Are We Leaving Too Much Money For Our Kids?

Summary

Podcast Summary: The Ramsey Show Highlights – "Are We Leaving Too Much Money For Our Kids?"

Episode Details:

• Title: Are We Leaving Too Much Money For Our Kids?
• Host: Ramsey Network
• Release Date: April 13, 2025

Overview: In this episode of The Ramsey Show Highlights, the discussion centers around the appropriate amount of inheritance parents should leave for their children. The conversation delves into the biblical perspective on wealth, the impact of inheritance on children's character, and strategies for managing substantial financial legacies responsibly. Experts like Dave Ramsey and Chris provide insights into balancing generosity with prudent financial planning to ensure that wealth serves to glorify God rather than undermine familial values.

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Key Discussion Points

1. Balancing Inheritance with Biblical Principles

Mark, a caller, initiates the conversation by expressing concerns about leaving a significant inheritance to his four daughters, aged between 7 and 13. As a Christian family, he grapples with the desire to provide for his children without fostering dependency on money or straying from their reliance on God.

Mark's Concern:

"We're conscious of what the Bible says about money, and we don't want to spoil our children or teach them to rely on money as opposed to relying on God for their needs."
[00:26]

Chris's Response: Chris reassures Mark by emphasizing that the Bible supports the principle of leaving an inheritance. He clarifies that inheritance itself isn't inherently problematic; rather, it's the stewardship and character of the inheritors that determine its impact.

"The Bible does not say it's bad to leave an inheritance. As a matter of fact, it says the opposite. A godly man leaves an inheritance to his children's children."
[01:31]

2. The Principle Over the Amount

Chris highlights that the focus should be on the principle of inheritance rather than the specific amount. He explains that wealth magnifies the character of the individual, meaning both positive and negative traits can be amplified.

Key Insights:

• Wealth itself is amoral; it reflects the morals and character of the person managing it.
• Good character traits, such as generosity, can lead to positive influences like philanthropy.
• Negative traits, such as a quick temper, can result in destructive behaviors when wealth is involved.

"Whatever it is, good or bad, is magnified."
[02:15]

He underscores the importance of raising children to be qualified stewards of the wealth, ensuring they understand that the money is not inherently theirs but entrusted to them by God.

"You don’t own it, God owns it, you're just managing it."
[02:45]

3. Managing the Wealth Responsibly

Addressing the practical aspects, Chris discusses strategies for dispersing inheritance to prevent misuse and ensure that the funds are used responsibly. He shares his family's approach to managing inherited wealth through trusts and setting qualifications for disbursement.

Strategies Highlighted:

• Age-Based Disbursement: Inheritances are released when children reach a certain age (e.g., 25), ensuring they have life experience before managing large sums.

  "We set it up until they reached 25 to have some kind of different dispersion."
  [04:25]

• Conditional Trusts: Funds are only accessible if the beneficiaries meet specific criteria, such as demonstrating spiritual maturity and responsible behavior.

  "If any one of them decides to live a life that disqualifies them as a manager of God's money, then they're not going to be able to get any."
  [05:09]

• Preventing Misuse: By setting strict guidelines, families can prevent scenarios where wealth exacerbates personal issues, such as addiction or irresponsible spending.

  "We don't want to fund a cocaine habit on the back of a yacht for a reality star."
  [04:57]

4. Real-Life Examples and Cautionary Tales

Chris draws parallels between inherited wealth and sudden money influxes experienced by lottery winners and professional athletes. He shares observations on how these sudden gains often lead to financial ruin due to a lack of financial literacy and life skills.

Notable Example:

• NFL Players: Chris notes that the average NFL career is short (about 3.8 years), and many players leave the league financially broken despite substantial earnings during their careers.

  "Hooping football. He doesn't know how to do anything else... The average NFL career is 3.8 years and most people leave the NFL broke."
  [07:28]

These examples reinforce the importance of educating children about financial management and ensuring they possess the necessary skills to handle wealth responsibly.

5. The Role of Character in Wealth Management

A recurring theme is the amplification of personal character through the management of wealth. Chris explains that wealth can either highlight positive attributes like generosity or negative ones like selfishness.

Critical Points:

• Good Character: Leads to impactful philanthropy and community improvement.

  "Someone who's generous... we call them a philanthropist because they change entire communities with their generosity."
  [02:30]

• Poor Character: Can result in destructive behaviors and personal downfall.

