Create a Trust for generational wealth and teaching about saving

[Helix]

@triviamaster

I just take issue with the word “obey” because, in my mind, it wouldn’t be an “order”, just an option.

Hm, I might have been a bit blunt. The reason I choose “obey” is because not heeding your suggestion has very serious consequences and those consequences are coming only from you wanting to have them met. They are on one hand just opportunity cost, but on the other hand there is their sheer magnitude.

@triviamaster

Putting myself in my child’s shoes is exactly what I’m doing: I would have appreciated to have a fast track to early retirement by benefiting from my parents investments and contribute to a “family institution” that I would pass on.

Regarding the child’s shoes: I wrote some possible demands down in hope one of them would go counter to your willingness. Seems that I failed, you can see them all as opportunities.

Let me make an example concerning someone else: The demand to be met is to have your own children. That, according to the founder, is a healthy and beneficial way of life. And that might even be true for many people. But as always many are not all:

• The gay son will have trouble meeting expectations. He might reject ethically ambiguous practices as surrogate pregnancies. And he might have built his life in a country that does not allow adoption for gay couples.
• The hideously disfigured daughter does not find a man who wants her. Her accident has left her infertile. Adoptions for single parents are not allowed.
• Yes, even the pedophile who is torn between their given sexual orientation and the wish to be a decent person and not hurt children qualifies. When this person reaches out for psychological help and manages to never give in to themselves, who could deny their virtue. They might likely avoid children and more so not have their own. They might also never cough up the real reason for that.
• Or one might just simply not like children. Not the best material for parenting, and they might believe there are enough humans on earth anyways.

Those are examples of people who can not comply or even reject the demands out of virtue. Some of the cases will have easy checks to accommodate them, some will be indistinguishable from stubbornness. They are not insignificantly few. I’m positive there are many similar cases for your 30% rule, even if it is a bit harder for us here to imagine. After all, we think our way is the right way, else why would we be on it?

@triviamaster

Honestly, I don’t know if I’ll be able to withdraw and rebalance a portfolio at 80. Will I be able to select ETFs correctly? What if nobody in the family has an interest in the stock market and can help? Of course, there are other options than a trust fund but it could fulfill that need as well.

I don’t know enough about the legal possibilities of trusts to say how well it will shield your older self from themselves (and from your present you). But you could probably always get those without trying to hold on to other people’s steering rudder instead of providing knowledge, wisdom and support if wanted regardless of the exact course.

[triviamaster]

@Helix

I wrote some possible demands down in hope one of them would go counter to your willingness. Seems that I failed, you can see them all as opportunities.

How are you going from a “putting X CHF or Y % in the fund in order to get Z CHF later” condition to a “you have to be married and have children” condition ?
I didn’t answer because it seemed completely unrelated to what I was suggesting.

@Helix

I don’t know enough about the legal possibilities of trusts to say how well it will shield your older self from themselves (and from your present you).

As soon as the money is the trust fund, it’s not yours anymore. The trustee is managing it. It can be a person or an institution.

[Helix]

@triviamaster

How are you going from a “putting X CHF or Y % in the fund in order to get Z CHF later” condition to a “you have to be married and have children” condition ?
I didn’t answer because it seemed completely unrelated to what I was suggesting.

As stated, I try to communicate the concept that what one might think is the right way, might not be the right way for everybody. Them others might be your children.

I also tried to avoid to confront mustachianism directly as earlier you seemed to hold the belief that only activities that enable a 30% savings rate or similar are worthy:

@triviamaster

Like being a singer or an actress? Well, if it’s her true calling and she’s good then earning money won’t be a problem. If it’s her true calling and she’s terrible, well… maybe it wasn’t her true calling after all… Note that, assuming the 30% of her income for 10 years condition (which I’m not set on yet), she could still “try” things for a few years. For example, she could try to make it as a photographer for 3 years and then, if it doesn’t work, switch career and then start contributing to the trust fund.

Please don’t assume that I state my thoughts unrelatedly. But have some more concrete examples:

• Many a famous painter died poor.
• Teaching poor children in poor countries does not have to go hand in hand with self enrichment.
• A content person does not need to earn a lot and might not want to work more. This can be unrelated to their ability to put money to good use without wasting it.
• Some people like to burn through the money. As long as it doesn’t hurt them the only reason that remains is that you look down on people who choose this lifestyle.
• The disabled as stated by others.

[Schwarzpulver]

@triviamaster

It would work like a family pension fund with contributors and beneficiaries. For instance, she would have to put at least 30% of her income for 10 years

I am late to the discussion but kind of like the idea of establishing a trust fund for future generations. One thing to consider though. Your original idea might severely impact your kid’s life choices regarding children: If he/she starts working after university, say, at 25 years old, would that mean he/she would have to delay having kids until age 35 if he/she wants to take time off work for children? Just some food for thought.
On another note I heard of a family trust fund that has been giving stipends to descendants whishing to go to university. This seems to have been working for a few generations. I really like this idea because of the value it places on education.