When should one share financials with their children?

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DawgFan2001
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Re: When should one share financials with their children?

Post by DawgFan2001 »

I'm 41, and within the last 2 weeks, my mother (aged 65) pulled out her note pad that listed her and my dad's (aged 70) assets and liabilities and walked me through it. They need to update their estate documents, and I have encouraged them to do so.

I''m not expecting to receive anything when they pass although it seems that an upper five figure amount for myself and my brother in addition to some four figure sums for each of the 4 grandchildren are possible. I cannot say what health or other expenses they will incur before they pass. I am not including any amounts as expectations on my part. My grandmother passed in January at age 103 and still passed along low six figures to each of her two sons, of which I received $15K from my father. I immediately applied that towards my child's private school tuition. It gave a bit of breathing room to get through the years ahead with said tuition.
nesta
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Re: When should one share financials with their children?

Post by nesta »

I'm now in my early 40s but I don't remember ever NOT knowing my parents financial situation.It wasn't about knowing how much an inheritance would be, it was about knowing their 'goal' number so that I could understand why they were saving money rather than buying me an expensive pair of jeans. I knew exactly how much they were giving to me for college each year so I could plan appropriately. I think it's helped me become a responsible saver/investor with my own goal number. They set up my IRA was I was 20, helped me know how to invest, how much to save, etc. My dad passed away last year, and it's nice to know my mom will be just fine, she has LTC insurance, we talk about investing and money a lot. DHs family is the complete opposite. Everything he knows about money was learned after we got married. His parents seem well-off, but they didn't teach their kids about being responsible with money. They have property that is most likely worth a lot, but we have no idea what things will look like for them and my FILs health isn't the best. DH is the executor so I wish they would be willing to share more, but I don't think they ever will. I think the sooner the better to share money information with kids. I find it stressful worrying about my in-laws and if they really are ok financially (which is what they show on the outside).
tesuzuki2002
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Re: When should one share financials with their children?

Post by tesuzuki2002 »

As a late 30-something with aging parents... I do wonder about their finances and how that may look when they pass... I'll have to deal with it at some point and I'd rather know going into it rather then just having it dumped in my lap.

I've been a prudent planner and I myself am already well secured for my retirement... My brother on the other hand... due to his life choices and such.. drugs, guns and other concerns... Him receiving a lump sump of money when they to pass would likely be a big mistake and lead to bad things.

My brother knowing that information today could make it better or worse... Not really sure. I think as a parent you have to vet these things out based on how your kids have turned out.
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FIREchief
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Re: When should one share financials with their children?

Post by FIREchief »

nesta wrote: Tue Aug 18, 2020 4:35 pm DH is the executor so I wish they would be willing to share more, but I don't think they ever will. I think the sooner the better to share money information with kids. I find it stressful worrying about my in-laws and if they really are ok financially (which is what they show on the outside).
Yeah, this introduces a new variable. As an adult child, I don't need to know anything about parent's/in-law's finances other than hoping that they are being responsible with money so that they won't run out. Nominate me as executor, and it's a whole new ball game. Either sit down and discuss the broad picture now (and answer any questions I may have), or find somebody else to serve as executor. The problem is that an executor doesn't know what it is they're stepping in (not into, but "in") until it's too late. As an example, if all bank accounts are TOD and there are ongoing payments (HOA, insurance, utilities, etc.) plus the need to pay for burial and legal assistance; than where is the executor going to obtain the funds to pay for these? From the other TOD beneficiaries? Sure, that works if everybody likes each other and isn't suspicious. Unfortunately, that's often not the world we live in. :annoyed
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delamer
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Re: When should one share financials with their children?

Post by delamer »

FeesR-BullNotBullish wrote: Tue Aug 18, 2020 4:01 pm
delamer wrote: Tue Aug 18, 2020 2:27 pm
FeesR-BullNotBullish wrote: Tue Aug 18, 2020 8:45 am
pennywise wrote: Tue Aug 18, 2020 8:20 am
FeesR-BullNotBullish wrote: Mon Aug 17, 2020 1:06 pm
Wife's dad emailed us we should expect a percentage in the likely event he passes before wife's mom. We have a good idea of the amount. It is significant, but we have not earmarked it or made plans for it. Wife's dad told us because wife's mom isn't the most responsible with money, and he want's to leave some to his kids. We're concerned that his will isn't up to date, but I'm glad we know so we can fight to honor his intentions. For the record, he has no inclination to update his will.
From what you write, it sounds like your FIL is telling his daughter he wants to leave her some money but his will leaves the estate to his wife, in which case there is no "fight to honor his intentions" because he also has let you know he has no intention of changing his will. You certainly can't change it for him post mortem based on something he said before he died.

So his intentions seem pretty clear: he thinks his wife is a spendthrift and the money will go to his wife. I can't imagine any court overturning a valid will with assets left to a spouse in favor of their children other than in some dire situation of mental or physical problems, but maybe I misunderstood your statement?

Otherwise as a wise man once said a verbal commitment ain't worth the paper it's printed on :wink:
I wasn't quite clear - I do believe money is willed to my wife. I suppose the "fight" will be verifying whether or not we actually have a valid claim. I'm not sure how things work when one passes, and we're concerned that wife's mom might attempt to stonewall us.
If that is your concern, then your wife needs to have her own attorney on speed dial when her father dies.

If she isn’t willing to have representation because it might affect her relationship with her mother, then she’ll need to live with the (potential) stonewalling or other mistreatment.
Thank you for your advice. It hadn't occurred to me that we might need legal representation; I figured we could verify for ourselves whether the money was properly willed to us. We'll pull up that email and ponder our next steps.
Anecdotally, it seems that some potential heirs wait too long for the estate settling to play out and it becomes too hard (legally, financially, emotionally) to try to recover what is rightfully theirs once a lot of time has passed.

It would be worthwhile to find out more about how estates are settled in your FIL’s home state.

Is there likely to be probate, what information are heirs entitled to about the will, what obligations does the executor have, etc.

If you can find out who the executor is, that would be a big step forward. Hopefully, it isn’t your MIL.

Good luck.
hudson
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Re: When should one share financials with their children?

Post by hudson »

At age 72, I don't plan to share any details with children until something comes up where it makes sense to do so.

I've seen some family members turn over control years before they passed. I've seen others who handled things just fine until their death. One, on the way to the hospital had his wife pull into a car dealership and bought his wife a new car; he paid nothing down and took out a loan. He passed away a few days later.

Our final papers are in order. A financially capable son has copies of appropriate documents with instructions and knows how to get to everything.

Bottom line, in my case, no one needs to know any details. If something unexpected should happen, the transition should be OK.
oldfort
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Re: When should one share financials with their children?

Post by oldfort »

The CSS Profile requires an incredibly detailed picture of your finances. If your kids apply to any of the 400 colleges which use the CSS profile, they get to see a comprehensive portrait of the family finances then.
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Re: When should one share financials with their children?

Post by 2tall4economy »

My dad shared nothing at all with anyone, even my mom. I knew about some of it because he was terrible with money and once upon a time I put their house in my name so mom didn't have to move houses anymore if dad missed too many payments.

When he passed, he owned no liquid assets, only property and real estate, none of which was free and clear, and had not paid the IRS for 4 years despite earning six figures for the majority of his life.

