When we start this blog, one of the main reasons was to create wealth to our son. We were born in a country which we have not to face hunger or absence of basic needs. Both of us (The Scrooge Parents) have high degrees of education. This was possible because the sacrifices made by our parents (a lesson we want to deliver to our son (s)). Because of that efforts both of us have average paying salaries and can put some money aside each month. Thank you Scrooge grandparents. Nevertheless, we want to aim to a higher objective to our son (s). Above anything else, we want to provide him with the chance of choosing where, when and how to live his live without having the mandatory “earn money to survive whistle” and at the same time keep the money flowing for future generations.
In order to do that we will try to provide him with the education to succeed in life. This education will be much more that what he might learn at school. We want to deliver him the financial education and the tools to achieve a higher purpose. So we start to think about the plan we are going to deploy. The first part of the plan is a mix of:
The Scrooge Family reaching Financial independence
A set of rules to the future generations. This rules are meant to make sure that the wealth goes on to future generations and for now are:
If he wants to buy a car or anything he needs (money to start a business) he can withdraw from the investment account. If he decides to do it he has to pay it back as soon as possible and with interest (the best business, he can find from an official bank or lending party). The maximum he will be able to withdraw is 2% a year and only 5 times before he become the elder (the older man or women alive from our blood). If he has brothers at the time the 2% will be divided by the number of brothers.
He can only withdraw money for the second time after the first one is totally payed of and so on.
When the money is taken he will have 1 year before starting to make payments (if he decides to do it later then sooner) and if by any reason he misses a payment, he and his heirs loose the right to withdraw money until they pay all that his owed (adjusted for inflation). This rule restarts the moment the person that didn’t pay passes away. After this the withdraws are again available.
After we pass away the 2% will increase to 3% (that is a more conservative approach of the trinity study, after all we want the money to last at least 100 years), but all rules before this still applies.
By now you might be wondering, but if they are able to withdraw that % how about the Scrooge parent’s money. Well the truth is that we are not really thinking about stop working. At least not before we can get the full benefits of the retirement plans.
This might seem counter intuitive, but the purpose of this blog is about being financial independent and not to stop working (we might get to that, but for now that is not our main purpose). The focus is to create an objective and a direction to move to. We want to reach financial independence but without making huge sacrifices that could make us quite before getting there.
