When did you tell your children how much you had amassed

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VINNY
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When did you tell your children how much you had amassed

Post by VINNY »

I am struggling with wanting to tell my oldest who is 12 how much mom and dad have managed to accomplish at such a young age with "regular jobs". We're not highly paid professionals.

I've had conversations with him in the past about money in general and he once said to me 1,000,000.00 is alot of money and that he wants to get a good job so that he can have that kind of money someday.

I jokingly said, don't you think mom and dad can have that kind of money. He said emphatically no way dad, because you and mom are a police officer and a teacher, you guys don't make that much. I laughed and said well someday we hope to. We have over 1M saved.

My son is very smart, straight A student and eager to be successful. I think if I shared this information with him it would demonstrate the importance of saving and investing. I don't feel it would make him become a slacker or think he can relax and has his future set for him.

I know 12 sounds young, but he seems so wise beyond his years that I believe sharing this information with him, would inspire him even more. He already says things like he doesn't want a big house or fancy cars because he doesn't want to waste his money. When we asked him what he wanted for his birthday, he said nothing, I don't need anything!

When we talked about going out for pizza the other night, he chimed in, to bring the pizza home so we don't have to leave a tip! He wants to be a software designer and is a great kid. He seems like a young Boglehead. His hero is Bill Gates.

I'm hoping that the revelation would give him the spark to realize if mom and dad accomplished to save that much money on a modest income and lifestyle, imagine what he can accomplish with the same principles but with even a higher paying job. I would like to give him even more of a burning desire to do well in school and to know the sky is the limit.

What do fellow Bogleheads think?
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FrugalInvestor
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Re: When did you tell your children how much you had amassed

Post by FrugalInvestor »

I think you should surprise him later, much later. A 12-year old may seem that he's 'beyond his years' but he won't know what to do with this information. You will be setting him up to fail because he will likely misuse it. You can teach him how to save and invest without divulging all the details of your finances.
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JoinToday
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Re: When did you tell your children how much you had amassed

Post by JoinToday »

I struggle with the same thing. My thought is 12 is too early to be telling him. College FAFSA was when children get exposed to this for certain (high school senior). My thought is that the responsible child needs to be aware of parents finances well before the parent starts losing their marbles (65 or 70, child is 35 or so. If the child is not responsible ..... well, need to find someone else. My child seems like your boy. I lucked out (so far).

I will be looking at the replies for guidance also.
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rfowler
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Re: When did you tell your children how much you had amassed

Post by rfowler »

Vinny,
Your post has really made me ponder.
First, congratulations on your financial accomplishment!

Your post made me recall my first memory of my own father showing me (as a teenager) his financial statement, net worth of about $1.5 mil. This was about 1975.
A few impressions that stayed with me forever were:
a) My dad's hard work, frugality and "smarts" were paying off, b) He was proud of his achievement, particularly since he was limited in his circumstances and unable to attend college, c) He wanted me to understand how to read a financial statement, and d) It was expected that that all of us children could accomplish the same.

So, yes I am all for sharing your financial accomplishment with your son, with the context that you described in your post: "this is what discipline and smarts can build." Given your son's natural inclination to entrepreneurship, it sounds like he would be inspired in a good way by your story.

p.s. I have to say we have not shared our financial information with our young adult children. My first priority now is to teach a few principles of money and financial management after leaving college.
Talisker
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Re: When did you tell your children how much you had amassed

Post by Talisker »

I told my kids at 10 and 12.

Both sharp and advanced for their age with strong interest in financial dealings.

I just told them the numbers they saw on the screen were family confidential and never to be discussed outside the family.

