The first blog of this series names several variables that determine how, or whether, inheritors manage to find their way in the world of work—whether paid or unpaid, or a combination of the two. Among these variables one of the most important is the source of the wealth and its history in a family. How long has the money been in the family? One generation? Two? Three? Possibly, though rarely, more?
This is commonly referred to as “old money.” Or is the wealthmaker one of the heir’s parents? This is called “new money.”
After thinking about this statement—why heirs need to work—for a few weeks, I have come to believe that it is the most complex, and possibly the most important, issue facing heirs. The subject of heirs and work needs to be approached from several perspectives—far too many for one small blog post. Therefore my intention is to devote the next few weeks to exploring some variables of this most important issue—I think it is the most important issue for inheritors.
I’ll begin with two contrasting examples—one of a man who never needed to work because his family was wealthy, but he had a passion for his work. Henri Cartier-Bresson is one of the greatest photographers of the twentieth century. Because he didn’t need to support himself he was free to devote himself to photography in his early twenties and for the rest of his life.
On October 16 I heard, by chance, an interview on CBC Radio’s “The Current” with Paul Piff, who has been doing post-doctoral research at the University of California at Berkeley. Anna Maria Tremonti, host of “The Current,” began by playing a radio clip from NPR (National Public Radio in the US) shortly after the 2008 financial meltdown. Two NPR reporters engaged in a conversation with four people they had just met in a bar near Wall Street. Of the four, three were Wall Street traders, still employed, and the fourth was a young woman who had lost her job as a result of the meltdown. The reporters wondered whether the traders, who had been generously bailed out by the Bush government, were grateful for not losing their jobs. Au contraire, the traders gloated, claiming they deserved their rich bailout. Continue reading
If you are someone who likes to hold a booklet in your hands (these are not “pamphlets,” as some surfers mistakenly believe) the time to order them is now. Altogether there are five publications of the remaining copies remain. I’ll give the numbers remaining in parentheses, below. Only 6 “The Inheritor’s Inner Landscape: How Heirs Feel” by Katherine Gibson remain in hard copy. Continue reading
Wealthy parents with young children or teenagers have a big job to do. Teaching them the skills they will need to handle the money they will eventually receive requires commitment, thoughtfulness, and follow-through. In general, the biggest part of teaching rich kids is how to handle their money responsibly. In the next two or three months I will offer a few examples from my interviews with inheritors. These are true stories; the only change is the names of the inheritors I talked with—that is confidential. Continue reading
Warren Buffett’s most recent advice on estate planning, delivered in response to a question at Berkshire Hathaway’s AGM, was as good as it gets.
I sit at my desk at The Inheritance Project, which consists of one small room, one person, nine publications, and nine years since the first book, The Legacy of Inherited Wealth: Interviews with Heirs. I am singlehandedly attempting to keep The Inheritance Project just barely visible because I am unable to understand Google’s impenetrable algorithm logic. I am laboriously typing from an article in today’s The Globe and Mail, May 20, 2013. An article by Thane Stenner in the “Globe Investor” section, called “Lessons in estate planning from Warren Buffett,” offers sage advice from the best expert in the field (IMHO). I humbly submit portions of his wisdom straight from The Globe. (This newspaper perversely keeps its articles online for only one day, so I won’t even try to create a link.) Continue reading
A new term has recently popped up on the Internet and on Twitter, and it came to the attention of The Inheritance Project. This new expression is “trust-fund progressives.” Though there is as yet no definition, the source of this expression appears to be a March 25 NY Times article by Paul Sullivan called “Among Young Inheritors, an Urge to Redistribute.” Continue reading
“They say if you marry money, you earn every cent of it,” says an actress in a play, “The Old Boy,” performed recently in New York. (NYTimes, March 19, 2013).
“Trophy wife” is an expression used to refer to a wife, usually young and attractive, who is regarded as a status symbol for the husband, who is often older and wealthy. (Wikipedia)
Reading the comment from “The Old Boy” brought to mind an interview I did in the late 1990s with Mary, a nanny who had many years’ experience working with ultra-high net-worth families. She described to me her role and what she had observed in these families. Here is a portion of that interview, taken verbatim from my book Like a Second Mother: Nannies and Housekeepers in the Lives of Wealthy Children, published by in 1999 by The Inheritance Project.
Just in case you aren’t certain of the meaning of plutocrat (and plutocracy), according to the OED: a “plutocrat” is “a person whose power derives from their wealth,” and a “plutocracy” is “government by the wealthy.”
The second of these definitions gives me the heebie-jeebies because, as I see it, this is already a reality, although we still have elections and other democratic institutions. Continue reading
My father started making annual announcements to me for several years beginning when I was ten or eleven. They went something like this: “Barbie, your mother and I have given you your gift.” I never knew what he meant and was afraid to ask, but I knew I was expected to express appreciation and I dutifully said my thank-you. But what kind of gift was this? I wondered. There was no toy or book or dress. Nothing tangible. Only disappointment.
My father’s pronouncements were always solemn and pompous, but it was not until I was in my early twenties that I learned that every year he was taking advantage of an IRS gift-tax-exemption rule to give me $10 thousand, tax free. Those annual “gifts” were the beginning of my inheritance. Continue reading