous wrote:There isn't a particular number to this.

I inherited about 500k my mother, and my DH inherited about the same from his mother, and thanks to what we've done with that money we won't ever have to worry about money and will likely leave a pretty decent-sized pile of money behind. We have made plenty of money of our own as attorneys, but we are gov, not BigLaw.

Generational wealth is just money passed from one generation to another -- with the definition of "wealth" being something DCUM could argue over 24 hours a day, 7 days a week, for 100 years and never agree on.

Yes.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:There isn't a particular number to this.

I inherited about 500k my mother, and my DH inherited about the same from his mother, and thanks to what we've done with that money we won't ever have to worry about money and will likely leave a pretty decent-sized pile of money behind. We have made plenty of money of our own as attorneys, but we are gov, not BigLaw.

Generational wealth is just money passed from one generation to another -- with the definition of "wealth" being something DCUM could argue over 24 hours a day, 7 days a week, for 100 years and never agree on.

OP here. I know there isn't a particular number that everyone will agree on. I guess the question could more appropriately be framed as what number or amount comes to mind when you hear the term used?

No number comes to mind when I hear the term used. I just think that someone had enough to pass money down, in an amount that would probably relieve any real stress about money. Also, with generational wealth in the family, folks probably don't have student loans -- there is enough money in the family to pay for college and prof school.

This is how I think of it. Not necessarily living off the interest of tens of millions. In our case, my late father in law (depression baby, super saver, "millionaire next door" type) left us about $900k, his intention was for us to use it so grandkids can go to private schools or college debt free, pay off our house etc. All of that frees us us to save significantly more for retirement and in general investments. Our HH income is $340k (govt workers) but have a networth of around $4million. If we play our cards right, we will be able to ensure kids are debt free, educated and able to support them in buying a house in the next two decades. that to me is generational wealth and how each generation gets an easier leg up than the previous generation.

Anonymous wrote:

Anonymous wrote:Enough to keep the principal untouched while successive generations enjoy the yield (not necessarily live off of). I would say at least $5M.

"Keeping principal untouched" is a spending issue.

Making money is easy compared preventing someone down the line wasting or losing it. How do you prevent that?

That is why 1M is “not enough” for generational wealth. You are not paying for 2-4 grandkids college off of just the interest. Let alone housing down payments/etc