The Giving Pledge is an initiative drummed up by Warren Buffet and Bill and Melinda Gates to get billionaires to publicly pledge to donate the majority of their wealth over the course of their lifetime or when they die. 40 billionaires agreed to sign on which is quite impressive considering the campaign was launched six weeks ago. Bravo!
While I’m no billionaire, I don’t plan on giving my kid a penny past the age of 18; that should indicate what I think about inheritances. I was able to see clearly how wealth affected people during my years at Cal because every single social class was represented. At private schools, the poor are less represented because there are a limited number of scholarships. At Cal, there ran the gamut from the extremely wealthy to those of us relying completely on financial aid.
Here’s the key observation: those who were wealthy and knew that their family wealth would ultimately pass onto them never achieved their full potential. Striving to be the best was irrelevant. My dorm neighbor Lauren, whose family bred horses for the Kentucky Derby, laughed, “I got a B in Legal Studies and I never even studied. How cool is that?”
Our first week in the dorms, another neighbor knocked on my door. “Hey you filed your financial aid already, didn’t you? Do you mind helping me out? I missed the deadline and I really got to get my butt in gear.”
“Will, aren’t your parents both lawyers? Why would you need financial aid?”
“Yeah. They’re not paying for college. Not a big deal. I’m going to Ace this semester and go for some additional scholarships.”
That guy, Will, went on to Yale Law and made partner two years after finishing law school!
When you know you’ve got dough coming to you, what’s the incentive to work hard? There’s none.
Don’t do that to your kids. Let them make it on their own. Let them reach their full potential without you writing them a check.
Take a look at the site and read some of the pledge letters. Almost all of these people are self-made billionaires.