Executor was delegated to me after I showed an interest and capability here that the original executor (my brother) lacked, at least partially because he is just a more emotional personal than I am.

Anyway, it was an absolute nightmare hunting down all of his accounts and information -- I probably missed some things here and there, but the upshot of someone who misses payments to creditors is they're extremely unlikely to have any cash sitting anywhere of significance.

Now, I'm on all my mother's accounts and the deed to her condo. She's constantly getting "advice" from "helpful" lawyers that she should do ladybird deeds and whatnot. I tell her she can do anything she likes, but make sure she understands how it's different than what she already has with my setup (answer: nothing unless she is concerned about my misbehaving - but since my net worth is more than hers it's never been more than a passing fancy)

Don't do this to your kids. I love the sheet idea. I have an electronic one that I update and give to my wife periodically but she never fails to lose it. Once she passes or I get close I think I'll start sharing with kids. It'll be a while though, hopefully... my kids are 1, 4, and 8 ;)
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FIREchief
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Re: When should one share financials with their children?

Post by FIREchief »

oldfort wrote: Tue Aug 18, 2020 7:15 pm The CSS Profile requires an incredibly detailed picture of your finances. If your kids apply to any of the 400 colleges which use the CSS profile, they get to see a comprehensive portrait of the family finances then.
Does that include total net worth or just annual income?
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FIREchief
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Re: When should one share financials with their children?

Post by FIREchief »

2tall4economy wrote: Tue Aug 18, 2020 8:15 pm Now, I'm on all my mother's accounts and the deed to her condo.
Doesn't this mean that you won't get a stepped-up basis upon her passing?
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oldfort
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Re: When should one share financials with their children?

Post by oldfort »

FIREchief wrote: Tue Aug 18, 2020 8:57 pm
oldfort wrote: Tue Aug 18, 2020 7:15 pm The CSS Profile requires an incredibly detailed picture of your finances. If your kids apply to any of the 400 colleges which use the CSS profile, they get to see a comprehensive portrait of the family finances then.
Does that include total net worth or just annual income?
It includes assets, liabilities, and income. This is slightly dated, but take a look at the videos if you're interested in what questions are asked. The level of detail is as granular as whether your parents own their home or rent, and if they purchased their home then in what year, for what purchase price, and the current market value.

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2tall4economy
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Re: When should one share financials with their children?

Post by 2tall4economy »

FIREchief wrote: Tue Aug 18, 2020 8:59 pm
2tall4economy wrote: Tue Aug 18, 2020 8:15 pm Now, I'm on all my mother's accounts and the deed to her condo.
Doesn't this mean that you won't get a stepped-up basis upon her passing?
I'm not a CPA (well, not a practicing one anyway!) but my read of the law is that, since I contributed nothing and it was "gifted" to me by adding me to the deed, it would be fully stepped up upon death, and any gift taxes would come from the lifetime gift tax exemption. So it's tax free and fully stepped up...
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Re: When should one share financials with their children?

Post by meowcat »

Parents with substantial means have a real fear about their kids. This fear is real. The fear is that if your kids find out how much your worth, their own financial lives can become, how should I say, less than productive. Parents don't want to raise degenerates, that's why they keep their finances to themselves. I've known a few "trust fund" babies that are just complete failures in life because they know they'll be taken care of.
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oldfort
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Re: When should one share financials with their children?

Post by oldfort »

meowcat wrote: Wed Aug 19, 2020 9:52 am Parents with substantial means have a real fear about their kids. This fear is real. The fear is that if your kids find out how much your worth, their own financial lives can become, how should I say, less than productive. Parents don't want to raise degenerates, that's why they keep their finances to themselves. I've known a few "trust fund" babies that are just complete failures in life because they know they'll be taken care of.
The CSS Profile makes it impossible to keep your finances to yourself, unless you're going to prohibit your kids from applying to any of the 400 colleges which use it.
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Re: When should one share financials with their children?

Post by michaeljc70 »

oldfort wrote: Wed Aug 19, 2020 10:09 am
meowcat wrote: Wed Aug 19, 2020 9:52 am Parents with substantial means have a real fear about their kids. This fear is real. The fear is that if your kids find out how much your worth, their own financial lives can become, how should I say, less than productive. Parents don't want to raise degenerates, that's why they keep their finances to themselves. I've known a few "trust fund" babies that are just complete failures in life because they know they'll be taken care of.
The CSS Profile makes it impossible to keep your finances to yourself, unless you're going to prohibit your kids from applying to any of the 400 colleges which use it.
Yes, but that happens when kids and parents are typically young and inheritances aren't being thought about. My parents were barely 40 when I started college. Many fortunes have changed over the next 30-50 years the parents may live past their kids going to college. My parents had no money when I started college. Now, through frugality, savings and an inheritance they got they are quite comfortable.
oldfort
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Re: When should one share financials with their children?

Post by oldfort »

michaeljc70 wrote: Wed Aug 19, 2020 10:14 am
oldfort wrote: Wed Aug 19, 2020 10:09 am
meowcat wrote: Wed Aug 19, 2020 9:52 am Parents with substantial means have a real fear about their kids. This fear is real. The fear is that if your kids find out how much your worth, their own financial lives can become, how should I say, less than productive. Parents don't want to raise degenerates, that's why they keep their finances to themselves. I've known a few "trust fund" babies that are just complete failures in life because they know they'll be taken care of.
The CSS Profile makes it impossible to keep your finances to yourself, unless you're going to prohibit your kids from applying to any of the 400 colleges which use it.
Yes, but that happens when kids and parents are typically young and inheritances aren't being thought about. My parents were barely 40 when I started college. Many fortunes have changed over the next 30-50 years the parents may live past their kids going to college. My parents had no money when I started college. Now, through frugality, savings and an inheritance they got they are quite comfortable.
1. There are always exceptions, but a snapshot of where someone is at 40 tells you a lot about where their career is going for the rest of their life. Take law as an example, most people enter law school at 22-24 and finish at 25-27. If they were going to make partner at a firm, and in particular big law, it would happen by 40 or it's never going to. Similar arguments would apply to finance/private equity/IB, management consulting, accounting, or any other up or out career field. Average age of matriculation at med school is 24. So you can be an attending physician at 33 with a five year residency. Silicon Valley/tech is a field where people are known for receiving options or equity in their 20s and 30s.
2. Most parents aren't going to be that young when their kids go to college. The median age for a first child is 28 for a mother with a college degree and 30+ for a mother with a graduate/professional degree. The average age of a first time father is 31. It's even higher than 31 for college-educated men. Additional children are born later in life. So it would be fairly typical that by the time the youngest goes off to college, at least one of the parents is in their 50s.
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Re: When should one share financials with their children?

