Author Topic: 200 year plan  (Read 9467 times)

solon

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200 year plan
« on: August 18, 2014, 10:28:57 AM »
Has anybody ever thought about a 200 year plan?

I've been giving this a lot of thought, but there's still so much to work out. Many things in our society are inherited: our attitudes toward money, family, work, and religion among them. And even if you don't hold the same views as your parents, your views are still a product of your environment, if only as a reaction against it. If you're in poverty, you probably come from a long line of poor people. If you're a Christian, you probably come from a long line of Christians. If you work hard and EARN every penny you make, you probably come from a long line of hard workers.

Given all these things, is there any value in thinking beyond your own retirement? What can you do to set your descendants up for success 200 years from now?

Obviously, we have no idea what the world will be like in 200 years. And we have zero chance of ever meeting those descendants. In fact, even our grandchildren will be dead before that generation is born. So what are some ways we can influence the world of our descendants?

If I set up a trust and put all my money in it, and it grows for the next 200 years, could that be useful to them?

Could I start a religious movement?

Should I train my children how to train their children? Should I train my grandchildren how to train their grandchildren?

What sorts of things should I teach my children? Compassion, generosity, and forgiveness? Computer skills, budgeting skills, and how to wash the dishes? Should I teach them to save like mad and retire early? For that matter, should I save like mad and retire early?

usmarine1975

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Re: 200 year plan
« Reply #1 on: August 18, 2014, 10:39:51 AM »
I don't know that I think of it in terms of a 200 year plan.  In my own mind it's the thought of what I can do to make life better for my children and potentially my grandchildren.  Beyond that I do not have much control save I put a lot of money into a trust and mandate how it is used.  With my own children my goal is to teach him to save, to be conscious, and to be a hard worker no matter what he/she decides to do with their own life.  Retirement for me is more a matter of having the decision to do what you want not necessarily sitting at home doing nothing as many see it. 

I do see the value in passing down financial literacy to your descendants as best you can.  I mean we have seen the passing down of financial stupidity from generation to generation.  It does actually make a difference.

slugline

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Re: 200 year plan
« Reply #2 on: August 18, 2014, 10:58:48 AM »
Your best shot at influencing things 200 years down the line might be to write an entertaining autobiography that includes the life lessons you've learned, print some copies on acid-free paper and hope your descendants pass it on.

This is fun to think about, anyway. I doubt that any bit of influence from my 1814 ancestors is with me now.

solon

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Re: 200 year plan
« Reply #3 on: August 18, 2014, 11:04:01 AM »
I do see the value in passing down financial literacy to your descendants as best you can.  I mean we have seen the passing down of financial stupidity from generation to generation.  It does actually make a difference.

Exactly! Except, I don't just want to teach this to my children. I want to create a heritage that will affect many generations. Just like financial stupidity, but in reverse.

RFAAOATB

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Re: 200 year plan
« Reply #4 on: August 18, 2014, 11:15:21 AM »
Who were the richest men in America at the birth of this country?  We remember the politicians more than the ultra rich.  After all, who is the big Rockefeller now?  A quick Wikipedia search shows that Rockefeller IV is a US Senator, so your best bet with money is to fund your own PAC that directly benefits your primary decedent target.

Here's a start to your 200 year plan:

Start with State Representative Solon,
State Senator Solon II,
Governor Solon III,
US Senator Solon IV,
President Solon V,
President Solon VI,
President Solon VII, etc...


welliamwallace

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Re: 200 year plan
« Reply #5 on: August 18, 2014, 11:22:50 AM »
I'll take it even farther. My 200 year plan is for myself. I'd say there's at least a 10% chance I live to be 200 years old with medical advances. I'm planning my retirement based on conservative estimates for an effectively infinite passive income.

solon

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Re: 200 year plan
« Reply #6 on: August 18, 2014, 11:25:26 AM »
I'll take it even farther. My 200 year plan is for myself. I'd say there's at least a 10% chance I live to be 200 years old with medical advances. I'm planning my retirement based on conservative estimates for an effectively infinite passive income.

Wow, that's serious, infinite passive income.

sol

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Re: 200 year plan
« Reply #7 on: August 18, 2014, 11:50:36 AM »
Read up on the Vanderbilt family.  Cornelius V. became one of the wealthiest Americans by building a huge shipping empire and wanted to establish a multi-generational family legacy that would last centuries.  He failed miserably, and you never hear about the Vanderbilt family anymore.  They're still around, they're just not rich anymore.

