Why are people here so infatuated with creating generational wealth?

Because I want my grandkids to have the chance to be Donald Trump.

But seriously, coming from a background without any wealth and working in IB, I've seen the multitude of advantages wealth can give you, as well as the stupid shit I've had to go through and I'm not gonna put my kids through that as well.

a sense of purpose from working towards something greater than yourself

Yea right lol, I’m sure if you hit it big you’d give all your cash to some random, corrupt charity and not your own flesh and blood. Get over yourself.

You are making so many assumptions here and Ozymandia has pointed most of them out. Another assumption is how giving to charity automatically = good. Why are you so sure that charities efficiently use all those funds for their causes?

You have 3 kids so you're ahead of me here, but I don't understand why you don't get the mindset of people wanting to create generational wealth - do you ACTUALLY want to give out your hard-earned wealth to completely random people who you don't even know will reach the end causes you want? Or would you rather prefer consolidating your wealth - within the family, that is - which creates a sense of achievement for most? And finally there's just the immense love people have for their own kin - people just want to support their children if they can help it.

I don't disagree with you, just sayin' that these motivations are pretty easy to figure out, with just a little empathy. Especially for working in finance - having empathy is super important especially concerning people's financial decisions. Even if you don't work in WM

Lol wut? I want to work till 80 because I don't want to stop working, not because I want to suffer through it to provide generational wealth for my kids. Others who started in worse financial conditions might be motivated by that which is fine too. Who are you to judge?

I know guys with parents in 9 figure net worth range that would out-work you under the table as they are intrinsically motivated, and I know others who are lazy useless bums. It's not the money that creates either situation, it is the parenting. Generational wealth is there to give your kids an unconstrained choice on their career to do what they love vs. what they must. I would NEVER accept my kid desiring to be anything less than the top 10% of their chosen profession...whether they get there or not matters less than the sheer desire and grit to try. If you can instill that in your kids, the rest will take care of itself 

I won't bother to address the numerous fallacies in the assumptions in the original post as others have already pointed out, but there are many reasons and motivations for people to want to create generational wealth. I grew up lower middle class, teetering on the brink of poverty. Considering the privilege and entitlement I constantly see on here, this is an upbringing the majority of this forum likely wouldn't truly fathom. Imagine going to a school where textbooks are outdated, teachers are overworked, desks are covered in graffiti and the building itself looks like it's falling apart. Quality education? More like a lottery where you hope to get a teacher who cares. Healthcare? We're talking about choosing between seeing a doctor and putting food on the table. And then there's the neighborhood - a place where hearing sirens is as common as hearing birds chirp. Crime, abuse, drugs, you name it, it's a part of everyday life in the neighborhood where I'm from. And if you think that's bad, try adding discrimination and systemic oppression into the mix, based on things like your skin color or where you live. And let's not even get started on the systemic barriers - those invisible chains that keep people from climbing out of the hellhole we were born into.

Perhaps a small minority of you have grown up similarly and understand what its like. This is why people strive to make money: to break the cycle of poverty and hardship and improve their living conditions and opportunities; to achieve financial independence and security and have more choices and freedom in life; to support family and community and pass on legacy to their descendants and create a world for them that's different from the one we grew up in.

I’m nowhere near wealthy enough to speak on either of these topics nor would I want to become that wealthy. 

Will say from my anecdotal observations that people I’ve met in finance are overly obsessed with getting rich and not really enjoying the moment and the journey itself.

What is the difference between having a few mil versus having generational wealth? I think your lifestyle would be generally the same, what could you do differently? I’ve always thought making all that extra money is just going to make you unhappy because you’ll spend all your time and energy getting there just to be really old and lonely with a fat bank account but unfulfilled because you’d realize that your life isn’t much different than when you had a couple mil yet you’d miss out on so many fun experiences because you were too busy working and chasing the bag. Am I missing something? 