Post by michaeljc70 »

oldfort wrote: Wed Aug 19, 2020 10:49 am
michaeljc70 wrote: Wed Aug 19, 2020 10:14 am
oldfort wrote: Wed Aug 19, 2020 10:09 am
meowcat wrote: Wed Aug 19, 2020 9:52 am Parents with substantial means have a real fear about their kids. This fear is real. The fear is that if your kids find out how much your worth, their own financial lives can become, how should I say, less than productive. Parents don't want to raise degenerates, that's why they keep their finances to themselves. I've known a few "trust fund" babies that are just complete failures in life because they know they'll be taken care of.
The CSS Profile makes it impossible to keep your finances to yourself, unless you're going to prohibit your kids from applying to any of the 400 colleges which use it.
Yes, but that happens when kids and parents are typically young and inheritances aren't being thought about. My parents were barely 40 when I started college. Many fortunes have changed over the next 30-50 years the parents may live past their kids going to college. My parents had no money when I started college. Now, through frugality, savings and an inheritance they got they are quite comfortable.
1. There are always exceptions, but a snapshot of where someone is at 40 tells you a lot about where their career is going for the rest of their life. Take law as an example, most people enter law school at 22-24 and finish at 25-27. If they were going to make partner at a firm, and in particular big law, it would happen by 40 or it's never going to. Similar arguments would apply to finance/private equity/IB, management consulting, accounting, or any other up or out career field. Average age of matriculation at med school is 24. So you can be an attending physician at 33 with a five year residency. Silicon Valley/tech is a field where people are known for receiving options or equity in their 20s and 30s.
2. Most parents aren't going to be that young when their kids go to college. The median age for a first child is 28 for a mother with a college degree and 30+ for a mother with a graduate/professional degree. The average age of a first time father is 31. It's even higher than 31 for college-educated men. Additional children are born later in life. So it would be fairly typical that by the time the youngest goes off to college, at least one of the parents is in their 50s.
Most people aren't doctors, lawyers or working in Silicon Valley. 65% of people don't even finish college. The median income is ~62k in the US. And that is household income where 2 or more people might be working. Many people cannot even start saving much toward retirement until their kids are out of the house/college. It is true people are having kids later in life than they used to.
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Re: When should one share financials with their children?

Post by oldfort »

michaeljc70 wrote: Wed Aug 19, 2020 11:10 am
oldfort wrote: Wed Aug 19, 2020 10:49 am
michaeljc70 wrote: Wed Aug 19, 2020 10:14 am
oldfort wrote: Wed Aug 19, 2020 10:09 am
meowcat wrote: Wed Aug 19, 2020 9:52 am Parents with substantial means have a real fear about their kids. This fear is real. The fear is that if your kids find out how much your worth, their own financial lives can become, how should I say, less than productive. Parents don't want to raise degenerates, that's why they keep their finances to themselves. I've known a few "trust fund" babies that are just complete failures in life because they know they'll be taken care of.
The CSS Profile makes it impossible to keep your finances to yourself, unless you're going to prohibit your kids from applying to any of the 400 colleges which use it.
Yes, but that happens when kids and parents are typically young and inheritances aren't being thought about. My parents were barely 40 when I started college. Many fortunes have changed over the next 30-50 years the parents may live past their kids going to college. My parents had no money when I started college. Now, through frugality, savings and an inheritance they got they are quite comfortable.
1. There are always exceptions, but a snapshot of where someone is at 40 tells you a lot about where their career is going for the rest of their life. Take law as an example, most people enter law school at 22-24 and finish at 25-27. If they were going to make partner at a firm, and in particular big law, it would happen by 40 or it's never going to. Similar arguments would apply to finance/private equity/IB, management consulting, accounting, or any other up or out career field. Average age of matriculation at med school is 24. So you can be an attending physician at 33 with a five year residency. Silicon Valley/tech is a field where people are known for receiving options or equity in their 20s and 30s.
2. Most parents aren't going to be that young when their kids go to college. The median age for a first child is 28 for a mother with a college degree and 30+ for a mother with a graduate/professional degree. The average age of a first time father is 31. It's even higher than 31 for college-educated men. Additional children are born later in life. So it would be fairly typical that by the time the youngest goes off to college, at least one of the parents is in their 50s.
Most people aren't doctors, lawyers or working in Silicon Valley. 65% of people don't even finish college. The median income is ~62k in the US. And that is household income where 2 or more people might be working. Many people cannot even start saving much toward retirement until their kids are out of the house/college. It is true people are having kids later in life than they used to.
What started this sub-thread was meowcat's comment about trust fund babies. People earning the median income and who can't save for retirement until their kids are out of college aren't the ones creating trust funds.
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Re: When should one share financials with their children?

Post by mickeyd »

We moved to our CCRC a year ago and took advantage of free wills that are offered (thru USAF JAG). We sent our kids copies of new wills and a listing of our VG accounts and checking accounts etc. We did not list values as they will change over time and our kids do not need to know values of the accounts nor a suggestion of how much they will get at the end in 20 years+/- from now.
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Re: When should one share financials with their children?

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duplicate
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Re: When should one share financials with their children?

Post by NotWhoYouThink »

My kids never saw the CSS Profile the only time I filled it out. And people with 8 figure portfolios probably never fill it out. As it was, mine left a lot out because 80% of our money was with MegaCorp, either in the 401k or the 457. I think the 401k had to be entered, but not the 457. It did show income, but we filled it out using the Really Bad Year income.

When FIL finally opened up about his financials one of his DILs started targeting the money for her kids. It wasn't pretty.
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Re: When should one share financials with their children?

Post by abuss368 »

As a parent I have thought about this myself. Not sure what the answer is at this point in time. Someday!
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Re: When should one share financials with their children?

Post by abuss368 »

In some respects the answer is there is no right answer!
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Re: When should one share financials with their children?

Post by oldfort »

NotWhoYouThink wrote: Wed Aug 19, 2020 11:36 am My kids never saw the CSS Profile the only time I filled it out. And people with 8 figure portfolios probably never fill it out. As it was, mine left a lot out because 80% of our money was with MegaCorp, either in the 401k or the 457. I think the 401k had to be entered, but not the 457. It did show income, but we filled it out using the Really Bad Year income.

When FIL finally opened up about his financials one of his DILs started targeting the money for her kids. It wasn't pretty.
The CSS profile asks for the total value of all tax deferred retirement accounts, including 401k and 457. Whether it counts against you in the formula for need-based aid at a particular college is another question. Kids are pretty astute at picking up on who's rich and who's not, based on your job and your lifestyle. They know who travels Netjets, travels first class, or travels economy. They see what homes you have and what cars you drive. They know whether you're in the C-suite at a publicly traded company, a surgeon, or a high school teacher. Choosing not to fill out the CSS Profile sends a strong signal you're rich enough not to qualify for any need-based aid.
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Re: When should one share financials with their children?

Post by FIREchief »

meowcat wrote: Wed Aug 19, 2020 9:52 am Parents with substantial means have a real fear about their kids. This fear is real. The fear is that if your kids find out how much your worth, their own financial lives can become, how should I say, less than productive.
Are you suggesting that this is true in all cases? Most cases? Some cases? I will suggest that while this may be true in many situations, it likely is not true in all situations. That said, I'm generally against sharing any financial information that an adult child (or anybody else) doesn't have a legitimate "need to know." I've always preferred that extended family, casual friends, neighbors, the plumber and everybody else thinks I'm about broke.
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FIREchief
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Re: When should one share financials with their children?

Post by FIREchief »

oldfort wrote: Wed Aug 19, 2020 12:30 pm Kids are pretty astute at picking up on who's rich and who's not, based on your job and your lifestyle. They know who travels Netjets, travels first class, or travels economy. They see what homes you have and what cars you drive. They know whether you're in the C-suite at a publicly traded company, a surgeon, or a high school teacher.
The flaw in this line of thinking is that many Bogleheads live far below their means. They can afford $800K houses, $80K automobiles, first class, etc., but they drive ten year old Chevy's, live in $300K houses, fly discount coach or free travel rewards, etc. That's how they became and remain "rich" (your word).
Last edited by FIREchief on Wed Aug 19, 2020 12:52 pm, edited 1 time in total.
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Re: When should one share financials with their children?

