In Defense of a Better Safety Net for Your Family

In Defense of a Better Safety Net for Your Family

After I published How To Manage A Better Safety Net For Your Family, a lot of readers emailed with questions. In the interest of advancing this discussion, I have addressed the most common questions here.

Everyone deserves a better safety net

I don’t have any say in what the public safety net provides. Rather than wait for our political leaders to improve the public safety net, I use my own resources to provide a better safety net for the people I care about. I really don’t see how anyone can object to that.

My estate will not be divided equally among my children

The goal for this portion of our estate is to amplify our children’s efforts to develop their abilities to the fullest extent possible. Abilities are by nature different and unequal among people, so my wife and I fully expect that distributions will be unequal among our children.

Just as a bicycle enables anyone to travel farther and faster than on foot, we intend for the safety net to amplify our children’s own efforts to develop their abilities so they can go farther and faster than they otherwise would have.

In setting the rules for using the safety net’s funds, equality of opportunity is much desired, but equality of results is not.

There is another portion of our estate that will be distributed equally among our children after my wife and I pass on. The safety net is the portion of our estate that we want to use to assist our children during their formative years while we are still alive.

What about children who are disabled?

My wife and I have great sympathy for those who are truly unable to make any effort on their own behalf through no fault of their own. We have made other arrangements for children with special needs.

Why not just give the children the money?

We think that true success in life can only come from one’s own efforts. We intend for this safety net to amplify our children’s efforts, not to eliminate the need for them to make an effort.

It would be a mistake for the safety net to provide 100% of the resources for anything. The process of going out into the world to find other people to provide the rest of the resources is an important reality check and source of feedback that keeps us all from spending our time on things that don’t matter to anyone else.

Do other advisors recommend this?

There are others who think along similar lines. Jim Stovall, who wrote The Ultimate Gift, comes to mind.

You don’t have to be as wealthy as the family portrayed in the movie to share the same hopes and fears for your children. I certainly am not as wealthy as Jim Stovall’s fictional family, but I feel the same. The best gift we can give to our children is to help them develop their talents to become the best version of themselves possible.

If we give our children enough money to make them wealthy we make it harder for them to learn to stand on their own. Rather than enabling them to go farther in life, it can cripple them.

Because the safety net only amplifies our children’s efforts, we believe that those who succeed would have been successful even if the safety net did not exist. However, everyone’s path to success will include many obstacles. We hope that our safety net will give our children an edge in overcoming those obstacles. We can give them a bicycle, but they still have to pedal.

I am proud to have established this safety net for my family. I have been doing this for almost 15 years, but I would love to hear from more people who share the same hopes and dreams for their children.

If you are interested in hearing more on this topic, click here.

Author Bio

Ken Kam is the CEO and founder of Marketocracy, Inc., and portfolio manager at Marketocracy Capital Management, LLC, an innovative technology based firm that maintains a database of the world’s greatest “unknown” investors.

Source: Forbes
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