Kids, how much is enough?

How much wealth is enough? This is a perennial question. This is a big question. This is a difficult question. This is a very good question, especially when it is asked as a question connected to one’s children. So let’s take a closer look at the question of children within the question above: the question of how much wealth should you leave for your children and why.

You work hard for the wealth. You build a corpus. You do this for various reasons, including leaving some of it behind for your children and other deserving recipients. How much should this sum of the some be for your children?

An earlier blog by me titled How much is enough explores the broader question of sufficiency. You may enjoy reading it. Related to that blog is this question: Should you bequeath all your wealth to your children? Let’s ask Bill Gates.

“Leaving kids massive amounts of money is not a favour to them”. – Bill Gates.

The lesson I’ve learned from my experience is that too much wealth can destabilise a child. It can make them complacent, lazy, entitled. These feelings hinder the child’s development as a good human being. Having too much can do more harm than having a little.

When your child works for their wealth, they learn to value it. They enjoy the fruits of it more responsibly. They appreciate it deeply. An article by Mitch Anthony about this feeling is most insightful. Here is an excerpt that really resonated with me.

Material reward without the price of labour overdrafts the moral account and ultimately robs the soul of incentive. – Mitch Anthony.

The price paid to get something is more precious that the reward. That’s why, many a thoughtful parent prefers to leave their children with incentives rather than investments.

My father strove to keep me grounded. He never allowed the sense of complacency or availability of wealth to hinder my pursuit of life goals. He encouraged me to focus on my education and use its power as a tool to build my own life. This valuable life lesson has helped me deal better with life’s challenges. I always thank my father for this rich gift of learning. It is something Ravi and I will bequeath to our children.

Warren Buffet famously said that he wanted to give his children “just enough so that they would feel that they could do anything, but not so much that they would feel like doing nothing”. Enough said.