Before I learned of FIRE, I had assumed Generation Wealth required a wildly high sum of money (hundreds of millions of USD). Anything less was just a nice retirement. (I had also assumed retiring was simply impossible.)

Like with many things about compounding, it matters critically to not spend all of one's money and to have time. Too little money or too little times and money goes to zero. Even a little more than the "balance" point, and the number go to infinity.

At 2 children per household, the number of households being supported grows at a larger rate than reasonable investment gains. The tripling time at 4% real gain is 28.01 years. (The tripling time for supported households is shorter than this. Tripling time chosen as the initial household will then become 3. Though in my scenario below the number of households in each 28 year period only doubles.)

If each new generation are comprised of twins, starts to receive on their 28th birthday, and sadly this is the day their grandparents die, then the balance seems to work out if the initial parents overshoot their FI number by about 66% either by over-saving or not withdrawing for years.

(Generational Wealth depends heavily upon how many children each generation produces. One under earner/over producer of children will sink the whole thing... )

It would seem the best I can hope to do is to give my children and grandchildren an education and a head start. They will have to live their own lives and make their own contributions to their retirements.

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[–] bizarroland@lemmy.world 3 points 6 days ago* (last edited 6 days ago)

You can use your financial stability to enhance theirs in other ways as well.

For instance, you can make your newborn an authorized user on a credit card.

That will give them a piece of 18 years worth of your credit history when they become an adult.

You can open a mutual fund for them when you find out you're expecting and put it into a trust. $10,000 allowed to grow for 24 years, using the rule of 72 and 10% average growth would be close to a $100,000 college graduation gift.

If you educate them well and they stick to the plan, instead of them greedily cashing it out the instant they are eligible, if they wanted to retire at 50 your $10k would have contributed $1.4 million to their retirement without another penny added to it.

If you added $500/month to it and gradually transitioned to them continuing to do the same, at age 50, after placing a combined $310,000 into the account, that trust would be worth over $10 million.

If you give your kids the gift of covered or mostly covered college, good credit, and financial responsibility, they would start life in the upper ranks and be very likely to stay there.

If you add in being a kind and loving, capable and supportive parent to them? What kid could ask for more?