Has not been an issue.
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whaleknives
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Re: When did you tell your children how much you had amassed

Post by whaleknives »

Maybe you can accomplish the same thing by showing him an example on a growth curve or compound interest chart. Or show him the "Fun with Compound Interest" appendix in The Only Investment Guide You'll Ever Need by Andrew Tobias (revised 2011).
"I'm an indexer. I own the market. And I'm happy." (John Bogle, "BusinessWeek", 8/17/07) ☕ Maritime signal flag W - Whiskey: "I require medical assistance."
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whaleknives
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Re: When did you tell your children how much you had amassed

Post by whaleknives »

Look! It has a new appendix: "More Fun with Compound Interest -- Teaching Your Kids to Save and Invest".
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InvestorNewb
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Re: When did you tell your children how much you had amassed

Post by InvestorNewb »

Personally I think 12 is young. I'm not sure why they really need to know, but if the topic ever came up or if they specifically asked, then I would be inclined to tell them. I didn't know how much my parents had until I was in my late teens.
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frugalhen
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Re: When did you tell your children how much you had amassed

Post by frugalhen »

I think kids should know they are loved, safe and secure. I don't see how knowing the parents portfolio size fits into that.

Respectfully.
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target2030
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Re: When did you tell your children how much you had amassed

Post by target2030 »

FrugalInvestor wrote:I think you should surprise him later, much later. A 12-year old may seem that he's 'beyond his years' but he won't know what to do with this information. You will be setting him up to fail because he will likely misuse it. You can teach him how to save and invest without divulging all the details of your finances.
I share FrugalInvestor's concern. I opine that kids have no need to know until they have graduated college and landed their first job. At that point, you can talk to them about the importance of saving a certain percentage of income on a regular basis, and provide them the books and tools needed to manage and project their investments...
target2030
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Re: When did you tell your children how much you had amassed

Post by target2030 »

JoinToday wrote:I struggle with the same thing. My thought is 12 is too early to be telling him. College FAFSA was when children get exposed to this for certain (high school senior). My thought is that the responsible child needs to be aware of parents finances well before the parent starts losing their marbles (65 or 70, child is 35 or so. If the child is not responsible ..... well, need to find someone else. My child seems like your boy. I lucked out (so far).

I will be looking at the replies for guidance also.
Do you need to declare 401K and other retirements for FAFSA? I hope not so your kids think that your net-worth is only a fraction of the total.
Retired1809
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Re: When did you tell your children how much you had amassed

Post by Retired1809 »

Short answer: "Don't." A wise man was once asked by his young son, "Dad, are we rich?" The wise father responded: "Your mother and I are well-to-do; you don't have a dime to your name."

Don't deprive your children of the opportunity to make it on their own.
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Re: When did you tell your children how much you had amassed

Post by Ron »

HikerNC wrote:Short answer: "Don't." A wise man was once asked by his young son, "Dad, are we rich?" The wise father responded: "Your mother and I are well-to-do; you don't have a dime to your name." <snip>
A good response, IMHO.

Additionally, you never know what the future brings. In my case, my parents divorced after I was out on my own and had my own family. Both parents remarried, and both gave their "wealth" to their new family group. Upon both passing, I received (and as expected) nothing of their remainder estate nor did they leave a dime to their only grandson (my son).

Let's just say that they both met my expectations.

- Ron
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HardKnocker
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Re: When did you tell your children how much you had amassed

Post by HardKnocker »

Don't tell nuttin'.

Why would you tell your 12 year this? :oops:
As far as the FAFSA I passed on filling it out. Wouldn't get anything.

How many here passed on filling out the FAFSA?
Last edited by HardKnocker on Sat May 17, 2014 9:06 am, edited 3 times in total.
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staythecourse
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Re: When did you tell your children how much you had amassed

Post by staythecourse »

HikerNC wrote:Short answer: "Don't." A wise man was once asked by his young son, "Dad, are we rich?" The wise father responded: "Your mother and I are well-to-do; you don't have a dime to your name."

Don't deprive your children of the opportunity to make it on their own.
This is what my father who is a physician told me in the early 80's when I was a kid watching t.v. and the evening news ran a clip on the most highly paid jobs in the entire U.S. when I saw his was in the top 5-10. I asked him how much money we had and his answer was "Enough money to put a roof over your head and food on the table and that is all you need to know".

I think it is better to keep kids "hungry" for success growing up and that is hard to do (human nature) when you know you have wealth.

Good luck.
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VINNY
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Re: When did you tell your children how much you had amassed

Post by VINNY »

Thanks for all your replies thus far, I will check out that book along with some others, like The Richest Man in Babylon and the The Wealthy Barber, so that if we decide to tell him, he has some foundation and then the numbers he sees will further demonstrate and enforce what he read.
frugalhen wrote:I think kids should know they are loved, safe and secure. I don't see how knowing the parents portfolio size fits into that.

