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Sorry, but what are you talking about? School is a set curriculum to learn a set of skills. Handing someone cash does not teach them anything. It will lead to young people burning through money and being even worse off then before, because they had enough money to get by without learning anything. Your plan would actually make people less equipped to handle life than if they were given some debt, and made to work for their first financial success.
Again, I've seen people try what you're proposing. 9/10 times their kids just withdraw more money than they should so that they can pay rent, eat, drink, and have fun without working. If the money is in a fund where they can't touch it (ie, they aren't old enough), they call behind their parent's backs to try and withdraw more money anyway. Once the money dries up, they panic and suddenly need to learn how to be an adult much later in life than most people. The idea posed in this thread is not very good. It's not more complicated than that. It's a much smarter idea to pay for some of the child's college, so that they graduate with a degree from a good school and a manageable amount of debt. Those people are the ones who end up in better financial positions later in life. Data very clearly shows people with a college degree have a significantly higher lifetime net worth than people without.
I’ll be spending 18+ years teaching my child to understand what money is and what it does. I’ll teach her to be humble and to not let material possessions be the source of her joy.
I’m not sure why people have this idea that money burns a hole in the pockets of ALL young people. I was able to grasp the concept of delayed gratification at a very young age...but I grew up working class with parents that didn’t spoil me or carry debt themselves.
You’ve likely never seen what I’m proposing because you likely don’t know anyone that’s young, retired and willing to financially (and philosophically) mentor a child their entire life.
If I see that my child’s net worth isn’t moving in the right direction - why would I continue giving assistance? They will have rebelled against principle I taught their entire life.
Like I said - take 100 kids following my plan vs 100 kids going the traditional route - I bet my kids end up with a higher net worth by 35-40 years old.
Location: Was Midvalley Oregon; Now Eastside Seattle area
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We started son's UGMA on day 7, as soon as he got his SS#.
On may threads I've read and "advised" that we/him will lose college financial aid and see the UGMA wealth vanish at majority for fast cars, intoxicants, wild friends, etc. I say that if the parent doesn't know his children early and doesn't know how to spend down the UGMA prior to turning over the UGMA, then the parent is more in fault than the child.
IOW, If Plan A isn't expected to be successful, Implement Plan B.
If you want them to learn about life, send them to a nice gambling casino, and let them blow it all.
No better education can one buy.
Giving young people a cash windfall that they didn't earn with their own effort will never be appreciated nor managed with wisdom.
Location: Formerly Pleasanton Ca, now in Marietta Ga
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Quote:
Originally Posted by eddiehaskell
I’ll be spending 18+ years teaching my child to understand what money is and what it does. I’ll teach her to be humble and to not let material possessions be the source of her joy.
I’m not sure why people have this idea that money burns a hole in the pockets of ALL young people. I was able to grasp the concept of delayed gratification at a very young age...but I grew up working class with parents that didn’t spoil me or carry debt themselves.
You’ve likely never seen what I’m proposing because you likely don’t know anyone that’s young, retired and willing to financially (and philosophically) mentor a child their entire life.
If I see that my child’s net worth isn’t moving in the right direction - why would I continue giving assistance? They will have rebelled against principle I taught their entire life.
Like I said - take 100 kids following my plan vs 100 kids going the traditional route - I bet my kids end up with a higher net worth by 35-40 years old.
Well sure they would, you gave them a a big lump sum that wasn't earned that gave them a jump on everyone else that has to work to get that lump sum.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
34,705 posts, read 58,042,598 times
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Quote:
Originally Posted by eddiehaskell
So we assume they’re mature enough to do college in high school, but they can’t possibly be mature enough to handle finances? Why do we baby our children financially?
please be more careful with your presumptions.
1) Who assumes kids are mature enough to do college during HS? Mine did college instead of HS, but not assumed... they were trained / enabled and encouraged to do that, never assumed.
2) Mature enough to handle finances? Who / how / what determines that criteria? Sounds a lot like the fears of a trust fund baby Mine are mature enough to be successor trustees of our DAF / Family foundation. That implies they will be mature enough to not detract from our purposed giving and to be accepting of gifting 100% of what they might have thought should have belonged to them.
1) Who assumes kids are mature enough to do college during HS? Mine did college instead of HS, but not assumed... they were trained / enabled and encouraged to do that, never assumed.
