Tuesday, January 16, 2024

The "something for nothing" society?

 

A while back, CNBC made an interesting analysis of the difference between what millennials expect to inherit, and what baby boomers expect to leave their children.


On the cusp of the greatest generational wealth transfer in history, baby boomers are set to pass more than $68 trillion on to their children ... But they may not be handing down as much as their children think.

Studies show a growing disconnect between how much millennials expect to inherit in the “great wealth transfer” and how much aging boomers plan on leaving them.

More than half, or 52%, of millennials who are expecting to receive an inheritance from their parents or another family member said they expect to receive at least $350,000, according to a recent survey of more than 2,000 adults by Alliant Credit Union. But 55% of baby boomers who plan to leave behind an inheritance said they will pass on less than $250,000.

Part of the discrepancy is “wanting to make sure people have enough money to live on before they start gifting,” taking into account their own life expectancy, long-term care and other considerations, said Susan Hirshman, director of wealth management at Schwab Wealth Advisory in Phoenix.

“There are a lot of what ifs,” she added.

Tack on inflation, geopolitical uncertainty and fears of a recession, and boomers suddenly may be feeling less secure about their financial standing — and less generous when it comes to giving money away.

. . .

At the same time, views of inherited wealth are changing, Hirshman noted. Parents may feel less inclined to pass on large sums of money, she said. The mentality is “I earned this and so should you.”


There's more at the link.

I used to find this interesting - not to mention depressing! - when I was still active as a pastor.  The number of younger family members who approached me about their elders, when the latter were in poor health, and asked me to find out what they'd allocated to their children and others in their wills, was a constant surprise to me.  Even worse were those who were dissatisfied with arrangements they already knew had been made, and who asked me - in some cases, tried to bribe me - to put pressure on their elders to change their wills at the last minute, so to speak.  Some lawyers confirmed to me that they faced the same pressures from younger members of wealthier families.  It seemed that the more people had, the more they wanted, even at the expense of other family members.

In one sense, I've always been grateful that my parents - both born just after World War I - never faced this problem with us kids.  They did well by anyone's standards, surviving World War II, emigrating to a new country and building a new life there, along with four children;  but as a family we were never wealthy.  They used their money, rather than clung to it, so there wasn't very much left at the end of their lives to leave to their kids.  I think we were better off knowing that.  None of us lived in the expectation that our parents "owed" us anything, financially speaking, so there was nothing for us to be disappointed about when the time came.

What also bothers me these days is that so much family "wealth" is tied up in physical objects, or stocks and bonds, where the owners have little or no control over what might happen to their value.  If a housing crash hits, a baby boomers' house that they valued at, say, $750,000 might be worth half that - and that's if they can find a buyer at all.  At today's mortgage rates, that's far from guaranteed.  In the same way, stock and bond prices fluctuate all the time.  If we get hit by a major recession or depression - something that's not unlikely, thanks to the undisciplined spending and feckless irresponsibility of our political leaders - those stocks and bonds will fall with the market.  It can become a financial bloodbath, like the start of the Great Depression, or the South Sea Bubble, or the tulip disaster.  There's no reason whatsoever why we might not see such events unfold in our own time as well.  What that might do to the inheritance some expect is depressingly easy to calculate.

I guess, in so many words, we need to remember that we are responsible for our own life, liberty and the pursuit of happiness - not to mention putting food on our table and a roof over our heads.  In the final analysis, nobody owes us a living.  Our parents and grandparents certainly don't.  It's up to us to make provision for our own needs.  It seems a lot of younger families today (not to mention the "Gibsmedat" generation in our inner cities, and the millions of state-subsidized illegal aliens pouring across our border thanks to the Biden administration's dereliction of its duties) have lost sight of that.

What will happen when the (final) penny drops, and there's no more free money being handed out?

Peter


18 comments:

  1. To your last query, Mr. Bracken put forth a short essay well over 10 years ago that could answer it.

    https://westernrifleshooters.blogspot.com/2010/07/bracken-cw2-cube-mapping-meta-terrain.html?m=1

    TMF Bert

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  2. Or Matt Brackens when the music stops:

    https://theprepperjournal.com/2013/09/05/music-stops-americas-cities-may-explode-violence/

    When the EBT fails to feed the BREAD in Bread and Circuses FAILS and to riots we go.

    Arab Spring was about the price of food getting too high for average people to eat.

