Anyone who is reading this article thinking that I am going to teach you how to be rich – forget it! That is the domain of Ramit Sethi from I will Teach You to be Rich. I hate treading on other peoples’ toes. Really! Apart from that I am likely to be teaching you how to be wealthy rather than how to be rich. What is this about then?
I am in America; in Atlanta to be precise! Attending a large conference organised by Georgia Tech which is very interesting on its own. It is a relatively recent development – according to European standards at least – and an example of the kind of differences between the approaches to life we can find in the US and in good ol’ Europe. When this conference started it was really not much to get excited about. In Europe, we would have very likely thought ‘oh well, it didn’t work’; end of story, end of conference. These people here, in the US, thought ‘oh well, it didn’t work; what can we do about that?’; beginning of story, beginning of a very promising conference.
Anyways, being in Atlanta reminded me of my visit to Washington last autumn. I loved Washington, I loved walking around Washington Mall and I even, completely by accident, found the Masonic Temple. Grand! You can’t walk around Washington Mall, I think, without seeing at least some of the numerous museums. And I did…What I noticed is that entry to the majority of them is free. For us, people from Europe, this is becoming rather unusual; visiting the Louvre, for example, costs 14 euro per person. But then again, the museums around Washington Mall, at least most of them, we founded by benefaction and are maintained by endowments; the museums in Europe are the domain of the withdrawing and impoverished State.
This made me ask myself the question, why in the US benefaction is much more common than in Europe. I came up with the following.
This is because of the different perceptions about and structure of wealth. In Europe, personal wealth is largely inherited through long, uninterrupted family lines. In other words, in Europe we mainly inherit our wealth and naturally also wish to conserve most of it to leave to our children. In the US wealth is considered to be ‘self-made’ – even when it is inherited, the inheritance does not go back to Richard the Lionheart. This makes it possible to expect your children to ‘make it’ as well and to ‘give back’ most of it.
Related to this, the structure of wealth is different. In Europe, there is relatively little liquidity and most of the inherited wealth is in buildings, land and infrastructure. In the US there is higher level of liquidity.
Nothing wrong with inherited wealth; but then we should not wonder that the US is so much more dynamic as society and economy.
I was also thinking that I have never relied on inheritance (although I did inherit houses and land) and would rather support my sons now so that they could become the men they could be. My sons: I have decided that most of the wealth I intend to build will fund research and sponsor PhD scholarships. Live with it!