2) Mature enough to handle finances? Who / how / what determines that criteria? Sounds a lot like the fears of a trust fund baby Mine are mature enough to be successor trustees of our DAF / Family foundation. That implies they will be mature enough to not detract from our purposed giving and to be accepting of gifting 100% of what they might have thought should have belonged to them.
My point was simply that most parents push their children to conquer the most difficult subject matter possible yet we (as in many posters in thread) assume that they are inherently incapable of grasping basic finances.
If your 21 year is given $100k and runs out to buy a Porsche...well, that seems like a thinking problem.
I would like to train, enable and encourage my child to have a good grasp of finances while not being a slave to consumerism.
I’ve always liked this quote
“Normal is getting dressed in clothes that you buy for work, driving through traffic in a car that you are still paying for, in order to get to a job that you need so you can pay for the clothes, car and the house that you leave empty all day in order to afford to live in it.”
Ellen Goodman
I’ll be spending 18+ years teaching my child to understand what money is and what it does. I’ll teach her to be humble and to not let material possessions be the source of her joy.
I’m not sure why people have this idea that money burns a hole in the pockets of ALL young people. I was able to grasp the concept of delayed gratification at a very young age...but I grew up working class with parents that didn’t spoil me or carry debt themselves.
You’ve likely never seen what I’m proposing because you likely don’t know anyone that’s young, retired and willing to financially (and philosophically) mentor a child their entire life.
If I see that my child’s net worth isn’t moving in the right direction - why would I continue giving assistance? They will have rebelled against principle I taught their entire life.
Like I said - take 100 kids following my plan vs 100 kids going the traditional route - I bet my kids end up with a higher net worth by 35-40 years old.
For the 3rd time, I have seen exactly what you're proposing. Again, I've worked in the industry for a long time. It doesn't work the way you're claiming. Your idea simply isn't very good, and isn't practical.
Why did you even bother to start this thread if you're going to argue when people with more experience than yourself point out the flaws in your plan? I understand the idea you're attempting to propose, it simply isn't a good idea, and certainly isn't one that will work most of the time. Again, if you want to make a good life for your child, make it easy for them to go to college with minimal debt. That's by far the best thing you can do to set them up with a solid life, financially speaking. With respect, you seem to have a lot to learn about finances and how to plan a future. You're asking these questions on a forum. That's a great start. Now start to listen to people more experienced than yourself when they reply to threads like this.
How / who can cough up $200k for 18 yo? You imply parents could do that.
Alternative, nearly free.... We matched our kids wages into their Roth's age 12-18. Bonus, they learned how to invest and value companies.
We taught them skilled trades. (They designed and built their own homes before they were 16). They also built furniture, rebuilt cars (engines and body work, and paint). Knew how to run a business pre age 16. Did free college instead of high School. So... With a lot of our time and very little money, they had the equivalent of $100k in assets by age 18. But... That is a long way from $200k in available spend (which I think most 18 yo would not be able to manage for financial gain). Need to start them with little +incentive + instruction + role and responsibilities.
You are very right.
I see most rich and smart people have high expectation from their children. They don't give money to their children freely and easily. They want their children to have good education and want their children to be like them or better than them.
For young adults, when they have money given to them easily, most of them become lazy and just want to spend it extravagantly. Easy comes, easy goes.
For the 3rd time, I have seen exactly what you're proposing. Again, I've worked in the industry for a long time. It doesn't work the way you're claiming. Your idea simply isn't very good, and isn't practical.
Why did you even bother to start this thread if you're going to argue when people with more experience than yourself point out the flaws in your plan? I understand the idea you're attempting to propose, it simply isn't a good idea, and certainly isn't one that will work most of the time. Again, if you want to make a good life for your child, make it easy for them to go to college with minimal debt. That's by far the best thing you can do to set them up with a solid life, financially speaking. With respect, you seem to have a lot to learn about finances and how to plan a future. You're asking these questions on a forum. That's a great start. Now start to listen to people more experienced than yourself when they reply to threads like this.
You’re telling me a little money (relatively speaking) up until say 25 years old is going to destroy the relationship I ha e with my child?
People more “experienced” than me said I couldn’t retire in my 20s - yet here I am many years later....still retired with more money than I started with.
At what point will people start listening to me a little?
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Mine are mature enough to be successor trustees of our DAF / Family foundation. That implies they will be mature enough to not detract from our purposed giving and to be accepting of gifting 100% of what they might have thought should have belonged to them. 