    Coming soon to a neighborhood near you.

    Got trusted family members and trusted friends you trust with your life?

    Got a good relationship with your creator, we all meet Him soon enough, best be on good terms with Him.

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  3. My folks lived on a farm that conventional wisdom said was too small to make a go of it. They did so anyway, using the old values of thrift and hard work. At that time they were able to continually save small amounts that they continued to roll over into CDs and, when a CD reached maturation, they rolled it over into a new one. It didn't create a fortune, but it did raise enough to pay all the death taxes when they passed away. I can't see that happening with inflation and the out-of-control spending the govt is doing to drive that. Savings get eaten alive by inflation. Also, when I was young, I(silently and to myself) wished for enough so I could take it easy in life. Having seen the mental and emotional development of most trust-fund babies, I consider myself fortunate to have not fallen into that trap.

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  4. Personally, I think this is a sign of poor parenting and poor communication.
    In my family we were taught the value of money and hard work. We also have known for years what our parents will was.
    Unfortunately, too many people were never taught these things. Even worse, they've been led to believe they deserve much for just existing, and quite openly show they'll never be satisfied.
    This reminds me of the line about good men, soft men, and hard times...
    Jonathan

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  5. We lose sight of the fact that in 2008 a third of the baby boomers wealth disappeared.
    A money guy back then assured me that it just "disappeared" and didn't make it to someone else's pocket.

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  6. There's another wrinkle in the story I have trouble with. Pertains to this...
    The globalists claim to want to depopulate the planet, the pharma industry appears to be doing it's job... if all these tinfoil conspiracy theories are correct, and mind you I'm of the opinion they are, then who's going to buy these houses?

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  7. Proverbs 13:22: A good man leaves an inheritance to his children's children.

    Boomers (of whom I am one, so spare me the standard "Not all Boomers" BS) have not been known for denying themselves personal wants nor prioritizing stable family relationships. Many of them are also petrified of death, and so refuse to make a will or take steps to pass on possessions or wealth. The stereotypical chronic cruiser or vacationer who chortles "I'm spending my kids' inheritance" is based on reality.

    No, not all Boomers, of course, but a not insignificant number of them. My husband and I were blessed by financial assistance from his parents when we were in need. We also received some help from my "silent generation" parents, altough my mother has seen fit to gift my siblings far, far more than I ever would have considered asking for - and I do not expect to receive a penny when she dies.

    We have chosen to help our sons, while simultaneously expecting them to earn what they can. Unlike far too many, we are cognizant that the post-war American generations were uniquely prosperous in a way unlikely to be seen again. Yes, older generations love to talk about "working their way through college." They also helped trash those institutions and push college for everyone, regardless of ability, so that younger people end up with minimal knowledge, a largely worthless credential, and tens of thousands in student loan debt.

    We went through some very lean years because we refused to outsource our children's upbringing and I stayed home with them while we managed as best we could on one income. When others took vacations and bought big screen tvs, we scraped together tuition to send our boys to Christian schools. We help them now with rent, because purchasing a home is out of reach at present, although we hope to be able to help with that in time. We also plan to pass on as many of our possessions and family 'heirlooms' as possible before we die.

    We want to help our children with their lives NOW, not make them wait until we're gone. They and their character are what we will leave behind, not some donation to an over-financialized 'charity' or a vanity project to paste our name on. We are far from wealthy, but we give all we can to our sons. Even if they are at times not as appreciative as we might wish, their future (and that of our grandson) is what we've worked for and what we value.

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  8. Vox Day posted this bit about Boomers today.
    Odd that you and he posted about the same issue from different sides.

    https://voxday.net/2024/01/16/a-boomer-on-gab/

    My Silent Generation Mother is alone, now that my father passed. She is helping me when she can. I know she has a Will, and I know some of the details, but not all.

    Anonymous @ 9:37 brings up a good point. Who exactly is going to buy all the property that the Boomers will try to sell? Won't be their surviving children.

    Boomers take much heat. Much of it is richly deserved. But, Vox and others like him have a tendency (IMHO) to be just as overly broad in their criticisms of Boomers, as Boomers are of younger generations. The situation is much more nuanced than many on either side care to acknowledge. My Own Grandfather, Born in 1903, was a rich man at one time, but when he died it was all gone. He blatantly favored one of his sons over the rest, yet all of the money that he amassed, was gone, even before he died. So, It is not just Boomers who make make poor decisions, and do bad things with money.