Respectfully.
Our kids fortunately have all three, they don't lack for love and security. I believe it could really aspire and motivate my oldest as he matures even more.

I'm just trying to put myself in my son's shoes (knowing his personality) and imagining what a profound impact it could have at an early age, not only to read such books but then to realize that mom and dad actually lived what he read and accomplished it. That were living proof.

I once asked him what kind of people do you think have that kind of money and he told me people like doctors and lawyers. That's part of my desire to tell him, to show him you don't have to have MD after your name to become wealthy.

I will check out those books to begin with and continue to look at other replies. Some posters are debating the same question. I trust my Bogleheads opinions and look forward to reading any additional responses.

Thank You
The Wizard
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Re: When did you tell your children how much you had amassed

Post by The Wizard »

I see no reason to divulge any of my specific investment balances or retirement income numbers to either of my offspring or anyone else aside from maybe a financial planner or estate attorney.
About all I've ever said is that I've arranged to have Retirement Income at roughly the same level as my net Employment Income, so I'm basically OK.
I do make annoying comments to my 28 yo son about maxing out his Roth IRA and using Vanguard funds to do it with. I need to check to see if he's done this, actually...
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user5027
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Re: When did you tell your children how much you had amassed

Post by user5027 »

I was told when I was in my 40's. My father said if anything happens to him and mom, "here is where you go," as he opened a file drawer in his home office. It had all the pertinent information including a list of amounts by institution name and account numbers, that he updated monthly. When I saw the total I commented that they had done well.

It was very helpful many years later when dad died suddenly and mom moved in with my brother.

We did not wait that long. I created the same file of information and showed our son when he was 25.
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Re: When did you tell your children how much you had amassed

Post by The Wizard »

user5027 wrote:I was told when I was in my 40's. My father said if anything happens to him and mom, "here is where you go," as he opened a file drawer in his home office. It had all the pertinent information including a list of amounts by institution name and account numbers, that he updated monthly. When I saw the total I commented that they had done well.

It was very helpful many years later when dad died suddenly and mom moved in with my brother.

We did not wait that long. I created the same file of information and showed our son when he was 25.
That's actually a significant point.
If I croak anytime soon, it will be an interesting few weeks for my son to figure out things, a bit of a challenge, one might say.
I do have a nicely organized filing cabinet that should serve as a start.
I see no reason to take major steps to make things even simpler for the Next Generation...
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Monk53
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Re: When did you tell your children how much you had amassed

Post by Monk53 »

Haven't and they are 33 and 30. Also passed on FAFSA. I don't think it's really something they need to know and while it's not a great amount of money, I don't want to potentially influence any decisions they make.
user5027
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Re: When did you tell your children how much you had amassed

Post by user5027 »

The Wizard wrote: That's actually a significant point.
If I croak anytime soon, it will be an interesting few weeks for my son to figure out things, a bit of a challenge, one might say.
I do have a nicely organized filing cabinet that should serve as a start.
I see no reason to take major steps to make things even simpler for the Next Generation...
It is not a major step only a matter of being organized. It includes a list of personal life and disability insurance, life & disability insurance from employer, company 401k, vanguard and banks.

It helps me see what my wife will have to live on if I demise or what we will have if I become disabled. I prefer to make things easier for my wife and children. Everyone's relationships may not be the same.
vested1
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Re: When did you tell your children how much you had amassed

Post by vested1 »

Once the genie is out of the bottle it is very hard to put back in. Sharing financial success with a child may have unintended consequences if for some reason that success doesn't continue. It would be natural for expectations of inheritance to become unrealistic and overblown, regardless of how much you intend to leave your child. I would much rather provide a pleasant surprise than a bitter disappointment. Examine your motivation for sharing this information and do so only in the interests of the child.
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BL
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Re: When did you tell your children how much you had amassed

Post by BL »

I can't see any value in giving him this information even though he is very smart and mature; he is still a child. Maybe make a list of the best and worst possible results of learning this would be useful in your decision. If you need to tell someone, do it here anonymously rather than burden the child. When you get old, then perhaps the children should have some idea.

