Most people tell me one of their financial goals is to “Leave a little something for my kids.” This is usually followed by some comment about how a couple of their children have always struggled financially. I cringe at these comments, having learned from hundreds of experiences, a sad truth. Financially responsible children do not need their parent’s money, and the irresponsible ones probably should not have it.
On my first day of college the professor began listing his expectations. When he got to grades he said, “Only the top 10% of you will get an A.” I immediately looked around the room trying to determine if I was smarter than 90% of them. In subsequent classes I found other professors grading in a similar manner. I realized the university was not going to measure me solely based on how well I did, but rather how well I did in comparison to everyone else. It is a tough lesson for a young person, but an important one since the same grading system would be used when I entered the real world of business and investing.
The world has changed since I attended school and one such change was evident in a study by the “Teacher’s College Record” that found the most common grade in American Universities today is an A. I wondered how young people could possibly be prepared for life if the schools no longer require them to prove their excellence. The real world will not be so generous with them.
I have spent my career working with retirees from a generation who understood that success meant working hard to get ahead, taking personal responsibility to spend wisely, and saving faithfully to stay ahead. The tough realities of the world that generation grew up in taught them that success is not handed out, but earned.
In our office we work regularly with the younger generations. Sometimes it is because they have inherited our clients’ money, or maybe a concerned parent brought them in to give them a head start. In this effort we are noticing a definite difference in the generations. Generalizing of course, I find the rising generations to be less patient, more willing to take on excessive debt and less willing to consider the need for a long term financial plan. Their grandparents understood that success required time. These younger ones often act as if they have no time. I find myself worrying a lot about their ability to demonstrate the discipline needed for lasting financial success.
So I would like to offer some advice to the parents and grandparents of this “Easy A” generation. If you want to leave “A little something” to your kids, consider leaving them a little of your time, your wisdom and your life’s lessons. Their world is not teaching them what they need to know, especially the financial lessons. If you take some time to prepare them, only then might that bit of money you are leaving them actually do some good.
Hi, I'm Dan. I'm a CFP® Professional.
Securities and advisory services offered through Commonwealth Financial Network®.
Member www.finra.org / www.sipc.org , a Registered Investment Advisor. Wyson Financial, 1173 S. 250 W. Suite 505, St. George, UT 84770.
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