Post by oldfort »

FIREchief wrote: Wed Aug 19, 2020 12:33 pm
oldfort wrote: Wed Aug 19, 2020 12:30 pm Kids are pretty astute at picking up on who's rich and who's not, based on your job and your lifestyle. They know who travels Netjets, travels first class, or travels economy. They see what homes you have and what cars you drive. They know whether you're in the C-suite at a publicly traded company, a surgeon, or a high school teacher.
The flaw in this line of thinking is that many Boglehead live far below their means. They can afford $800K houses, $80K automobiles, first class, etc., but they drive ten year old Chevy's, live in $300K houses, fly discount coach or free travel rewards, etc. That's how they became and remain "rich" (your word).
I'm not convinced bogleheads live as far below their means as you seem to think. I remember one thread where someone talked about getting a $1.8 million starter home. We had a fun thread about what car to get in the $150k-$200k range. The $5k watch thread has how many posts. This isn't MMM. The other side of the ledger is your job. You can be Ebenezer Scrooge and afraid to set the heating above 60 degrees in the dead of winter in the NE, but everyone knows the Fortune 500 C-suite makes more than the surgeon who makes more than the bank teller. If you're a government employee, in most cases, your salary is a matter of public record.
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Re: When should one share financials with their children?

Post by FIREchief »

oldfort wrote: Wed Aug 19, 2020 12:49 pm
FIREchief wrote: Wed Aug 19, 2020 12:33 pm The flaw in this line of thinking is that many Bogleheads live far below their means. They can afford $800K houses, $80K automobiles, first class, etc., but they drive ten year old Chevy's, live in $300K houses, fly discount coach or free travel rewards, etc. That's how they became and remain "rich" (your word).
I'm not convinced bogleheads live as far below their means as you seem to think. I remember one thread where someone talked about getting a $1.8 million starter home. We had a fun thread about what car to get in the $150k-$200k range. The $5k watch thread has how many posts. This isn't MMM. The other side of the ledger is your job. You can be Ebenezer Scrooge and afraid to set the heating above 60 degrees in the dead of winter in the NE, but everyone knows the Fortune 500 C-suite makes more than the surgeon who makes more than bank teller. If you're a government employee, in most cases, your salary is a matter of public record.
I said "many Bogleheads." That could be 10%, 20%, etc. It's an indeterminant number. You seem to be thinking that all "rich" Bogleheads think and act the same. That's generally not a good approach to forming opinions about any group of people.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
oldfort
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Re: When should one share financials with their children?

Post by oldfort »

FIREchief wrote: Wed Aug 19, 2020 12:52 pm
oldfort wrote: Wed Aug 19, 2020 12:49 pm
FIREchief wrote: Wed Aug 19, 2020 12:33 pm The flaw in this line of thinking is that many Bogleheads live far below their means. They can afford $800K houses, $80K automobiles, first class, etc., but they drive ten year old Chevy's, live in $300K houses, fly discount coach or free travel rewards, etc. That's how they became and remain "rich" (your word).
I'm not convinced bogleheads live as far below their means as you seem to think. I remember one thread where someone talked about getting a $1.8 million starter home. We had a fun thread about what car to get in the $150k-$200k range. The $5k watch thread has how many posts. This isn't MMM. The other side of the ledger is your job. You can be Ebenezer Scrooge and afraid to set the heating above 60 degrees in the dead of winter in the NE, but everyone knows the Fortune 500 C-suite makes more than the surgeon who makes more than bank teller. If you're a government employee, in most cases, your salary is a matter of public record.
I said "many Bogleheads." That could be 10%, 20%, etc. It's an indeterminant number. You seem to be thinking that all "rich" Bogleheads think and act the same. That's generally not a good approach to forming opinions about any group of people.
This is getting off track. All I was pointing out was there are a lot of indicators about income and wealth for your kids to pick up on(lifestyle, job, FAFSA/CSS Profile, public property records). You want to derail it on how all rich Bogleheads think and act alike. Sheesh.
delamer
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Re: When should one share financials with their children?

Post by delamer »

oldfort wrote: Wed Aug 19, 2020 12:49 pm
FIREchief wrote: Wed Aug 19, 2020 12:33 pm
oldfort wrote: Wed Aug 19, 2020 12:30 pm Kids are pretty astute at picking up on who's rich and who's not, based on your job and your lifestyle. They know who travels Netjets, travels first class, or travels economy. They see what homes you have and what cars you drive. They know whether you're in the C-suite at a publicly traded company, a surgeon, or a high school teacher.
The flaw in this line of thinking is that many Boglehead live far below their means. They can afford $800K houses, $80K automobiles, first class, etc., but they drive ten year old Chevy's, live in $300K houses, fly discount coach or free travel rewards, etc. That's how they became and remain "rich" (your word).
I'm not convinced bogleheads live as far below their means as you seem to think. I remember one thread where someone talked about getting a $1.8 million starter home. We had a fun thread about what car to get in the $150k-$200k range. The $5k watch thread has how many posts. This isn't MMM. The other side of the ledger is your job. You can be Ebenezer Scrooge and afraid to set the heating above 60 degrees in the dead of winter in the NE, but everyone knows the Fortune 500 C-suite makes more than the surgeon who makes more than bank teller. If you're a government employee, in most cases, your salary is a matter of public record.
There is a level of wealth (and wealth sources) that put people in a whole different category. And those people aren’t the reference point for most of society. I know a few families who probably have a household income that’s twice ours (pre-retirement), but I don’t know anyone who lives off extravagantly off a trust fund or who is in the top 1% of net worth.

I see your point generally, although we’ve tried to educate our kids that you never know what someone has in the bank based on appearances. It took me a long time to learn that.

This is an interesting analysis: https://www.joshuakennon.com/the-hierar ... ed-states/
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Re: When should one share financials with their children?

Post by FIREchief »

oldfort wrote: Wed Aug 19, 2020 1:21 pm
FIREchief wrote: Wed Aug 19, 2020 12:52 pm
oldfort wrote: Wed Aug 19, 2020 12:49 pm I'm not convinced bogleheads live as far below their means as you seem to think. I remember one thread where someone talked about getting a $1.8 million starter home. We had a fun thread about what car to get in the $150k-$200k range. The $5k watch thread has how many posts. This isn't MMM.
I said "many Bogleheads." That could be 10%, 20%, etc. It's an indeterminant number.
All I was pointing out was there are a lot of indicators about income and wealth for your kids to pick up on(lifestyle, job, FAFSA/CSS Profile, public property records). You want to derail it on how all rich Bogleheads think and act alike. Sheesh.
No, it looks like that was you. :P
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FIREchief
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Re: When should one share financials with their children?

Post by FIREchief »

delamer wrote: Wed Aug 19, 2020 1:32 pm This is an interesting analysis: https://www.joshuakennon.com/the-hierar ... ed-states/
Interesting article. The following sure sounds like it's describing a lot of Bogleheads. 8-)
The millionaires next door are the vast majority of millionaires in the United States. They are teachers, lawyers, plumbers, real estate brokers, small town bankers, and car dealers who spend their life spending less than they earn and putting the difference aside into savings and investments.