An overview of an annual budget might be more useful. Even using percentages rather than numbers might be useful in various ways. This is something that he is more likely to understand and make use of. Listing % saved, % housing, food, car replacement and expenses, etc., could be very valuable even now with his allowance and earnings, and later when he is supporting himself. (Other experiences, like grocery shopping on a budget, figuring the cost of an item when you don't pay cash, etc., are all learning experiences with more immediate value.) Sure, he will probably figure out some of the dollars on his own, and that is fine. If a million comes up, perhaps consider how many years that would cover in retirement.
freddie
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Re: When did you tell your children how much you had amassed

Post by freddie »

Kid doesn't have enough perspective. 1 million is a lot of money but he isn't going to understand that you probably need 3 million (obviously making this up given I don't know your salaries/pensions) to replace your income.

I have also lived in CA too long. Police officers are high paid employees in most towns:)
VINNY wrote:I am struggling with wanting to tell my oldest who is 12 how much mom and dad have managed to accomplish at such a young age with "regular jobs". We're not highly paid professionals.

I've had conversations with him in the past about money in general and he once said to me 1,000,000.00 is alot of money and that he wants to get a good job so that he can have that kind of money someday.

I jokingly said, don't you think mom and dad can have that kind of money. He said emphatically no way dad, because you and mom are a police officer and a teacher, you guys don't make that much. I laughed and said well someday we hope to. We have over 1M saved.

My son is very smart, straight A student and eager to be successful. I think if I shared this information with him it would demonstrate the importance of saving and investing. I don't feel it would make him become a slacker or think he can relax and has his future set for him.

I know 12 sounds young, but he seems so wise beyond his years that I believe sharing this information with him, would inspire him even more. He already says things like he doesn't want a big house or fancy cars because he doesn't want to waste his money. When we asked him what he wanted for his birthday, he said nothing, I don't need anything!

When we talked about going out for pizza the other night, he chimed in, to bring the pizza home so we don't have to leave a tip! He wants to be a software designer and is a great kid. He seems like a young Boglehead. His hero is Bill Gates.

I'm hoping that the revelation would give him the spark to realize if mom and dad accomplished to save that much money on a modest income and lifestyle, imagine what he can accomplish with the same principles but with even a higher paying job. I would like to give him even more of a burning desire to do well in school and to know the sky is the limit.

What do fellow Bogleheads think?
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Re: When did you tell your children how much you had amassed

Post by Longdog »

I think you've already imparted on him a value system that will serve him well in his life. I don't think anything will change if you tell him.
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Re: When did you tell your children how much you had amassed

Post by Leesbro63 »

We've always lived well below our means, but still live pretty well. I never told my kids exactly what the numbers were. But by about the end of high school (they are now 20 and 24), they pretty well figured out that we are Millionare's Next Door.
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Re: When did you tell your children how much you had amassed

Post by BigTom »

VINNY wrote:Thanks for all your replies thus far, I will check out that book along with some others, like The Richest Man in Babylon and the The Wealthy Barber, so that if we decide to tell him, he has some foundation and then the numbers he sees will further demonstrate and enforce what he read.
frugalhen wrote:I think kids should know they are loved, safe and secure. I don't see how knowing the parents portfolio size fits into that.

Respectfully.
Our kids fortunately have all three, they don't lack for love and security. I believe it could really aspire and motivate my oldest as he matures even more.

I'm just trying to put myself in my son's shoes (knowing his personality) and imagining what a profound impact it could have at an early age, not only to read such books but then to realize that mom and dad actually lived what he read and accomplished it. That were living proof.

I once asked him what kind of people do you think have that kind of money and he told me people like doctors and lawyers. That's part of my desire to tell him, to show him you don't have to have MD after your name to become wealthy.

I will check out those books to begin with and continue to look at other replies. Some posters are debating the same question. I trust my Bogleheads opinions and look forward to reading any additional responses.

Thank You
You may save him a lot of money on higher education if you do tell him .

