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Old 07-27-2011, 05:31 PM   #41
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I tried to stay away, but I can't help myself.

No way do I owe anybody anything, including my kids. By the logic used to justify this, each generation would be working to fund the next. If you work to give your kids a nest egg, whatever that is, don't they then owe you're grandchildren a nest egg, meaning they have to work as long and as hard as you did to pay the debt owed to the next generation? And so on and so on?

All this talk about the lack of jobs and future prospects is nothing but doom and gloom. The vast majority of people have jobs and aren't going to lose them. The vast majority of young people entering the job market will get a job, though it may not be the glamorous, high paying one they were promised. Despite the economy, many will begin businesses and actually succeed eventually.

I live in Nevada. Worst unemployment in the nation. We went to the movies today. Amazingly, the theater was still open. We ate breakfast at a casino, still open. I noticed many people out and about shopping, engaging in business, even, *gasp*, going to their jobs. We need to get a grip. Life goes on. This is a blip on the radar. Things will correct, one way or another. If the government doesn't do something, the market will. I'm sure all the people that lived through the Great Depression are snickering at us right now.
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Old 07-27-2011, 05:37 PM   #42
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Originally Posted by bizlady View Post
We told our daughter (only have one child) not to expect anything, nor do we expect anything from our folks. Fortunately, she and her husband are good savers and well on their way even with their modest income.

When she was in college, we told we would cover tuition room and board for 4 years. Misc expenses were hers, as well as anything after 4 years. She graduated in 3 1/2 years.

We do give generous gifts to them as we feel we can afford to. Once we get to SS age and have a sense of how our finances look then, we will start making some distributions to them if we believe we can afford it. Our plan provides a nest egg for them, but the plan will have bumps along the way.

Do we owe them--no. Would we like to assist and leave them something that makes a difference- you bet! But we will take care of our needs and some of our wants first, as this is OUR time. :-)
I totally agree with you.
I told DS the same thing: 4 years of college tuition, board and lodging at the university hall and books and supplies. Work in the summer to pay for the rest of your expenses. Meaning, I will not be subsidizing your dating and drinking and others. No out-of-state tuition for me.

DD is easier. She attended a local college. I gave here the rules for using the car. I pay for gas and insurance - she can only use the car going to school and PT work.

It turned out that 4 years is not enough for them. DS switched majors and DD had not been taking full time courses. What is one to do? You can not leave them hanging when it is too close. So, I ended up paying for the 5th year.
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Old 07-27-2011, 05:40 PM   #43
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How are you guys paying for your kids' educations? Did you use 529s, UTMAs, or some other means? I've got a newborn so I'm looking for some tips.
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Old 07-27-2011, 05:47 PM   #44
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I don't feel I "owe" my son a good nest egg but I will be sorely disappointed if I don't leave him a little something...whether he needs it or not. Would prefer to leave him a really big inheritance but who knows what life will bring.

His father died when he was young and left me pretty well off. I feel obligated...yes obligated...to pass a little something along to him. He is independent in his life now, but I am giving him a $13,000 gift every year to spend down my eventual estate. I think if I needed help (money or otherwise) at some point down the road, he could be depended upon to help me. But I would hate to ask him. I am better at being on the giving end of things.
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Old 07-27-2011, 05:48 PM   #45
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I have no kids here, but I do believe older generations *do* owe something to younger generations given the economic mess and massive debt they are also leaving for them.
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Old 07-27-2011, 05:53 PM   #46
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My wife and I fully intend to leave money to our children. With the way the economy is now, and who knows how it will be in the future, the idea of giving each of them some money to help with their lives pleases us. Perhaps it will help them buy a house or a car that they need. Or perhaps it will help them pay for their kids education. That's how we feel....
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Old 07-27-2011, 06:17 PM   #47
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I don't feel I owe my son anything, but I do plan to set him up with some investments that I can spare, and let the magic of compound interest grow. He is 25 supporting himself, but I don't mind getting him a little further along.

