Kids, Wealth, and Consequences: Ensuring a Responsible Financial Future for the Next Generation

Chapter 1. Calculating Your Family's Future

Many wealthy people have worked hard to amass their wealth, while others have been fortunate enough to inherit a large sum of money. In either case, most wealthy people do not take the time to answer the most important question this book will ask: What is money for? After answering this question, the next step is to calculate how much money is needed to reach your goals. Many wealthy people run out of money or leave far less to their kids or grandkids than they had imagined. The first section of this book, "Financial Choices," helps you consider what you want your money to be for, and helps you set a strategic course to meet your money goals. The three chapters in this section pose hard questions and introduce financial techniques to help you understand the realities of what happens to money through the generations. Although this section of the book may seem very technical, it is the first step to increasing the likelihood that your money will help, not hinder, your children's success, emotional health, and happiness.

The amount of money you decide to spend each year can have far-reaching consequences, both intended and unintended, on your children's future. It can affect the legacy you leave behind, not only in terms of how much financial capital they will eventually inherit, but also in terms of the lifestyle to which they have grown accustomed, the messages your spending patterns send to them, their expectations (which may not be realistic ...