Friends and money: better left unsaid?
Friends and money: better left unsaid?
Money is complicated enough with earning it, saving it, investing it, etc. but how much damage could merely talking about it with friends cause? Not just dividing the cost of a baby shower or how much a neighbor's car cost, or who took a bath on a stock but the juicier bits like net worth and real money not just overextended people playing rich. Would revealing your finances to friends cause jaws to drop to the floor?
After my father died I gave up my apartment and moved in with my elderly mother. No complaints. We live in the tiniest house and drive the oldest cars in the neighborhood. Frugal is the word. We also have several million dollars and are very sophisticated investors, who shun "professional" services.
At some point in adulthood many friendships fall into patterns and hierarchies: the smart rich couple in the biggest house, the free spirit family, the chronically unemployed black sheep. I have always kept my mouth shut, even with very close college and work friends about money. The few times I have let things slip I have completely regretted it, like when I asked my friend's tax attorney husband basic questions about an estate return for my father. "Don't worry about it- it's only for estates larger than $2 million" "I know, we put aside 1 million for taxes . . ." "I didn't know you had money. You drive an old car" "Why, because I don't put my net worth on four wheels?" ouch.
There is a distressed apartment building in a prime urban area that will be auctioning apartments and a few people I know will be buying one as an investment. My family plans to buy an entire floor of 6 apartments in cash. This is not to brag- we just cashed out of equities- some we've held for 30 years. I have not breathed a word of it, but no doubt people will find out. I just hope that I can keep my friends and keep living a fun, happy life. But I do expect some alienation and snide remarks. OK bogleheads, let it rip - have you relationships been adversely affected because you count pennies and keep your numbers to yourself and others pay 14% APR?
After my father died I gave up my apartment and moved in with my elderly mother. No complaints. We live in the tiniest house and drive the oldest cars in the neighborhood. Frugal is the word. We also have several million dollars and are very sophisticated investors, who shun "professional" services.
At some point in adulthood many friendships fall into patterns and hierarchies: the smart rich couple in the biggest house, the free spirit family, the chronically unemployed black sheep. I have always kept my mouth shut, even with very close college and work friends about money. The few times I have let things slip I have completely regretted it, like when I asked my friend's tax attorney husband basic questions about an estate return for my father. "Don't worry about it- it's only for estates larger than $2 million" "I know, we put aside 1 million for taxes . . ." "I didn't know you had money. You drive an old car" "Why, because I don't put my net worth on four wheels?" ouch.
There is a distressed apartment building in a prime urban area that will be auctioning apartments and a few people I know will be buying one as an investment. My family plans to buy an entire floor of 6 apartments in cash. This is not to brag- we just cashed out of equities- some we've held for 30 years. I have not breathed a word of it, but no doubt people will find out. I just hope that I can keep my friends and keep living a fun, happy life. But I do expect some alienation and snide remarks. OK bogleheads, let it rip - have you relationships been adversely affected because you count pennies and keep your numbers to yourself and others pay 14% APR?
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Re: Friends and money: better left unsaid?
Maybe some of them have found a middle ground between keeping $2M in the bank and paying a 14% APR.foxy9 wrote:OK bogleheads, let it rip - have you relationships been adversely affected because you count pennies and keep your numbers to yourself and others pay 14% APR?
In any case, how will people find out if you don't tell them?
None of the friendships I have are based on money. Aside from occasional discussion of Bogleheadian ideas about saving and investing, I've never felt the compulsion to let on to anyone how much money we have and whether or not it would be more than they have. What would be the point?
When someone mentions how old my truck is, I simply tell them it runs like a top and won't need another until stops doing so. No one's ever had an adverse response to that. Nor have they come up with an alternative reason I should buy a new one.
I'd forget about it. If you're not focused on money, your friends probably won't ever ask you about it.
JT
When someone mentions how old my truck is, I simply tell them it runs like a top and won't need another until stops doing so. No one's ever had an adverse response to that. Nor have they come up with an alternative reason I should buy a new one.
I'd forget about it. If you're not focused on money, your friends probably won't ever ask you about it.
JT
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We don't really get a hard time since we grew up poor and are responsible for everything we have. We don't mind telling our stories either, and people are more shocked than anything. Not even really impressed, just shocked. Folks who've had it handed to them through family or whatever might expect a different attitude from others, envy or even hostility. Either way there's never really anything to be gained from scoreboarding. Just your own quiet peace of mind should be reward enough, and maybe being able to help out a friend on occasion.
