Motivations: Money Lasts Just Three Generations | Series 5.8

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Welcome to the EnjoyMore30s Family Finance

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podcast. The only podcast dedicated to making life more

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enjoyable for young families by hitting on the financial topics

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that tend to weigh on us, stress us out, and distract our focus

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from simply enjoying life.

Joseph Okaly: 00:00:17

Hello, thank you for joining me as always on the

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EnjoyMore30s Family Finance podcast. Every week, as you

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know, I'm talking to you about money so you can take steps

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forward, gain that confidence, remove that financial anxiety,

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because we want you just to be focusing solely on making your

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life more enjoyable. This series, as you must know by now

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we're in the eighth episode of it, we focus all of our energy

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on the kids. We focused our energy on your kids with the

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Your Kids Money Mindset series, because as a family, you know,

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the kids are what we're all about. So we want to make sure

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that we help you with that part of your life as much as

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possible. If your kids are better off, we know that you'll

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be happier too. And what we know is that we're not just trying to

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get through this today. But we're trying to build something

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for our kids. That's why we're listening. So their lives are

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better. So their kids lives are better. But maybe surprisingly,

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that can very often and not just in the US but all over the

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world, it's not the case that that wealth goes on beyond the

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third generation.

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So as always, if you like what you're hearing, please make sure

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to subscribe or follow us on Apple podcasts or really

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wherever you listen. Clicking stars, writing reviews, it

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really really helps us reach the literally millions of other

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young families out there just like you.

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Last week, we talked about those things called trusts, those

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things you've heard about on TV, the movies, those things that

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sound like rich people have these, maybe I should too, and

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we broke down more as to what they are, and when you would

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actually really have to be concerned with them when it

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comes to your kids. So if you haven't checked that out yet,

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please make sure to check it out soon.

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Today's episode is actually a bonus episode. I had not

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originally planned to cover this topic, but I happened to come

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across it mid season. And it's titled Motivations: Money Lasts

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Just Three Generations. So what we're going to cover today is

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how human nature, all of the world seems to dictate that

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money and wealth is going to dissipate as the generations

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progress. The goal for today's episode is for you to become

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aware of the challenges that are not associated with creating the

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wealth. We're always focusing on how to create the wealth, but of

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actually maintaining the wealth across generations, which

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requires some really completely different techniques. And in

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many ways, wealth is much harder to maintain, than it is to

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create because it leaves your direct control. The Chinese have

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a saying "wealth does not pass through generations". So that's

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about as direct as you can get. The Japanese are a little bit

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more subtle. "Rice paddies to rice paddies in three

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generations". The Scots? "The father buys, the son builds, the

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grandchild begs". And here in America, we use "Shirtsleeves to

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shirtsleeves in three generations". So maybe you've

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heard one or all of these. They all kind of go to the same

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thing. What all of these mean, is by the third generation, just

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the third, wealth is lost. And you have to start all over again

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at the bottom. So why is wealth lost? What happens to it? The

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first generation is poor. They have nothing, just their

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motivations to be better. They have a purpose in life, to make

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life not better just for them, but for their family. They're

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alone. They want to be self sufficient. They want that

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autonomy to create. And as they advance, they're trying to make

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their business better and better. They're trying to get

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that mastery. The second generation now gets to build off

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the first. They likely saw, you know, to some degree with their

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parents went through it wasn't you know, as hard for them

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obviously. They saw how hard they worked. They heard stories

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of how hard they worked to get there. They're not building from

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scratch. They have certain guidelines, most likely of the

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direction their parents went in, but they still have enough

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purpose, autonomy and mastery, those three things, very

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important things. They have those aspirations to likely

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continue carrying that torch on. Then we get to the third

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generation, the grandchildren. The grandchildren never saw what

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grandma and grandpa went through, it was more removed. By

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now they've probably grown up with certain privileges, let's

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say an easier life and that value for money, so the

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relationship they have, the mindset they have when it comes

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to money, is likely altogether different than just two

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generations ago. And as you can see by the many sayings all over

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the world, can cause the money to quickly dissipate and starts

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that cycle all over again for the next generation to come to

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start building up from nothing.

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Now I had heard of the "shirtsleeves to shirtsleeves"

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reference before, but it wasn't until a recent podcast episode

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that I listened to by Nikki Unani and her Connected

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Generation podcast, which is fantastic, by the way, where she

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interviewed the author of a book called Intrinsic. And that

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evaluated this very concept. What happens when there is a

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lack of purpose, a lack of autonomy, a lack of ability to

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pursue a mastery. And what this can lead to is a very unhealthy

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and potentially self destructive money mindset. The ironic part

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of really all of this, though, to me, is an easier life is what

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we're all by default, trying to establish for our kids, right?

