Preservation of Generational Wealth

 First generation, trader; second generation, gentleman; third generation, beggar - Spanish proverb

GenX > GenY > GenZ

There is a belief across the world that the family wealth rarely survives three generations. According to a 25-year survey by the Williams Group family wealth consultancy, published in 2002, approximately 70% of wealthy families lose their wealth by the second generation and an incredible 90%, lose their wealth by the third generation.

One of the major reasons for this is the upbringing of the next generation. Many parents today continue to provide financial support to their adult children, even after they have begun earning their own income, in order to help them maintain a comfortable lifestyle. Nothing wrong in it if it's only done once in a while or when their children are having a tough time financially. But many parents feel some kind of obligation to provide more for their children as they have created enough wealth themselves. This for them becomes the proof of their love towards their children. I have seen instances where parents openly boast about how much wealth they have created and thus their children don't have to do much to live a comfortable life.

Once this becomes the norm, the math stops adding up. Think about it. You are spending at a higher rate than you are earning, which means that your net worth is reducing with time. And the trend is likely to continue in the coming generations as well because of the following two reasons

1. GenY develops a habit of spending more than they earn. The fact that they are able to do it without their own efforts will never make them realise the importance of financial discipline, which leads GenZ to follow the same pattern
2. GenX does not help GenY realise the importance of skill-building for increasing the family wealth. This prevents GenY from passing on this knowledge to GenZ too

So, what can we do to prevent this? Like every other pattern, we need to break the cycle so that it is not repeated. We can at the least teach the following to our children

1. Teach them the importance of building skills. This is the only way to create wealth ethically. As the adage goes, "Give a Man a Fish, and You Feed Him for a Day. Teach a Man To Fish, and You Feed Him for a Lifetime".  In today's world, it is easy for children to get lost in the amount of opportunities available. The aim should be to guide them focus towards an area of their interest and help them be in the top 5%.
2. Teach them the importance of financial discipline. The rate of spending should always be less than the rate of growth of wealth. They should be able to understand the difference between needs and wants, the earlier they can understand this, the better
3. Teach them the basics of investing. Money decreases in value over time, so we should find a way to grow the money we have already earned in addition to earning more. Its really surprising that schools don't teach this important life skill. It is also surprising that most parents themselves lack this skill. Videos and courses of Akshat Shrivastava can be a good starting point, for both parents and children [P.S. - These links are not sponsored]

By doing these, we can at least be happy that we have tried decently enough to break the above pattern of decreasing generational wealth. Only time will tell, how successful we were in accomplishing it and thus help the family lineage prosper for many generations.

Do remember that children learn more by watching us than listening to us.

 

The stimulus to implement "Right to Education" act

I had been having this idea for some time now. There has been so much noise being made on the importance of voting during the elections and how it will help elect the right candidates (without criminal backgrounds etc). But how many people amongst the ones who vote are really aware of the background of the candidates who are contesting in the elections? Or rather I should put it this way. How many of people amongst the ones who vote are learned enough to read/understand the background of the people they are voting for? I guess not many. Then how can we expect people to elect the right representatives for themselves. We cannot clean up this system without our people getting educated and all of them. We have definitely made a start when we passed the "Right to Education" bill. But are we sure that it will be implemented? Do we have enough infrastructure to provide education to each and every child in the age group of 6-14 years? As of now, I don't think we have enough schools in our country to implement the "Right to Education". So, are our politicians doing or will be doing enough to provide the infrastructure for this. I am a little skeptical here. Many of them would want that the people remain ignorant so that they can play their dirty politics and instill their own ideas into the minds of the poor uneducated people. I have an idea here. The right to vote should be conditional. Yes, on the conditional that the person has acquired minimum amount of education. Of course, the person has to be above 18 years of age too. I know this would be unfair to may people who have already voted and have not had enough education in their childhood. So let me put it this way. All the people who will be reaching the age of 18 years after 2020 will be eligible to vote only if they have completed minimum primary education. The older people who were above 18 before 2020 can vote without this minimum education condition. This will have two advantages. One, it will sure that the people who are voting are atleast educated to the primary level so that they can read and understand the manifestoes and the campaigning banners and also read the backgrounds of the candidates which I hope will be published by the newspapers, which ultimately will help clean up the system. And two, the infrastructure required for implementation of "Right to Education" will be hastened (atleast till the primary level) to some extent since the politicians will want that people whose vote will be surety for them are eligible to vote. We could make the eligibility criteria stricter for people who attain the age of 18 after 2030 by making the minimum education level to 10th standard for gaining voting rights. I don't know how much of the above idea is practical, but I hope that some wise individual in the government reads this and does something about it. The numbers I have put for the years and minimum education levels are just random and people who would want to implement this can discuss amongst themselves and come up with the right numbers which is practical. My motive was to just explain the idea using the random numbers which is not too bad I guess ;).

The Tigers are in Danger Here

You might be wondering, most of us know that the tigers are in danger, so why am I restating it here. Well, the context is a little different here. It was the IPL match between the Kolkata Knight Riders and the Chennai Super. Shane Bond bowls and Dhoni smashes that low over the long on boundary. There were a couple of people dressed as tigers, the mascot for KKR I guess, and they somehow managed to escape that shot by Dhoni. In comes the commentary, "The tigers are in danger here", the commentator fully aware that Dhoni is one of the ambassadors for Aircel's Save Our Tiger initiative. Wow!! Harsha your presence of mind is truly amazing.