I'm also very confused about why you are confused about people wanting to create generational wealth. People want to give their kids a better and easier life. What is so confusing about that? You may not agree with it, but to not understand it is...well...as Ozy put it "Are you honestly this dense?" If you have more socialistic tendencies and would like to donate your hard earned wealth rather than pass it down to your kids, that is perfectly fine...welcome to the Democratic Party, but to push that onto others is a bit selfish, no? Sounds like the exact same thing as estate taxes, which this country already has and debates over. Regarding "spoiled, lazy, entitled kids," as others have mentioned this comes down to parenting. A very close friend of mine's family are literally billionaires, but you would never know that was his background. He is incredibly stingy and has not received any financial assistance other than college/MBA tuition from his parents. He attended MIT undergrad (and no..no donations were made...he graduated with a 4.8 GPA, double major and double minor, while working a mix of day and night shifts). His first job was at a top law firm where he was the first employee to ever be hired without a graduate degree or PhD, and now he is finishing up his MBA at a top M7 with MBB lined up. His cousin on the other hand, decided to "work" for the family office and get paid $500k/year doing nothing. Amazing how much of a difference parenting can make.

Want to give my kids a more advantageous upbringing than what I had. My thesis is marginal improvement per generation has the same power as compound interest.

Also, there are plenty of generational family heirs that didn't abuse their privilege and are doing just fine.

Don't overthink and have fun!

Leaving money for your kids and grandkids is also creating a positive impact. This post reeks of self-righteousness. As someone who didn’t grow up with wealth, I would want to see my family not have to endure the same struggles I did. Money doesn’t buy you happiness, but it does buy you freedom in today’s world. And freedom is invaluable.

I don't want to see my kids grow up in poverty either, but at the same time if I raised them in a good neighborhood and sent them to a good college what more could they ask for? Agree that money buys you freedom, that's certainly what I'm working for at this point....but I also want my kids to go out and work for that freedom too, make the tough decisions about how to handle life, go through some struggles to build resiliency....not just count down the days until i die so they can inherit a $30M trust.....

Definitely want to leave money behind for my kids to keep them safe, however, I'd pick a couple of million dollars and spending time with them than working 90+ hours per week and never see them to leave them 30+ mil

I think the people who talk about it either don’t have kids yet or don’t yet have the kind of wealth that could change their kid’s life. When you have both, you seriously question what it means to do the “right” thing for your children. I’ll leave it at that as I don’t want to influence the direction of travel for this topic. 

OP you can raise your own kid(s) however you like but it’s quite odd to try and impose your views onto others as the most sensible way to raise kids when in reality most don’t see it the same and have their own preferences as to how they want to raise their children 

I agree with your overall sentiment but I see how some people are annoyed at the post.
 

Did you recently read Die With Zero? The whole book is about this. You shouldn’t save and save and save and then die. You should use your money to live a full life. Some people’s definition of a full life is grinding to $50mm and leaving it to their kids. Your definition of a full life (and mine) is nothing like that. That’s all you need to say 

Because I have extended family members whose kids could pursue whatever they want / not worry about money ever (while maintaining a certain lifestyle in VHCOL / HCOL areas) and I've always been sort of envious of their lifestyles. Having 'trust fund' money is life changing for the parents and children. Eliminates so much stress.

A lot of the 'generational wealth' I've seen are in tech / creative spaces (aka all you need is a STEM degree to really break into the spaces they've become successful in). Haven't grown up around or knew many people who became 'trust fund' rich off high finance jobs so as a result, I think this type of wealth is more achievable than people think. Have seen people do something similar with owning multiple blue collar businesses and passing it down to the next generation not having to worry about their kids needing a JD / MD to take over a successful private practice in those white collar professions for example.

