Anonymous wrote:My great grandfather, along with his brother, founded a business in 1917 that, according to his obituary in 1939, was making "several million dollars yearly." Then my grandmother and her sister inherited money. I remember in the late 90s I was staying at my grandparents' house helping out because my grandfather had dementia. A not-so-great boyfriend came and stayed for a bit and he snooped into my grandmother's ledger which was sitting in the den and told me all wild-eyed that there was 3 million in the one account he looked at. When she died, she ended up leaving about 1 million to each of her three children, including my mother. When my mother died, my sibling and I got under $500k -- but each of us had had college and professional school paid for. I don't have kids, but my sibling's kids have school paid for as well. But the money has gone down with each generation. Eventually it peters out.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I wish I did have a solution but I strongly believe the gap between the well off and the poor underlies much of what is going wrong in our society. I’m in favor of something like an inheritance tax. Something where you can leave a reasonable amount of money to each of your children but the rest goes to the government. That’s probably impractical but it might be a start. And by reasonable I mean $5 million or $10 million. Something indexed for inflation. But this idea of having huge amounts of money passed to the next next generation seems a little off to me.

I'm the PP at 14:25 who has studied tax policy in the context of wealth disparity. Like I said, I have never really found an answer. But the closest thing to a good answer was to drastically increase transfer taxes (inheritance and gift). I think it is the most palatable answer all around (if not the best one), but in the US extreme notions about property rights prevail, making this close to politically impossible.

In practice though this would really impact small and medium-sized businesses, not just “farms.” And if all buyers knew the owners were facing big estate tax bills, you wouldn’t even be able to sell them fairly. You can do planning but death is still unpredictable and at a minimum you will leave people with tough choices about using all the liquid assets to pay taxes to keep a business that could be in any kind of shape.

Anonymous wrote:Small to the parents.

Anonymous wrote:

Anonymous wrote:I wish I did have a solution but I strongly believe the gap between the well off and the poor underlies much of what is going wrong in our society. I’m in favor of something like an inheritance tax. Something where you can leave a reasonable amount of money to each of your children but the rest goes to the government. That’s probably impractical but it might be a start. And by reasonable I mean $5 million or $10 million. Something indexed for inflation. But this idea of having huge amounts of money passed to the next next generation seems a little off to me.

I'm the PP at 14:25 who has studied tax policy in the context of wealth disparity. Like I said, I have never really found an answer. But the closest thing to a good answer was to drastically increase transfer taxes (inheritance and gift). I think it is the most palatable answer all around (if not the best one), but in the US extreme notions about property rights prevail, making this close to politically impossible.

Anonymous wrote:

Anonymous wrote:

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.

I consider that to be generational wealth. 200k in your 20s allowing property purchase and early retirement savings will change the lives of this posters kids; it has a very different effect than 200k when someone is nearing retirement or the asset will go immediately to college tuition.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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.

I consider that to be generational wealth. 200k in your 20s allowing property purchase and early retirement savings will change the lives of this posters kids; it has a very different effect than 200k when someone is nearing retirement or the asset will go immediately to college tuition.

I graduated college in 2009. My parents have given me an annual gift to allow me to max my 401k. Once I got married, they increased that to 2x to allow my spouse to do the same. At 36, both accounts are approaching $1.5mm.

The annual gift is a small portion their net worth. But small gifts, started early and over time, lead to great results.

These are not “small” gifts.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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.

I consider that to be generational wealth. 200k in your 20s allowing property purchase and early retirement savings will change the lives of this posters kids; it has a very different effect than 200k when someone is nearing retirement or the asset will go immediately to college tuition.

I graduated college in 2009. My parents have given me an annual gift to allow me to max my 401k. Once I got married, they increased that to 2x to allow my spouse to do the same. At 36, both accounts are approaching $1.5mm.

The annual gift is a small portion their net worth. But small gifts, started early and over time, lead to great results.

Anonymous wrote:

Anonymous wrote:

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.

I consider that to be generational wealth. 200k in your 20s allowing property purchase and early retirement savings will change the lives of this posters kids; it has a very different effect than 200k when someone is nearing retirement or the asset will go immediately to college tuition.

Anonymous wrote:

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:I wish I did have a solution but I strongly believe the gap between the well off and the poor underlies much of what is going wrong in our society. I’m in favor of something like an inheritance tax. Something where you can leave a reasonable amount of money to each of your children but the rest goes to the government. That’s probably impractical but it might be a start. And by reasonable I mean $5 million or $10 million. Something indexed for inflation. But this idea of having huge amounts of money passed to the next next generation seems a little off to me.