The Kingdom in my Head

Americans are at a distinct disadvantage when it comes to generational wealth preservation in a family.

In parts of the world it is accepted that your families’ wealth and position has given you a distinct advantage in life. A birthright. This should be a source of pride. In America, pulling yourself up by your bootstraps, ‘nobody gave me nothing’, and not being born with a silver spoon in your mouth are the notions that derive pride in one’s accomplishments.

This rugged individualism also holds us back from worrying about and tending to our family’s wealth as a common pool. One from which all in our line both contribute and consume.

Our American sense of social mobility (arguably not as great as we perceive) leads us to respect past accumulated wealth less.

We tend to see this as ‘our luck‘ and less as ‘their hard work‘. I think we are more inclined to spend an inheritance on ourselves. Thinking we ‘deserve it’, as opposed to putting an emphasis on ‘preserving or shepherding wealth‘.

American children are told they can become anything they want to when they grow up. But then, largely expected to do this own their own. Plenty of other countries/cultures stress the parents continuously sacrificing their own comfort in order to provide a better future to a generation beyond themselves.

Part of our Freedom loving culture is the freedom to make mistakes and be selfish.

Comparatively speaking,  we live our lives free of the crushing cycles of familial honor and shame. However, it is honor and shame which stress that a family’s fortunes are tied to (and dependent on) one generation to the next.

America is largely comprised of people who came to this country with very little, yet large amounts of money come and go in our lifestyles with relatively alarming frequency. These two factors have a psychological affect on our population. Check out ZeroDayFinance’s post on Why Do We Blame The Poor?

How many of use even have a frame of reference for a family member going back further than our immediate grandparents?

What, there’s no hallway of stuffy portraits in your house?

These realizations have always bothered me. I want the opposite. I want all of my descendants to work towards a common goal of a mini-empire. The only way this could possibly manifest is by teaching my children right out of the gate to think differently.

Lo there do I see my father. Lo there do I see my mother and my sisters and my brothers Lo. There do I see the line of my people, back to the beginning. Lo, they do call me. They bid me take my place among them, in the halls of Valhalla. Where the brave financially awake may live forever.(at a modest 4% draw).

One giant dream of mine has come to pass. We were able to secure the Family cottage.

I am confident that my sons will be good stewards of this heirloom. Beyond that, all I can do is hope. Recently, my state has revised its property tax laws so that current taxes are no longer ‘uncapped’ and reevaluated when a property is sold. Provided the next owner is a direct relative of the prior owner.

This solves a huge issue and was the main reason why many ‘family cottages’ don’t stay in the family year after year.

What I would really like to do is start a FUND that invests and payouts the gains in the form of dividends. Each family member being entitled to a share once they turn 18 and some internal guilt based mechanism that leads to people reinvesting their own money into the collective pot. Is this a thing? Anybody out there want to chime in on the feasibility of this? Does the Law against Perpetuity prevent this or it is it simply a matter of setting up the correct type of Trust?

I do not come from the right brand of genetic stock to know these answers. I work hard towards my goal of FIRE and I don’t want everything to end with me.

Please! Oh blue-blooded Masters, take pity on this plebeian and show me a way.

The Atlantic published a great article that hits on this topic all about The New Aristocracy. Check it out!

11 thoughts on “The Kingdom in my Head

  1. Nice Duck Tales safe…is that the family cottage because it would be one sweet cottage.

    I have debated leaving financial family legacies versus a motto or creed. I am leaning more towards creed. My creed would be “seek happiness and success not wealth and show”…gotta tweak it a bit, but basically teach my son to live modestly and not try to impress others with material things.

    • It’s a delicate balance. I want them to have the mindset of someone without family money but I still want them to have access to family money. Can’t quite see how that would work yet.

  2. My dream, too —> “Where the financially awake may live forever.(at a modest 4% draw).”

    As a culture, people in America value independence (in thought and actions) a lot more than other parts of the world. Growing up in India/Kenya when I was younger, I found that there’s a lot more consensus based, collective decision making that happens in families who pool their wealth and build on top of previous generations’ legacies (usually via a family business). Even decisions like moving out by yourself out of your family home have huge social consequences.

    • I vacillate between wanting that sort of group commitment and then when I think back, and actually picture my family members, being terrified by it.

  3. This reminds me of how I don’t want to win the lottery. It would steal the pride of saving and investing my own wealth. It just seems too easy.

    Now that I am independent from my parents, I don’t want financial help from them, but there was a time not too long ago that I had difficulty seeing it any other way. I appreciate their help, but I don’t think I would give my own kids as much of a “free ride.”

  4. I would settle for a positive influence in the families future trajectory by focusing on the keys to success: education, perseverance, and some luck. As such I’m much more likely to gift education to my family then anything else. There is a certain pride that comes from doing it without family help after you have the basic tools.

    • I wonder if it is a ‘grass is always greener’ situation. I did the whole pull myself up by the bootstraps(you are right about the pride thing). I think I would like to see what the other side of that looks like.(maybe my pride thing is thinly veiled sour grapes?)

  5. I too would love to have wealth that spans many generations so that my daughter has a head start and can add to the pile and hopefully create a financial legacy. Unfortunately there is a lot of evidence that generational wealth is lost by 80% in the 2nd generation and over 90% by the third. Of course their is estate taxes that even though have been raised have the opportunity to be lowered in the future. This death tax is essentially a tax on already taxed money and I’m not a big fan of it. But the way things are designed it is hard to pass large amounts of money to the next generation.

    • I have a feeling that the real problem is not passing money on to the next generation, but passing good money sense on to the next generation.

  6. “Financially woke” I like that! I am in the bootstrap situation. Learning as I go and seemingly hitting every roadblock as I make my way up. However, I still have respect the work of those that have inherited wealth, position or status. To vilify that is to say that by being a good man and leaving an inheritance I am putting my children in a lose-lose situation. When the legacy is more than money but education, work-ethic, impact and all that is understood I believe wealth can be preserved. However, it seems that many of today’s heirs and heiress only inherited the money.

    • agree and agree. I plan on leaving an inheritance, but I also do little things on purpose to try and raise children that are not spoiled or entitled.

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