For many of these frugal millionaire households, most of their wealth is in the form of home equity and retirement accounts. If you include home equity (I don’t but I understand why some people argue for it here), 7% of American households are millionaires, meaning 1 out of every 14.3 households. The figure is higher if you exclude home equity; roughly 1 out of 25 households. I think the latter is the more appropriate metric. Nevertheless, a vast majority of these millionaires are millionaires next door. You’d never know from their outward appearance that their assets minus liabilities resulted in a figure in the seven figures.

The millionaires next door are the Americans that have no mortgage debt, have no credit card debt, and generally have little or no financial stress.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
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meowcat
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Re: When should one share financials with their children?

Post by meowcat »

FIREchief wrote: Wed Aug 19, 2020 12:30 pm
meowcat wrote: Wed Aug 19, 2020 9:52 am Parents with substantial means have a real fear about their kids. This fear is real. The fear is that if your kids find out how much your worth, their own financial lives can become, how should I say, less than productive.
Are you suggesting that this is true in all cases? Most cases? Some cases? I will suggest that while this may be true in many situations, it likely is not true in all situations. That said, I'm generally against sharing any financial information that an adult child (or anybody else) doesn't have a legitimate "need to know." I've always preferred that extended family, casual friends, neighbors, the plumber and everybody else thinks I'm about broke.
No, of course not, just that the fear is real. I don't have statistical data but I think I'd be pretty accurate in saying that the primary reason behind parental financial secrecy is based on that fear.
More people should learn to tell their dollars where to go instead of asking them where they went. | -Roger Babson
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FIREchief
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Re: When should one share financials with their children?

Post by FIREchief »

meowcat wrote: Wed Aug 19, 2020 1:50 pm
FIREchief wrote: Wed Aug 19, 2020 12:30 pm
meowcat wrote: Wed Aug 19, 2020 9:52 am Parents with substantial means have a real fear about their kids. This fear is real. The fear is that if your kids find out how much your worth, their own financial lives can become, how should I say, less than productive.
Are you suggesting that this is true in all cases? Most cases? Some cases? I will suggest that while this may be true in many situations, it likely is not true in all situations. That said, I'm generally against sharing any financial information that an adult child (or anybody else) doesn't have a legitimate "need to know." I've always preferred that extended family, casual friends, neighbors, the plumber and everybody else thinks I'm about broke.
No, of course not, just that the fear is real. I don't have statistical data but I think I'd be pretty accurate in saying that the primary reason behind parental financial secrecy is based on that fear.
I don't agree with that. I think it is more due to an appreciation of the value of not sharing personal information that others have no need to know. In many respects, I think there are parallels with personal health information.

That said, we may be envisioning two different scenarios. If your comments are in the context of those with teenagers or younger adult children who have not established a foundation of valued skills (academic, trades, etc.), than I might tend to agree with you; particularly if the kids have an expectation (realistic or otherwise) that "mom and dad won't let me live in the streets." OTOH, for those with proven responsible adult children, I believe that those who choose not to share their financial income/balances are doing it for reasons other than "fear."
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
7eight9
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Re: When should one share financials with their children?

Post by 7eight9 »

meowcat wrote: Wed Aug 19, 2020 1:50 pm
FIREchief wrote: Wed Aug 19, 2020 12:30 pm
meowcat wrote: Wed Aug 19, 2020 9:52 am Parents with substantial means have a real fear about their kids. This fear is real. The fear is that if your kids find out how much your worth, their own financial lives can become, how should I say, less than productive.
Are you suggesting that this is true in all cases? Most cases? Some cases? I will suggest that while this may be true in many situations, it likely is not true in all situations. That said, I'm generally against sharing any financial information that an adult child (or anybody else) doesn't have a legitimate "need to know." I've always preferred that extended family, casual friends, neighbors, the plumber and everybody else thinks I'm about broke.
No, of course not, just that the fear is real. I don't have statistical data but I think I'd be pretty accurate in saying that the primary reason behind parental financial secrecy is based on that fear.
How the Wealthy Talk to Their Children About Money
Two-thirds of the 57 people polled by Wilmington Trust, a bank founded by the du Pont family in the early 20th century and now owned by M&T Bank, said they were “apprehensive about sharing inheritance details.” All participants had a net worth of more than $20 million, and only a tenth of them said they had given complete information about inheritance to their heirs — apparently for fear of dampening their work ethic.
https://www.nytimes.com/2017/05/19/your ... tance.html
I guess it all could be much worse. | They could be warming up my hearse.
delamer
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Re: When should one share financials with their children?

Post by delamer »

FIREchief wrote: Wed Aug 19, 2020 1:44 pm
delamer wrote: Wed Aug 19, 2020 1:32 pm This is an interesting analysis: https://www.joshuakennon.com/the-hierar ... ed-states/
Interesting article. The following sure sounds like it's describing a lot of Bogleheads. 8-)
The millionaires next door are the vast majority of millionaires in the United States. They are teachers, lawyers, plumbers, real estate brokers, small town bankers, and car dealers who spend their life spending less than they earn and putting the difference aside into savings and investments.

For many of these frugal millionaire households, most of their wealth is in the form of home equity and retirement accounts. If you include home equity (I don’t but I understand why some people argue for it here), 7% of American households are millionaires, meaning 1 out of every 14.3 households. The figure is higher if you exclude home equity; roughly 1 out of 25 households. I think the latter is the more appropriate metric. Nevertheless, a vast majority of these millionaires are millionaires next door. You’d never know from their outward appearance that their assets minus liabilities resulted in a figure in the seven figures.

The millionaires next door are the Americans that have no mortgage debt, have no credit card debt, and generally have little or no financial stress.
Classic “Millionaire Next Door” description from the book of the same name. Although the book does talk a lot about small business owners who have a big portion of their assets in said business.

It’s an interesting question whether someone who has to work to maintain their high-end lifestyle is really rich.
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Re: When should one share financials with their children?

Post by delamer »

7eight9 wrote: Wed Aug 19, 2020 2:06 pm
meowcat wrote: Wed Aug 19, 2020 1:50 pm
FIREchief wrote: Wed Aug 19, 2020 12:30 pm
meowcat wrote: Wed Aug 19, 2020 9:52 am Parents with substantial means have a real fear about their kids. This fear is real. The fear is that if your kids find out how much your worth, their own financial lives can become, how should I say, less than productive.
Are you suggesting that this is true in all cases? Most cases? Some cases? I will suggest that while this may be true in many situations, it likely is not true in all situations. That said, I'm generally against sharing any financial information that an adult child (or anybody else) doesn't have a legitimate "need to know." I've always preferred that extended family, casual friends, neighbors, the plumber and everybody else thinks I'm about broke.
No, of course not, just that the fear is real. I don't have statistical data but I think I'd be pretty accurate in saying that the primary reason behind parental financial secrecy is based on that fear.
How the Wealthy Talk to Their Children About Money
Two-thirds of the 57 people polled by Wilmington Trust, a bank founded by the du Pont family in the early 20th century and now owned by M&T Bank, said they were “apprehensive about sharing inheritance details.” All participants had a net worth of more than $20 million, and only a tenth of them said they had given complete information about inheritance to their heirs — apparently for fear of dampening their work ethic.
https://www.nytimes.com/2017/05/19/your ... tance.html
If your parents have a net worth of $20 million-plus and you haven’t figured out that you are very likely going to inherit a pretty big chunk of money, then I don’t think your odds of having a successful career are good either.
7eight9
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Re: When should one share financials with their children?

