Working hard for the next generation

The other day I met up with a retired physician and his adult kids for dinner. His (the retired physician) father was also a physician as well but the kids are not. From the looks of their home, it was clear that there was a bit of generational and self-generated wealth—six acre land, fine artwork, sculptures, $200,000 piano—you get the idea. While not professionals, the children were successful in their own right. The daughter was a professional musician on tour. She was a classically trained violinist, pianist, gymnast, and held some history degree. The parents spoke of how gifted their children were like any other proud parents would.

Just like any pragmatist would, I started to wonder what factors influence how we choose our lifestyles and careers.  How much of these factors depend on family finances?  Music lessons are not cheap.  Piano lessons can run anywhere from $50 to $100+ an hour.  These lessons can recur on a weekly basis.  These activities do add up.  If this physician’s daughter went through childhood without those music and sporting lessons, she may not have even realized any potential in a career in artistry.  How do parents even know if their children will have any talent to nurture?  Maybe without those lessons she would have still carved out a career doing the same thing. We’ll never know. What is important is that this physician’s next generation was still able to carve out a successful career, albeit perhaps less financially successful than their father’s.

“I worked hard so that my son could be in a band.”

Not everyone who pursues a life in art can be financially successful.  I’ve met plenty of gifted musicians whose daily chore consists of struggles to find performance venues along with trying to write their own music.  Many of them have other blue collar jobs in order to make ends meet.  Another doctor who I work with occasionally has a son in a band. I’ve never heard of his band, but I do hear about the struggles of getting discovered by a scouts. Perhaps they will become famous one day, but it sounds like a tough job. I’m not sure how he actually makes a living.  The son drives an M5.

I’ll stop judging now.

I like to think that with proper financial decisions and continual hard work, wealth can be sustained and built upon in successive generations.  However, I can see through my colleagues why sometimes even conscientious families will have difficulty sustaining wealth.

We want the best for our children.

No, I don’t intend to blame our kids for society’s downfall.  But it is tough to withhold opportunities for our children especially if we are able to offer our time, money, or knowledge.  I know that my parents sacrificed their paychecks, savings, and time to help further my fund of knowledge.  With our children, we can often be biased to think that they are more capable than they might actually be. Who knows if your kid has the talent to be the next top professional golfer? Better start those lessons early and get the best set of clubs on the market!

This not a parenting blog, but rather a financial and lifestyle blog for high income earners. Chances are that if you’ve stumbled onto this website you probably have enough compulsion to prevent your hard-earned wealth from ending after your generation. But many of our coworkers may have a different view of their lifestyle and could be spiraling down a path that they don’t want. I suppose that in the end, it may not matter to you anymore if the next generation struggles.

How much assistance do you offer your kids?

(Image courtesy of Flickr)

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  • PICU MD

    I think you can put spending on your kids in 2 buckets. In one bucket are expenses that enrich the child either academically, artistically, or athletically. I think even they are above and beyond what “most” people would spend I do think using our extra financial power for the benefit of our kids is the right thing to do. For example, if you buy your kid an expensive SAT prep course and you have the money to do it, by all means.

    The other bucket is toys. That’s everything from a new PS4 to our friends M5. I think there’s a guilt factor that occurs from our busy lifestyles that make us overcompensate by buying stuff for our kids. Obviously we all know that no amount of stuff replaces us being there.

    • Smart Money MD

      True. I envision myself cranking up quite a bit of spending on my kids’ educations and experience over the next decade. Will it prolong my working career? Probably, but my parents would’ve done the same if they had the means.

      • PICU MD

        How much do you feel like we should contribute to our kids education (assuming we can afford it)? Just college? College and med school? etc

        • Smart Money MD

          Provided that we can afford it, I’d spring for college. Professional school beyond that might blow a hole in our retirement plans. However, I know plenty of doctors who are able to fund their kids’ medical education fully as well. It really depends on their generation too. These doctors who are funding their kids’ medical school are in the early 60’s. Many of them also practiced during a time where medicine paid a whole lot better than it does today.

          Many of the top private colleges these days have tuitions around $50k+ a year. If you include room/board and some miscellaneous costs, the financial aid packages estimate a cost around $70k a year!

  • Did you say $200,000 piano?!? Hoping that’s a typo, but guessing it’s not. Wow.

    Our kids take piano lessons; we’re doing guitar with one of them, too. I’m willing to spend on my kids certainly, but not splurge excessively.

    Best,
    -PoF

    • Smart Money MD

      Once your kids become virtuosi, you too can splurge on a Bosendorfer Imperial 290. You even get 97 keys instead of the usual 88. Consider it an investment. 😉