There is a current trend among Gen Y parents to ensure that their Kids have a comfortable life and don’t struggle as they have had to. Admirable as this may seem, maybe Gen Y parents should also pay heed to Darwin’s Theory of Evolution. 

Nature is the World’s best teacher and Gen Y parents can learn a few lessons of life by observing how Nature responds when life comes into existence without going through the struggle. 

I am sure most of you have heard of the story, of how if you help a chick to hatch, that chick is going to die. 

“Assisting in a hatch is more often than not a fruitless endeavor. It must be a last resort type of action. Often when a chick has been assisted in a hatch it will die a few hours to a few days later.”

The lesson here is that the chick has not struggled to break through the eggshell and as a result is too weak to survive. You will observe the same thing happen if you try to help a Butterfly break free of it’s cocoon.

If we do an extrapolation of this to the human world – Gen Y generation had to struggle to make it in this world. And that struggle made them stronger and tougher. Today as Gen Y parents look back, they don’t want their kids to struggle as they did. They want them to have more comfortable lives. In that process what are they actually doing? They are robbing their kids of the chance to struggle and learn, they are robbing them of the chance to become stronger and tougher. In short they are setting them up for failure. They are taking steps so that their kids don’t know what failure is and hence won’t know how to recover or overcome failure.

My view is that – the growing trend of Gen Y parents who set up Money Nest Eggs for their kids and their kids have inherited this without toiling for it – is a disaster waiting to happen. The children of Gen Y parents will not really appreciate the value of the Money Nest Egg and will soon end up losing it all.

My own life experiences have taught me that when I inherited money at a young age, I was brash about it. I really didn’t value it, as when I had earned if. When I earned it, I knew the blood, sweat and tears that went into it and so I valued it more and cared for it more. In my younger days, I was filled with the view, that I am independent, I am not bothered about money, I will work hard and make money. I was young and felt I had time in the world and so I didn’t respect the money that I had inherited.

But then also, there are some experiences in life, which we must go through, to learn. There is an old country saying – Some lessons in life we will learn, only if we get slapped in the face.

And I believe that lesson is there with money too. The initial money that we give our children, there is a high probability that they will lose it or be cheated of it or make foolish decisions … net net – they will end up losing it. This then teaches them a very valuable lesson. 

The question Gen Y parents need to ask themselves is at what stage in their kid’s lives do they want them to learn this valuable lesson. If their kids don’t learn it early in their lives, then they won’t have time to recover from it. If this lesson is learnt towards the middle of their kid’s lives or towards the end of their kid’s lives, the chances of their kids recovering from it, will be low and their kids will end up having a miserable life.

My thought process here is to that we should allow our kids to fail. We should plan for their failure. What I mean is that, at the right age, we give them only a certain lumpsum of money into their hands and then see how they go about spending / investing / utilizing that. Then let them work and earn money, thereby realizing the value of money and also learning how not to lose money.

Once they attain Money Maturity – and by Money Maturity I mean they can take decisions about money with their heads, not with their hearts, they can take money decisions understanding the value of the money that they have in hand/inherit, they take money decisions knowing how hard it is to get that much amount of money – once they attain that Money Maturity, we transfer the Money Nest Egg that we have been putting aside for them.

Again all of these are just my views and individual Gen Y parents would need to see, if this fits into their particular life scenario. By the way Gen Y parents in this article, refer to the Lower / Middle Income Group of that population set.

Cheers,

TS