Compare them to the Rockefellers, the Astors, or the Hearsts, all of which established slightly more successful multi-generational dynasties.  The key difference, it seems, is moving into high society and rigidly controlling your childrens' marriage prospects to ensure they only marry into other wealthy families.  The rich don't stay rich by diluting their wealth with commonfolk marriages.

brewer12345

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Re: 200 year plan
« Reply #8 on: August 18, 2014, 11:57:33 AM »
Read up on the Vanderbilt family.  Cornelius V. became one of the wealthiest Americans by building a huge shipping empire and wanted to establish a multi-generational family legacy that would last centuries.  He failed miserably, and you never hear about the Vanderbilt family anymore.  They're still around, they're just not rich anymore.

Compare them to the Rockefellers, the Astors, or the Hearsts, all of which established slightly more successful multi-generational dynasties.  The key difference, it seems, is moving into high society and rigidly controlling your childrens' marriage prospects to ensure they only marry into other wealthy families.  The rich don't stay rich by diluting their wealth with commonfolk marriages.

From what I have seen, all the brains that lead to the accumulation of the wealth in the first place have generally been bred out of the line within three generations.

Daisy

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Re: 200 year plan
« Reply #9 on: August 18, 2014, 12:14:00 PM »
I think there is a certain joy and sense of accomplishment in finding your own way and successes in the world. A little help is nice and a good boost, but the type of wealth you're talking about here could be crippling to the soul of your descendants. That's all assuming your wealth lasts that long in the family.

usmarine1975

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Re: 200 year plan
« Reply #10 on: August 18, 2014, 12:19:16 PM »
For me the idea is more about passing down a legacy of the mind.  The last few post have alluded to the passing down of Money.  Money is simply a tool that used wrong can be a disaster.  Or used correctly be a catalyst.  The idea for me is to train my children with the tools to pass on a legacy.  If money happens to follow that is great but the money or assets are just a tool not the Legacy I am trying to establish.

RFAAOATB

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Re: 200 year plan
« Reply #11 on: August 18, 2014, 12:28:26 PM »
And that is the mystery.  How can we combine large wealth with an instilled appreciation for wealth and the desire for public service?  After all, being Kennedy rich helped Joseph P. Kennedy III be a US Representative.  It's a lot easier to focus on hard jobs when you know that all the money can cushion a fall that would break the more average of us.

rmendpara

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Re: 200 year plan
« Reply #12 on: August 18, 2014, 01:45:14 PM »
One way is to set up your trusts to be somewhat restrictive (i.e. paying for education costs and providing for a home purchase that must be operated as a primary residence and the price may not exceed 2x the median price in the local zip code, and is further restricted to an absolute % of the trust balance).

Rules and restrictions like that can make sure the heirs can't just blow it on useless crap (at least not easily...). Of course, there are ways to get around a trustee's/custodian's management rules, but if an heir is that bent on skirting the wise decision of their ancestors, the lineage is lost anyway for that person's descendants.

If I leave anything to my kids that is substantial (i.e. more than perhaps 30x the median national income... $1.5 million ish today), I'd probably be sure to include some restrictions in the family trust uses, or just limit it to a more modest transfer and donate the rest elsewhere.

solon

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Re: 200 year plan
« Reply #13 on: August 18, 2014, 02:04:29 PM »
For me the idea is more about passing down a legacy of the mind.  The last few post have alluded to the passing down of Money.  Money is simply a tool that used wrong can be a disaster.  Or used correctly be a catalyst.  The idea for me is to train my children with the tools to pass on a legacy.  If money happens to follow that is great but the money or assets are just a tool not the Legacy I am trying to establish.

I agree, we're talking about passing on much more than money. In addition, you have to pass on the knowledge of how to do the right thing with the money. Or else we have the problem of all the money being gone in 3 generations. Which is why I'm focusing on 200 years. What do I have to do to get the money - and the mindset - that far down the road?

sheepstache

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Re: 200 year plan
« Reply #14 on: August 18, 2014, 02:08:49 PM »
I like the 200-year-lifespan plan but I feel like the first (and perhaps all) people to enjoy that are going to be the ones with tremendous money to throw at their healthcare.

