@waltworks , can you answer some questions about the generational wealth?
1. Do you earn an income of $500,000 or more?
2. Are you building some kind of business that could scale up rapidly?
3. Do you plan to sustain a mustachian (40%+) savings rate over the course of an entire career, rather than just 10-20 years?
I'm used to seeing the phrase "generational wealth" in articles about Bryce Harper signing a new baseball contract, not here.
1. Ha! No.
2. Ha! No.
3. Yes.
Look, even if you only make, say, $100k a year (relatively normal white-collar professional salary), you can end up with a LOT of money when you die if the following conditions apply:
-You maintain a >50% savings rate (as we easily have/do/will) and are generally disinterested in material possessions.
-You don't quit earning income early (ie, work until normal retirement age or longer).
-You invest your savings.
-The stock market returns something approximating it's historical average (7% real) over your lifetime.
-You actually live to ~80 like an average healthy 'murican.
If you sit down and run those numbers for our family (we make less than that but not a ton less) you end up with something like $20,000,000 (real/inflation adjusted, not nominal) when you die, even if you fully retire/stop earning money at 65. And in our case neither adult made more than grad student stipend money (I lived like a king on that $18k a year!) until age 30 or so. You'd do much better if you got a decent job right out of college.
Many people will also inherit significant sums of money from parents/relatives but I'm not including any windfalls in that. I'm also leaving out social security. There are of course downside risks too (dying earlier, long term care costs, meteor strike, etc).
$20 million is enough to do some interesting stuff. At 4% rule withdrawal rate, it throws off $800k/year (though there would be some significant overhead costs to operate the trust.) That would pay for a lot of descendants educations, food/housing stipends so they can afford to try starting a business or have a kid, etc. Or it could fund someone to fly around in a jet and act rich, I guess, if that's your thing. But it's certainly enough to create significant effects on many generations if you want to.
-W