Dude said his parents are leaving him some cash and a house lol

Yeah.. easy to say that when you have a solid support system champ. Wouldn’t be surprised if OP’s definition of “middle class” is 500k+ household income (not rich, but definitely not middle class)

The world is changing, fast. There may not be another opportunity or country like this (US) to create wealth in the future. I am setting my kids up now along with teaching them the most important things (1) family and a very close (2) education.  
 

It’s not about them living in pure luxury for the sake of luxury.

This post somewhat confirms a long-held superstition of mine that the middle-class is the most selfish, narcissistic segment of the economic ladder.

I grew up lower-class, watching my family work themselves to the bone trying to give me the kind of opportunities they never had. My dad worked 2 separate back-breaking construction jobs and slept 4 hours per night; my mom worked 12-hour shifts as a nurse 6 days per week, then came home and took care of the household after. They did all this so they could afford to send me to a private school, in the hopes I could make something of myself.

I became friends with a lot of upper-class kids at that school, and what became apparent to me is that, in their own way, their parents weren't too dissimilar to mine. The only difference was the yardstick. Their parents still worked 18-hour days, still pushed their kids hard to make something of their lives, still sacrificed their personal experiences for the benefit of their offspring, and so on. It's just, for them, the payoff was bigger. They could afford to raise their children in a large, spacious home. They could afford to do the school run in a Range Rover. They could afford to bring their children to charity dinners and ski trips in the Alps. They could afford to provide for their children's material needs so they might pursue a career about which they were passionate, regardless of the financial rewards. It might've been a different world than the one I lived in, but the motivations were the same. Remove as many of the barriers that exist between your child and their future success, so that they might build for themselves a life they enjoy.

Then, you get the middle-class. So determined, for some strange, perverse ideological reasoning, that their children's life must be made artificially difficult - as if their existences are simply some warped character-building exercise. It's one thing to say 'hey, kid, I've got less bread than a Soviet boulangerie, you won't inherit much'; it's entirely another to say 'I'm loaded, but I'm gonna leave most of it to charity because God forbid your life becomes too easy'. Why on Earth would you want to deliberately make your own child's life harder? It's a uniquely spiteful mindset, and I only ever find it in middle-class types such as yourself.

To answer your question, I'm creating generational wealth so that my children's lives may be easier than my own. I don't give a rat's ass if it makes them entitled; they didn't ask to be born. I made that choice for them - I may as well make sure that decision they weren't at the table for doesn't cause them undue hardship. That's not to say I don't expect my kids to make something of themselves - I do - it's just that I'm not going to make that any harder than it needs to be. 

TL;DR: We don't understand your mindset either.

That should be the entire point of staying in this industry for 20+ years for most people.

Not everyone is here to make 5m+ and be drugged up and partying into their 40s (as one example)

Also just because someone comes from a wealthier background doesn’t automatically mean they’re lazy and a waste. A vast majority of people that are considered successful in terms of career come from a good home. If my kids are able to graduate without debt or skip 2... nevermind having a Roth set up (I will make sure of that too) theyll have more freedom to focus on achieving goals.

I almost think the way we’re heading 0 debt in 20+ years will not only be super I common but also not be a guarantee to financial freedom while working hard…it’s even like that now for first years with little to no debt who aren’t making over 80k living in tier 1 cities.

Hilarious to watch this self righteous moron continue to double down on his dumbass take, repeatedly refusing to acknowledge logical responses to his original post. As Ozy mentioned from the beginning, is he honestly this dense?  

Many of the posters above me have already provided strong rebuttals, so I'll try to simply offer one more perspective that may be useful for you. It sounds like you may have too narrow of a view around (1) the buildup of "generational wealth" and (2) what folks will do with that wealth.

(1) From your post and comments, it sounds like you assume that people will 100% need to ignore family, personal interests, etc. "creating some empire" in order to build up generational wealth. This isn't the case for everyone. Many people actually enjoy what they do, and so are willing to work hard at it -- especially in fields like finance where hard work is often rewarded with relatively high pay.

