Recently retired Ross and Penny have an estate planning challenge. They've accumulated a comfortable net worth, with a good portion of it in liquid investments. They plan to leave everything to their three adult children, but they also want to help them financially right now. The problem is that all of their children have a different relationship with money than Ross and Penny. In a nutshell, the parents are savers and the children spenders. If they give large sums of money, Ross and Penny would want their children to use the cash to improve their financial lives. Would they do that?
Horatio Alger1 was an American writer of novels about impoverished boys rising from humble backgrounds to middle-class security and comfort through hard work, determination, courage and honesty. His writings were characterized by the "rags-to-riches" narrative, which continues to have a formative effect on many entrepreneurs today.
Like many young adults, Lindsay took what her parents had to say with a grain of salt when it came to money. A new college graduate with an entry-level job, she was more interested in spending her paycheques than saving them. Saving was for later, she thought. Life was for living. When her father raised an eyebrow or offered advice, she brushed him off.
Then came the financial collapse of 2008. Lindsay lost her job and moved back into her parents' basement, regretting immediately almost every dollar she had blown.
The term 'empty nest' evokes different feelings for everyone. It may have happened way too fast or maybe it took far too long, but with all your children almost grown and out of the house, a new phase of your life is about to begin. As with every stage of your journey, finances will play a key role in what's possible for you during your empty nest phase. By fine-tuning your current financial strategy and looking ahead at future challenges, you will be better positioned to achieve the success you deserve.
When pondering the financial impacts of the Covid-19 quarantine and the resulting global economic shutdown, it helps to visualize dropping a pebble in a pool of water. As any child knows, the ripples start moving away from the point of impact until they disappear across the pond and finally dissipate, and the waters return to their calm state.