Welcome to another episode of the Chicks on the Right podcast, where we have friends and sponsor of our show, Zach Abraham from Bulwark Capital Management, on with us to talk about finances, money, the economy, all kinds of stuff. And today we're going to talk about inheritance because there's a recent article from MSN dot com entitled five reasons that boomers are spending their money instead of leaving it to the kids. So what's your immediate take on inheritance and how it should be managed?
And do you think the boomers are mean? Because I don't think they're being mean. They want to spend it on themselves. They can just spend it on themselves.
Yeah.
You know what's funny from my perspective, I've actually had to I've had to step in several times and kind of grab clients by the shoulders and shake them and say, listen, your retirement savings.
Are not for your kid, right, what is left over is for them. But you know it's in.
One of the ways I explained it to him is I go, like a drowning man saves no one, right, So if you exhaust your funds, your kid's gonna end up being you know, trying to take care of you if if if they're not just a complete user, right, because there I've seen some of that too, which I mean I always, I always say the most disgusting part of this job is when somebody passes away. I've seen some really good situations and families that handle it correctly, but just watching the vultures come in and.
Oh my gosh, I can only imagine people. Money changes people.
Oh yeah, it just and it's just it's and and and the matters and the amounts really don't matter.
Right, You're right, it turns into it, it turns into a blood fight, and it's just disgusting.
Yeah, But generally speaking, so I've gotten to see a lot of different inheritances and and some of what my clients have done have greatly impacted what I plan to do. But but first and foremost, Yes, what you were saying is I think that the boomers, in some ways, the boomers are helping out their kids more than ever, more than any other generation. So I think that there is
actually a lot of that going on. But I do also think due to the lack of pensions, right, remember, so like the makeup financially of this generation that's retiring is substantively different than any other major generation that's retired before. If you go back and look at retirement in the seventies sixties, most people had virtually no exposure to the stock market. They had a pension, and then they had additional income that they made off of CDs and bonds
and things like that. The stock market was not considered a retirement.
Vehicle the way it is now. So it's changed a lot, But.
I still do see the boomers helping out a lot. But again, it changes the way you look at things when all of a sudden you're sitting there going, Okay, I am my pension, right, I got to stretch this money out and make it work. So I see both things going on. I see them helping out a lot, you know. I see a lot of people helping their kids out with first with first home purchases, especially recently.
But then, yeah, I think.
They got a button batten down the hatches a little bit, just because a lot of them are have the fixed income portion, so the portion of their retirement income that is coming in every month, regardless of what happens in markets or anything, that is a smaller percentage of their overall retirement spending than any other generation before. So by definition, they've got to be more mindful and watchful over their retirement assets because you know, it's not guaranteed.
Isn't it.
Like Warren Buffett or somebody who didn't leave money to his kids because he's like, I don't.
Want to do slan to I mean he's live.
Yeah, you know he's still live, but I'm like he but he doesn't give him money. He doesn't like dole out because he could be literally they could they could be living at daddy's house right now and not doing anything right.
Yeah, well he doesn't even live in like a fancy house like he lives like in a seventies little Brady Bunch house. Yeah, he lives very modestly.
Yeah, it's a five thousand square foot home in Omaha. But it's the same one I believe he purchased back in the late fifties or early sixties.
Wow, he's remodeled it nice people have. Yeah. People have to remember though, with Warren that he is, first of all, I am convinced and it's not a this is not a controversial thought, but that he's probably he's a little on the spectrum, and he is obsessed with the idea of compounded interest. So for him, the house is not him being disciplined, it's the idea that that money is not compounding at a rate of like ten to thirteen
percent a year. It just drives him nuts, literally, So where you and I'd be.
Like, hey, when I get rich, I'm going to keep the house small because you know, I'm not going to overextend myself. That that's not his thinking, right, The byproduct is that. But he's just obsessed with compounding interest. And this is a guy that you know, had accumulated don't quote me, but I want to say it's something like between thirty to fifty grand by the time he was
fifteen or sixteens, is doing odd jobs. And remember this is like back in the thirties, right, so he could pay cash for a nice new home, you know when he was in his teens, and it was just compounded interest. He was just obsessed with the concept. But what he said is he wants to give them enough money to where they can do some cool things, but not enough money to where they can do nothing. So yeah, I don't know what the amount is that, but he's leaving
them a very manageable amount. Now I get this question all the time. Do I agree with that one hundred percent?
Okay?
We live in a period of time where culture glorifies money and wealth above all else.
And as a guy that has been flushed and a guy that has been.
Broke, I have found the correlation between money and happiness, and more importantly, money and a good family to be very loose, right, like, meaning, money magnifies what you are. If you're not happy without it, you won't be happy with it. If you got a bad marriage without it, it'll get worse with it. It just magnifies, right, And so we put so much stock in money that looking back at my own kids, I don't want money, you know, I don't want it to limit their potential, like you know,
I want them to have the resources needed. But you know, my wife and I talk about this all the time. We had to fund our own way through college. We had to do all this stuff on our own, quite the hard knocks way, right, Yep. There's such a satisfaction, a sense of accomplishment, and also you know a closeness that that you know, that that breeds or that yields that you just can't get anywhere else, and that sense of satisfaction.
I think to rob that from your kids is I think it's a crime.
