What do you want to impart upon your children; generational knowledge or wealth?
Lately I have seen a lot of posts on social media about generational wealth. I had to take some time and reflect on this.
I found it interesting that that some people are working so hard to build generational wealth. Yet, there are no guarantees that their children or grandchildren will keep the fortune in the family. Who is to say that they will not squander it all away?
For me, generational knowledge is more important. I hope to teach my children to build wealth rather than give them wealth. In my family this has been a reoccurring generational theme. My parents had to build their own fortunes and I do not expect, nor want them to leave anything to me or my children. They have had challenging lives and they should enjoy fruits of their labour. My children and I are young and fully capable to create our own wealth to enjoy.
Not too long it was explained to me that the large number of social media posts about importance of generational wealth was fueled by overt efforts in US to limit the accumulation of wealth for certain groups of people up until 1980's. The most specific wealth example was the limited sale of homes to African Americans with deed covenants.
I believe that passing on financial knowledge to my children will allow them to avoid making money mistakes and help them grow their own wealth one day.
However, I want to pass on the the financial literacy lessons that my parents passed on to me, as well as the lessons that I learned on my own. I want to teach my kids to earn money smartly (mainly through passive income), to save by paying themselves first, budget, be savvy consumers, etc. I believe that passing on knowledge will allow them to avoid making financial mistakes and help them grow their own wealth one day. I hope that this approach will avoid entitlement syndrome.
How do you feel about this? Is generational wealth important to you? Should perhaps generational wealth and generational knowledge be given equal importance when it comes to our children?