My mom has been critically ill on and off in the last year, and if she passes, this family money may go towards a trust for him as well.
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Old 07-27-2011, 06:29 PM   #48
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DW & I managed to complete college without any support from our parents. We have not received any inheritance and do not expected any. Nevertheless, we are FI due to our own efforts of hard work and savings. Do we own our children anything? Technically, no, but we plan to leave them something.
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Old 07-27-2011, 06:33 PM   #49
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swampwiz, with all the money you're saving with your Chapter 7 and not paying your bills you should be able to leave a bunch of money.
You know, considering the $134K I ended up saving (net) from the Chapter 7 as a base and presuming a 10% real return rate (I presume a net 7% return of the S&P and me beating the market by 3%) - and thus a 7 year doubling rate, that in 28 years, that nest egg will be worth about $1.1M. This would be a great legacy to leave to any children.
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Old 07-27-2011, 06:38 PM   #50
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Our first grandchild is 7 months old. We already have $30K in a 529 plan for her. Our plan is to put the RMD's from the IRAs we inherited into that plan each year until she goes to college.
Aren't you concerned that by the time your grandchild hits college, that the costs will be so high and/or the redistributionist welfare state so well entrenched that any cash in a 529 account would basically be cash that would be implicitly confiscated (i.e., there would be no reduction in tuition for such a well-endowed student, etc.)?

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We do not have to scrimp on our own lifestyle to do these things so we are happy to be able to augment the finances of subsequent generations.
Bless you. I suspect you have been an excellent parent and will be an excellent grandparent as well.
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Old 07-27-2011, 06:38 PM   #51
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You have a link for that "greatest disparity of wealth" claim? Because off the top of my head I would've put the excesses of the 1890s or the 1930s ahead of the 2000s.
And you would be right about the Gilded Age. Here are the top dogs in current dollars. Gates and Buffet do pretty well but Rockefeller and Carnegie blow them away. In shear numbers, the gilded age barons carry the day. But, the past few decades have been a huge reversal of the mid century norms returning us to pre-depression levels of disparity:


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Old 07-27-2011, 06:41 PM   #52
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I myself am saving every thin dime I can, which hopefully will provision a somewhat comfortable retirement--most likely in Malaysia or Thailand.
I am living abroad in Eastern Europe (day job - English teacher/consultant) and I figure that if I were to have children, it would be with a woman from here, so my long term plan, if I can't afford a decent life in the USA, is to just live here. My nest egg could certainly well support any children that would want to live here as well.
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Old 07-27-2011, 06:46 PM   #53
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I hope that by the time we come to leave a legacy, our kids won't need it for anything other than to boost their own retirement.

If we get to activate the FIRE plan with 200K more than we need, I quite like the idea of putting 100K per kid into any home purchase which they might make. That would be on the basis of an outright purchase of a part of the property, with the idea of keeping the money safe on "our side" of the family, in case of divorce. So for example if DS marries and buys a 300K property, we would buy 1/3, and we'd structure it legally so that 51% of the partnership could force a sale. That might mean us ganging up with DDIL to screw DS, but I suspect he would accept that risk ; on the other hand, it would mean that they could sell to move up, etc. (Does this make sense ? Has anyone done it ?)
I would go a step further and try to make it so that on paper, your DS doesn't have any assets, that way if he gets into a situation like I did, of massive debt, he can go the route of Chapter 7. The only benefit of you giving him the cash now is to make it easier for you to not lose much in Chapter 7, or if your estate is so large that you would be paying an estate tax.
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Old 07-27-2011, 06:46 PM   #54
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My parents fed, housed and clothed me until I graduated from high school and joined the Navy. They didn't owe me a thing more than that. If I had children, I would feel precisely the same obligation (but maybe add in some financial aid for college).

I agree with REW's statement earlier -- if there was anything left when the young wife and I depart this earth, my kids would be welcome to it, but I wouldn't feel an obligation to ensure that result.