OP, you know The Long Now Institute?  It's a group devoted to questions and ideas that go beyond the current human lifespan.  One of the classic examples is one of the universities in England planted oak trees way back when the buildings were constructed because they knew that eventually the oak beams holding the buildings' roofs would need replacing.

solon

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Re: 200 year plan
« Reply #15 on: August 18, 2014, 02:21:06 PM »
I like the 200-year-lifespan plan but I feel like the first (and perhaps all) people to enjoy that are going to be the ones with tremendous money to throw at their healthcare.

OP, you know The Long Now Institute?  It's a group devoted to questions and ideas that go beyond the current human lifespan.  One of the classic examples is one of the universities in England planted oak trees way back when the buildings were constructed because they knew that eventually the oak beams holding the buildings' roofs would need replacing.

I've heard of Long Now. Aren't they the ones that use 5 digits for the year? I love the oak example!

ArbitraryGuy

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Re: 200 year plan
« Reply #16 on: August 18, 2014, 05:06:09 PM »
From what I have seen, all the brains that lead to the accumulation of the wealth in the first place have generally been bred out of the line within three generations.

There's even a saying: clogs to clogs in three generations!

mozar

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Re: 200 year plan
« Reply #17 on: August 18, 2014, 06:26:20 PM »
How about not being a dick to your kids? My dad went on and on about his "legacy" when I was growing up. And now I just resent him because he cares more about his legacy than who I am today.

Be nice to your kids. Support them emotionally, leave a legacy of respect. I know a few people with huge trust funds, who hate their parents so much because of alcoholism, emotional abuse etc. I think they married down, are living in poverty, plan on donating everything just to spite their parents. I know at least 5 people like this.

Blindsquirrel

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Re: 200 year plan
« Reply #18 on: August 18, 2014, 08:17:36 PM »
  Contribute to IRAs for your youngest family members. Will probably deposit 5K in an account for my favorite and only nieces new child invested in SPY with dividends reinvested. I will be long dust by the time she gets it but it should be worth a good stack by then. Not 200 years but 65 ish. 200 year dynasty is tough to do I think. FYI- a few of the Vandebilts are still pretty fricken rich. http://en.wikipedia.org/wiki/Biltmore_House

solon

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Re: 200 year plan
« Reply #19 on: August 18, 2014, 08:48:59 PM »
How about not being a dick to your kids? My dad went on and on about his "legacy" when I was growing up. And now I just resent him because he cares more about his legacy than who I am today.

Be nice to your kids. Support them emotionally, leave a legacy of respect. I know a few people with huge trust funds, who hate their parents so much because of alcoholism, emotional abuse etc. I think they married down, are living in poverty, plan on donating everything just to spite their parents. I know at least 5 people like this.

There's a whole lot in here, mozar, and I don't think I want to unpack it right now. Obviously, we don't want to mistreat our children. I want to teach them the value of passing on their own legacy - monetary and otherwise. I'm just not sure how to go about it, so I was wondering if someone here has thought about it.

Threshkin

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Re: 200 year plan
« Reply #20 on: August 18, 2014, 08:50:18 PM »
I'll take it even farther. My 200 year plan is for myself. I'd say there's at least a 10% chance I live to be 200 years old with medical advances. I'm planning my retirement based on conservative estimates for an effectively infinite passive income.

Wow, that's serious, infinite passive income.

My retirement cash flow plan is an ever ascending asset curve.  I never want to run out of money.  My kids and grandkids, etc. will be set for life if the plan works.

Of course I will probably get killed by a passing meteor next week........

missj

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Re: 200 year plan
« Reply #21 on: August 18, 2014, 09:24:40 PM »
Can we rename this the "dynasty plan?"  he he

I'm glad this thread is here because I was just thinking today at work, that while it's really cool and satisfying to build up a nest egg and watch it grow and understand how it's theoretically possible for the money to last forever...that at the same time once my grandkids have been helped through college and their first home purchases; I could really care less what happens to the rest of my money because I may or may not even know or like the rest of my "lineage".  In fact, it's possible that if the money keeps growing and gets really big, the money could actually POISON my descendants and turn them into people that are nothing like me or what I stand for.

What about building up a scholarship trust?  That would give a hand up to loads of potential hard workers and free thinkers.  Depending on laws, it may even be a tax shelter if you set it up as a non-profit?  I don't know how restrictive you can get with those things, whether or not you can restrict it to certain blood lines, or certain geographical areas.  Who knows, you might even be able to dictate or limit which types of educations can be pursued.  Maybe one of the "hoops" for applicants to jump through is they have to read your auto-biography and financial treatise and then write an essay about how what you said back then applies in today's world?