There are also many people who do value family and non-work interests, but are willing to grind in their 20s/early 30s before they have children (or while children are still young) so they can build that strong professional foundation and give themselves the optionality to have a better WLB in the future. It's not that they love work and hate their families, but rather that they view grinding as a worthwhile shorter-term sacrifice to enable a better life for them and their families.

(2) It also sounds like you imagine people who build generational wealth will leave their children loads of money and encourage entitlement, laziness, etc. This isn't the case for everyone. Some of us who grew up in lower middle class / lower-income households know what it's like to grow up struggling. So the goal is to make sure our children have enough of an inheritance so they won't have to go through those same struggles. How much money will we leave to our children? How much money is too much to leave them? Those answers may be different for each person, depending on their point of view. But it's too lazy of a POV to assume leaving your children some money will automatically make them spoiled. That probably has more to do with the quality of your parenting than anything else.

Also, not everyone is aiming to create generational wealth ONLY for their immediate, nuclear family. Some of us actually know of relatives and community members who also could use some assistance -- cousins and uncles/aunts, members of your church community who are struggling, youth in the neighborhood you grew up in, etc. Many people -- you as well, it sounds -- often reference charities as some holy grail of giving. But what about the people you actually know? The people in your proverbial backyard? The people close to you and around you who may have been dealt a bad hand, who you can help? Just because you may not have ideas of how to spend your money outside of charities, it doesn't mean we all are in that same position. Some of us have actual ideas for how to spend that generational wealth ourselves, in impactful ways that don't involve charities.

I come from an immigrant family with many relatives here in the USA, and also loads of relatives back in my home country. I also have a church community with many people from lower-income communities. There are so many people that generational wealth could help, even outside of my immediate family.

If we are being honest with ourselves, a lot of people fall in love with growing their net worth and making more money, far beyond the point in which they reach Financial Independence or have the ability to walk away and pursue other interests. I truly believe those that tie their purpose to 'creating generational wealth' to pass on to their kids and grandkids are honestly just coping, in the same way that the absent parent who puts career above all else is coping by 'doing it for the family' when they already live lives of extreme financial excess 

Just say you like making a lot of money and building wealth, but admit that you enjoy doing it for yourself and not out of some sense of greater altruism 

Lol “why do people on this finance focused forum want to make lots of money and then want their kids to be well off?” 
 

Coming from a family where my mom put three kids through college on just her wage, preventing that scenario again.

I don't know about generational wealth, but I do want to, if I have kids, have enough to allow them to pursue their true interests and enjoy life still even if that interest doesn't pay all that well. I'm lucky that I generally enjoy finance/business and that field happens to be somewhat lucrative. Not everyone has that luxury and I personally believe life is most fulfilling when you're in a flow state doing what you enjoy doing with people you care about.

I've seen a good number of kids from either already wealthy families or kids who attain tremendous wealth at a young age despite growing up middle class and neither scenario necessarily ends up well. I wouldn't want my kids to be entitled/live in a bubble where they feel like the world owes them something, but I also want them to be able to indulge in experiences and not feeling like they're missing out on certain things, for which you unfortunately need to have a level of financial security to attain. Certainly though, I don't want them to grow up to be like most wealthy ivy leaguers I know that are obsessed with prestige, status, and superficial things, like where they bought their loafers from.

I think this is because of these kids are still in early 20s and haven't realized just how hard it is to work and earn in the real world, let alone make generational wealth. People like Musk and Gates were extremely lucky as they had everything handed to them on platter. Well, probably not exactly but they ARE product of privileged circumstance.

Sounds to me like some pipe dream of creating a family dynasty. In realty, shirtsleeves to shirtsleeves is the more likely scenario.

I agree, my kids won't be getting an inheritance due to the many reasons above. Now, for those who prefer a donation, it's important to note what kind of charity you're going after. You want to put your money where the organization can do most good for most people, and aren't shady and will stand for the truth. That's why I will give my estate to the Catholic Church, given it's the one founded by Jesus Christ himself. The only thing my kids are inheriting is God's salvation.

