It wasn’t that long ago that I published a post on how to approach the question, How Much is Enough? Since that time, though, I’ve come to some conclusions about the failings associated with that question — to the point that I think I just might hate the question. Let me tell you why:
- Answering how much is enough is a goal-setting question. However, the goal one can set from that question is probably a pretty empty goal. Few individuals or couples really want to set the table for their kids to do nothing. Yes, there may be a base line of comfort or a safety net that they might wish to provide — but just about everyone wants their kids and grandkids to be self-sufficient people, so planning for something entirely different will generally be dissatisfying.
- Answering how much is enough, when not coupled with the same introspection regarding oneself, can be a very minimizing question. By that I mean that there is an assumption that the kids won’t be able to handle as much as the senior generation is presently handling. Of course, sometimes they can’t. But it can also be messaging that the kids will never measure up or can’t be trusted — messaging which could turn out to be a self-fulfilling prophecy. Answer the question may also mute the interest in training/raising up the skill set and moral competence of the next generation as well.
- It avoids or obscures a larger, more important question: how are we as a family to steward the resources we hold?
I’m guessing that some of you may have a pretty good initial objection to the above: if the question is good enough for Warren Buffet, who are you to say it’s such a terrible question? Buffet, as many know, is often quoted as having said “I want to give my kids enough so that they could feel that they could do anything, but not so much that they could do nothing.” It’s a fuller phrasing of the “How much is enough?” question. And while the phrasing is appealing, and there’s much Warren Buffet could teach me, I’m going to stick to my belief that it’s the underlying goals and objectives that are of utmost importance. Moreover, I believe the Buffet quote is not likely reflective of his primary goals.
First, the quote has to do with feelings. Character is always of greater import than feelings. Second, doesn’t Warren Buffet have enough that he could do nothing? He chooses not to, but he could pack it in whenever he’d like. If it was of primary importance to live on that edge of having to be productive, why doesn’t he allow himself that gift every day of his life? Third, does that magic balanced inheritance point presume the kids have nothing to contribute? If they do, does that impact what might be left behind? Fourth, does the feeling that you can do anything have any intrinsic value in and of itself? I think not — although it can have value if tied to resourcing productive, moral people.
Of course my intent with this post is not to chastise Mr. Buffet. This post is also not an indictment of those who have posed the question “How much is enough?” Rather, it is a further call to explore whether our planning, parenting, grandparenting, etc., are driven towards the right ends. That’s at least how I see it.
What do you think?
I believe when a person sets his heart on money “enough is not enough” but when one learned to be content and ingrained in his mind that the resources will be used for the well-being of others; then he’ll find joy in giving.
I tend to agree with you, Gregoria — although answering the questions for others as opposed to oneself has its own implications. 🙂
I find this post and the prior one on How Much is Enough very thoughtful and accurate. Even though the question is natural and ubiquitous from wealthy parents/grandparents, it is not just not a good question because of its many underlying assumptions. A better question is, “How much would you like to prepare your kids for?” Properly prepared children and grandchildren can handle amazingly large sums of inheritance responsibly.
To drive home the point you make in this article about assumptions, I sometimes will ask clients or audiences at client events, “how much is enough…for you?”
That’s an excellent question, Jim — it gets at the heart issues that can drive the question when directed at the kids or grandkids. Parallel questions that can also be helpful is “where are these assets best utilized?” or “where are our assets best stewarded/managed?” I find the latter is a bit easier to start with, because we’re all on a journey where we learn to release a bit of the grip on the wealth that we call our own. Regardless, advisors need to be brave and honest enough to ask questions like you’re asking, Jim, as well as provide them with the safety to explore the implications of what their brave and honest answers might be.