Without a plan, one plans to fail.
That’s the reason why I am so adamant on having and building a trust fund for ourselves and our future generations.
Without a purpose for trust fund and future generations, one will likely live without care for money and how it’s spent.
Want to spend on that new toy? Buy.
Want to fly someplace? Go.
Want to splurge on XYZ? Do it.
Sure, I am not against spending a portion on lifestyle and luxuries, but I do not align with people who live hedonistically only without plans to make their future, generations and world a better place.
You do you.
Building a legacy trust will also decrease strife and conflict between siblings, family and its recipients, given that me and my wife will be the one setting the tone and purpose for the fund that we built.
We’re not just gonna handover our hard earned monies (not that there’s super a lot at this point, as we have to build from scratch, but over time and compounding, perhaps we can make something worthwhile for the long long term).
Handing over all earnings, assets and cash to the next generation, in my opinion, is a bad idea. Unless all you’d amass is less than $100K, then whatever. If you have more than enough, say north of $2-5M, then I think that putting it in a trust that can be self-sustaining and perpetuating with some regular payouts may be better for your future generations.
This is in line with the idea that people without idea or purpose of money, will have no regards to spending money, especially if it’s money that they did nothing to earn. Usually if you put in the work to earn, save and invest, you tend to have more vested interest and value each dollar, because if you think about, every dollar you made is made with your energy and time, which you cannot get back, forever.
2021 is gone forever.
Back to a $5M trust fund, say it invests on your instructions in global ETFs, with a standard returns of conservative 6% per annum. If you instruct to draw down 2-3% per year (to X recipients), and reinvest the rest, it can keep giving and growing over time.