The Worst Financial Gifts to Give Your Kids – Passive Income Article

#6 Champagne Taste on a Beer Budget

An even bigger liability is a child who does not have any idea how to earn, save, budget, and spend wisely. Stanley and Danko documented the serious adverse effects of “economic outpatient care” in their classic book The Millionaire Next Door.

If your children leave your house with the idea that most Americans go to private school, drive Audis (or a Tesla), shop at Whole Foods, and vacation in Fiji, you have done them a massive disservice. Maybe they will earn enough to maintain the lifestyle they have gotten used to, but I would expect a large percentage of the children of my readers will earn less than their parents did on an inflation-adjusted basis.

#7 Parental Financial Insecurity

All of the above are terrible gifts to give your children. However, I saved the worst one for last. Most of the above problems are solvable—some pretty darn easily (sell the car, surrender the whole life policy, etc.). That’s not the case for this one.

I run into docs all the time who are flummoxed at how to take care of their parent who can’t control their spending, who has no assets, who just got scammed, who wants to move in with them, who requests money from them, or who basically is in such terrible financial shape that their…