Why Are Millionaires Leaving Their Kids Nothing?

[Music] hey you guys okay so sometimes on this channel we talk about food you know we talk about grocery store savings affordable meals but I'm pretty sure talking about the Food Network star guy Theory this is a first and there was a recent article on People magazine and they reported that he isn't planning on leaving his kids any money when he dies and since he just signed an estimated $100 million deal with the Food Network this got people talking some people think it's selfish of him to do this others think that it's fair to encourage your kids to forge their own paths and as someone who literally grew up in the world of personal finance and now teaches and talks about money I kind of want to yeah give you my thoughts on this because realistically what does more damage in the long term leaving your kids an inheritance or leaving them with nothing and forcing them to work it out on their own I don't know let's talk about it so first let's hear guy out okay because when he's saying that he doesn't want to leave his kids money why well according to the article he said I've told them the same thing my dad told me my dad says when I die you can expect that I'm going to die broke and you're going to have to pay for the funeral so it sounds like he leans more on the tough side of love if you know what I mean and he also says that he expects his sons to get at least two graduate degrees one of them is currently working on a law degree the other one is pursuing an MBA and guy isn't the only High earning celebrity who's not playing on passing down his money to his kids the NBA star Shack as we all know he said he wants to help his kids Thrive within reason so Shaq's six kids have to present their dad with a fully formed business plan to prove that he should invest his money before he gives them anything and Bill Gates another great example if you're a '90s kid like me you always remember Bill Gates being the richest guy in the world and a lot of people talk about how much he gives back as of January of 2024 he's estimated if giving away $9 billion in his foundation so overall he's giving a lot of money obviously that's you know his kids won't see they won't see that but he's got billions so some Reports say that he they're not going to give their kids anything but the principle of the matter is the same so clearly there are a lot of wealthy entrepreneurs out there who are standing firm and intentionally decid not to give their kids a free pass what is the right answer well here at Ramsay we are a biblically based company and so we do talk a lot about giving back and what that looks like to change your family tree and in Proverbs 1322 it says a good man leaves an inheritance to his children's children now of course that verse can be more than just money in your bank account right I mean I think leaving an inheritance of a spiritual walk an inheritance of character inheritance of wisdom or Compassion or discipline like all of these things you want to pass down generationally and this works in Reverse too that you get generational traits like self selfishness or greed or laziness right and so you can see like what am I teaching my kids and what are they learning as the norm and life but at Ramsay our primary motivation again is getting people to a place where they're debt-free they have a say over their income they're able to build wealth and they're able to be extremely generous now because usually you know this is all about the behavior transformation it's not always the dollar amount so this idea that you live like no one else you sacrifice you get out of debt you save up an emergency fund so that way you can live and give like no one else and having the margin in your budget to pay it forward and bless others with your money it's just a really powerful part of winning with money and again giving is one of the most fun things that you can do with money the joy that comes when you give and this could be to an organization or a charity you love maybe your local church maybe a family that needs it or a person whatever happens there the joy is is tremendous so when we talk about that where do our kids come into play cuz if you don't know I have three little ones a Caroline and Charles they're eight six and four right now and they're still years away from going out into the world and handling money on their own but we do want to set them up for success and so when I look at what my parents have done financially and you know the character traits that they've passed on to us the opportunities that we've been given uh you know there's different things there that I think are really important and I think are such a gift if I as the second generation can Steward those well and I look at at my kids and I'm like oh man one thing they will not have is seeing the sacrifice that their parents me and Winston went through I mean there's some sacrifice there but like my parents filed bankruptcy right so like as a kid like there was lots of sacrifice that I was experiencing and my kids will never know that drastic of a change in their life so the norm and the Baseline that Winston and I have to set we have to be really intentional with of like hey this is what life looks like and we live on a budget we live below our means like we do this plan that we talk about on this show all the time and so letting the norm be the Baseline of giving and saving and then spending whatever it is letting them learn that money comes from work and working and all of that you know is huge it is so so huge so when you think about the actual tactical side though of money being past down generation to generation personally I don't see it as a completely like wrong thing in the world right I don't think I'm on this extreme side of like don't get your don't give your kids a penny but I do think if you just provide every single thing for them there's a part of their dignity that is never formed because they always have this level of a handout so what can you do in a balance to say hey we want to help jump start our kids and you know and and I know families now that they're not waiting to die to give their kids everything right because if you do think about it it is an interesting thought uh there's a book called die with zero but it's basically this idea that it's like yeah you know spend it all because what are we here for like enjoy your money while you're here because if you just save it all this person was saying in the book and then you pass it to your kids let's say you you live till you're 85 and maybe your kids are 60 well they've already established their whole life right at that point so they don't always technically need that money so then what are they going to do have it an account for 20 30 years and then passes down to their kids you know 30 years later so it's kind of this point of like what are we doing all this for right and and I get that there is a level that I'm like okay I can see why someone says that so almost My Hope for my kids is like are there things I can do that still gives them dignity still gives them the ability to get up and go to work and learn how to manage their money and work for what they want but also gives them a jump start in life right if if you can start them out with a great mutual fund and they can use some of that money maybe for a down payment on a house or even the crazy thought like what if you paid for your kids's first house right and instead of a mortgage payment they invest it and instead of that instead of it going to the bank they invest it for their future like I don't know these these different ways that you can get creative and think big of what I do for my kidss to set them up well but it still gives them dignity and it's an interesting conversation to have because I don't think anyone has the exact right answer but I'm always about balance in life so this extreme side of like give them everything or give them nothing I'm like huh what's like that Medium you know range there that that balance where yeah we can actually bless our kids and help them start off on a really great foot that's such an advantage I mean that's wonderful but also that they have the ability to make decisions on their own and they have to work work and they have to have the Dignity of paying you know paying the cable bill and the life bill or whatever it is so there's somewhere in that balance that I think is really key but leaving an inheritance to your children's children The Inheritance is more than just money so teaching them contentment teaching them that you know having stuff is not wrong but it's not going to fulfill you the way you think it will you will be a rat and a whe the rest of your life if you just keep accumulating more stuff thinking that's going to make you happy right so we we want to pass an inheritance of that wisdom we want to pass an inheritance of contentment and all these other parts of life to them as well so it's an interesting subject to talk about and I know some people are very opinionated on it but I think it's I think it's interesting so again it's a personal choice and again it's all about balance cuz too much of a good thing it can be harmful and if it's a lot really fast and they don't know how to handle it that can be really scary so you want your heart in a place where you have a lot of wisdom that you're using and a lot of generosity the giving aspect of giving to others who need it I think is huge to model for your kids regardless of where you are financially ask yourself what will realistically be helpful for your kids and make sure again you're pouring into the character side of them as well and guess what I have a video all about how to set your kids up for Financial Freedom so make sure to click the link below and check that out and you can also grab my kids book I'm glad for what I have because it teaches about contentment and again this idea that stuff is not wrong it's not bad but it does not fulfill us the way we think it will so remember you guys to take control of your money and create a life you love

Channel: Rachel Cruze

Views: 74,904

Keywords: the rachel cruze show, the rachel cruze show youtube, money, budget, how to save money, budgeting, personal finance, rachel cruze, save money, how to budget, debt, saving money, save, how to make money, ramsey, finance, how to get out of debt, debt free

Id: wJCMgxcZUr4

Length: 9min 4sec (544 seconds)

Published: Mon Mar 25 2024