Projection.  Most of the weirdos obsessing over generational wealth wish they came from it.

If you think about it, wanting to have wealth with the intention of influencing later generations is fucking dysfunctional.  Look at how trump parades his kids/spouse(s) around like trained show dogs, and how the nobility control every aspect of their lineages….the most emasculated man in earth is ‘king’ Charles of England.  
 

You know what’s an actually impressive display of applied wealth?  Public endowments.  An example is Ben Franklin’s legacy, and he’s not on the $100 by accident. It’s a product of his personal greatness and not something he set out to do.  If you live a life that’s worthwhile, your legacy will be apparent by virtue of your excellence…and not because you set out with a vanity mission of making your mark.  Look how history judges such people, it’s never positively.

Live a good life, kick ass, and your legacy will take care of itself

you're a liberal, aren't you ?

Whatever money I have when I die is going to my children instead of to strangers (i.e., charity).  It's not an uncommon thing that people choose to leave most of their $ to charity, which is absolutely mind-boggling to me.  Historically in America, the primary motivator for ppl to work hard their entire lives was to make sure their kids were better off than they were.  That's increasingly less true.  There's also a misconception that you can't leave your kids a lot of money or live well without spoiling them, which just isn't true.  I don't come from a wealthy family, but know plenty of ppl who do, were raised well, weren't handed $ or things w/ no strings attached, and are hard-working/disciplined ppl.  When I die, 100% of my money is going to my family and the higher $ amount that is, the better. 

Couple points mainly hit above:

1. At OP, I get what you're saying in the sense, just because you leave someone money doesn't mean they will use it correctly (look at the Vanderbilts). On the flip side, plenty of children of wealthy have growth their trust fund. However, I'd say, you leave children money so they have options/freedom. With money, they don't have to take a job they don't want to live somewhere unsafe.

2. We're creatures of comparison. Money is really the only way some can compare themselves to one other, or the only way they can really show love to their children. You can say, I gave my children more money than someone else, but you can't really say, I "loved them more" than another to their own children.

3. I think money can be used as an excuse for not being a good parent/working all the time. So you may not spent time with your kids, but if you give them a big inheritance it works out in their heads. 

4. I'd also say right now in history is probably the easiest time its been to create generational wealth. Before you had to be born into it or it would take generations, now you can learn AI over a weekend or buy some trash coin and build wealth. So in a way, its become the new flex for people. Use to be bragging about sending your kids to college, or making a lot of money, now people brag about owning assets that they can pass down because they think its easy (i.e., watch a Tik Tok on financial advice). 

There are so many reasons.

1. Spending scales as you grow your net worth. If you make it to 20, 30, 40 million, "blowing" the extra money doesn't really provide marginal happiness. You can easily spend on the next nicest thing, but that's not what depletes your net worth. It's saying hey, I spend 500k per year but I'm going to step it up to 800k by flying private all the time (including international trips), etc., stuff that is super wasteful in the context of your life and you'd rather help the next generation. Leads to point 

2. If you are scaling your income and spending, by the time you have this significant net worth, your lifestyle is pretty set. Again, things can get marginally better, but it would be unsettling and not enjoyable to let's say quadruple your spending - that's just not your life. 

3. All the talk about stopping once you reach a number sounds good, but when you get there, it's difficult for many reasons. (i) you have kids so you actually don't have enough money to live the lifestyle you want with them while they're young (enough bedrooms for everyone, great experiences and trips, living in a nice and safe location), (ii) not only do these jobs pay more as you get older, they also become better - sure you could view the past 30 years as a sunk cost, but it feels dumb to let's say have $5m, you've worked super hard your whole life, and now you make $1.5m and the job is fun and you set your own schedule to NOW call it a day, (iii) retirement isn't for everyone and "downshifting" to another job where you make less and work less isn't actually a better option (can you imagine being an MD where you talk to people you want to talk to, work from business class, take vacation on your own time to now having to talk to some middle aged "manager" to put in a PTO request for christmas)

4. When you have kids, you genuinely care about improving their lives, and money is one way. Not everyone who grew up middle class has such great memories. And whether you did or did not, having more money does create more opportunity for experiences, comforts, conveniences and sets your kids off on the right foot. 