Post by 7eight9 »

delamer wrote: Wed Aug 19, 2020 2:12 pm
7eight9 wrote: Wed Aug 19, 2020 2:06 pm
meowcat wrote: Wed Aug 19, 2020 1:50 pm
FIREchief wrote: Wed Aug 19, 2020 12:30 pm
meowcat wrote: Wed Aug 19, 2020 9:52 am Parents with substantial means have a real fear about their kids. This fear is real. The fear is that if your kids find out how much your worth, their own financial lives can become, how should I say, less than productive.
Are you suggesting that this is true in all cases? Most cases? Some cases? I will suggest that while this may be true in many situations, it likely is not true in all situations. That said, I'm generally against sharing any financial information that an adult child (or anybody else) doesn't have a legitimate "need to know." I've always preferred that extended family, casual friends, neighbors, the plumber and everybody else thinks I'm about broke.
No, of course not, just that the fear is real. I don't have statistical data but I think I'd be pretty accurate in saying that the primary reason behind parental financial secrecy is based on that fear.
How the Wealthy Talk to Their Children About Money
Two-thirds of the 57 people polled by Wilmington Trust, a bank founded by the du Pont family in the early 20th century and now owned by M&T Bank, said they were “apprehensive about sharing inheritance details.” All participants had a net worth of more than $20 million, and only a tenth of them said they had given complete information about inheritance to their heirs — apparently for fear of dampening their work ethic.
https://www.nytimes.com/2017/05/19/your ... tance.html
If your parents have a net worth of $20 million-plus and you haven’t figured out that you are very likely going to inherit a pretty big chunk of money, then I don’t think your odds of having a successful career are good either.
Grandma was worth $4 billion. Son predeceased her. Her dog got $12 million in trust. Two grandchildren got nothing. The other two got something.
I'm sure her grandchildren knew she was well off. Hopefully the disinherited ones didn't count on receiving a pretty big chunk of money. :happy
https://cityroom.blogs.nytimes.com/2007 ... last-will/
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FIREchief
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Re: When should one share financials with their children?

Post by FIREchief »

7eight9 wrote: Wed Aug 19, 2020 2:23 pm Grandma was worth $4 billion. Son predeceased her. Her dog got $12 million in trust. Two grandchildren got nothing. The other two got something.
I'm sure her grandchildren knew she was well off. Hopefully the disinherited ones didn't count on receiving a pretty big chunk of money. :happy
https://cityroom.blogs.nytimes.com/2007 ... last-will/
LOL. Gives a whole new meaning to the phrase "you lucky dog!" :P

I'm guessing she felt that $10M was enough to make anybody financially secure for life. I wonder what the other two grandkids did to make her mad? Maybe they asked her for money one too many times and didn't like her answer. Perhaps the old school, "if you want some money, get a job." 8-)
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delamer
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Re: When should one share financials with their children?

Post by delamer »

7eight9 wrote: Wed Aug 19, 2020 2:23 pm
delamer wrote: Wed Aug 19, 2020 2:12 pm
7eight9 wrote: Wed Aug 19, 2020 2:06 pm
meowcat wrote: Wed Aug 19, 2020 1:50 pm
FIREchief wrote: Wed Aug 19, 2020 12:30 pm

Are you suggesting that this is true in all cases? Most cases? Some cases? I will suggest that while this may be true in many situations, it likely is not true in all situations. That said, I'm generally against sharing any financial information that an adult child (or anybody else) doesn't have a legitimate "need to know." I've always preferred that extended family, casual friends, neighbors, the plumber and everybody else thinks I'm about broke.
No, of course not, just that the fear is real. I don't have statistical data but I think I'd be pretty accurate in saying that the primary reason behind parental financial secrecy is based on that fear.
How the Wealthy Talk to Their Children About Money
Two-thirds of the 57 people polled by Wilmington Trust, a bank founded by the du Pont family in the early 20th century and now owned by M&T Bank, said they were “apprehensive about sharing inheritance details.” All participants had a net worth of more than $20 million, and only a tenth of them said they had given complete information about inheritance to their heirs — apparently for fear of dampening their work ethic.
https://www.nytimes.com/2017/05/19/your ... tance.html
If your parents have a net worth of $20 million-plus and you haven’t figured out that you are very likely going to inherit a pretty big chunk of money, then I don’t think your odds of having a successful career are good either.
Grandma was worth $4 billion. Son predeceased her. Her dog got $12 million in trust. Two grandchildren got nothing. The other two got something.
I'm sure her grandchildren knew she was well off. Hopefully the disinherited ones didn't count on receiving a pretty big chunk of money. :happy
https://cityroom.blogs.nytimes.com/2007 ... last-will/
The Wilmington Trust report was a report on wealthy people who were planning on leaving inheritances large enough that they thought the money might interfere with their heirs’ work ethics.

That’s a whole different issue than disinheriting someone.

My point was that if your parents/grandparents are $20-million-rich and you don’t know that they are wealthy, then you aren’t probably very bright.
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Re: When should one share financials with their children?

Post by deltaneutral83 »

Well, it only matters if one has assets, call it >$100k in investable assets upon death. And if so, one's executor needs to know the details rather than a treasure hunt after death I imagine, and for many, it is a child whom is the executor. For many families who do not talk about money and then the parents become first generation "wealthy" (and by wealthy I mean something like 40-50x expenses in investable assets) that can be a large mental hurdle to discuss anything with 0's on the end for a host of reasons. For 2nd and 3rd generations who behave which is as noted by some as rare, it can be as common as talking about the weather.
JackoC
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Re: When should one share financials with their children?

Post by JackoC »

delamer wrote: Wed Aug 19, 2020 2:12 pm
7eight9 wrote: Wed Aug 19, 2020 2:06 pm
meowcat wrote: Wed Aug 19, 2020 1:50 pm
FIREchief wrote: Wed Aug 19, 2020 12:30 pm
meowcat wrote: Wed Aug 19, 2020 9:52 am Parents with substantial means have a real fear about their kids. This fear is real. The fear is that if your kids find out how much your worth, their own financial lives can become, how should I say, less than productive.
Are you suggesting that this is true in all cases? Most cases? Some cases? I will suggest that while this may be true in many situations, it likely is not true in all situations.
No, of course not, just that the fear is real.
How the Wealthy Talk to Their Children About Money
Two-thirds of the 57 people polled by Wilmington Trust, a bank founded by the du Pont family in the early 20th century and now owned by M&T Bank, said they were “apprehensive about sharing inheritance details.” All participants had a net worth of more than $20 million, and only a tenth of them said they had given complete information about inheritance to their heirsl
If your parents have a net worth of $20 million-plus and you haven’t figured out that you are very likely going to inherit a pretty big chunk of money, then I don’t think your odds of having a successful career are good either.
Yeah I think a key there is 'complete information' v the general idea. Parents might have to distort their own lives to keep the general idea of wealth a secret; perhaps some people do, but might want to reconsider if that really makes sense IMHO. Likewise, outcomes like them leaving it all to the dog or the new husband who is younger than all his stepchildren are rare enough in real life to be memorably newsworthy. And most kids with any potential to make something of themselves are smart enough to realize by adulthood if their parents are flaky enough for something like that to happen.