  "Someone that has a problem with their temper when they become wealthy becomes a rage aholic."
  [02:20]

Chris stresses the importance of instilling strong moral and spiritual foundations in children to ensure that they view wealth as a tool for positive impact rather than a means of personal indulgence.

"Our job as parents is to raise children that become qualified stewards."
[06:07]

Conclusions and Takeaways

1. Inheritance is Biblically Supported: Leaving an inheritance is not contrary to biblical teachings; rather, it is a principle encouraged in Scripture when managed wisely.

2. Focus on Stewardship Over Amount: The emphasis should be on teaching children to manage wealth responsibly, viewing it as a stewardship rather than personal entitlement.

3. Implement Conditional Structures: Utilizing trusts and setting specific conditions for inheritance can prevent misuse and ensure that wealth contributes positively to the family's legacy.

4. Educate on Financial Literacy: Providing children with financial education and life skills is crucial to prevent scenarios where sudden wealth leads to financial instability.

5. Cultivate Strong Character: Wealth amplifies personal character, making it essential to foster virtues such as generosity, responsibility, and humility in children.

6. Prepare for Lifelong Responsibility: Understanding that wealth comes with significant responsibilities ensures that children appreciate the value of money and use it to honor God and support their families effectively.

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Notable Quotes with Timestamps:

• Mark: "We're conscious of what the Bible says about money, and we don't want to spoil our children or teach them to rely on money as opposed to relying on God for their needs."
  [00:26]

• Chris: "The Bible does not say it's bad to leave an inheritance. As a matter of fact, it says the opposite. A godly man leaves an inheritance to his children's children."
  [01:31]

• Chris: "Whatever it is, good or bad, is magnified."
  [02:15]

• Chris: "You don’t own it, God owns it, you're just managing it."
  [02:45]

• Chris: "We set it up until they reached 25 to have some kind of different dispersion."
  [04:25]

• Chris: "If any one of them decides to live a life that disqualifies them as a manager of God's money, then they're not going to be able to get any."
  [05:09]

• Chris: "We don't want to fund a cocaine habit on the back of a yacht for a reality star."
  [04:57]

• Chris: "Our job as parents is to raise children that become qualified stewards."
  [06:07]

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Final Thoughts: This episode of The Ramsey Show Highlights provides a thoughtful exploration of how Christian families can approach inheritance with mindfulness and responsibility. By emphasizing stewardship, character development, and strategic financial planning, parents can ensure that their wealth serves as a blessing to future generations rather than a source of dependency or distress. The insights shared by Dave Ramsey and Chris offer valuable guidance for anyone navigating the complexities of passing on wealth within a faith-based framework.

Transcript

[Dave Ramsey]

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[Mark]

I have done a wonderful job at saving and investing. You know, depending upon the age that we retire at, I don't think it's unrealistic that we could end up with a nest egg of between 8 and 12 million dollars.

[Chris]

Well done, sir. Touchdown.

[Mark]

Thank you. Thank you. So my question is, we're a Christian family. We have four younger, younger, wonderful daughters between the ages of 7 and 13 right now, and I want to know what you feel is appropriate to leave behind as an. As an inheritance. Excuse me? Because we're conscious of what the Bible says about money, and we don't want to spoil our children or teach them to rely on money as opposed to relying on God for their needs, you know, going for forward after we pass.

[Chris]

Mm. Do you not think it's possible to teach them that and with having built that character, that then they're then able to own this wealth like you are able to own this wealth?

[Mark]

Well, I'm. I'm not saying that at all. I just, you know, I never had a nest egg like that passed to me.

[Chris]

No, I know.

[Mark]

And so, you know, but do you.

[Chris]

Think the only way to learn it is to start out broke?

[Mark]

No, I don't think.

[Chris]

And the Bible does not say it's bad to leave an inheritance. As a matter of fact, it says the opposite. A godly man leaves an inheritance to his children's children is a Bible verse.

[Mark]

Totally agree with you. I just didn't know if there was maybe a line that maybe, you know, you might cross over, like, that's too much or something like that.