But given my lack of children, my view should be appropriately discounted..
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Old 07-27-2011, 06:48 PM   #55
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I would go a step further and try to make it so that on paper, your DS doesn't have any assets, that way if he gets into a situation like I did, of massive debt, he can go the route of Chapter 7. The only benefit of you giving him the cash now is to make it easier for you to not lose much in Chapter 7, or if your estate is so large that you would be paying an estate tax.
You seem sort of fixated on bankruptcy. I'm wondering why.
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Old 07-27-2011, 06:54 PM   #56
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I think we owe our kids the education to create their own lovely nest egg, which we've provided.
But with all the outsourcing and artificial intelligence applications wiping away professional level jobs, aren't you afraid that an education will have little economic value, leaving the educated class in the same rotten, brutish situation as the so-called "lower classes"? Can you safely predict that your children or grandchildren will not become unemployable when they become senior level employees at the age of 35?
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Old 07-27-2011, 06:56 PM   #57
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Originally Posted by swampwiz View Post
Aren't you concerned that by the time your grandchild hits college, that the costs will be so high and the redistributionist welfare state so well entrenched that any cash in a 529 account would basically be cash that would be implicitly confiscated (i.e., there would be no reduction in tuition for such a well-endowed student, etc.)?



Bless you. I suspect you have been an excellent parent and will be an excellent grandparent as well.
Well, based on your reference to "the redistributionist welfare state" I suspect we will not find much common ground on our expectations for the future of our country and our children/grandchildren. There certainly are political/social trends that might impact our plan to fund our grand daughter's college education via 529 plan. But it appears to me to be the best mechanism currently available. Our daughter-in-law is a PhD scientist and our son is a software engineer. I am pretty confident that with their and our support our grand daughter will be able to afford college no matter what happens.
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Old 07-27-2011, 06:57 PM   #58
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Originally Posted by swampwiz View Post
But with all the outsourcing and artificial intelligence applications wiping away professional level jobs, aren't you afraid that an education will have little economic value, leaving the education in the same rotten, brutish situation as the so-called "lower classes"? Can you safely predict that your children or grandchildren will not become unemployable when they become senior level employees at the age of 35?
I think many of us believe our children will be resilient and resourceful enough to find a way to succeed in life - without having to bail on their obligations when the road gets bumpy or 'gaming the system' to look for an easy way out.
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Old 07-27-2011, 07:02 PM   #59
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Originally Posted by flyfishnevada View Post
I tried to stay away, but I can't help myself.

No way do I owe anybody anything, including my kids. By the logic used to justify this, each generation would be working to fund the next. If you work to give your kids a nest egg, whatever that is, don't they then owe you're grandchildren a nest egg, meaning they have to work as long and as hard as you did to pay the debt owed to the next generation? And so on and so on?
The idea is that if you were to leave a big enough nest egg, your descendants could live off of the interest (earnings) of that nest egg, and leave the nest egg to further generations, like Henry Ford and John Rockefeller did (obviously, you would not have to leave THAT big of a nest egg, but I think you get the point.) Wouldn't you feel that by living it up during your lifetime, that you would be harming them?

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All this talk about the lack of jobs and future prospects is nothing but doom and gloom. The vast majority of people have jobs and aren't going to lose them. The vast majority of young people entering the job market will get a job, though it may not be the glamorous, high paying one they were promised. Despite the economy, many will begin businesses and actually succeed eventually.

I live in Nevada. Worst unemployment in the nation. We went to the movies today. Amazingly, the theater was still open. We ate breakfast at a casino, still open. I noticed many people out and about shopping, engaging in business, even, *gasp*, going to their jobs. We need to get a grip. Life goes on. This is a blip on the radar. Things will correct, one way or another. If the government doesn't do something, the market will. I'm sure all the people that lived through the Great Depression are snickering at us right now.
I am much more pessimistic that you. I feel that the rubicon has been passed and that the economic value of labor is on an unstoppable decline. The only question is whether the future is one of a dystopian "Soylent Green" or a utopian socialist one (the only good future I can see as possible.) Either way, having a family nest egg will help your legacy feel good enough about itself to reproduce, thereby allowing your genes a better chance at winning.
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Old 07-27-2011, 07:10 PM   #60
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You seem sort of fixated on bankruptcy. I'm wondering why.
Because the ability to file Chapter 7 was the most extraordinary financial move I have ever been able to do.
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