5. Leaving generational wealth does not mean raising bratty kids. This is a trope made up by the middle class and poor. Generally those with generational wealth from white collar professions like finance have kids who are extremely hard working in addition to having a foot forward in addition to having a better understanding of what works and what doesn't. Do you know what the generational wealth provides for? You're 28 and just got married and you're a PE senior associate moving your way up the ranks and you just had a kid. Okay, well if you grew up middle class now you have to live 2 hours outside the city because you can't afford a big enough place, you can't afford help, you're still paying off student loans, etc. Instead, with generational wealth, you're able to afford a 3 bedroom that's 20 minutes from your job and can afford a nurse and a nanny so that your partner can continue to explore their career and pursue their passions. And in a few years when you want to make better memories with your family, you can buy a decent vacation house. Things you should be able to do in 15 years, it just accelerates your path. All the nonsense about "well this doesn't create grit" is truly nonsense - it's not that deep, you're already working super hard, etc.

6. Lastly, do you know what's an amazing monetary gift to your kid? The ability for them to follow their passions without having to make money. It does not mean they aren't working hard, but maybe they want to be the best violinist in the world, maybe they want to be a doctor (which really is not a path to wealth anymore), etc. Options that are more difficult for someone who doesn't have a nice safety net

I'll provide my own perspective as this question sort of cuts deep and I can see and partially agree with both sides. I think I'm actually the perfect lab rat for this!

I wrote a post a few months ago about being anxious about not being able to replicate my living standards growing up. My mother was a European diplomat and I grew up going to (the best) private schools in Australia/NZ and across Europe, then to top UK universities. My mother also supported me fully financially in London when I was unemployed for 9 months after graduating. However, she is a civil servant and is retiring in her small home town with a really measly pension. She literally wouldn't able to afford to fly to Australia or the West Coast of the US to visit me, even though I would've gone to the best schools in LA and lived in the best neighbourhood had she been posted there.

My father is an investment banker in new york, like you guys, but because of a lot of different reasons he has never purchased any property (even though he went to NYU Stern in 1992 and made $170k in 1996) and I won't be getting virtually any money from him either (though this will be much more than from my mother, as rough as his situation is from our perspective). The bottom line of my situation is that I have 0 inherited wealth despite having all of the privileges of growing up rich before I started working full time (not in the US though). And I'm very grateful for all of them. But the reality is that there's no money in my family at all, they literally couldn't give me £20k for half a down-payment on a studio here in London, even though that's less than 1 year's tuition at any of the schools I've attended in my life. Would I trade safaris in Kenya or a few years skiing in the alps or even a year at some public school for £20k now (I guess think of it as $50k in New York)? If I knew I would inherit even $1m (very low compared to most of my friends), would I feel way more protected financially? Hell yeah! I'd even feel more confident around girls of my 'social class'. I don't even think my friends have fully processed my situation, when I told them that it would be impossible to pay for a US MBA, they said "why doesn't your dad just pay? What's wrong with him?", it's never crossed their minds that I'm actually from a normal middle class family setup, and to be honest it's something I wasn't aware of til I was 25 or so either.

So to answer your question yes, both of my parents lived their lives through the P&L - all the money that came in went out, and the balance sheet is empty now. I absolutely want to leave wealth to my kids so that they don't have to feel the same fear that I'm feeling now! Though to be fair, even leaving them $1m each in today's money would be more than good enough, just enough so that they have something to fall back on or to pay private school fees for their kids, we're not talking family dynasties here.