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Comment by slantyyz | Hacker News Reader

I think this quote is a nice wake-up call to any potential heir who thinks he/she is entitled to a large inheritance:

“If my children are competent, they don’t need my money,” Mr. Yu explained. “If they’re not, leaving them a lot of money is only doing them harm.”

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Bit of a logical play, the dilemmic fallacy to be precise, but, alternatively:

If they're competent, leaving them a lot of money won't do them any harm. If they're not, they need his money.

[edit] here's the classical example of this change in perspective: http://divisbyzero.com/2008/11/30/euathlus-and-protagoras/

Competent people will manage their wealth wisely, while the incompetent simply squander it.

I'm playing with his dilemma more than anything else, but you could also attack his assertion that the competent don't need his wealth. His children could be competent and unlucky, for instance, which could mean they need a lot of money: chronic illnesses, for example.

But if they're competent, they don't need the money, because they'll be able to work up to the point where they have as much as he did - according to the article, he started off as a "poor street hawker," so his belief that his children could do the same is certainly logical. They probably also have the advantage of his connections, better education, and so forth, meaning that they should be even more capable than he was. Also, if they're competent, lacking money might be good for their moral character, and encourage them to eventually do the same if they gather a lot of money, doing more good for society.

If they're not competent, it's better to give the money to the foundation he started, so that it can help as many people as possible, instead of being squandered. Sure, his children might need it more, but they wouldn't be able to do as much with it which would be useful to society, which is what he is trying to do.

Yeah, I'm not arguing against those points, per se. The dilemmic fallacy is simply a way to show the dilemma is subject to perspective, and therefore not as steely as it may seem.

Incompetence isn't an irreversible trait. A lot of people face barriers that make reversing the condition extremely difficult or impossible, but these typically aren't the children of rich people. Their problem is more likely one of never experiencing true need, and thus not understanding the risk of being incompetent.

How about if the children are competent AND they receive the money?

At the risk of having spoiled kids, might this potent combination bring us another Warren Buffet or Bill Gates? Sure it might not be fair, but children who inherit get a nice safety net which allows them to take greater risks to pursue their dreams.

Edit: I didn't realize the extent that Buffet bootstrapped his wealth. Still, there are plenty of good inheritance examples... the Trumps and Kushners?

Warren Buffett made almost all of his money himself.

The problem is that when people get unearned money they usually become wasteful and lose their drive. It's also really hard to keep working on something financial when you've got a large external income; if you're making a million bucks a year in investment income then spending all your waking hours on a business that's making fifty grand a year doesn't seem worthwhile even if it might eventually grow much larger.

True.

But I'm guessing the children of successful business people also get, besides the money, a great education on business. More importantly, they probably inherit a great worldview of money/business, which drives them to also try and do great things.

This isn't true in every case, but it's probably true in some cases. I'm guessing any child of a person like Bill Gates might be given the kind of education which pushes him/her to great heights. Should probably check some statistics on this issue.

The problem is that success and money are not the same. There might be a parent that made a lot of money taking stupid risk. The education that the child gets from the parent isn't worth anything and he will have to burn through a lot of money to unlearn the things his parent taught him. Therefore he could use the large inheritance.

Even though people are rich doesn't mean they are smart. Survivorship bias

Could a will have a matching clause? Every dollar you earn gives you another dollar 5 years down the line. You get 200k seed.

I thought I heard that Buffett wasn't going to leave much to his heirs, and the bulk of his fortune will end up going to the Gates foundation?

Depends on what you mean by "much". In percentage terms, he's promised to give away 99% of his fortune, leaving only 1% to his heirs. But in absolute terms, his fortune is around $50 billion, so the 1% he's leaving is still around $500 million--- so his heirs will still be among the richest people in the U.S.

An interesting documentary around this question was made by an heir to the Johnson and Johnson fortune called "Born Rich"

http://www.youtube.com/watch?v=uKKb7_7qBrk

Its an old adage that's been handed down many generations. I hear it from a lot of the wealthy in Hong Kong.

I would say that by the time he said this, his children already have their own businesses, acquired some good wealth of their own, and have been groomed well to run them (and as well as handle/invest money wisely)

actually the idea of his children resenting this gesture is crucial to endearing himself.

I told my wife "My son will inherit my wealth, only if he is competent." and I made will accordingly. My son is 3 now.

So... he's not an evolutionist and thinks being a philanthropist is more fulfilling. Seems self-righteous to me.

To clarify... if his children were competent AND had his money, I'm sure they could make an even greater impact to the world than he did. Instead, he would rather give his money away to charity as some form of personal achievement. ??

Isn't life suppose to evolute in some form, rather than starting from scratch? That is effectively what he's imposing on his children. His comment about "competence" makes no sense to me.

  Isn't life suppose to evolute in some form, [..]

Life is not 'supposed to' do anything. That we evolved is a fact of this universe, not a moral guideline. Arguing otherwise would be pursuing the naturalistic fallacy: something is natural, therefore it is morally good.

Evolution as a natural order. I'm pretty sure evolution trumps de-evolution, otherwise you wouldn't be here my friend. At the core is "knowledge transfer" from one generation to the next.

Or the ultimate in Asian parenting...

"What?! You get A- in math?! You not smart enough to get A+? Maybe you not smart enough to inherit fortune..."

Racist much?

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