We spend a lot of time in this community discussing the accumulation of wealth and the tenets of living frugally so that we can retire early (well, so that you can retire early – it is too late for me to retire early). What we don’t spend a lot of time talking about is what to do with the money we don’t need to live on in retirement, or whence it goes when we are no more.
Andrew Carnegie
I read an interesting article in the New Yorker today that started with a blurb from Steel and Railroad magnate Andrew Carnegie’s essay “The Gospel of Wealth”. To quote the article:
“Passing on riches to one’s children was a mistake, he argued, for inheritances ‘often work more for the injury than for the good of the recipients.’ Handing out money to the poor was similarly ill-advised, since ‘neither the individual nor the race is improved by almsgiving.’ Rather, the best way to dispose of a fortune was to endow institutions that would aid ‘those who desire to rise’.”
Carnegie was clearly of the “teach a man to fish” school of thought, but there were many at the time who took issue with his philosophy. The article proceeds to discuss the pros and (mostly) the cons of charitable foundations and the tax exempt status given to these organizations. Some of them you’ve heard of like the Gates Foundation, the Ford Foundation or the Rockefeller Foundation, but the vast majority you have never heard of – The Laurie M. Tisch Illumination Foundation or the Gill Foundation. The article posits that many, if not most, of these “charitable” organizations are largely self-serving, and do not nearly do enough with the huge endowments they enjoy.
Read the article and draw your own conclusions, but it did get me to thinking about whether, and if so, how we think about the money we are not going to need for a comfortable and satisfying retirement. Sometimes it feels like we (and by we I mean me) get so caught up in thinking about how to save, then spend our funds that we don’t think about what comes after that.
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Do we have larger responsibilities than to ourselves and our comfort? How do we deal with those? What actions, if any, should we take in order to begin to satisfy whatever obligations we have?
Hmm.
I completely understand that those, very esoteric, questions are going to have different answers for all of us, but one of the things that reading the above article made me question is whether our current, obvious outlets for philanthropic endeavors are actually moving the needle. Doesn’t it seem as if the world is no better off today than it was 20 years ago (or in my frame of reference, 50 years ago). This despite having 500 times the number of “Foundations” supporting different philanthropic ideals than when Carnegie was building libraries and universities.
Using the various planning calculators (I’m a fan of FIRECalc), it appears that the Oldsters can expect to have between $3 million and $30 million left when we are dead (Mrs. Oldster comes from a long-lived line of women, so she’ll likely be around a good bit longer than me so compounding will hopefully work it’s magic). I won’t mince words here, both of those numbers stagger me. Granted, with inflation working it’s magic (or anti-magic), whatever is left won’t be worth as much as today, but if we’re not going to burden our child with whatever wealth is left when my wife and I have both passed on, what should we do with it?
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I’ll be honest, I don’t know the answer to that question, yet. While I’m still walking in this world I’ll continue to be a supporter (read – sucker) for organizations who work to better the lives of children and animals. I support things like Nothing But Nets and other United Nations Foundation children’s charities and also local Humane Societies here in Appalachia, but most of that is done with existing cash flow. What should happen to our money when we are gone? I’m just not sure.
What do you intend to do with whatever you are leaving behind?
Until Next Time, FIRE On! – Oldster
