Here’s a thought experiment with which I have thought about experimenting.
When I die, I will give my child one dollar along with a link to this article (or rather a link to my digital home in the metaverse where an NFT of this article will await them on my holo desk.)
Such an approach to death and money will mean many things, some good and some bad.
It will have meant that we calculated our lives correctly (a difficult task). Calculating our living expenses, the rate of inflation, equity returns, and most importantly, the date of our deaths would be hard enough, but add the many unexpected events that occur as time goes on and it’s basically impossible.
So, let’s say we get close enough. A margin of error. More if we are too conservative, less if we are too aggressive.
This also assumes a safety net of cash allowing us to withstand any shock. If the housing market crashes, or we lose our jobs, or an unexpected and expensive illness occurs, we won’t be out of the game.
It will then mean that instead of saving as much as possible during our lives, we spent as much as possible during our lives, without going into debt.
What would spending everything we have give a child? Here are a few things off the top of my head:
By spending extra money on time saving expenses, we can spend more time with our kids. What good is a huge gift of cash if your parents were always working and never had any time to raise their children?
How do you buy time? Buying time looks a lot like frivolous extravagances. Things like a lawn cutting service, a flight without layovers to get home sooner, outsourcing home improvement projects, living in a more expensive neighborhood closer to work to lower commuting time.
These are the things I was raised to do myself or do without. But time and attention are the only real currencies in life, so it’s worth being uncomfortable spending this money if it’s in service of a greater good.
Health is purchased many years in advance of when you need it. It can be bought by paying more for whole foods. It won’t register on any hospital scans for decades. Paying for gym memberships or state park passes for the family. Buying gear like bikes and rock climbing equipment. Therapy sessions and workshops to better communicate frustrations and expectations. And because we’ve bought time as well, we have the ability to use these things.
Joy is bought with delayed gratification and the events or activities that are delayed and subsequently attained. Building a swing set for the backyard and then using the time and health we’ve also bought ensures our future children will have the most opportunities to have a joyful upbringing.
Living close to and visiting friends and families often, even when it costs more or is inconvenient to drive to their house, buys children joy as they spend time with their tribe. I recall a trip that my mom and I should not have gone on according to the budget, but for which I will eternally remember.
Maybe it is a cabin up north, planning a vacation to Disney World, or paying the astronomical prices for popcorn at the movie theater.
Ostensibly, we’d pay for our 18-year-old to attend a prestigious university.
However, that seems to be one of the last purchases we might make for a child’s education. Perhaps not at all with the way the world is changing.
Instead, the first purchases would be trips to museums, books across disciplines, subscriptions to the best apps which have gamified learning, maybe even private lessons for the musically inclined (which I am not). Fees for whatever sport they want to play so that they can learn to be part of a community or team.
As a skateboarder, I never learned how to be part of a team, but I learned how to be part of a community. This valuable life skill can be taught.
It might also include reliable rides to a part-time job so they can learn responsibility, how to solve problems, interact with people, and earn their own money. It might also mean just booking a Tesla Robo-taxi.
There is future safety and present safety. Future safety can be bought by paying for insurance (life insurance and health insurance for myself mainly). In the event I die, I can rest assured the payout will afford my spouse or children to remain in a safe area with clothing and food.
It also means a home in a safe neighborhood. Which requires eschewing the conventional wisdom some millennials have after witnessing the GFC that housing is risky. It means using a mortgage as forced savings and responsible leverage.
Present safety can also be bought in the form of new(er) cars with more safety features and better crash test ratings.
Well, if we bought all the preceding categories of items and services, we will have bought many memories along the way, and instilled a set of values and morals into our children for which they can recall and lean on in times of difficulty. I believe these will prove far more valuable than an extra couple zeros on the check they receive from my attorney after I’ve been buried.
If I’ve explained this to my children well enough, it will never be that “we don’t have money to pay for that” but that “we choose to spend our money on different things” in the hopes they will appreciate it more as they get older.
I recognize that were it not for many of these same items being provided to me by my mom, I would not be in a position to do the same for my family one day. It is a privilege to be able to have these thoughts and the finances to act upon them.
The difficulty is that this requires constantly rebalancing work, savings, investing, and ultimately spending. Thankfully, I love this stuff.
To my children, if you read this and still wish I would have left you an inheritance, stop whining. You already got it. Now log off your OASIS and go outside.
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This is great–I’ve always been more in favor of a living inheritance and giving money while you can still enjoy seeing it put to use. When you break it down as you did it’s hard to argue in favor of a lump sum at the end of a life without those advantages provided.