Unfortunately I can't answer this question but congrats on your achievement .
cmr86
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Re: When did you tell your children how much you had amassed

Post by cmr86 »

Honestly, I feel like that's a conversation to have later in his life. My uncle tried sitting me down when I was that age and tried getting me interested in the market by doing fantasy stock picking. At the time it was all so over my head that I just couldn't care less.

Truthfully, I still couldn't care less, because I have no desire to pick individual stocks. . . (though the need to save sank in, largely due to my parents)
Last edited by cmr86 on Sat May 17, 2014 9:28 am, edited 1 time in total.
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Re: When did you tell your children how much you had amassed

Post by livesoft »

I started with the 4% rule-of-thumb at about age 16.
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runner9
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Re: When did you tell your children how much you had amassed

Post by runner9 »

I agree with later in life. You can start with compounding interests, etc to show that it's possible and how he can accomplish it without stating that you, the parents, have done so.

Doing so he may decide he doesn't need to, just wait for an inheritance.
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Svensk Anga
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Re: When did you tell your children how much you had amassed

Post by Svensk Anga »

I vaguely knew that my parents had some substantial savings when I was a teen. I figured that it would not make much difference in how I would run my life since by the time any inheritance came around, I could be approaching retirement age. That would be too late in life to find that there was not that much coming after all. Having an independent bent helped to motivate me to make my own way. I still do not know my parents' situation, other than that they seem to have all the resources they need at age 80+.

We have not divulged wealth to our twenty-something kids.
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Re: When did you tell your children how much you had amassed

Post by Beth* »

As someone who has driven a lot of carpools in my life, I can tell you that kids reveal lots of information to their peers that their parents might not want them to reveal. They seem to think the carpool driver is deaf. I have overheard kids talking to their peers about all sorts of personal family issues that I am 100 percent certain that their parents did not want revealed. If you tell you children how much money you have, there is a very good chance that soon all their friends and their friends' parents will know as well.

Also, while your 12 year old may be level-headed and frugal, he may change going into adolescence. Many kids go through a couple of difficult years in their teens. In my opinion, having a teenager know that you have over a million dollars saved, and therefore theoretically could afford to buy him a car or the latest technology equipment, might not be a great idea.

My kids are in their 20s and they don't know how much money we have. I have talked to them about the importance of saving a percentage of their paycheck, and I have told them that their father and I have always done this and now we are prepared to have a comfortable retirement, but I have not told them how much money we have. There is no reason they need that information.
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Re: When did you tell your children how much you had amassed

Post by Sheepdog »

When? Last month at my age 80 and their ages 50 and 44. Never before then, but they knew we were fine. We did send them to college after all with no debts. Why did I tell them now? It was time because of our ages. I showed them where the money was and how they can get to it to help their mother when I die. I reviewed our recently revised Revocable Trust including trustee information, powers of attorney, living wills, where the money will go after we both have gone (their inheritance and to charities) and so forth. One was surprised that our in-retirement investments had grown, but the other didn't seem to (his wife's eyes lit up though.)
They didn't tell me their worth though. I am curious, but it isn't my business. I know they are doing okay, so I am at ease.

additional edit. When I finished my discussions, I asked them both and the one spouse (the discussion was at different times), about their wills, power of attorneys and living wills. I was astonished that neither of them had even thought about them. They have no children, so they didn't think it was important. I am glad I asked them because they hadn't thought about their needs of P.O.A and living wills. Who would inherit their estates? Who would they want to take care of them? Who would they want to make their health care decisions. Hopefully, after those discussions they will get going.
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Re: When did you tell your children how much you had amassed

Post by freebeer »

The Wizard wrote:...About all I've ever said is that I've arranged to have Retirement Income at roughly the same level as my net Employment Income, so I'm basically OK....
Great approach! Not clear that a 12-year-old needs to know that but later on... seems like a sound way to go. DW's parents are retired and we have no idea about their financial situation, which creates minor stress (we think they are basically OK but don't really know if there's a chance we'll need to help out at some point). So having that level of information would be helpful.