[Chris]

It's not an amount. It's a principle. And so here's the principle. You are not obligated, biblically or otherwise, to leave the money to your children, okay? But to assume that it's going to damage them is not true. Okay? So what wealth does do is it magnifies the character of the person, including you, including me, and including your kids and my kids and Jade's kids. Okay? It magnifies the character of the person so that the problems in my character are magnified when I've got wealth because it gives me power. Does that make sense? The good parts of my character are also magnified. So someone that has a problem with their temper when they become wealthy becomes a rage aholic. And don't, you know, who I am comes out of their mouth and stupid stuff like that. Right, but someone who's generous. When they become wealthy, we call them a philanthropist because they change entire communities with their generosity. So whatever it is, good or bad, is magnified. And so the first thing that we taught the Ramsey kids is you're not entitled to anything just because you hit the gene pool lottery, right? Yep. You're not entitled to anything, number one. Number two, in order to be qualified to manage the Ramsey wealth, the next generation, you have to have a spiritual understanding of the wealth. And that is, is that you don't own it, God owns it, you're just managing it. And once you grasp that, you realize wealth is the reason. You see, the reason is that the Bible has warnings about wealth because it's heavy to carry. It's a lot of responsibility to leave one of your children that becomes an adult 10 or 15 million dollars probably by then, each. Okay, yes. And so you leave one of them $10 million. That's a lot of responsibility if their job is to manage it for God, for his glory, which includes taking care of your own household.

[Caller]

Mark, let me ask a question on your behalf because when I hear your question, I have thoughts of my own. Cuz here's the thing. If you live to be, you know, 80 and your kids are older when they start receiving this wealth, that in some ways that feels a little bit better. It's like, okay, they've got to experience life. They're not dependent on this money at that point. But what if the worst were to happen and they got this, they got access to this money earlier. Right. Maybe when they're in their early 20s. How Dave, then would you disperse this amount to where it is helpful to them? It's not too heavy in one at one season or would you disperse it? What would you do?

[Chris]

Well, ours, ours was set up until they reached 25 to have some kind of different dispersion. Right. So like when they're minors, it was to be managed and in order to qualify for a disbursement at 25 in the trust, they would have to have done this, this and this. Okay. Be walking with God and you know, actively. So you're not. In other words, we don't want to fund a cocaine habit on the back of a yacht for a reality star. That's not what we want this money to go for. And so if you're going to do that, then you don't qualify anymore into the trust.

[Caller]

Right, but is there a limit that you'd give a 25 year old as a disabled.

[Chris]

No, I didn't, I had it at 25. We turned it all over to him. Oh, wow. I mean, we haven't turned it over.

[Caller]

I'm saying you wouldn't.

[Chris]

Mine are now the youngest is 33. But today if I die, it's just dispersed. But if any one of them decides to live a life that disqualifies them as a manager of God's money, then they're not going to be able to get any. They're taken out of the trust immediately. And so because it's not really my money and it's not really their money, we are managing it. One of the beauties of managing it is you get to enjoy some of it, but most of the managing of it is a weight of generosity and a weight of other things. So what I want you to avoid, Mark, is this. There is a thread that runs through some of our Christian churches that says that money is bad. Money is not bad. It's not good or bad. It's amoral. It doesn't have morals. What it does is it exposes the morals and character of the people that it touches. Does that make sense?

[Mark]

Absolutely.

[Chris]

So our job as parents is to raise children that become qualified stewards. Meaning. And then I leave it to them. And I don't think anything about it because I am well aware that the temple was built by Solomon atop Mount Moriah in Jerusalem. And in today's dollars it would be somewhere around between 10 and $20 billion building. It was not built with Solomon's money, it was built with his dad's money. It was inherited money, David's money, Solomon's, David's son. It was inherited money used to build the temple of God. And so we're sure that God uses families that have character generationally to manage his goods. So it's not unchristian to do this. What you don't want to do is leave it to someone who it does harm to because they've got a problem in their life and it expands the problem.

[Caller]

Well, I think too we're used to seeing. It's almost like we're filtering it through. Oh, you see a lottery winner, they win a bunch of money, they have this huge amount of money that comes into their life. Or an athlete who has this huge amount of money come into their life and before you know it, they've.

[Chris]

And I've sat with those guys in NFL many, many times. And what I'm dealing with is a 21 year old who has one skill in all of his life. Skill. Buckets. He has one bucket, he plays football. He doesn't know how to do anything else, and that is exposed when he gets a $10 million signing bonus and he loses it almost instantaneously. 3.8 years is the average NFL career and most people leave the NFL broke. The exception would be mainly the offensive line, because generally those are the smartest guys on the team. This is the Ramsey Show.

[Dave Ramsey]

CHM isn't health insurance, it's a health cost sharing ministry. Check it out for [e-mail] budget.