This post on generational wealth is based on a chapter in my upcoming book on financial literacy
Dr Boyce Watkins’ verbal imagery summarizes it like this, “generational wealth is a relay race”.
The Proverbs say that a wise person leaves an inheritance to their children’s children.
First, if you’ve survived tech layoffs, automation, and globalization to have something to leave your heirs, congratulations!
But here’s the sad truth about passing down financial resources to your heirs: statistically, most wealth is lost in 3 generations.
The 1st generation sacrifices to make it
The 2nd generation spends it
The 3rd generation loses whatever’s left.
A Chinese Proverb states it like this
Rags to Rags in 3 generations.
How does this happen?
A lack of financial literacy.
The 1st generation sacrifices to make life better for their family but the result of the sacrifice of their time means they neglect to instill the steps, maneuvers, and how to overcome the inevitable setbacks it takes to make it and the steps necessary to sustain and grow it.
We are about to enter the greatest wealth transfer in world history. But if we do not start the financial education now, while we’re around to guide our heirs, all of that sacrifice will be in vain.
My wish is that you will be in a position to have a family office in place. If you don’t know what a family office is, you’ve got work to do.
Here’s how you can start the financial education.
There is a company I use to purchase single shares of stock as gifts called www.GiveAshare.com
In 2009 I bought a single share of McDonald’s and GE for my kids for 2 reasons:
- They were on sale so I bought them on the low.
- McDonald’s was a company the kids could understand as I taught them the game.
Those single shares were added to and grown for as little as $20 at a time. But since they were dividend paying stocks, the kids also received checks from McDonald’s & GE (dividend checks).
This is how I got my kids started.
I am so passionate about this method of starting someone’s journey in financial literacy that I give single stock shares as Christmas presents, wedding presents, and child birthday gifts.
My wife thought this was weird at first, but now she gets it. She now recommends companies to ME!
I buy so many shares as gifts from www.GiveAshare.com that they have agreed to give a discount to anyone who uses code:
MonkSays
From their website you can purchase and ship shares world wide.
If you want to see financial literacy change someone’s life, gift them a share of stock in their favorite company or brand they patronize.
But if it’s a dividend paying stock, watch how their interest and knowledge expands when they receive regular checks from that brand!
I’ve received calls of appreciation over and over again. And I’m happy to take those calls knowing that someone’s family financial future just expanded.
Monk Says…
Investing is a game and I teach how to play it. Like Omar said in The Wire, “the game is out there. It’s either play, or get played”.
I recently retired early, and now that I’ve reclaimed my time, I use it to teach financial literacy to the youth, young adults, and the mothers who raise them.
To help spread the message of financial literacy, share this with 3 people:
- Your children/family
- Your good friend
- Your work buddy
Then ask them to give YOU their opinion on this post.
MonkSays.com