Our HS junior has been informed that he'll have no financial aid eligibility (so get on the stick for a merit scholarship esp. if he wants any chance of funding beyond undergrad)... thus at some level he and his 11-year-old brother know we're well off. But they also know that I'm making substantially less now then when at MegaCorp, and DW went back to work a couple years ago and as far as our kids know that was to help make ends meet. I.e. they don't have any idea that we could both stop working tomorrow and we like it that way. We've seen way too many spoiled kids. HS junior was excited when we went from 1 car to 2 cars and has no notion about us gifting him his own car (a la a number of his entitled peers).
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Re: When did you tell your children how much you had amassed

Post by ccieemeritus »

I haven't told my (almost) 18 year old daughter yet. But I have talked about living below our means, not needing to buy "stuff", and index funds. I don't think I will tell the kids the total until they've established their careers at earliest. I think it's dangerous for teenagers to know that their parents are "rich".

That said, she did get some income data from the college app process.

On her 17th birthday (before college app season for her) we did give her a printout of her 529 and coverdell account statements, and express the goal to get her through college without student debt. It gave some perspective to the public/private school choice. Interestingly she did mention the pressure some friends are under with no college funds at all (some of those friends live in nicer houses than us, but no college fund?). So she knows "her" total, but not "our" total.

I did establish a small custodial account for them to get used to account statements. For my son it's 1 share of aapl plus swppx. I highly recommend that. It lets us talk about the right things without giving the total away. My son shows interest. Daughter not so much.
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Re: When did you tell your children how much you had amassed

Post by cfs »

I vote with the do it later

I never had a conversation about money with my father or mother, and as far as I can remember none of them had any type of account and any type of investments other than the old can in the kitchen, and it should be said that my family was poor but we had a clean and organized home, my father was a disabled Soldier, collecting the military pension and his social security, plus earning a few dollars as a fisherman. Now back to the subject at hand, my vote is with the do it later group, keep helping him and teaching him about global economies and financials without reaching the see I told you we could do it and we did it moment.

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lululu
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Re: When did you tell your children how much you had amassed

Post by lululu »

user5027 wrote:
The Wizard wrote: That's actually a significant point.
If I croak anytime soon, it will be an interesting few weeks for my son to figure out things, a bit of a challenge, one might say.
I do have a nicely organized filing cabinet that should serve as a start.
I see no reason to take major steps to make things even simpler for the Next Generation...
It is not a major step only a matter of being organized. It includes a list of personal life and disability insurance, life & disability insurance from employer, company 401k, vanguard and banks.

It helps me see what my wife will have to live on if I demise or what we will have if I become disabled. I prefer to make things easier for my wife and children. Everyone's relationships may not be the same.
+1 to user5027.

12 is too early, in my opinion. Tell a twelve-year-old, and the whole neighborhood, extended family, and school will know. Saying in an offhand way that the family is financially okay is probably okay.

I think everyone should tell the adult(s) who have to take over finances when you croak where all the financial information is, and having it organized, is mandatory in my view. Having been an executor/trustee, even with organized information that is major work at a difficult time.
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TomatoTomahto
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Re: When did you tell your children how much you had amassed

Post by TomatoTomahto »

Beth* wrote:As someone who has driven a lot of carpools in my life, I can tell you that kids reveal lots of information to their peers that their parents might not want them to reveal. They seem to think the carpool driver is deaf. I have overheard kids talking to their peers about all sorts of personal family issues that I am 100 percent certain that their parents did not want revealed. If you tell you children how much money you have, there is a very good chance that soon all their friends and their friends' parents will know as well.
A 12-year old will brag to a friend that his parents have a million dollars. That friend will feel bad or good about that. In either case, it's likely that the response will be "oh yeah, MY parents have 2 million."

My 18-year old knows that we can pay for his college, that he's unlikely to have to support us, and that we value LBYM. He also knows the range of my wife's income, which is known because of her title and position.

Btw, another poster who did not bother with FAFSA; it would have been a waste of time.
I get the FI part but not the RE part of FIRE.
snowman
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Re: When did you tell your children how much you had amassed

Post by snowman »

Very thoughtful responses so far. It is too early, and there really is no need. Just keep doing what you are doing, and he will be fine.

As some posters correctly noted, kids do share sensitive family information when the time is “right” within their peer group. You have to assume this (or any other) information will be shared among the peers, and subsequently among their parents. Is that something you want?

