Generational Wealth

 

Money is a sensitive topic to broach so I will speak in generalities. But I also think that precisely because of the nuances, we need to have more openness about our attitudes about personal finances.

Generational wealth is a thing, since many things enable the rich stay rich. Indeed, an important marker of wealth are the physical things that get passed down from generation to generation, like a vacation home or a fancy watch.

But what I want to explore, somewhat autobiographically, are the attitudes we have about money and the extent to which those attitudes are passed down, either explicitly or through observation, or alternatively when those attitudes change over time.

“Poor” can be a fairly fuzzy term, in that it is usually used in a relative sense in that we think of a community consisting of those who are richer and those who are poorer. Of course, there are times and places where you would consider that just about everyone is poor, particularly from a modern lens. Indeed, for much of history and many parts of the world, you could say just that.

One could argue this was true for my grandparents growing up in Taiwan. And then fortunately, they ended up doing pretty well for themselves. But they never forgot the habits and constraints that governed their childhood.

Similarly, my parents have done pretty well for themselves. But they too have tended to live well below their means, practicing great frugality, both from what they internalized from their parents as well as from being immigrants to a new country and desiring to put my sister and me in the best position possible to succeed here.

Now that I am myself a parent, I think a lot about what I learned and observed from my parents, and in turn what I want to instruct and model for my children. I’d like to say that we too live modestly and below our means, partly due to our upbringings, and also as a practical matter of being able to save up for retirement and be generous in our charitable giving.

And yet I’d also like to say that we try not to act as though we are as constrained as my parents and grandparents. Every time I take the kids out for ice cream when we’re on vacation, I make it a point to tell them that my parents probably never once indulged in this “luxury” that our kids are privy to on an almost daily basis multiple times a year. And I say this not to make them feel guilty but rather the opposite, which is to reinforce for them – and, importantly, remind myself – that isn’t it great that we can enjoy this thing.

Of course, for many people, going out for ice cream is hardly an indulgence but rather a normal thing that normal people too. But it still feels like one to me, as do a number of things that are otherwise comfortably and uncontroversially within our family budget. I know a lot of children of immigrants face this tension.

As with my grandparents and then my parents, what I want for our kids is that they are modest about money, both in how they spend it and how they approach it. And yet, I also want them to know that they are lucky enough to be able to enjoy material things and that they should do so with pleasure. 

Said another way, I would feel I was letting down my ancestors if I raised kids who were money hungry or flaunted their wealth. But I would also feel I was letting down my ancestors if my kids felt unnecessarily constrained about spending, placing upon themselves an unnecessary anxiety about scarcity and thrift. And, in turn, I hope they are able to pass on healthy attitudes about personal finances to their kids.

Alas, far too few of us have a healthy attitude about money. I think this is because we receive so many false and negative messages, and don’t counterbalance them enough with our own honest talk about what’s good and right. It’s what compelled me to muse about my own financial journey, in which I stand on the shoulders of my past generations and hope to lay a strong foundation for my future generations.