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Your Take: The Gates and Buffetts’ Inheritances

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I’ve read a lot about Bill Gates and Warren Buffett over the years and a factoid that surprised me as a younger man, but less so now, was that each planned on passing on “little” of their wealth to their children. Little is all relative, since both are worth many billions, but the idea that you wouldn’t pass on everything boggled my mind. As the years have passed, I realized that it makes more sense, in their case, if you didn’t pass everything on.

First, it’s an absurd amount of money. Bill Gates has said publicly that he’s passing on $10 million to each of his children. $10 million is already a lot of money. It would take you 100 years at $100,000 a year to earn the same sum and $100,000 a year is nothing to sneeze at (let’s just ignore taxes to keep things simple, shall we?).

Second, when you get too much, you lose a bit of that hunger. You don’t know adversity. You don’t know what it’s like to have to think on your feet and be resourceful. Those are all skills that you need to learn in order to be successful and I’d really like to see the Gates kids do something special. They have the pedigree.

What do you think about inheritances in general? Or of the approach Gates and Buffett are taking?

{ 30 comments, please add your thoughts now! }

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30 Responses to “Your Take: The Gates and Buffetts’ Inheritances”

  1. Shirley says:

    I applaud Gates and Buffett for not leaving their children with nothing left to want or work toward. I feel that a life without goals of some kind would be empty emotionally and unproductive.

    • I know that Buffett really made his kids work for what they got. They were definitely taught a work ethic. So, I think when it is all said and done they should leave their children an inheritance. It is their family after all!

  2. STRONGside says:

    I’m definitely torn. I think that the concept of inheritance really should be altered. For many people, they only receive their inheritance(if any) late in their lives, after their aging parents pass on. At this point in many people’s lives, this inheritance is simply not needed or not useful. Many folks who receive an inheritance are in retirement, have paid off their homes, and do not need that money as much as they did say 20 years before.

    My suggestion would be, to the extent that this is possible, is to pass on inheritance earlier in life. Sure, many parents joke that their children are taking their inheritance when that parent pays for a college education or for a wedding, but what if that parent were to give a large sum of money to their child when they were say 35 years old instead of 55, or 65.

    Many of you will bring the Biblical story of the prodigal son to mind. He squandered his inheritance and came crawling back to his Dad broken, and destitute. I would like to propose that when managed correctly, the opposite could be true. What if an inheritance was viewed as a grant. It was used to fund the future of your child. For example, they could use their inheritance to invest money in a new business that would sustain them for years to come, or pay off their house so they could live mortgage free. or they could create college funds for their children so they would not have to worry about their children’s education.

    Sorry this comment has gotten a little long winded, but I definitely would love to see a shift in how inheritances are given, and what they are intended and used for.

    • tbork84 says:

      I know that Buffet did do something like this for his children. They all received a certain amount of Berkshire stock several years ago as they were starting to make their own way in the world. It was an early inheritance that they could do with what they wished.

  3. I love the decision made by Gates and Buffett. I wish others could see the befits – not only to their children, but to society.

    The need to hoard every penny and build as much wealth as possible is going to result in class warfare in this country. The ultra-rich have too much.

    • joe bassett says:

      The ultra rich rule. Money means nothing to them. They have power. Corporations have too much and the poor have nothing.

    • sophomore says:

      The war you indirectly advocate is a choice. Be careful to understand the consequences before you promote agression on your neighbor with vastly more resources.

  4. partee875 says:

    I think a child of Bill Gates or Warren Buffett would definitely have the skills to be smart and live completely happy with $10 million. I’m sure they’ve received tons of money and extra benefits throughout their life where the windfall wouldn’t make much of a difference in their lives. I’m sure they are all well educated and are aware of the extraordinary priveleges they have in life… unlike a certain hotel heiress…

    Also, Gates and Buffett are giving it to wonderful causes which is great!

  5. billsnider says:

    Why do rich people donate their money? Simple. If they don’t, they lose control of where it goes. So they donate it while they live and to avoid the high inheritance taxes.

    Is Bill Gates leaving only $10 million to each sibling? No! He is also buying them things such as education, stocks and other such goodies. They have been well provided for in their lives.

    Bill Snider

  6. zapeta says:

    I’m glad that they are going to give the majority of their wealth to charities where the money will be used for something good rather than just sitting in the bank accounts of their children.

  7. mannymacho says:

    Wouldn’t expect anything less of the man who has lived in the same house for decades!

  8. Griminald says:

    I remember Gates saying years ago that his children will have to work to make their money like he worked for his.