By and large I think kids of people who have money accept it part of life and deal with it. It's not the worst situation. The advantages to it, in making your own way in the world, seem to get ignored in a lot of posts on these type threads. For example if an eventually attractive commission-only job essentially requires you to work for nothing for a year or so, it's not actually an advantage to....not be able to do that because you don't have any money and in real life it's not possible to just 'work another job'. If your parents can front you, you've got a leg up. Whatever the overall 'fairness' of that is (beyond scope here), I think the supposed 'moral' disadvantage of an inheritance 'hanging over your kids' is sometimes exaggerated here. But again, giving every single detail is a different question than the general idea.

As is letting them know where to find accounts. My dad DIY'ed investments in a scattershot way and it took months to chase down the great majority of his investments, a few little fish slipped through the net, found much later after I'd gotten rid of the paperwork to claim them. He didn't tell my mom the details either. I had no idea of my parents numbers till his death, but did know them basically by the time my mom passed having helped her organize it. Pretty impressive numbers given their income history, not that significant to me by that stage. It would have been good if they'd been a little less tight fisted in some earlier episodes when I was younger, but their money, their choice.
Afty
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Re: When should one share financials with their children?

Post by Afty »

meowcat wrote: Wed Aug 19, 2020 9:52 am Parents with substantial means have a real fear about their kids. This fear is real. The fear is that if your kids find out how much your worth, their own financial lives can become, how should I say, less than productive. Parents don't want to raise degenerates, that's why they keep their finances to themselves. I've known a few "trust fund" babies that are just complete failures in life because they know they'll be taken care of.
I would argue that the solution is not to hide your wealth, but to be honest and teach your kids how to handle money responsibly.
oldfort
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Re: When should one share financials with their children?

Post by oldfort »

FIREchief wrote: Wed Aug 19, 2020 1:44 pm
delamer wrote: Wed Aug 19, 2020 1:32 pm This is an interesting analysis: https://www.joshuakennon.com/the-hierar ... ed-states/
Interesting article. The following sure sounds like it's describing a lot of Bogleheads. 8-)
The millionaires next door are the vast majority of millionaires in the United States. They are teachers, lawyers, plumbers, real estate brokers, small town bankers, and car dealers who spend their life spending less than they earn and putting the difference aside into savings and investments.

For many of these frugal millionaire households, most of their wealth is in the form of home equity and retirement accounts. If you include home equity (I don’t but I understand why some people argue for it here), 7% of American households are millionaires, meaning 1 out of every 14.3 households. The figure is higher if you exclude home equity; roughly 1 out of 25 households. I think the latter is the more appropriate metric. Nevertheless, a vast majority of these millionaires are millionaires next door. You’d never know from their outward appearance that their assets minus liabilities resulted in a figure in the seven figures.

The millionaires next door are the Americans that have no mortgage debt, have no credit card debt, and generally have little or no financial stress.
The article contradicts itself somewhat. It starts by saying most of their wealth is in the form of home equity and retirement accounts. It goes on to say how many millionaire households wouldn't be considered millionaires if you exclude home equity. Home equity is an outside appearance. If someone lives in a $150k home, then $150k is the upper bound on their home equity.
delamer
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Re: When should one share financials with their children?

Post by delamer »

oldfort wrote: Thu Aug 20, 2020 10:25 am
FIREchief wrote: Wed Aug 19, 2020 1:44 pm
delamer wrote: Wed Aug 19, 2020 1:32 pm This is an interesting analysis: https://www.joshuakennon.com/the-hierar ... ed-states/
Interesting article. The following sure sounds like it's describing a lot of Bogleheads. 8-)
The millionaires next door are the vast majority of millionaires in the United States. They are teachers, lawyers, plumbers, real estate brokers, small town bankers, and car dealers who spend their life spending less than they earn and putting the difference aside into savings and investments.

For many of these frugal millionaire households, most of their wealth is in the form of home equity and retirement accounts. If you include home equity (I don’t but I understand why some people argue for it here), 7% of American households are millionaires, meaning 1 out of every 14.3 households. The figure is higher if you exclude home equity; roughly 1 out of 25 households. I think the latter is the more appropriate metric. Nevertheless, a vast majority of these millionaires are millionaires next door. You’d never know from their outward appearance that their assets minus liabilities resulted in a figure in the seven figures.

The millionaires next door are the Americans that have no mortgage debt, have no credit card debt, and generally have little or no financial stress.
The article contradicts itself somewhat. It starts by saying most of their wealth is in the form of home equity and retirement accounts. It goes on to say how many millionaire households wouldn't be considered millionaires if you exclude home equity. Home equity is an outside appearance. If someone lives in a $150k home, then $150k is the upper bound on their home equity.
I don’t understand what you mean by “outside appearance.”
oldfort
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Re: When should one share financials with their children?

Post by oldfort »

delamer wrote: Thu Aug 20, 2020 10:42 am
oldfort wrote: Thu Aug 20, 2020 10:25 am
FIREchief wrote: Wed Aug 19, 2020 1:44 pm
delamer wrote: Wed Aug 19, 2020 1:32 pm This is an interesting analysis: https://www.joshuakennon.com/the-hierar ... ed-states/
Interesting article. The following sure sounds like it's describing a lot of Bogleheads. 8-)
The millionaires next door are the vast majority of millionaires in the United States. They are teachers, lawyers, plumbers, real estate brokers, small town bankers, and car dealers who spend their life spending less than they earn and putting the difference aside into savings and investments.

For many of these frugal millionaire households, most of their wealth is in the form of home equity and retirement accounts. If you include home equity (I don’t but I understand why some people argue for it here), 7% of American households are millionaires, meaning 1 out of every 14.3 households. The figure is higher if you exclude home equity; roughly 1 out of 25 households. I think the latter is the more appropriate metric. Nevertheless, a vast majority of these millionaires are millionaires next door. You’d never know from their outward appearance that their assets minus liabilities resulted in a figure in the seven figures.

The millionaires next door are the Americans that have no mortgage debt, have no credit card debt, and generally have little or no financial stress.
The article contradicts itself somewhat. It starts by saying most of their wealth is in the form of home equity and retirement accounts. It goes on to say how many millionaire households wouldn't be considered millionaires if you exclude home equity. Home equity is an outside appearance. If someone lives in a $150k home, then $150k is the upper bound on their home equity.
I don’t understand what you mean by “outside appearance.”
If someone's a millionaire because they have $750k in home equity, then their home value has to be at a minimum $750k. Living in a $750k+ home vs a $150k home is a visible sign of income/wealth aka "outward appearance."
Last edited by oldfort on Thu Aug 20, 2020 10:48 am, edited 2 times in total.
hnd
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Re: When should one share financials with their children?

Post by hnd »

I've had numerous conversations with "well off" people in regards to inheritance and work ethic. I think most realize that their children understand that there is potentially a large sum of money available to them at some point. And I think there are a few who have worried that if they know that amount, will my children even try?