Maybe there could be a pay it forward clause in the scholarship contract, they are required to do XY and Z for at least 1 member of your family....I don't know.

cool thread idea!
« Last Edit: August 18, 2014, 09:29:03 PM by missj »

mikefixac

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Re: 200 year plan
« Reply #22 on: August 19, 2014, 12:07:43 AM »
I'll take it even farther. My 200 year plan is for myself. I'd say there's at least a 10% chance I live to be 200 years old with medical advances. I'm planning my retirement based on conservative estimates for an effectively infinite passive income.

Not much talk about it now, but I think you're right. On one hand, many will not live as long as their parents did, but those who are responsible might live longer than any previous generation.

Doubleh

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Re: 200 year plan
« Reply #23 on: August 19, 2014, 12:37:53 AM »
There was a recent similar thread talking about legacies - can't link to it right now as I'm typing on my phone. That mentioned Joshua Kennon who initially comes across as quite unmustacian - some prett expensive tastes - but underneath has a lot in common in terms of living below your means and investing to live off income.

He has some interesting articles on trust funds and inter generational wealth which changed my thinking on this question. As others have said I wouldn't want my descendents to be handed enough money that they never have to work. But maybe enough that they could do a job they love instead of one that pays more could be beneficial. Or possibly a fund that matched the income generated by their own investments in order to incentivise them to build their own portfolio. And in due course that could be added to the trust to benefit further generations.

Plenty of examples of inter generational wealth over here in Europe before inheritance taxes drained them.

Cyrano

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Re: 200 year plan
« Reply #24 on: August 19, 2014, 01:38:21 AM »
Read up on the Vanderbilt family.  Cornelius V. became one of the wealthiest Americans by building a huge shipping empire and wanted to establish a multi-generational family legacy that would last centuries.  He failed miserably, and you never hear about the Vanderbilt family anymore.  They're still around, they're just not rich anymore.

Compare them to the Rockefellers, the Astors, or the Hearsts, all of which established slightly more successful multi-generational dynasties.  The key difference, it seems, is moving into high society and rigidly controlling your childrens' marriage prospects to ensure they only marry into other wealthy families.  The rich don't stay rich by diluting their wealth with commonfolk marriages.

Then Gloria V made her own fortune in the fashion business, and Anderson Cooper is doing pretty well for himself these days. The latter day Vanderbilts have done better when they did not inherit the bulk of the family money than when they did.

teen persuasion

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Re: 200 year plan
« Reply #25 on: August 19, 2014, 10:42:54 AM »
I read a book, "Family Fortunes"  by Bill Bonner, a few years ago.  The subtitle mentioned building as well as keeping a dynastic type of fortune, but I never found any details on the building part.  The ideas for maintaining the fortune were interesting, though.  I seem to remember they set up a family business office, and treated the fortune like a business.  Elder members were on a board of directors, younger generations were groomed to manage the holdings.  Everyone was expected to be involved at some level, though those more interested or inclined were welcome to greater involvement.  They emphasized the education of the youngest generation, and tried to guide their interests rather than just  letting individuals figure things out on their own.  There were family RE properties, even businesses.  One branch had a vineyard, another a different business.  They were international, and worked to maximize value for the family as a whole.

nawhite

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Re: 200 year plan
« Reply #26 on: August 19, 2014, 10:57:27 AM »
One possible option for a trust fund would be one like this:

http://www.joshuakennon.com/creating-huge-wealth-with-trust-funds/

SunshineGirl

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Re: 200 year plan
« Reply #27 on: August 19, 2014, 10:58:31 AM »
I think about my house/property in 100-year terms. It's already nearly 100 years old and reflects that time period. Then an addition was done at some point before we bought it that we've always hated. We are now working to make it the perfect house for us for decades to come (it doesn't need all that much to get there), and the changes should be positively thought of 100 years from now, if we do them right.

I've never thought 200 years in the future -- 100 years is easier for me to imagine!

Less

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Re: 200 year plan
« Reply #28 on: August 19, 2014, 10:17:02 PM »
I do see the value in passing down financial literacy to your descendants as best you can.  I mean we have seen the passing down of financial stupidity from generation to generation.  It does actually make a difference.

+1 to this. Good habits are essential. Also I believe the theory that children will tend to reflect behaviour rather then follow instruction.