As we enter the season of Thanksgiving and Christmas gatherings, your children or grandchildren’s memories of summer might be fading - but in this short blog, I’d like to give you, as parents and grandparents, something to think about as you plan for next summer!
I have been in the financial services industry for four decades. In our industry, the use of the term "investment" usually refers to conventional financial instruments like stocks, bonds, and cash. The term "alternative investment" refers to an asset that is not conventional. It is complex in nature and has limited regulation. The most common alternative investments are private equity, hedge funds, real estate, and commodities. Alternatives tend to have attributes that differ from typical stock and bond investments from a return and time horizon perspective.
I encourage and challenge you to consider a different type of alternative investment - an investment in your children and grandchildren that I call a “posterity investment.” So, what do I mean by a "posterity investment"? It is a use of money in a manner that promotes the values and ideals you want to pass on to your family. It is an investment that promotes the character qualities you want in your posterity (generations that come after you).
As a grandpa, I must admit this concept of investing in children and grandchildren was never on my radar screen. After all, if I ever retire or even have anything to leave my children and grandchildren, then surely, I must invest in financial instruments. So, my default, as is undoubtedly the case for you as well, was to invest any surplus margin or savings in traditional financial investments, either in a personal account, a retirement account, or to pay off debt which was still a prosperity or financial investment.
Once the IDEA that any surplus funds could be invested in my posterity (Gen2 and Gen3) and not just a default to traditional financial investments like stocks and bonds, my wife Julie and I began asking a different question: "Is there a way to use some of this money to better build spiritual and social capital into our children and grandchildren?” The result was a line in our budget called, “posterity” which was a predetermined amount from our surplus earmarked to invest in posterity. Just like you may predetermine to put $2,000 in an IRA, you can determine an amount to invest in your children and grandchildren.
What are some examples of posterity investments? The list is endless, and you will undoubtedly have more than these, but to give you an idea, here are some posterity investments Julie and I have made: paid for scripture memory verses, paid for book reports on books we recommended, paid for a weekend marriage retreat, funded mission trips to a third world county, match the boys for a car if they received the HOPE Scholarship (inspired them to work and build a work ethic and keep grades up), gas for the boat and a day at the lake with kids and their friends, and on and on.
Annually, we host "cousin camp", where, over the weekend, we keep all the Gen3 grandchildren, and the parents get the weekend to themselves. All the costs for the weekend (craft supplies, food, slip 'n slides, etc.) are an investment in Gen3.
ln the past, I would have considered many of these suggested investments an expense rather than an investment. Many of them might appear to increase your living expenses (such as food budget), or they may seem to be a frivolous use of money, like gas for the boat. As you can see, the outflow included a spiritual and social dimension of investment in Gen2 and 3, and categorizing them as a posterity investment causes us to look at them differently. They do not just increase living expenses and are not necessarily made each year. This posterity line in my budget is right before my 40lk contribution. They are both investments.
I have shared a few of the alternative investments Julie and I have made to challenge your thinking and to give you some illustrations of potential posterity investments. I encourage you to tailor your ideas to the ages and interests of your family. Think of the activities you enjoy and what benefits or memories you would like to pass on to your children and grandchildren.
Remember the definition of an alternative investment: complex, not conventional, and different with a long-time horizon. That concept is key. You are making these investments to build a long-term return in spiritual and social capital in your posterity. These investments may be unconventional or unpopular, and your friends and family may even scoff at you for not putting the money in traditional investments with a focus on retirement and taking care of yourself financially. But let me encourage you: as I look back at our spending. I have no regrets that we made these investments in our family. We might have ended up with more financial capital if we had invested differently, but seeing the social and spiritual capital returns in the lives of our sons and now our grandchildren is priceless and cannot be quantified on a balance sheet.
I hope you have picked up the BIG IDEA that if you have a surplus, before you automatically default to traditional investments, consider ways to invest in your children and grandchildren's spiritual and social capital. Maybe have a discussion over your Thanksgiving or Christmas meals and gatherings and then consider your upcoming posterity investments based on what your kids/grandkids are dreaming about for their next summer’s adventures! Be creative and come up with your own, and/or commit to fund or partially fund their summer camps, beach trips, mission trips, etc. Just something to think about. From a return and time-horizon perspective, I don't think you will regret doing this.
For more thoughts on this and other topics, I recommend my book, Your Life… Well Spent.
About the Author
Russ Crosson
Russ Crosson is executive vice president and chief mission officer of Ronald Blue Trust. Russ was hired in 1980 as the second employee of Ronald Blue Trust.
Russ has worked extensively in all areas of financial planning, specializing in comprehensive financial, estate, and philanthropic planning, as well as generational family wealth management and transfer. Russ serves as chief advocate for the heart and soul of the organization and works to ensure the mission of the company is carried out with integrity in every area of the organization with a focus on making sure the company's mission is passed down and inculcated into future generations.
Prior to his current position, Russ served as president and CEO of Ronald Blue Trust (2002 - 2017). From 1999 -2002, Russ served as executive director of the National Christian Foundation (NCF).
Russ is the author of several books including Your Life... Well Spent, The Truth About Money Lies, What Makes a Leader Great, andYour Money Made Simple. He has also been a featured speaker in many venues.
Russ graduated from Kansas State University with a BS in mathematics and a master's degree in education.
Russ and Julie live in Roswell, Georgia and are active in teaching and mentoring young married couples in their church. They have three sons, three daughters-in-law, and eight grandchildren. In his spare time, Russ enjoys playing tennis and pickleball, water skiing, and especially enjoys time with his grandchildren.