But this is a parenting preparedness problem which obviously who wants to get into that whole ball of wax. I want my children to know that nothing is guaranteed. There are unlikely scenarios where i lose everything! so be prepared with your own volition.

But I think the other thing is i don't want my children to have a work ethic that keeps them slogging away unsatisfied in their jobs, keepign them from their families, while knowing that life is short and they could be spending it doing something they really enjoy and it is likely that there will be monetary support for them on the back end.

If I've won the game, i want to

A) give my children the knowledge that I am willing to support them in working hard at some endeavor that may not be lucrative enough to fund college for my grandchildren or their own retirement in a large way. Whether thats philanthropic endeavors or whatever.

B) allow them to enjoy the fruits of my labors with me. A good friend of mine's father died (mother had died a long while prior) and left his 2 sons a very large chunks of money. In letters he wrote both of them, he lived frugally in retirement so that he could leave them this money. Both were heart broken. They've of much rather have had more special moments with their father on vacations or other use of that money and been left nothing then not having their father yet also having this large chunk of money. Everyone is different but this spoke to me in how I want to live if i ever "win"
michaeljc70
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Re: When should one share financials with their children?

Post by michaeljc70 »

oldfort wrote: Thu Aug 20, 2020 10:46 am
delamer wrote: Thu Aug 20, 2020 10:42 am
oldfort wrote: Thu Aug 20, 2020 10:25 am
FIREchief wrote: Wed Aug 19, 2020 1:44 pm
delamer wrote: Wed Aug 19, 2020 1:32 pm This is an interesting analysis: https://www.joshuakennon.com/the-hierar ... ed-states/
Interesting article. The following sure sounds like it's describing a lot of Bogleheads. 8-)
The millionaires next door are the vast majority of millionaires in the United States. They are teachers, lawyers, plumbers, real estate brokers, small town bankers, and car dealers who spend their life spending less than they earn and putting the difference aside into savings and investments.

For many of these frugal millionaire households, most of their wealth is in the form of home equity and retirement accounts. If you include home equity (I don’t but I understand why some people argue for it here), 7% of American households are millionaires, meaning 1 out of every 14.3 households. The figure is higher if you exclude home equity; roughly 1 out of 25 households. I think the latter is the more appropriate metric. Nevertheless, a vast majority of these millionaires are millionaires next door. You’d never know from their outward appearance that their assets minus liabilities resulted in a figure in the seven figures.

The millionaires next door are the Americans that have no mortgage debt, have no credit card debt, and generally have little or no financial stress.
The article contradicts itself somewhat. It starts by saying most of their wealth is in the form of home equity and retirement accounts. It goes on to say how many millionaire households wouldn't be considered millionaires if you exclude home equity. Home equity is an outside appearance. If someone lives in a $150k home, then $150k is the upper bound on their home equity.
I don’t understand what you mean by “outside appearance.”
If someone's a millionaire because they have $750k in home equity, then their home value has to be at a minimum $750k. Living in a $750k home vs $150k home is a visible sign of wealth aka "outward appearance."
But how do you know they don't have 2 mortgages on their house? I don't know how much equity anyone in my neighborhood has. I wouldn't consider how much debt someone has an "outside" thing that you can glance at and see.
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FIREchief
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Re: When should one share financials with their children?

Post by FIREchief »

oldfort wrote: Thu Aug 20, 2020 10:25 am
FIREchief wrote: Wed Aug 19, 2020 1:44 pm
delamer wrote: Wed Aug 19, 2020 1:32 pm This is an interesting analysis: https://www.joshuakennon.com/the-hierar ... ed-states/
Interesting article. The following sure sounds like it's describing a lot of Bogleheads. 8-)
The millionaires next door are the vast majority of millionaires in the United States. They are teachers, lawyers, plumbers, real estate brokers, small town bankers, and car dealers who spend their life spending less than they earn and putting the difference aside into savings and investments.

For many of these frugal millionaire households, most of their wealth is in the form of home equity and retirement accounts. If you include home equity (I don’t but I understand why some people argue for it here), 7% of American households are millionaires, meaning 1 out of every 14.3 households. The figure is higher if you exclude home equity; roughly 1 out of 25 households. I think the latter is the more appropriate metric. Nevertheless, a vast majority of these millionaires are millionaires next door. You’d never know from their outward appearance that their assets minus liabilities resulted in a figure in the seven figures.

The millionaires next door are the Americans that have no mortgage debt, have no credit card debt, and generally have little or no financial stress.
The article contradicts itself somewhat. It starts by saying most of their wealth is in the form of home equity and retirement accounts. It goes on to say how many millionaire households wouldn't be considered millionaires if you exclude home equity. Home equity is an outside appearance. If someone lives in a $150k home, then $150k is the upper bound on their home equity.
Well, it's a question of math here. If we accept "millionaire" to mean anybody with a net worth > $1M, than there is a wide range, likely heavy at the bottom and thinning out as you go up from there. If a kid knows that they live in a $800K house, do they assume that they will receive a huge inheritance and not have to work any more than they want to? Likely not. They might not even know that mom and dad have $600K equity in the house, and may assume it's just mortgaged to the max like everybody else's. I think we're talking more about the folks with $5M who live like they have $1M total net worth (including home equity). That would be the type of Boglehead I referred to up stream (i.e. the 1 out of 25 per the article). I could be wrong.... 8-)
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
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FIREchief
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Re: When should one share financials with their children?

Post by FIREchief »

oldfort wrote: Thu Aug 20, 2020 10:46 am
delamer wrote: Thu Aug 20, 2020 10:42 am
oldfort wrote: Thu Aug 20, 2020 10:25 am
FIREchief wrote: Wed Aug 19, 2020 1:44 pm
delamer wrote: Wed Aug 19, 2020 1:32 pm This is an interesting analysis: https://www.joshuakennon.com/the-hierar ... ed-states/
Interesting article. The following sure sounds like it's describing a lot of Bogleheads. 8-)
The millionaires next door are the vast majority of millionaires in the United States. They are teachers, lawyers, plumbers, real estate brokers, small town bankers, and car dealers who spend their life spending less than they earn and putting the difference aside into savings and investments.

For many of these frugal millionaire households, most of their wealth is in the form of home equity and retirement accounts. If you include home equity (I don’t but I understand why some people argue for it here), 7% of American households are millionaires, meaning 1 out of every 14.3 households. The figure is higher if you exclude home equity; roughly 1 out of 25 households. I think the latter is the more appropriate metric. Nevertheless, a vast majority of these millionaires are millionaires next door. You’d never know from their outward appearance that their assets minus liabilities resulted in a figure in the seven figures.

The millionaires next door are the Americans that have no mortgage debt, have no credit card debt, and generally have little or no financial stress.
The article contradicts itself somewhat. It starts by saying most of their wealth is in the form of home equity and retirement accounts. It goes on to say how many millionaire households wouldn't be considered millionaires if you exclude home equity. Home equity is an outside appearance. If someone lives in a $150k home, then $150k is the upper bound on their home equity.
I don’t understand what you mean by “outside appearance.”
Living in a $750k+ home vs a $150k home is a visible sign of income/wealth aka "outward appearance."
Or, a sign of overextending and incurring huge debt to try to keep up with the Jones'. :P There are many people living in $750K houses who can barely pay their bills.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
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