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'We're working so hard for you, for your better life. We fall

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down, you don't have to fall down, we'll fall down for you.

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We take the risks, you don't have to take the risk, we'll

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take the risk for you'. As human beings however, if you remove

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our purpose, our autonomy, our ability for mastery, we

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seemingly become lost. We don't have a direction. If life is

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easy, like we're trying to make our kids lives easier. If we

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make that easy, though, that means they may not have any

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purpose. If their stability comes with limited autonomy to

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operate, if everything has been mastered and created for them

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already, where am I to go kind of a mentality. This really,

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really resonated with me, because so much of what I'm

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doing and working with middle class families, is creating

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wealth for retirement, creating wealth for happiness and

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otherwise. And thankfully, this can often lead to a surplus of

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it for our clients, so that they may share more of it with the

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generations to come. It makes them happy to give and make life

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better for their children. In fact, we have to encourage many

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of these people that can afford it, to spend the money. And it

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sounds weird, probably having a financial advisor encourage you

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to spend your money. But as you know, from listening to this

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podcast, it's all about making life as enjoyable as possible,

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not dying with a bunch of money in your pocket. What this all

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kind of leads to is greatly amplifying the importance of

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teaching your kids an excellent money mindset. This teaching

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that you give them has to extend not just to them, but to their

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kids and maybe their kids to be able to have wealth actually

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last long term. A mindset then that establishes money as a

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tool, with happiness in life as the goal instead of the goal in

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of itself. If you solely just want them to work so that they

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have money and stability, then the logic follows, if they're

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simply given money and stability, then they're all good

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to go. As we just saw, though, worldwide, not just in the US,

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worldwide, that is not how it tends to play out. If we instead

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encourage them to find a purpose that they love and enjoy, give

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them space for that autonomy, even if it means failures along

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the way. Give them that opportunity to master something

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completely new, then they'll have the building blocks of a

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happy life, a longer lifespan, and you know, as well as longer

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lifespan to the wealth that we're helping create. Talk to

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your kids when they're young. I can't encourage that enough.

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Teach them why they are really working when they get older.

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Even talk to them jointly about what they may like to do with

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the wealth that they eventually receive. What would they like to

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help create? What lessons would they want their kids and their

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grandkids to learn and develop? If every generation kind of

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looked at the money as a nicer and nicer set of tools to create

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with, I mean, what wonderous things could they all set their

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mind to building?

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So again, you know, I want you to walk away from today's

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episode with a new mindset when it comes to generational wealth,

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and maybe reexamine the importance and the skills that

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we need to teach for wealth to truly be generational for those

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to come. So we want to expand our mindset. I hope you're

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walking away with an expanded mindset of "am I just trying to

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make my life easier for my kids because that automatically

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defaults to better? Or should I be trying to shape the mindset

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to enable them to go out and create a purpose, autonomy to

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move and just a reason and a desire and a passion to go out

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and master something" because at least in my opinion, I feel like

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for my own kids as a parent, that's what I see them making

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them really truly happy in their lives.

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So thanks for tuning in today. Next week we have the final

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episode, which is the series recap for Your Kids Money

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Mindset. I've really you know, received such a good charge of

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energy from the season. Getting to just focus and think about

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how to enable you to not just help yourself, but to really

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help your children as well both practically as well as maybe

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mindset and emotional-wise. So I very much thank you for tuning

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in, being a part of that experience.

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Overall if you're able to implement what we cover like I

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say every week, fantastic! You have less to worry about, more

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focus on enjoying life. As always, if you do want me to

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help with anything, have questions you need help in

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clarifying, check out the Ask Joe section on the show's, on

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the show's website, excuse me, EnjoyMore30s. That's

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EnjoyMore30s.com. Until next week, thank you very much for

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joining me today and I really look forward to connecting with

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you again soon.

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The conversations on this show are

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Joe's opinions and provided for general information purposes

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only. They do not constitute accounting, legal, tax, or other

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professional advice for your specific situation. You should

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always seek appropriate advice from a financial advisor,

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accountant, lawyer or other professional before acting upon

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any content or information found here first. Joe is affiliated

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with New Horizons Wealth Management LLC, a branch office

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of TFS Securities, Inc., and TFS Advisory Services an SEC

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Registered Investment Advisor Member FINRA/SIPC.