Inheritance and the Do Anything/Do Nothing Distinction

The Time Warren Buffett Fooled Himself

I’m a fan of Warren Buffett’s sayings, often repeat them, indeed if it were up to me, they’d be collected in a little red book that investors were required to carry in the breast pocket of their work smocks. I came across one, however, that I will now critique, at the risk of being sent for reeducation somewhere in Omaha province.

Buffett famously said that in passing down wealth, parents should “leave children enough so they feel they can do anything, but not so much that they can do nothing.”

Presumably the amount that would allow children to “do anything” would be one that renders them financially free to follow any career path, no matter what it pays. While Buffett’s middle child, Howard, held corporate jobs for years before turning full-time to philanthropy, his two others seem to have gone the “do anything” route. The youngest, Peter, has spent his whole life as a musician and philanthropist, and the oldest, Susan, after a stint as a real estate broker, worked at The New Republic magazine and aided progressive causes. They were all free to do anything, but I’m pretty sure they were also free to do nothing, if that’s what they wanted.

On reflection, the wealth needed to do anything and to do nothing are basically the same. Even if there’s some daylight between the two, and the “do nothing” threshold remains just out of reach, the hardcore do-nothing-er can always move where the cost of living is lower. On Succession, we heard Connor Roy’s advice to Cousin Greg that “5 million is a nightmare,” because “you can’t retire, and it’s not worth it to work.” But he was thinking of New York, whereas that $5 million would’ve been enough in Cleveland – a relocation evidently beyond the ken of Connor or his fellow Greg mentor, Tom Wambsgans.

Also, what does it mean to “do nothing?” If none of the Buffett children had ever held paying jobs and were philanthropists only, would that count as nothing? “Nothing” conjures up a playboy, jetting from one louche pleasure to another – but I mean, who does that? Even the louchest heirs I’ve met have had wealth-related obligations, which they had to take seriously if they intended to stay rich. In fact, one (European) heir I knew with a reputation as a playboy was pretending, making an appearance at NYC clubs with beautiful women, then returning to his office to crunch numbers into the wee hours. He ended up multiplying his family fortune.

Getting back to Buffett, his comment about inheritance is, I’m sorry to say, the rare occasion when he was fooling himself. My guess is that when his kids were small, he considered the wisdom of Cornelius Vanderbilt who said, or maybe shouted, causing his turtle soup to spill, “Inherited wealth is as certain death to ambition as cocaine is to morality." Despite this opinion, Vanderbilt left approximately 95% of his fortune to his son William Henry – who did well with it.

Still, some rich people do take a hard line, believing that an education is all the offspring are entitled to and every dollar beyond that should be earned. While Buffett couldn’t do that to his kids, the idea that they’d never need to work must not have sat well either, so he invented the do anything/do nothing formulation, which doesn’t hold water.

Buffett needn’t have worried anyway, because his children have turned out fine, and I suspect they would have even if he’d handed them ten times whatever he did.¹ The Succession heirs were screwed up by wealth, but that’s TV (though someone who worked for Murdoch tells me it’s a very accurate representation). In real life, children of the rich follow the same distribution as any others: a few are angelic, a few demonic, and the rest cover the range of human personalities. If wealthy parents cut off a child in the hope that forced self-reliance will turn him into another Abe Lincoln, they’re equally likely to get a Dick Nixon. And along the way their relationship will be affected, and I’m 99% certain not positively, by the spectacle of the parents living well while the child pinches pennies.

No, if even Cornelius “Meanie” Vanderbilt lacked the stomach to force William Henry to make it all on his own, few of us will either.² The reality is if you have both wealth and children, the genie is out of the bottle. This is one reason the trusts and estates field keeps growing, as more rich parents seek to at least delay the transfer and mitigate any ambition-killing effect of a large bank account at a young age. I’m referring to generational wealth here, but that’s a rarefied sphere, whereas for most Americans the amounts involved present different issues.

I recently came across a Reddit thread with a title to the effect of, “My Uncle Died with Millions and Never Helped Me Out.” The Redditor recalled how he struggled financially in his 30’s, living in dilapidated housing and working two jobs, while his childless uncle and aunt quietly piled up wealth. When they died, he was shocked at the size of their estate, and although he inherited some money, it was when he was young that it would’ve made a real difference. Commenters agreed, pouring scorn on the Baby Boomers sitting on wealth far greater than any prior cohort.

The Boomers are worth over $83 trillion, while their main heirs, the millennials, are finally gaining assets but mostly illiquid ones like houses, while carrying student loans and mortgages. New York City seems at the forefront of an inter vivos transfer to come nationwide, as a large percentage of the young people living here are reportedly subsidized by their parents.³

Meanwhile, out in “real America,” Boomers still overwhelmingly say they have no plans to transfer wealth until they’re dead, even while they are tithing to churches, supporting ladies’ improvement societies, or worse, buying $Trump coins.⁴ Why so many prosperous Americans refuse to hand over a little cash now when it could help, and prefer that the next generation eagerly await their demise, escapes me.

To end with another saying, one I rate 100% true, “Charity begins at home.”

1. He has now given all three the responsibility for donating the bulk of his fortune after his death, so they’ll be busy with that. In a Warrenesque masterstroke, he required unanimity, so that each of them can get out of an uncomfortable ask by saying, “My brothers/sister will never go for it.”

2. William Henry Sawikin might have thoughts on this; I’ll ask him.

3. How Many New Yorkers Are Secretly Subsidized By Their Parents?, New York Magazine (Feb 10, 2025)

4. Why Boomers are refusing to give their $84 trillion in real estate, wealth to their children, New York Post (Jan. 30, 2025)