The sixth point of the “Eight Points of Financial Confidence” is wealth transfer, which is normally made to family, usually children. For most people, it’s an end-of-life transfer via will or through a beneficiary designation.
However, another important type of wealth transfer is the voluntary lifetime gift to churches, charities, and causes that improve the world around us, benefiting our society and maybe even the world. Whether you have found yourself making charitable transfers or not, keep reading to learn what I have discovered from working with thousands of people over the last four decades.
Earlier in my life and career, I assumed that people making charitable transfers had “made it” financially and were “giving back” to their community. I thought that making the money had to come first, before the giving. Gifting cash or appreciated assets and investments occurred only after wealth had arrived, and those gifts, I thought, were often made to get a tax deduction.
I was wrong.
Sure, there are donations, especially the headline-grabbers for stadiums, buildings on campus, or a new wing for the hospital or museum, made after a fortune was earned. Thankfully, people like Bill Gates and Warren Buffett are leading by example and encouraging billionaires everywhere to make substantial pledges to charity.
But from my perspective today, it’s really the other way around. I’ve come to believe that, for many people, a charitable heart came first and was followed by prosperity and wealth. I’m not about to make guesses as to why this is so, but I can think of many situations where it absolutely was the case. Call it blessings from above, the karma of the universe, or nature’s reward for a kind heart.
And though tax savings is almost always considered, it is almost never the reason for the gift. The donation was usually the result of a charitable desire backed by an emotional reason or logic.
Recently, I wrote a post that had “Spend Some, Save Some” as the topic. Perhaps it should be revised someday to read, “Spend, Save, and Share Some.”