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Re: Friends and money: better left unsaid?
foxy, you should continue to keep your mouth shut and work hard not to let anything slip. Absolutely nothing good can result from others knowing about your assets and liabilities.foxy9 wrote: I have always kept my mouth shut, even with very close college and work friends about money. The few times I have let things slip I have completely regretted it
If any of your more brazen friends ask about your finances, simply deflect the question.
There's no reason why your fun, happy life can't continue, though it may require replacing some of your current friends with new friends.
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Re: Friends and money: better left unsaid?
What makes someone a sophisticated investor?foxy9 wrote:We also have several million dollars and are very sophisticated investors, who shun "professional" services.
...
My family plans to buy an entire floor of 6 apartments in cash. This is not to brag- we just cashed out of equities- some we've held for 30 years.
LOL.foxy9 wrote:"Why, because I don't put my net worth on four wheels?"
One thing is for sure, if your friends don't know that are filthy rich, at least they are not your friends because of your money. Like they say - you don't know how many friends you have until, until you have a beach house.
Maybe some of your friends who YOU think are not rich, are actually even richer than you. Now wouldn't you be happy to be able to talk about it more openly? Embrace your wealth. You don't have to show it off, but it doesn't mean you have to lie. IMO.
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Politics, religion and money (not necessarily in that order) discussions are the best way to antagonize people unless they seek your advice. I know this from personal experience.
Adrian
anenu@tampabay.rr.com
Adrian
anenu@tampabay.rr.com
I haven't yet had any bad experiences, but I'm pretty paranoid that people will get lawsuit happy if they found out, or family members would expect much more in the way of "gifts" and "assistance".
Note: I am not "rich" by any means, I'd bet I'm in the bottom 5-10% of members here. Just happen to be a little better off than those I know.
Bottom line: better to keep your mouth shut. Nothing to gain (maybe some admiration / jealousy) and probably a lot to lose.
Note: I am not "rich" by any means, I'd bet I'm in the bottom 5-10% of members here. Just happen to be a little better off than those I know.
Bottom line: better to keep your mouth shut. Nothing to gain (maybe some admiration / jealousy) and probably a lot to lose.
I think it is better left unsaid. If your friends find out and ask why you kept it secret, just say "because I like to know who my friends are". They should take that as a compliment. And, as already mentioned, some may already know.
I think your problem, if any develops, will be your new "friends". Right now, you probably know who you can trust. If your wealth becomes known, you may not be as certain about that as you are now.
I think your problem, if any develops, will be your new "friends". Right now, you probably know who you can trust. If your wealth becomes known, you may not be as certain about that as you are now.
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these may be the three most important things to discuss and exchange ideas about, yet are forbidden in public discourse. this is why I don't attend many cocktail parties.Adrian Nenu wrote:Politics, religion and money (not necessarily in that order) discussions are the best way to antagonize people unless they seek your advice. I know this from personal experience.
Adrian
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Think we are being trolled. But I'll bite for the "sophisticated investor".
Better left unsaid. Once upon a time, at a reunion, an acquaitance had asked how I was? I made the mistake of replying that I was doing "well" - I made no mention of money, finance or anything of the sort. Instead of I'm happy for you or that's good out came; my hubby is tops in his company, we live in the biggest house on the block..yada..yada..yada (it turned out to be all LIES). Bottom line - People are generally not happy when they hear someone is doing well, financially or otherwise.
Are you really sophisticated? I'm surprised you haven't looked into setting up an LLC to hold the investments, that's what all the "sophisticated real estate investors" do whether or not you really want to mask the true ownership and you're really worried about what others think.
Better left unsaid. Once upon a time, at a reunion, an acquaitance had asked how I was? I made the mistake of replying that I was doing "well" - I made no mention of money, finance or anything of the sort. Instead of I'm happy for you or that's good out came; my hubby is tops in his company, we live in the biggest house on the block..yada..yada..yada (it turned out to be all LIES). Bottom line - People are generally not happy when they hear someone is doing well, financially or otherwise.
Are you really sophisticated? I'm surprised you haven't looked into setting up an LLC to hold the investments, that's what all the "sophisticated real estate investors" do whether or not you really want to mask the true ownership and you're really worried about what others think.