Also, as already noted, many responsible, mature and honest teenagers go through difficult period of time often resulting in unintended consequences. As a responsible parent, you have to assume it will happen to your 12-year old as well. You want to protect him and your family by not sharing sensitive information that does not need to be shared. He already knows you are doing OK financially, and that's all he needs to know.
sscritic
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Re: When did you tell your children how much you had amassed

Post by sscritic »

Do you tell your children at college to lie to their friends about getting financial aid? Their friends all complain about filling out the FAFSA and about making trips to the Financial Aid office to get their stipends. Do you tell your child to fill out a fake FAFSA along side their friends reporting only 1/10 of your assets and income? And don't forget to tell them to make fake trips to the Financial Aid office (they can duck into a bathroom and stay there for 30 minutes to fool their friends).

Maybe they can wear a fake mustache when they go. :) Wait, they want their friends to see their fake trips to the Financial Aid office, so no fake mustache. The fake mustache is for when they go to the ATM and take out $300 every day (or at least use the fake mustache every other time they go to the ATM).
Bacchus01
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Re: When did you tell your children how much you had amassed

Post by Bacchus01 »

Did you tell your parents your net worth?

Why would you tell your kids?
jetgold
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Re: When did you tell your children how much you had amassed

Post by jetgold »

I think I would save this bit of information to tell him no sooner than when he is in college or graduating, and then sharing it in the context of when you begin to talk about his work-life/employment and saving/investing for his own retirement. One thing to consider is whether telling him makes you feel better, or does he really need to know this for building his money sense since he already seems to be demonstrating good money sense (congratulations on instilling this in him!) . Did you feel a bit let down that he couldn't recognize that you and your wife might have already accumulated the 1 mil? Might want to reflect a bit on his need to know vs. wanting him to recognize that your hard work has resulted in your financial outcome. :happy
synergy
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Re: When did you tell your children how much you had amassed

Post by synergy »

Spouse and i are 65 and we are discussing setting up our 40 yo and 36 yo children how to access our accounts and how to help either one of us if necessary. They are both gainfully employed and we have not felt any need to discuss our finances with them. They are both level headed and industrious and have always known that we were there for them if needed. We got them through good colleges with minimal loans and graduate school was on them. I would never have considered having a discussion including the details of family finances with either of them at 12. I really liked that they got to be kids for as long as they did and it did not stunt their ambition or personal drive.

I vote with the wait until a child needs to know rather than when the parent needs to tell.
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FelixTheCat
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Re: When did you tell your children how much you had amassed

Post by FelixTheCat »

My parents never told me.

I will never discuss it with anyone due to a very money hungry ex-wife.

My child will find out when I die.
Felix is a wonderful, wonderful cat.
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Gattamelata
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Re: When did you tell your children how much you had amassed

Post by Gattamelata »

In my opinion, showing him how much you have saved doesn't teach him much. But that conversation seems like a very teachable moment to me.
I jokingly said, don't you think mom and dad can have that kind of money. He said emphatically no way dad, because you and mom are a police officer and a teacher, you guys don't make that much.
"Son, how much you have often has nothing to do with how much you earn. The key is how much you save, which in turn is driven by how much you spend." Then just run some simple numbers: Income of 50,000/yr, savings of 20,000/yr = millionaire in 50 years. Income of 200,000/yr, savings of 5,000/yr = millionaire in 200 years. Then take him to an expensive neighborhood, show him the houses and the cars and the views, and explain that most of the people in the neighborhood are not wealthy. They have high incomes and high expenses, so they might be millionaires in 200 years. Some of them are even spending more than they make. If they lost their high paying jobs for a few years, they'd be in real trouble. Drive home the point that the key to wealth isn't income, it's managing your spending and saving. Higher income makes things easier, to be sure, but without the discipline to budget and save, it's useless.

