This article is adapted from Perpetual Wealth: How to Use “Family Financing” to Build Prosperity and Leave a Legacy for Generations by Kim D. H. Butler and Kate Phillips. The book contains a whole chapter on raising financially responsible children! Right now you can download the entire PDF at Partners4Prosperity.com/pwbook.
There is a saying attributed by some to Abraham Lincoln, “You have to do your own growing no matter how tall your grandfather was.” This is especially true when it comes to money!
Even when great sums of money are passed on to future generations, multi-generational wealth rarely lasts more than a generation or two. It fails when the children—even if they are middle aged “children”—haven’t done their own growing. Money given to someone not ready to hold it is like water poured into a leaky bucket.
“Keeping up with the Joneses? Don’t – most of them are flat broke.” —Steve Adcock, Think, Save Retire
Homes, cars, healthcare, groceries and a college education all cost much more than they used to. Thanks to inflation, the price of goods and services increases while the purchasing value of our money decreases. But another type of inflation that may have an even greater impact on your finances: lifestyle inflation.
Lifestyle inflation is the natural tendency of human beings to desire improvements. As one blog defined it, “Lifestyle inflation is the unnecessary expansion of spending to match an increasing income.” We especially see it’s effect over time. Let’s look at some examples of lifestyle inflation.
If the word “budget” does not make you jump for joy, you are not alone. Budgets exist to track, control, categorize and ultimately limit your spending. Although they can provide us with greater control and—eventually—freedom, budgets are based in concepts of scarcity and limitation.
Budgets are the monetary equivalent of diets. Instead of limiting and restricting food, budgets limit and restrict spending. And while diets—and budgets—can produce results deemed desirable, nobody really likes dieting.
Is there a different way to think about managing our money that might produce desirable results—without a sense of deprivation? We think so! In this article we (Kim Butler and Kate Phillips) share ideas of how to manage your spending with a prosperous mindset!
Are all investments equally suitable for your retirement plan? Do some retirement account assets work better than others… and if so, why?
You can put almost anything into some type of retirement account—from a mutual fund to an alpaca farm! Awhile back, we wrote an article about some of the BEST investments to put in a retirement plan—especially a self-directed retirement account. Today, our focus is on what DOESN’T belong in that retirement account.
Qualified retirement plans or accounts are those that meet government tax code requirements for contributing pre-tax dollars that grow tax-deferred until withdrawal. They include 401(k)s, 403(b)s, and SEP plans. IRAs work very similarly, though not technically “qualified.”
Putting an asset in a traditional 401(k) or IRA gives you tax-deferred growth. But just because you CAN put an asset in a retirement account doesn’t mean you should. In this article, we’ll explain why, and we’ll name five assets you probably DON’T want in your retirement plan:
“If there’s a single unsolved problem in the retirement plans for many middle- and upper-middle-income adults, it’s what to do about long-term care costs later in life,” says Christine Benz of Morningstar. And she’s right.
According to the Genworth 2018 Cost of Care Survey, the national median annual cost for long term care ranges from $48,000 to $100,375 depending on the type of care required. Of course, home care is less expensive than care in a facility, and shared rooms are less expensive than private rooms.
Kids are expensive—and worth it! In a recent survey, an overwhelming majority of parents (94 percent) say parenting is the most rewarding aspect of their lives. But if you think the expenses end when the child turns 18 or graduates from college—think again! Many parents support adult children in various ways.
According to a recent study by Merrill Lynch and Age Wave, 79% of parents in the U.S. provide financial support to their 18- to 34-year-old adult children. This amounts to $500 billion spent annually—twice what those same parents contribute to their retirement accounts ($250 billion).
“Grit is living life like it’s a marathon, not a sprint.” —Angela Duckworth, Grit
What determines success? Is it intelligence, talent, or something else?
Angela Duckworth’s book, Grit: The Power of Passion and Perseverance, answers this question and explores the “something else” that is essential for success. Grit is the ability to sustain effort in order to reach long-term goals. Duckworth defines grit as part passion (something you know you want and/or love doing) and part perseverance (hard work and resilience).
Let’s dive into some of the highlights from this excellent book. As we do, we’ll look at how grit can be applied, specifically—to your finances!
This website is provided for informational purposes only. The information contained herein should not be construed as the provision of personalized investment advice. Information contained herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security or investment. Investing involves the risk of loss and investors should be prepared to bear potential losses. Past performance may not be indicative of future results and may have been impacted by events and economic conditions that will not prevail in the future.
Yes, send my FREE Prosperity Accelerator Pack including:
Financial Planning Has Failed Ebook
Kim Butler’s 7 Principles of Prosperity™️ Audio, Video, and Summary