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Add to FavoritesChildren need financial support from parents. But the argument is whether it is now or later. Advantages of money differ from person to person. Carvings in Babylonian clay tablets on financial support to children show the best examples. A book "The richest man in Babylon" written by George S Clason wrote on true stories based on Babylonian clay tablets which were excavated by archaeologist carries a lot of advices on children inheritances.
According to Clason's book , a rich man in Babylon gave a big amount of Gold coins to his son with an important advices written on clay tablet. Some time later, after leaving his parents, he lost all his money, but not the clay tablet. He followed all advices in the clay tablet. Long time later, he visit his parents not only with the same amount of gold coins gifted by his parents but also with a equal amount of additional money and two servants whom he bought (Slaves).
What do you think which was in Clay tablets. It teaches how gold would be protected and grew with a talented financial behavior of any person. No mater how much money you give to your children, they take advantage of it totally depend on child's financial behavior. In the same true stories coming from ancient Babylon a very rich old man gift his inheritance to his non-relative instead of his children.
Later he proves his decision was correct and that his non-relative, Arkad who trained for years on simple money management techniques became the richest man in Babylon. It all shows children should be financially supported but it should happen like a 'baton' change in a relay run in athletics. Child should be ready and run in an equal speed as parents but without money to take money from parents at the correct time.
According to the book "Rich dad poor dad" which was written by Robert Kiyosaki, says how his 'rich dad' trained his son on money management till he become very old before hand over his money in inheritance. Rich dad knew transferring of money to child is disastrous without adequate behavior training on financial management.
Therefore, the inheritance should be preceded with golden rules as it was in ancient Babylonian Clay tablet.
First rule is 'Gold' (money) will come gladly and compound with a person who save 1/10 of his earnings.
Second rule is 'Gold' serve diligently and contentedly for a wise owner who profitably employs them. Then, it multiplies even as the flocks of the field.
Third rule is 'Gold' cling to the protection of the courteous owner who invest it under the advice of men wise in its handling.
Fourth rule is 'Gold' slip away from the man who invest it in business or purpose with which he is not familiar or which are not approved by those skilled in its keep.
The final rule is 'Gold' flees the man who would focus it impossible earnings or who follow the alluring advice of tricksters and schemers or who trusts it to his own inexperience and romantic desires in investment.
Many young children inculcate all those negative attitudes of money loosing ways. Therefore, I am of the opinion that money should not be given to a young those who may go against the rules of money protection and growth of it.
Learn more about this author, Susantha Nanayakkara.
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Now
The answer to whether you should give your children financial aid now, or make them wait to inherit, depends upon the household, the type of financial aid given, and the intended use of that financial aid by the children.
As a parent, the financial aid I am most willing and able to provide for my children is in the form of long term savings and investments toward their future. Both of my children have college savings plans that can also be used as individual retirement plans without them having to obtain a separate account in the future. I contribute a monthly amount into these accounts with the express purpose that the accumulated funds are to be used to assist them in obtaining a college education. I maintain ownership of these accounts while they are young, and once they reach an age where I feel they are responsible enough to take them over, I can transfer ownership solely to them.
If the funds are not used for college, they will still be accessible to them (through me) to help them do other things such as buy a home, attend a trade school, or start a business of their own. Additionally, since the accounts have been started for them now while they are both under 5 years old, the monthly contribution needed is very small and manageable for my wife and I. The accounts gain interest over time and based off of minimum returns, and by taking the annual rate of inflation into account, there should be enough money available to pay the majority of their expenses if they choose to go to college. I am not giving them a "free ride" or a "hand out." Instead, my Wife and I are trying to assist as much as possible while forcing them to be a joint contributor of the remaining funds needed.
The reason why we chose this plan for our children is because we believe that our children should be equal partners with us when it comes to getting the things they want or need from us. Of course we want to give them every opportunity to pursue whatever dreams and life ambitions they have, but we are not in a financial situation to be able to foot the bill 100%. By doing this, we believe we are teaching them the value of a dollar, and we are instilling in them the importance of saving for the future.
As a former Financial Adviser, I counseled many clients on the benefits of starting savings plans while they were young instead of waiting until they were fifteen years away from retirement. What many people fail to realize is that if you allow a savings program time to accumulate, you will not only have more money available to you when you need it, but you will also be able to contribute smaller amounts if you start earlier!
People who wait until they are in their forties to start a retirement plan will have to invest an amount that is five to 7 times greater than if they had started saving for retirement when they were 22 and fresh out of college. The problem with that equation is that the average person does not see the pressing need to start saving when they are young, because...well...ret irement is a long way away still. In most cases, it's not until people reach their forties that they realize they are only 20 years away from retirement and their retirement accounts, if any, are not sufficient enough to allow them to retire at the age they wish to do so.
Those who say that we should just let our children wait to inherit money from us, are forgetting that in order for our children to have an inheritance, we, the parents, must first have something to leave them when we die! The fact of the matter is that we don't prepare for our own futures, and we likely aren't going to prepare for our children's futures either. The majority of people have no will or trust set up, they have no disability or life insurance in place, they have no savings accounts or retirement accounts, and they don't see the value in setting any of those up.
And if someone does have all of those things in place, and waits until they die to leave it to their children in one lump sum, they aren't going to know if the children used it wisely to further their own lives, or if they just went on a 10 spree to Vegas and left it all at the Bellagio!
Personally, I would like to die knowing that I was able to provide for my children throughout their lifetime by having accounts established in their names, that I funded, to help pay for the things they needed or wanted. Also, when I die, I will know my children are well taken care of because they not only learned how to provide for themselves, they also earned what they have by being an active contributor. Giving your children a head start in life is vastly different from giving them a hand out, or leaving them a wad of cash to count over your grave.
Learn more about this author, Rob Hetrick.
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