There are other opportunities in that conversation. If he's engaged in the numbers discussion and his math skills are there, then you could explain that your simple savings numbers are only part of the picture and teach him about the power of compound interest - that's always worth teaching as early as they can learn it. You could also take him to a poor neighborhood to show him the other side of the equation. You can tell him "Your mother and I are not exactly wealthy, but we're comfortable. We could afford to live in that rich neighborhood I took you to, but then we wouldn't be comfortable any more - we'd be stretching to afford it. Instead we live in our neighborhood. It's a good neighborhood, and living there allows us to save so that we're prepared for the unexpected." You can tell him about something you wanted but didn't buy, because you'd rather have security than luxury. You could introduce the principle of delaying instant gratification for much greater benefit down the road. "I didn't buy a boat because I want to be able to help you go to college if you decide that's what you want," or whatever.

You could go as deep as his interest allows. If my experience with my parents is any indication, it's important in these things and at that age to avoid boring or frustrating them with too much information. Don't be afraid to dispense it in eyedropper fashion: drop a bit of information, let him think about it on his own, and then go to the next level if he asks a question the next week. If he doesn't ask and you want to discuss more, keep it focused on what he understood, not what you think is next: "What did you think about our discussion about money last week?"

I think it's hard to know exactly how far to go with kids, but introducing them to fundamental principles early (like saving and budgeting) seems like it's a safe bet, while diving into specifics (your income, your savings, your specific budget or goals) seems like it could cause problems for all the reasons mentioned by other posters so far.
ddoubleu
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Re: When did you tell your children how much you had amassed

Post by ddoubleu »

I, too, say there is no reason to tell a 12 year old. If your son is as smart as you say he is, let him figure it out that anyone with a modest income can become a millionaire. Telling him now that you're a millionaire adds no value in my opinion. Another way to look at it is if he really wants to be a millionaire and thinks only lawyers and doctors is the only way to get there, it'll drive him to become one himself (not that there's anything wrong with other professions!).

I'll even take it to the extreme and say money is the root of all evil. You tell your son now, he WILL tell his friends and that story will spread like wildfire. Before you know it, some scumbag finds out and will want to do harm to your family to get that money.
The Wizard
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Re: When did you tell your children how much you had amassed

Post by The Wizard »

One problem is: for MOST 12 year olds, money is for short term SPENDING. It certainly was for me at that age.
So it's really not the appropriate time to get into that topic.
Once they are on their own successfully at 25 or 30 or older, then there may be some reason to discuss this.
But even then, I'm not sure...
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EnjoyIt
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Re: When did you tell your children how much you had amassed

Post by EnjoyIt »

I think 12 years old is too soon. He may choose to not go get a higher education and instead do the bare minimum to follow in his parents footsteps. Apparently your footsteps are arriving in Dublin (congratulations are in order,) but I would assume you want even better for your children. I think the risk of knowing outweighs the benefits.

What one of my friends does with their kids to give them a proper financial education is:
They created a checking account for them, and all money the child receives either through work, chores, gifts or whatever goes in there. The child has full control of that account and can spend it on whatever they want, but if they need cloths, books, movie tickets, and now car insurance and gas money, they must pay for it themselves. This has clearly shown them how to budget and save. They also have retirement accounts where they learn about investing and the wonder of compound interest thereby teaching them the value of saving. As a second hand observer, these kids are well prepared for their financial future.

I plan to do similar once the time is right.
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hljockey
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Re: When did you tell your children how much you had amassed

Post by hljockey »

My kids already think I'm an a*****e because I refuse to loan them money any more. The oldest is 40 and the youngest 37 and I told them the interest free loan gift bank was closed a long time ago.

So there is no way I'm telling them how much money I have managed to save since then.
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Dale_G
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Re: When did you tell your children how much you had amassed

Post by Dale_G »

My boys are in their upper 40's and I have given them a rough guide as to our assets. They probably figured out some time ago that we have reasonable means. I never have disclosed my salary however. I think sons want to compare themselves to dads and, unless there is rampant inflation, they will miss the mark. No need for them to feel bad about that.

I do regret not giving my dad (now long departed) a casual hint. He certainly figured out that we weren't candidates for the poor house, but he would have missed the number by a wide mark.

I see no good in telling young children anything about net worth, unless the family is very wealthy and the children are being specifically groomed to manage wealth for future generations. "Go to college son, but your job will be to keep us on the list of the 400 hundred weathiest families in America".

Dale
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