Page 62 - Ramco JO SACCOStar _Vol 50.indd

EXHALE
SHOULD YOU
LEAVE your
CHILDREN an
INHERITANCE
By Silas Nyanchwani
There are two types of rich and
middle-class parents: Those
who believe that it is right to
leave their children an inheritance and
those sickly opposed to the idea. The
latter believe that education is the best
inheritance you can bequeath your
progeny.
Movie star Jackie Chan represents the
first group. He once famously said, “If he
(Jaycee, his son) is capable, he can make
his own money. If he is not, then he will
just be wasting my money.”
It is a mistake, often irrational belief, that people think of business first before
most rich people, especially self-made
tend to have. We have seen so many
empires collapse, because the patriarch
failed to mentor his children well and
upon his death, within a few years, all the
fortune he spent years building is swept
off in the avarice and naivete of the kids.
The greatest favour any parents can do
to their children is to bequeath them
an inheritance. Anything to give them
a head start. There is no intellectual
or philosophical rationale that some
parents, especially fathers remain tight-
fisted, even when some could be dying
or wasting away in a disease that may kill
them.
But before you dish out the goodies, the
best favour you can do them is to train
them on how to manage it. That means
you must be a present parent. Not a
parent who thinks that all parenting
problems can be fixed by throwing
money at them and outsourcing.
Be the father who carries the children,
both sons and daughters to your factory,
farm, or the car yard you run. As they
grow, at appropriate times, teach them
the value of hard work. Teach them the
60 | SACCO Star Magazine
value of dirty hands, make it fun. Forget
the nonsense that you struggled when
you were young, so your children must
not suffer.
Various scholars, notably, David
Blanchflower and Andrew Oswald
of Dartmouth & NBER and Warwick
University observed more than 20
years in a paper, “What Makes an
Entrepreneur” published in the Journal
of Labour Economics that those given
an inheritance, of say Sh 800,000, are
approximately twice as likely, to set up a
business.
When capital is a given, most young
they think of employment. And business,
when well done, has better rewards
overall than the best job in the world.
Parents who argue that it is wrong to give
children more than an education often
make a good point, if you are narrow-
minded, you may be persuaded. They
believe that a child, if well raised, should to save, and where to save. Even when
be able to fend for themselves. They are
not necessarily wrong. But you look at the
opportunity cost and the time it takes for
one to raise capital through conventional
means, and you realise it is not worth it.
Smart parents know you can’t make all
the wealth in one generation and it is a
baton that you pass on. Most such parents
will mentor their children appropriately,
appoint the most qualified to head the
family business and there are quite some
good examples of businesses now almost
in their third or fourth generation and
thriving. You can point to the Rockefellers
and the Fords of this world. Locally, some
political families, needless to mention
them are doing wealth management and
succession in a well-managed way.
There are reasons why you should give
your children an inheritance. One being,
you will probably die ahead of them,
hence your obsession and attachment
with material things doesn’t make
sense, because, if you die, well you are
forgotten.
Secondly, education alone is not enough.
Kids who get ahead, and by far outstrip
others in business, usually had a big head
start, whether it is a home, or a car, or
small capital to start whatever business
they had in mind. Most starter businesses
are usually rubbish, but there is no
substitute for the experience one gets.
Thirdly, the earlier you can expose the
kids to a business or corporate culture,
the quicker they can get over their ego,
and stop thinking that some jobs are
dirty and beneath them. This will give
them ample time to learn the intricacies
of the business.
More to the point, the most important
thing you can teach them is to learn how
the inheritance is not that much, SACCOs
provide the best route for capital, given
their flexible payment scheme, positive
peer pressure, and the ability to double
or triple the loan. This can help one get
a good head start. Because most young
people need money to buy their tools
of trade, be it a camera for wedding
photography or a bodaboda.
Be the parent who prepares children to
take up their responsibilities and one
who gives them capital and remains
patience as they experiment until a good
idea comes along.
@nyanchwani
e-mail: snyanchwani@gmail.com