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  9. First, the last paragraph in that quote is a flat-out lie. Only those Gen-x who have sick souls and think like Boomers talk that way. All the rest are striving mightily to leave something for their children and their children's children. As a rule, Gen-x and millennials (the oldest of whom are in their 40's now) violently reject the Spending the Kids (that you didn't kill in the womb) Inheritance philosophy that defines the Boomer generation.
    .
    (I know it's largely a futile exercise for most commenters who will read this, but please try to recall that Macro is not Micro. If you're not a wretched sybarite who gleefully blathers on about bootstraps, wonderful. Good for you, and God bless you. Like me, you're an exception that proves the rule. And the rule is our generational peers comprise one of the most wicked, selfish generations that has ever walked God's Earth.)
    Second: https://voxday.net/2024/01/16/a-boomer-on-gab/
    "A righteous man leaves an inheritance for his children and his children's children, but the wealth of the wicked is laid up for the righteous." -Proverbs 13:22

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  10. Last Will And Testament:
    "Being of sound mind and body, I spent all I earned on things I enjoy. Enjoy your independence to do the same!" ;-)

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  11. All that my parents had to leave us was a quarter-share in their lovely retirement house in the Hills of Northern San Diego County and a small selection of family mementoes. But that was before my father passed away in 2010, and several years after that my mother fell and injured her back so catastrophically that she is paralyzed from the shoulders down. The house was sold to fund her care, and for my sister and brother to add onto their house so that she could live with them. Care of Mom has fallen to my sister, as Mom would rather die than move to Texas where I live. Anything left when Mom passes away goes to my sister.
    As for me - my daughter gets my house and contents, and I'll fix it so that she gets the rights and royalties to my books, as far as that goes. My daughter is in real estate, so she knows exactly what my house is or will be worth.

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  12. I saw very poor behavior with the death of my father-in-law and later my sister-in-law (She had a trust). Rule of thumb, the less savings or more bankruptcies the more interested they will be in the terms of the will.

    My parents gave me my inheritance early. They made sure I got a good education, helped while I was young and have been generous through my life. My wife's parents did the same and left a sizable inheritance. We have been blessed and are trying to follow their example.

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  13. Look, I live at home because I can't afford rent. I care for my aging parents, and will until circumstances change (I WOULD like to marry one day). I make myself available to help with my siblings' families as well in the meantime. And while I know my parents' will stipulates a decent inheritance, I will simply be happy if they manage not to leave us with debt.
    Inflation is painful for everyone but the very rich, and though I have seen plenty of entitled people my age (late Millennial), I also see plenty of kicking the can down the road from my parents' generation or even earlier - and soon that can is about to come up hard against the roadblock of reality.
    So I try to learn skills, stay out of debt, and build up a small stash for emergencies, though I fully expect the economy to implode sooner than later. And I really just hope that my parents' money can support them through their later years. If they leave an inheritance, great, but I'm not counting on it.

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  14. I have seen this going on. Both sets of my grandparents did not leave me a penny nor did I expect them to. I am striving to leave my children something but cannot guarantee anything.

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  15. We're (late Boomers) trying to make sure we have enough to live comfortably without burdening our kids. And - when we can - helping our kids if something comes up unexpectedly.

    Barring unforseen circumstances, our kids will probably inherit most of our investments - between the 4% withdrawal rule-of-thumb and fixed expenses we should be able to easily handle on Social Security alone, we don't expect to run through what we have.

    But our kids know not to count on a windfall, either, and that when we retire in a year or two we will be on a stricter budget than we are now. Sure, we'd rather pass on everything we have to our kids rather than the government - but taking care of ourselves without being a burden on them is also an important gift.

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  16. I like to refer to the Gimmedats as Santa Claus Socialists or cargo cultists.

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  17. Something I learned in a 44 year (so far) career as an accountant, and also personally in my family: if it is not written in the will, it does not exist. People make promises to their heirs that never get put in the will...intentionally? who knows, but I have seen it again and again. I have also seen families destroy themselves over laughably small amounts of money. Do yourself and your family favor, see a lawyer, have a will prepared, do some basic estate planning.

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  18. A good man leaves an inheritance to his children and grandchildren. But Bidenomics will impoverish us all.

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