Adrian and OP wrote:
Politics, religion and money (not necessarily in that order) discussions are the best way to antagonize people unless they seek your advice. I know this from personal experience.
these may be the three most important things to discuss and exchange ideas about, yet are forbidden in public discourse. this is why I don't attend many cocktail parties
Ditto,
Sam
Politics, religion and money (not necessarily in that order) discussions are the best way to antagonize people unless they seek your advice. I know this from personal experience.
these may be the three most important things to discuss and exchange ideas about, yet are forbidden in public discourse. this is why I don't attend many cocktail parties
Ditto,
Sam
I thought cocktail parties were something you did in the '60s. I was too young back then, so I've never even been invited to a cocktail party. OTOH, I go to block parties all the time.
We have a broad spectrum of long-term friends. We know pretty well the financial situations of almost all of them without them having explicitly told us. I imagine they can guess our situation accurately as well. Same goes for family as well. Same goes for neighbors. We have nothing to hide and nothing to flaunt either.
None of these have ever asked directly about our finances, but have asked about general financial advice probably after seeing which books I read on vacations that we often take together with friends or simply asking, "What book have you read lately?"
We have a broad spectrum of long-term friends. We know pretty well the financial situations of almost all of them without them having explicitly told us. I imagine they can guess our situation accurately as well. Same goes for family as well. Same goes for neighbors. We have nothing to hide and nothing to flaunt either.
None of these have ever asked directly about our finances, but have asked about general financial advice probably after seeing which books I read on vacations that we often take together with friends or simply asking, "What book have you read lately?"
Re: Friends and money: better left unsaid?
And after you answer that, what makes someone a VERY sophisticated investor?natureexplorer wrote:What makes someone a sophisticated investor?foxy9 wrote:We also have several million dollars and are very sophisticated investors, who shun "professional" services.
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I don't mind talking about money. My problem is people assume because of two letters after my name that I had a ton of it, even when I didn't/don't. I've been in some awkward situations with unemployed friends when I felt like I needed to pay the whole bill etc. I'm still trying to decide how I feel about that. I tell you what though, I like being able to treat others a whole lot better than not being able to treat.
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Re: Friends and money: better left unsaid?
If the people I know are any indicator, you are sophisticated if you know the the meaning of the terms "stock" and "bond". You are very sophisticated if you know the difference between "investing" and "speculating."Sunflower wrote:And after you answer that, what makes someone a VERY sophisticated investor?natureexplorer wrote:What makes someone a sophisticated investor?foxy9 wrote:We also have several million dollars and are very sophisticated investors, who shun "professional" services.
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I'd caution against letting your friends know. No good has ever come out of it in my experience. And I know most of the time it's entirely my fault. Either I sound like a parent disapproving of their spending habits or their fun or I come off as Scrooge, too cheap. I just get so passionate over the subject and I forget myself. I often get snide remarks when something comes up involving money or frugality. For example, at a convention handing out free t-shirts. My friends would say, "I bet mmmodem would line up for hours to get that ugly t-shirt." I don't mind because I've fully embraced my cheapness but I'm sure my spouse does not appreciate the label. Luckily, I have 4 siblings that are more or less in agreement with me on finances that we can discuss freely.
Selling a million dollars of stock after a huge market crash and investing that in a distressed apartment building?
If this works out, you truly are very sophisticated. Especially is sophisticated means lucky.
If this works out, you truly are very sophisticated. Especially is sophisticated means lucky.
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why would you disclose buying an apartment building?
buy through a revocable trust, initially naming a trusted attorney as the trustee and you as the trustor. the day the trust is signed have the attorney sign a successor trustee document where he resigns all duties.
then, the copy that gets filed at the recorder of deeds shows that the attorney bought it as the xyz revocable trust.
problem solved. having your own name on public records/real estate is just asking for trouble. if you are in an accident, what do the lawyers do 1st? an asset check, of course.
buy through a revocable trust, initially naming a trusted attorney as the trustee and you as the trustor. the day the trust is signed have the attorney sign a successor trustee document where he resigns all duties.
then, the copy that gets filed at the recorder of deeds shows that the attorney bought it as the xyz revocable trust.
problem solved. having your own name on public records/real estate is just asking for trouble. if you are in an accident, what do the lawyers do 1st? an asset check, of course.
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People seem to like to know where they (and you) stand in the economic pecking order, are they above or below you. In my small town which side of town you lived in spoke volumes, as it always has hasn't it?
When my spouse and I were struggling to get our small business in the black years ago we discovered that other successful small business owners went out of town to spend their money (real estate, vacations, etc) and kept quiet about it. And another friend in a nearby town commented that on weekends most of the doctors and dentists flew out of town for the same reason.
