Over the years, I have encountered numerous parents who unintentionally wreck their children's lives through financial indulgence. This phenomenon is often characterized by what I call the 5-Cs.

The first C stands for Cash, where parents hand over money without ever requiring their children to earn it. The second C is College, representing the full payment of their child's higher education. The third C represents the Car; here, parents not only buy the vehicle but also cover all related expenses, including insurance, gas, and repairs. The fourth C is the Condo, where the parents purchase their child's first home. Finally, the fifth C returns to Cash, specifically in the form of a Trust Fund. This safety net prevents the child from learning how to budget, sacrifice, and invest for the future.

The child may get married and appear to live a fairytale life, but the long-term reality is often bleak. This pattern explains why many family fortunes are completely gone by the third generation. The cycle typically flows as follows: the First Gen builds the fortune, the Second Gen enjoys the fortune, and the Third Gen loses the family fortune.

Take care.