Yeah, there's definitely there's definitely a difference between a kid, I think, who has some skin in the game, like with college, and a kid who doesn't. But you know, with us, like we've always been like, okay, we we will help you out, like with our older kids, will help you out, make sure that your college is paid for,
will make sure you don't have any debt. And then you are educated and you are capable, and you're not coming back to live here and then and then you know what I mean, And then you are you're you're capable of going out and making your money. And both of them have done that. Now our fourteen year old is our fifteen year old will have to have a little skin in the game when it comes to college. And so she's already like well versed in Okay, I've gotta I gotta do, like she knows in the back
of her mind, I gotta do this. I gotta get scholarships. I gotta have it like she gets it. And and they're all hard workers. But I think you know a lot of that lies with they're not going to be handed everything, Like they're definitely not handed everything, because we weren't handed everything because we my husband and I both were not We didn't come from people with a lot of means, and so it's so so good for you.
And I think it's good because a lot of times I look around and it's not all the time, but it shouldn't be a blanket statement. But I think, you know, I look around and I see some people, at least people who I have known throughout my life, who if they were given like a hefty inheritance, or if they knew they were going to get an inheritance, they were freaking lazy.
They were lazy, well, fear right, Like, there's so many people. One of the things I thought was so interesting about this MSN article is that they talked about, like these reasons that the boomers are spending their money instead of leaving it to their kids is not necessarily about a plan for like when they died and the kids inherit all this money, but instead they wanted to be alive to see their kids enjoy some of it. So they
were like living and it wasn't really an inheritance. It was really like, hey, we want to help you pay for college. Hey we want to help you pay for this house because we want to help you understand the value of money and also enjoy watching our loved ones have a great life, like a have a new house or have a whatever college paid for, you know what
I mean. So that was interesting, But the super rich was the most interesting because the super rich also the people I think that we're doing it right, were the ones that were saying, you're just like Warren Buffett, You're going to get enough to be comfortable, but the billions of dollars I have beyond that, you're gonna help me decide what charities are going to right right?
Cool?
Yeah, And I think that going along, one of the easy or one of the things that I've gleaned from this is that if you're gonna give money to kids reward activity, give give help them in things that they're already attempting to do right right and to see progress, like, for instance, well I help my kids out with the down payment on a house if I am so blessed to be in that position at that time, probably, but I'm gonna want to see some money saved up first, right, exactly,
and and and does it have to be a certain percentage? No, but let me see the effort, right, let me see the and and and let me and let me help you and let let's I want to help you on your way.
But helping you on your way kind of implies you already started, right, like, I'm not gonna get you out the door.
And I think that the delineation I'm gonna help you do things, I'm not gonna help you do nothing right. And and I had a very wealthy client that came up with what I thought was an ingenious plan. And it was very very detailed and very structured. And he was a self made guy, you know, bootstraps type story. We all know it, working class guy, construction type company, specialty niche. But it worked his way up to where he's probably forty fifty million dollars net worth, right, and.
He has two daughters.
And what he did with his estate attorneys and a little bit of help from us, but they had most of this put in place.
And what they did.
What he did is he delineated out like life goals, so if they got married, they would receive this. If they stayed married for ten years, they would get this. If they got their master's degree, they would get this. And so there was money there to help out for things, but every portion of money required them to accomplish something to get it right. And so it was like, even when I'm not here, I will help them, but there
have to be things that there's got to be progress evident. Right, I'm not just going to hand them a million dollars because they got married.
And I remember the conversation with him. He goes, A, they haven't earned it, and B I want the marriage to work.
That's good.
Yeah, And you know, I think about so many times where you know, I don't I mean, I don't think this would have been the case. But a lot of times going through those hard times, those broke times when you don't have enough money to get a divorce, right, like you don't have it of money, you got to learn how to work through things. And I think we
as parents, they have a term for it now, snowplow parents. Right, everybody knows helicopter parents, but snow snowplow parents go ahead of the kid and knock down every obstacle.
Right, Yeah, that's so bad.
And then they will why isn't my kid strong, and I'm like, he hasn't had to be.
They have to and they have to eat the ramen noodles, they have to period of time, they have to have the apartment where they have cinder blocks is furniture for myselves.
And it's fun.
It's fun, you know, it's fun.
It's you hungry, and that's good. It's a good thing. And it makes you scared. It makes you scared out of your bloody mind, and it makes your paranoid. I was listening to a Joe Rogan interview recently and he talked about being growing up and being paranoid, being a loser, and I was just laughing because I was like, I still have that paranoia. I remember I worked on a fishing boat and I took a bunch of books with me because I was so afraid I wouldn't go back and finish college.
Just paranoid I was going to be nobody. And that little fear is good. It drives you, it's you up early in the morning. It makes you work harder.
And you shouldn't feel a little PTSD is good for you, right you just everything shouldn't be easy, and and you know, nobody, nobody climbs to the top of a little knoll and stands there and head. They do it when they get to the top of a mountain, Right, that's.
An accomplishment, And I just feel like we're flattening too many mountains for our kids.
Yeah, I love that. I love them. That's good.
That's good stuff right there, Zach. You always have good stuff. And I know you have lots and lots of good advice for people who are either looking for a financial advisor or maybe already have one but would like a second opinion. You have these free webinars that people can sign up for. Where can people learn more about you and your services.
Yeah, we've actually got one coming up, so you can go to Buworkcapitalmanagement dot com. Know your Risk Radio dot com. You can just google us Bullwork Capital Management takes you right there to our website. You can sign up and the other nice things. You know, when you're investing with us, lending, your money is going to black Rock or Vanguard or any of those other places too.
So love that. Not a bad deal. Love it? Thank you, Zach, Thanks ladies, thanks for having me. Reservices offered through Trek Financial LLC and SEC Registered Investment advisor.
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