    Historically in every great dynasty, the greatest man tends to be the founder, and perhaps the founder’s son — those who worked the hardest to establish the name. Over time, the rest of the family line gets too entitled, they stop working, they don’t learn to make their own name, and the family pedigree is taken down with them.

    Today that shift starts with people who make money to make their name, to their kids who use their name to make their money.

    Gates cares enough about his legacy to do a lot of charity work, but also enough to avoid over-entitling his children.

  9. Wilma says:

    I’m so busy scurrying around like a squirrel just trying to make ends meet and keep expenses to a minimum that thinking about how much some body else has over me really doesn’t matter.

    There’s a case right now in my neck of the woods where a family is fighting with the city library because a family member willed all their money to the library and disowned the family. They maintain he was paranoid and mentally ill when he committed suicide and that he really didn’t mean to disown the family or will all the money to the library. They were fighting for years before he killed himself and to me it doesn’t matter. If you own it then you can give it to whomever you please whether you are of sound mind or not. Gates and Buffet have given much to charity and I would love to be one of those charitable causes but I applaud their responsible attitudes toward the stewardship of their money.

  10. Eddie says:

    Education, opportunities, and social networks are very likely all the inheiretence needed at this level…..I suspect any child of Gates or Buffet would have a bright future with $10 in the bank, let alone $10 million.

  11. No Debt MBA says:

    I agree with Gates and Buffet’s approach. Once you’ve provided the basics for your children, health, security and education, why would they need or deserve millions or billions more? We all value our children, but valuing discretionary income for them over basic food and sanitation for other children seems small minded.

  12. DIY Investor says:

    Buffett once said he would leave them enough so they could do what they wanted but not so much that they could do nothing. I agree with his approach

    • joe bassett says:

      Why not leave them nothing? Say you make it on your wits. Look Gates and Buffet could be broke and worth 100 million in a year. They have told their kids how they can apply for grants from the government and foundations. These kids know how to buy stock and put it on hold for a week and make a few hundred thousand a year. The rich don’t work.

  13. Marilyn says:

    I live in Omaha. Mr. Buffett lives a relatively simple life here. You can drive by his house, I can take you there. A few years back Mr. Buffett’s car was hit by a lady. They were both on way to dinner, lady at a tony restaurant, Mr. Buffett at one of the local low price hamburger joints.

    If very wealthy people put their money into making this a better world it would be a wonderful thing. I applaud both of them for their high-minded actions.

  14. Rosa Rugosa says:

    I am overcome with amusement at the idea of getting by on “only” $10 million. Imagine the hardship! 🙂

  15. joe bassett says:

    They have trust funds. They have property. They have stocks. They will leave more than $10 million. It makes you sick so many people grub for 40 years to make a million. Then you see it was just bullshit, because with grants you can have more give to you than others earn. Gates and Buffet put their money in foundations and majority is given to Blacks, mexicans and jews. Most decent Whites don’t know they can get free money from foundations and grants.

    • Mike says:

      Wow. Pretty sure you can’t speak for “decent Whites” because you probably can’t even define the word “decent” much less recognize it in other people.

  16. joe bassett says:

    Buffet’s and Gate’s granddaughters would get a few million to pose for Playboy. They could give speeches and earn $100,000 telling stuff told to them by their Grandparents. They could get paid to make guest appearances on shows. They could get 10 million advance on writing a book. But I say they will leave them emergency money maybe a trust fund when they reach a certain agae. I would not hand someone 18 a billion dollars.

  17. Daraius says:

    I’ve seen Warren Buffet’s children at the Berkshire Hathaway shareholders meeting and they are regular unassuming people – just like their dad!

    I do recall that in addition to a small inheritance (just enough to do what they want, but without being able to live off it entirely).

    I admire both Gates and Buffet for limiting the inheritance to their children!

  18. Joe says:

    $10 million is still nothing to sneeze at. How many of us would ever dream of inheriting “just” that much? Though if you’ve grown up in a crazy-wealthy home like the Gates’ or the Buffets’ your overhead might be significantly higher.

  19. govenar says:

    Even with $10 million, they’ll still never need to work.

  20. Chaz says:

    I bet the cost of security to protect their extended families from abduction and ransom would be 10M per year. this issue will follow them regardless of the exact amount of their inheritance for generations.

  21. Al says:

    The assumption is that money will corrupt the Gate’s kids, but if they are being taught ethics at home,I’m sure they can handle a fortune. It’s a
    little unfortunate that they cannot carry on their
    Dad’s charitable work.

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