Assuming historical returns, your money doubles roughly every 7 years, so within the rest of your lifetime, that 1 million should turn into at least 8. That's an extremely comfortable upper-middle-class lifestyle on the interest payments alone. If your children don't spend it all, your grandchildren would easily have private jet money by the time their parents retire.
If getting a million dollars wouldn't affect how much money you can leave your kids, you already have generational wealth.
Well said.
Where I live, one million dollars would allow me to pay off my house, open healthily sized investment accounts for my kids, pad my investment account, setup a trust and, overall, set my family up for a comfortable life in the future. I don't see how that isn't generational wealth.
Basically the bar is higher than "something you can pass down". It is enough that the next generation does not need to worry about making money either.
We can debate “live comfortably” if you want, but no 4.5 people are doing that from the investment proceeds of 1m.
What you are describing is kind of more like social mobility.
Generational wealth is definitely not "affect[ing] how much money you can leave your kids." That's an equivocation - if you're leaving your kids a dollar, another dollar will "affect how much money you can leave your kids."
edit: you need a million dollars to securely retire at all, and that's if your parents, kids, or you don't get sick. If they do, a million is not only not "generational wealth" but it may not even last you three years.
At a more sane expected return of 5% annually, you get $50k a year to live off of to just keep what you have (or rather, watch it slowly erode in value due to inflation).
That is basically a one person income, maybe two adults if you pinch pennies and live in a crappy apartment or a low-end house in a midwestern suburb.
You can get a lot more lucky with a million bucks than you can with 10k if you gamble, but there are no guarantees. Risk tolerance is the most impactful variable. For those in the low risk tolerance group, I think you'd need at least 2 mil these days. And that's with being frugal, as well as probably not having much left over for kids.
You would also have to train your kids to responsibly use the money without demonstrating it, as you’d just be hoarding it. People don’t have a good track record there, either.
I think the best you could do generationally with a million would be to try to invest moderately and draw down a small percentage (2-3%) to demonstrate fully considered use of the money. This would keep you in a middle class income but give you more ability to donate charitably, vacation together, let one spouse retire earlier, solve a financial crisis for a child, etc.
Letting them in on the thinking would give them a good chance to handle a high six/low seven figure inheritance, depending on how the investing goes.
Common definition is somewhere between 1.5 to 5 million per child.
You need more than $1.5m today should be $6m by the time they're 20. Depending on inflation, cost-of-living, tuition, etc. that might be enough.
People talking about generational wealth aren't saying, "what if they live a frugal life in the Topeka suburbs."
Also wealth does not start at the ability to live an extravagant life without a salary... You're wealthy way before that point.
Technically any asset transferred to the next generation is “generational wealth”.
But in the context of a startup sale, when you say generational wealth almost nobody assumes you mean the ability to pass a few thousand down.
The common understanding is that you have enough money that future generations do not need to worry about money, assuming they maintain an average or slightly above average lifestyle and use the money responsibly.
Speaking for yourself I guess
Buying a house in desirable areas is going to be in the ~ $1M range, college is going to be hundreds of thousands, etc.
MotherDuck, a semi-competitor of theirs has raised $100mil in funding. DuckLabs has reportedly taken no external funding (so all ownership is with the founders) and was profitable with 30+ employees.
On the sidelines, other companies behind beloved open source products, like Astral, Astro, Bun are getting bought left and right.
With that as a backdrop, I think they should have been able to get quite a good payout.
The DuckDB foundation owns some equity in MotherDuck, which is a data lakehouse platform based on DuckDB, and all three have been moving closely together in making DuckDB better locally as well as in the role of a query engine that really threatens a lot of amazon's role in data lakehouses. DuckDB in the hands of a good team means that you can use AWS almost only for storage, instead of using any of the managed services.