Most people don't have a clue exactly how much take-home money other people have so they guess by looking at their spending, and may be wildly wrong of course.
I prefer to talk of other things, like art or horticulture or something that expands my mind. Knowing how much money someone has is of no interest. Tell me something interesting instead, smart investing techniques yes, dollar amounts-no.
When my spouse and I were struggling to get our small business in the black years ago we discovered that other successful small business owners went out of town to spend their money (real estate, vacations, etc) and kept quiet about it. And another friend in a nearby town commented that on weekends most of the doctors and dentists flew out of town for the same reason.
Most people don't have a clue exactly how much take-home money other people have so they guess by looking at their spending, and may be wildly wrong of course.
I prefer to talk of other things, like art or horticulture or something that expands my mind. Knowing how much money someone has is of no interest. Tell me something interesting instead, smart investing techniques yes, dollar amounts-no.
I for one have talked about finances with a select few people, without negative consequences. I realize there is a risk but some have the character to maintain a relationship in the face of differing financial circumstances. The key is to do this with someone with whom you share the same values vis a vis money.
This is, of course, not easy to discern.
This is, of course, not easy to discern.
If the point is actually helping your friends/family, try to help once if you can, if they decline your offer never bring it up again. If the point is bragging about yourself forget about it. I look back to when my Uncle handed me a Larry Swedroe book "What Wall Street doesn't want you to know" as I graduated college. I'm very thankful he stepped out of his comfort zone with that as he probably wasn't sure how I would react. I've done the same for close family/friends and been well recepted. But if they aren't interested, drop it.
yes. this "problem" seemed a bit tenuous. Who's relatives/friends spend their free time doing property record searches in their spare time? Even if they see your name, you could simply say "must be another 'John Smith'", I couldn't afford that building". I just don't see the problem.markpa wrote:why would you disclose buying an apartment building?
buy through a revocable trust, initially naming a trusted attorney as the trustee and you as the trustor. the day the trust is signed have the attorney sign a successor trustee document where he resigns all duties.
then, the copy that gets filed at the recorder of deeds shows that the attorney bought it as the xyz revocable trust.
problem solved. having your own name on public records/real estate is just asking for trouble. if you are in an accident, what do the lawyers do 1st? an asset check, of course.
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I totally agree, I think the more you let people know about your assets the more uncomfortable it is. I mean like it or not, people now wrongly have started valuing people based in what car they drive, what clothes they wear and of course what kind of house they stay in blah blah blah. In friends money is always an uncomfortable topic. I really don't think there is much greatness in showing off how big a car you drive or anything else. I think it's important to be focused on making that money, maintaining good family and friends and just being happy. Showing off just tells people how hopeless and attention seeking a person and makes relationships a lot more difficult.
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When it comes to politics, religion and money with close friends, money is the one thing we don't talk about. Other than the occasional mentioning of Boglehead philosophy or some specific economic question, but never is personal income mentioned. Some of my friends do pretty well (I am guessing) and I don't want to know what they make. If they do much better than me, I don't want to envy their income. And if they don't, I don't want to feel better about myself because I make more than them.
I have borrowed money once from my parents after I was out of college. It was repayed with no problems on either end, but I won't do it again, unless my back is against the wall and no other options are available.
To the OP... I wouldn't lie about your wealth, but I also wouldn't make it a topic of conversation. That should help you avoid 99.9% of those situations.
I have borrowed money once from my parents after I was out of college. It was repayed with no problems on either end, but I won't do it again, unless my back is against the wall and no other options are available.
To the OP... I wouldn't lie about your wealth, but I also wouldn't make it a topic of conversation. That should help you avoid 99.9% of those situations.
Re: Friends and money: better left unsaid?
Back in the late 50s my father, by working 2-3 jobs and rolling the proceeds into distressed properties, had accumulated 2 small apartment buildings (flats they were called) on the south side of Chicago. He would do much of the renovation himself in the evenings and on weekends while doing factory work during the day. Not high-end apartments but clean and functional housing that he would rent out to other blue-collar workers.foxy9 wrote: ... There is a distressed apartment building in a prime urban area that will be auctioning apartments and a few people I know will be buying one as an investment. My family plans to buy an entire floor of 6 apartments ...
Certainly not a wealthy man but his apparent affluence made him an easy target for extended family and "friends".
My $ .02 . Keep your numbers to yourself. Find contentment in being the silent millionaire next door.