Thevshi Posted October 27, 2008 Posted October 27, 2008 I originally created Velocity with one rank of wealth, which represented her personal trust funds and the like, with the theory that her parents were much richer. This was before the above wealth rules were in place. When the new rules were announced, I corrected her level fo wealth to conform with the new rule by making it equal to her parents' level of wealth.
Dr Archeville Posted October 27, 2008 Posted October 27, 2008 Well, how much of that does she have direct access to/control of? And what level of wealth do her parents have? She doesn't have a job, correct? So the only wealth she'd have is what her parents give her, correct?
Thevshi Posted October 27, 2008 Posted October 27, 2008 Well, I just indicated that Wealth 4 was her parents level (puting them in the range of having a few hundred million in cash/"toys") I would point out that very few (if almost no) teenages truely have "direct control" over substantial sums of money. You have to be 18 to open a securities account or a bank account (as those involve entering into a contract, which you have to be 18 or older to do in many places, at least in the US). The same goes for ownership of stocks or bonds, as those involve a contractual relationship as well. Like many children of very wealthy parents, most of Velocity's money (from her parents and grandparents) is in trust funds and Uniform Tranfer to Minors Act (UTMA) accounts, which means she does not have direct access to them until she reaches the appropirate age. For UTMA accounts in most states that is 21. For trust funds the age can be anywhere from 18 to never. It is possible to set up trust accounts where the beneficiary never gets direct control over the funds (usually by setting up a "spendtrift" trust). Off hand, I'd say most of Velocity's trust funds have been set up to transfer to her when she either graduates from college, or reaches 26 (it is possible to set up conditions such as this as well). She does not have a job (as she just started college). And yes, she gets a very generous allowance from her parents, which is both from their own money, as well as occassional payment of some of the income from her UTMA and trust funds. By the way, I have thought of an interesting, if somewhat extreme, real world example of where the children of a really rich person would not have the wealth benefit of their parents. It is Warren Buffet and his children/grandchildren. While he is one of the world's richest men, he has pretty much always lived a rather frugal lifestyle. As I understand it, his home in Omaha is valued at less than one million dollars (I believe is is closer to $500,000 or $600,000, probably a pretty nice home in Omaha, but hardly grandious). He also drives around an old beat up car (something that is like 20 years old) (my brother met Warren Buffet in Omaha on a trip set up by my brother's MBA program for their students. After Buffet's presentation to them, he took the group out to dinner, givng some of the students a ride in his old "beater"). Buffet's children were never provided large trust funds or the like, from what I understand, unless they have gone off to make money on their own, they have pretty middle class lifestyles. A couple of years ago, when Buffett announced he was gifting the vast majority of his fortune to the Gates Foundation, there was also announced that he was making some small (very small!) gifts to his children and grandchildren. From what I recall reading, it was only enough to (in the above framework described by Barnum) put them at Wealth 1, maybe Wealth 2.
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