Interesting quote from Antonio L. Tiu, president of AgriNurture, Inc., a P3-billion agriculture company that’s braving the stock market blahness and pushing through with an initial public offering in the coming months.
“In Buddhism, there’s an interesting logic. If you are destined to earn a billion pesos, and I’m your father and I let you inherit P999 million, I am reducing your power. You are supposed to work hard and create value for everyone, and then suddenly I give you everything. But suppose I give your inheritance to the public, I am passing on a legacy rather than inheritance. If I give too much money to the next generation, I am actually destroying their future.”
In Filipino parlance, pamana is a measure of how well we love our children. More love means bigger inheritance. We even equate that to parenting prowess. (As if money can measure love, huh?)
But that’s the way things are. There is a cocktail of emotions linked with leaving an inheritance: parental love, pride, fear of the future, fear of economic collapse, etc.
Now, Tiu is saying completely the opposite. Giving “too much” money, he says, can destroy our children’s future. Giving too much may mean they’ll go lazy, or worse, squander away money they haven’t worked for.
This principle goes into buying life insurance, properties, and other stuff we want to leave to our children. In the United States, retirees are deciding to blow their dough well into old age, figuring that they need to enjoy the fruits of their hard work, leaving less for the future generations. In the Philippines, there are heirs and heiresses and we hear about them in the news. But with less than 50 percent even thinking about retirement, the situation closest to reality may be no the prospect of no inheritance at all.
So the question is, what’s “too much,” what’s “just enough” and what’s “not enough?”
August 28th, 2008 at 1:19 am
The subject of inheritance is something deeply rooted in our culture. The usual thing that happens is for the parents to divide whatever wealth they have amassed in their lives to their children, some equally while in some cases, according to their merits in the eyes of the parents.
I see no problem in leaving them the inheritanceas long as they have been prepared properly through the years to take the responsibility associated with such wealth.
Take a look at the old rich families like the Ayalas, the Aranetas, etc. Or even the current taipans who made it big through the years like the Gokongweis, Sys, Tans, Yuchengcos. These families have prepared the next generations to assume the leadership of the family’s big corporations/businesses by getting them ready probably even while they were still children.
It is important to give them the proper education, training and the right character and attitude for them to take the responsibility for the next generation’s control of the wealth that their forebears worked so hard to establish. This is precisely the veyr formula by which these old rich have maintaned their status in society.
For me, if I have some wealth to leave to my children, I would buy enough life insurance so that the wealth I will give to them would not be eaten by estate taxes.
And of course, I will ensure that they have been raised properly to be responsible individuals who will balance their wealth creation with their socio-civic obligations.
There is no point in amassing so much wealth when you are surrounded by poverty. Soon, you’ll have no one to buy your goods and services and you’ll end up very, very lonely indeed. My formula is to build my community as I build my wealth.
August 22nd, 2008 at 12:51 pm
Let me add to my earlier comment. Another is, in every family we have the most talented, good looks, and able/skilled (ang pinagpala), and of course the least (ang tulog ng umulan ng talento at kagandahan, hehe) (by nature designs, I guess), so I would give more to the later (wawa naman), and less to the former.
August 22nd, 2008 at 12:41 pm
IHMO large cash in bank is not good. I would go for: 1. house and lot, 2. good education, 3. good values, 4. paid travels to other culture/countries.
August 21st, 2008 at 12:06 am
Allow me to put a numerical value to this discussion. (Forgive me, I’m an engineer, I can’t help myself ^^). Most financial advisers would suggest you at least save 6 months worth in your bank account, that is, if you need P20,000 to live comfortably in a month, you should at least have P120,000 (20,000 x 6) in your account. The assumption is that 6 months is more than enough time for anyone to be able to find another source of income.
When it comes to inheritance, I believe the same principle should be applied: Leave enough to give your family enough time for them to be able to find a new source of income and establish themselves without having to change their current lifestyle drastically.
As to how much time would be enough really depends on the individuals involved. This is where, I think, proper education, values oriented upbringing, etc. comes in.
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August 20th, 2008 at 11:40 pm
Yey, it worked!
Allow me to put a numerical value to this discussion. (Forgive me, I’m an engineer, I can’t help myself ^^). Most financial advisers would suggest you at least save 6 months worth in your bank account, that is, if you need P20,000 to live comfortably in a month, you should at least have P120,000 (20,000 x 6) in your account. The assumption is that 6 months is more than enough time for anyone to be able to find another source of income.
When it comes to inheritance, I believe the same principle should be applied: Leave enough to give your family enough time for them to be able to find a new source of income and establish themselves without having to change their current lifestyle drastically.
As to how much time would be enough really depends on the individuals involved. This is where, I think, proper education, values oriented upbringing, etc. comes in.
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