Recently more than 40 super rich pledged more than their half of wealth for charity. Reading their pledge was quite inspiring and eye-opening. Many of them didn’t want to leave this wealth for their children, because they feel it will spoil them. They didn’t want “Lucky sperm’ or ‘Lucky ovary” factor to define their children’s life but their own hard work. (http://www.givingpledge.org)
It was little surprising for Indian like me, we are all born with the concept that unless we do something totally against the wishes of our parents, we are going to inherit their wealth.
Recently I saw news about Mr Narayan Murthy’s son marrying Mr Venu Srinivasan’s Daughter. A fairy tale marriage indeed. Both bride and groom are well educated in best US universities and are professionals in their own right, but what made this a big news was the wealth they both inherited ( In thousands of crores each) and not their professional achievements.
Statistics show that we are one of the least giving country in percentage of GDP, though we have largest number of poor and needy people. We do about 0.4% of GDP ie about 20,000 Crores. It includes all formal and informal contributions. USA does 2% of their GDP and Netherland 4%. (http://blogs.timesofindia.indiatimes.com/givingisliving/entry/giving-nation)
All our religious festivals involve some sort of giving. Whether it is Sankranti or Ugadi. All major fasts needs to be concluded by some sort of donation. Most of the time it is given to sisters, aunts, daughter in laws, son-in-laws or our relatives. It is also given to priest or temple or offered as offerings to God. Few people give to charities or poor people. Today new generation is bit changing, and have started giving to charities. I remember once we went to buy dhotis and sarees for giving in a major festival time.,.. the shop keeper asked us.. Is it for your own use or for donating?. The idea was that if you are giving to some one it will be of lower or cheaper quality compared to the one you will use for your self.
What do Middle Class Indian Parents do of their savings or properties? a. It is for financial safety during their old age. b. to pay for children’s primary, high school and College fees. c. Another major expense which parent is expected to bear is cost of marriages. Actually marriages are show-off time for parents. Family status and wealth is generally one of key criteria for selection of bride and groom in arranged marriages. Towards the end of their life or after their death, the property is inherited to Children. Inherited wealth is one of key factor for fight and rift among siblings. More the money bigger is the rift ( Ambani and many other examples).
My question is why should you inherit the wealth to your children, specially if they are doing well for themselves. Yes you help them to get good education, get married etc. But after they are settled, all children should build their own wealth. It may be some help if children are not successful and struggling, but more often than not the parent’s wealth may not make them successful in long run unless they have some thing in them.
The biggest wealth of an average middle class Indian is his/her house. I am making a case that parents should not give their houses to their children after their death. Same thing they could also do about their other assets, bank balances etc. They should sell the house and donate the money to a charity after their death or even earlier if they have more than one house. Most of the time successful children dont stay with parents any way these days and may not need parent’s house.
Let us do a back of envelope calculation. Suppose there are 100 million families in India, who own their houses. If we take average price of House as Rs 5Lakhs ( it would be far more). That is 5000,000 Crores. That is a lot of money. Only 10% of this( 500,000 cr) is about 20 times of what we are giving today as nation and almost same as the amount pledged by 40 super rich last week ( about USD 100 billion).
I saw an article in Indian media discussing why rich Indian wont do such pledge but there was also a hope that it would change over year. In next 10 years there would be many more people contributing to charities. But I think why should we wait for our rich to act, when we all can do that , Giving is not about how much you have but how much you enjoy giving…why rich guys should have all the fun.
Can we?
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