Warren Buffett’s approach to inherited wealth and his own kids—a healthy example

A November 2 article about Peter Buffett in Toronto’s Globe and Mail by Sarah Hampson is well worth the read.  Billionaire Warren Buffett’s philosophy of giving money (or not!) to his own children is an inspiring example that closely matches the approach of The Inheritance Project . Excerpts from the article:

“An award-winning musician and composer, Peter Buffett, the 53-year-old second son of Warren Buffett, . . . has an unusual relationship with money and his famous surname, which he admits “can be both a blessing and a curse.” . . . He talks about making life what you want when his has clearly been made by his famous father. Despite his family’s wealth, he doesn’t consider himself rich – not with money, anyway.

His grandfather left him $90,000 when he was 19. At 40, his father gave him enough to pay off some “equipment loans” for his music business and the mortgage on his $194,000 home in Milwaukee. He doesn’t speculate on investments. “I have never bought a share of stock.” And yet he gives away millions that were never his. His father’s long-held view on inherited wealth was that he would give his children “enough money so they would feel they can do anything but not so much that they could do nothing.” [Emphasis added.] However, he has heavily endowed their independent foundations. In 2006, he gave each of his three children a billion to pursue their own vision of philanthropy.

Interestingly, the balance [Peter Buffett] enjoyed as a child is what he most reveres about his upbringing in Omaha, Neb. . . .  His father, who is famously frugal, never moved from the house in Omaha and still drives himself to work. He gave his children 75 cents a week for allowance. Once, when his daughter, Susan, asked her father for a $41,000 loan to renovate her kitchen after she had a child, he refused, telling her to “go to the bank like everyone else.” But if [Peter] learned about a strong work ethic from his father, his mother taught him emotional values. “She would radiate compassion, love and acceptance,” he explains. He would walk home from the local elementary school every day for lunch and find his stay-at-home fifties-era mother, talking with other people, often less fortunate, from different parts of town. “