You're on your own.
My wife was talking with her best friend the other day about their parents and various things happening in the world and the conversation led into inheritance. Her friend is a professional, as is her husband and they are both earning well. They have two kids, a house they bought from her parents and recently a summer place that they are renovating.
The conversation was on what happens when their respective parents pass, as both sets of parents have two children each also, meaning that an inheritance would be split. She was saying that whilst they feel a little over-extended at the moment (only a little), they know that in the future, they are going to inherit significant amounts from their parents, which means that they will be completely debt free at that point regardless.
As my wife was walking home, she realized that we don't have that situation, as while there likely will be something coming from her parents, there is nothing coming from mine at all, since they have already both passed and left nothing but memories. She realized that while she knew this earlier, she hadn't really considered how big of an impact it makes on us, because unlike her friend, we can't afford to take the risks, because there is far less safety net.
Of course, I have always known that there would be no inheritance for me, because that was never in the cards given the family I have. As such, I have had to rely on myself, which is probably part of why I have the work ethic I do, because if I can't cover it, I don't have it. There was never a time in my adult life where my parents supported me, or passed me a little extra cash when I was short. I'd just have to cutback and have less.
This was especially true once I came to Finland, so my life here has been built from the ground up - or should I say, the suitcase up. I came with a suitcase of the wrong clothes and a couple thousand dollars, which was spent on a crappy, crappy car, so I could take more work out of town, that people without cars couldn't take.
And it is because of this that I probably feel the sense that if people who are struggling financially work a bit harder, they could improve their situation, because I did. However, while I also logically know that there are other factors in play that can hold us back, I do think we can all improve our behavior in some way, therefore improving our outcomes.
And, for me, one of those things is an attempt to maximize opportunity for my daughter. And by this, I don't mean make her path easy and smooth and give her everything. Instead, I want her to have the resources available to her to feel that she can take some risks in life and if she is willing to learn and work hard, use the resources she has at her disposal to improve her opportunities further than I can with the resources I have.
Compounding interest doesn't just compound for life, it compounds across generations too, which is a big reason why the rich get richer. However, regardless of the starting point, we are all able to find ways to use what we have to improve our lives at the micro level, even if the macro view is a shambles. And, I believe that those of us with children should do our best to provide them with the tools that help them make the most out of their lives. After all, it isn't like life is going to be getting easier for them, so the "my parents gave me nothing and I was fine" attitude might be less relevant in todays world.
It is not that it is impossible to come from nothing, but it is likely getting increasingly hard, especially since there is more consolidation in many industries, so the vast majority of value goes to an increasingly small minority. What that means is that for individuals, it is harder to build a business model to compete, no matter the industry they choose.
There are new opportunities in emerging fields however, but in order to really dive into those, you have to be willing and able to take the risks and that often means, being able to survive through the early lean times. This is no easy feat and even after those times, it doesn't suddenly translate into wealth. However, having that little bit of background support financially, as well as people who encourage the attempt, can make all the difference. It might not even require that much, or some lumpsum, but something can help.
And it is more than the direct financial support that helps, because most likely, the parents who are able to leave their children an inheritance, can do so because they have built the habits to generate and hold the value. This means that throughout childhood, the kids are more likely to have financially stable role models to learn from. Sure, this doesn't mean that the parents don't fail in other ways, but failure parents who are also financial failures, isn't any easier to deal with later in life.
My wife isn't that interested in the financial side of things in terms of investments, as she is more at the practical daily level with these things. However, I know that I might drop dead tomorrow and I want to make sure that they have the best opportunity to go on without me. And, even if I live a full life, I want to be able to be that support for my daughter in all the possible ways I can as a parent, including with money.
While my wife might not see this as important as I do, I think that it is because she and I have very different backgrounds. While her parents are working-class for sure, they were also smart spenders, meaning they were quite frugal and didn't overspend. This meant that she always had some safety net, so she doesn't know what it really is to be without it completely. I know what it is to have nothing, and while there are lessons to learn from that, I don't feel that those lessons can only be learned from that state. My daughter will hopefully not suffer needlessly, so she can spend her energy on something more valuable than just making ends meet.
We are a long way from being able to provide that yet though, so if I do drop dead tomorrow, she won't have much coming her way. But, a few years down the track and I hope to be able to have a safety net in place for her that might not be huge, but can save her in the worst of times. When you have your back against the wall, you want someone in your corner and while I might not be there physically, I might still be able to help her.
Inheritance is an interesting problem in the world, because it does assist in maintaining the wealth gap. But, we also don't live in a world where resources are going to be distributed well across the entire population without competition. So, for now, we have to be part of the game and if we want to play to our potential, we have to train well and have the equipment necessary for the sport. In the economy, one of those items is money.
A lot of people have built their careers, starting from hand-me-downs.
Taraz
[ Gen1: Hive ]