Its not the V anymore, its the A now

I remember my childhood days when cricketing greats used to speak about the importance of playing in the V. If a batsman scores most of his runs in the V area, then he was considered to be technically good batsman. But those days are gone-by.

Watching Brendon McCullum play, the other day againt the Aussies, I was wondering if the V, has been replaced by the A now. Be it Brendon McCullum or Douglas Marillier or Dilshan or even greats like Sachin Tendulkar whose paddle sweep and the uppercut can be categorized as scoring in the A, they have completely changed the major areas of scoring as far as T20s are concerned and ODIs to some extent. I also wonder what Geoffrey Boycott will have to say about this. I guess he would say something like "That's absolutely ridiculous" in that typical Yorkshire accent of his. I am sure that, with audacious shot makers like Sehwag around, it won't be far off when these kind of shots are played in test matches too and I am sure all of us will surely be waiting for those.

It's not Luck

Last week, India crashed out of the T20 World Cup, 2009, without winning a single match in the super-sixes. There was lots of cries amongst the Indian fans criticizing the Indian captain Mahendra Singh Dhoni, even burning effigies of him. Then there were some former greats saying "his honeymoon period is over", etc. Then there was this gtalk status message of one of my friend's friend saying that Dhoni has no talent at all and that he is very lucky to achieve all those which he has till now. To all these people, let me mention a few things which I think about Dhoni.

It was not mere luck that he was made the captain, nor was it luck that he won the T20 world cup for us with a young and new team. It was not luck that, his team won the final edition of the famous tri-series in Australia beating the mighty hosts twice. It was not luck that his started the downfall of the Aussie test empire by winning the test series in India 2-0. Yes, Anil Kumble was the captain in that series, but because of Kumble's injury, Dhoni was the captain for the two tests which India won. It was not luck that India won the ODI series against England (5-0) and in Sri Lanka(3-2 in 2008 and 4-1 in 2009). It was not luck that his team won a test after 33 years and a test series after 41 years in New Zealand and remember the second test when Dhoni was injured and India struggled and just managed to earn a draw. Needless to say that India also won the ODI series in New Zealand (3-1). Yes, he doesn't have the technical brilliance of a Sachin Tendulkar or a Rahul Dravid but thats not all which makes a cricketer and more so a captain. It requires a lot of commitment and as the commentators say "You have got to have something between your ears" and he has lots of it. Its certainly not luck. It requires a lot of meticulously and shrewdly thought out plans and self belief to implement them. Remember the 8-1 field against Katich and Hayden in the fourth test of the Border-Gavaskar trophy?

Yes he had a few failures, the Asia Cup, the recently concluded T20 world cup etc. But thats the way it is. No team can keep on winning each and every match. Sport would be so boring if only one team is winning everywhere. So all those who are criticizing Dhoni right now and burning his effigies, this is for you. "Dhoni is the best captain that India has had over the years and by a long way too or may be Dada comes a close second, but others, forget it and also currently, the best wicketkeeper batsman in India".

So Go Dhoni!! Go India!! All the Best for the West Indies Tour!

New Ashes Born !!

In Affectionate Remembrance
OF
ENGLISH T20 CRICKET
WHICH DIED AT LORD'S
ON
5th JUNE, 2009,
Deeply lamented by a large circle of sorrowing
friends and acquaintances.
R. I. P.
N.B.—The body will be cremated and the
ashes taken to Netherlands.

In view of the unexpected defeat of England at the hands of Netherlands, a new ashes series can be started where England and Netherlands can play a T20 cricket series once in two years and the trophy can be named "The New Ashes".

Forget IPL....here comes KPL

When the whole of India was going gaga over IPL, MTech students of Computer Science Department of IIT Bombay were thinking of something else. "Why not come up with our own cricket league?", they thought. Thus was born the Kresit Premier League (KPL), a tennis ball cricket league with its unusual rules and short boundries to create more excitement. It had all the ingredients of the IPL. Team ownership, player auctions etc and and and has real money at stake!

The KPL kicked off at the KVIIT grounds today. The first match was between the "Drunken Masters" in their yellow outfits and "Team Pulkit" in their orange outfits. There were not many spectators, the only ones being the tournament officials and some members of other teams (may be just to pick some clues on weaknesses of the playing teams ;)). Though the name "Drunken Masters" doesn't sound serious, they were in some serious business today as they toppled a star studded "Team Pulkit". "Team Pulkit" won the toss and elected to bat. They posted a pretty decent total of 53 in 6 overs. They might even have thought that from there they should win it. But the "Drunken Masters" had other plans. They got of to a flier with a few sixes flying around and they didn't look back after that. They got to their target of 54 in mere 4 overs. Well that would take net run rate to some distance. After that there was a photo session for both the teams and then everybody left to their hostels. Well that was day-1 of the KPL. Tomorrow, "The Undertakers" take on "Team Pulkit".