What to do with all this MONEY ?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
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Rajsx
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What to do with all this MONEY ?

Post by Rajsx » Fri Jul 03, 2020 2:45 pm

Sometimes this thought comes in my mind, I know a little strange .

I & DW come from humble beginnings & after decades of hard work, living below our means, savings & favorable Wall Street investments we find ourselves with a net worth of $ 7.5 m. We are very fortunate & we never thought we would find ourselves in this situation. But the question is still there, what do we do with this Piggy Bank of ours ?

I am 64, a physician by profession & will retire next year, DW is 59 a House Wife. our daughter a physician married to another physician has 2 kids, our son is working & completing his MBA. We live comfortably in a paid off house (included in the Net Worth), spend around $130k/yr. Nothing extravagant but do not deprive ourselves of anything reasonable. Most of the regular Household maintenance duties are hired out like Lawn & house maintenance, Cleaning etc..
Both kids went to private schools, we paid for their education including graduate school, daughter went to an IVY & son to a state School. We gift the grand kids 529 Plans on their Birthdays & Christmas & deposit equal amounts in Son's savings. We continue to travel, vacation in & outside the country.

I manage my own all Vanguard mostly index funds, with a 55/45 Asset Allocation & at the rate of present yearly expenses most calculators show we may leave around $ 3 to 4 m when we pass unless we increase our expenses.

Here is the problem, we do not feel comfortable with extravagance, find it difficult to fly 1st class, do not eat out several nights a week due to issues with weight & Diabetes. in general we do not tolerate wasteful spending as that was the modus operandi for past several decades & that is the way we were raised. We do not want to buy a larger house as it is for only two of us now & also it means more maintenance chores.
We donate regularly to our Church(Temple) although its affairs & ways are different now than when we joined. We donate to organisations which help educate not so fortunate. We entertain with our group of friends & are reasonably active socially.

We often find our son wasting his money, apart from signing up for an Annuity in his 401k at work, he does not educate himself on simple financial issues. Our kids were born in the lap of luxury, in some ways it is not their fault as they have not yet seen the struggle which many face, he has not learnt the virtue in saving.

I do watch my Portfolio closely, keep learning from Bogleheads & other finance books but like many we will be leaving money to the family when we pass, who may potentially spend our Piggy Bank, their inheritance in lesser ways than how it was saved for & built.

How do you feel about leaving inheritances ? I will be thankful of any thing I can learn from the Forum, thanks in advance
Last edited by Rajsx on Fri Jul 03, 2020 2:56 pm, edited 1 time in total.
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jjface
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Re: What to do with all this MONEY ?

Post by jjface » Fri Jul 03, 2020 2:50 pm

I wouldn't mind a million if you have nothing to spend it on.

sailaway
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Re: What to do with all this MONEY ?

Post by sailaway » Fri Jul 03, 2020 2:51 pm

Aren't there any philanthropic interests for either of you?

Scholarships? Charities? Museums? Homeless programs?

livesoft
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Re: What to do with all this MONEY ?

Post by livesoft » Fri Jul 03, 2020 2:56 pm

sailaway wrote:
Fri Jul 03, 2020 2:51 pm
Aren't there any philanthropic interests for either of you?

Scholarships? Charities? Museums? Homeless programs?
American Diabetes Association immediately comes to mind. One could contribute to research funding directly as well.

I feel fine about charitable giving and I also feel fine that my children might inherit some money.
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aqan
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Re: What to do with all this MONEY ?

Post by aqan » Fri Jul 03, 2020 2:57 pm

Why not do something extravagant, take luxurious vacations, buy expensive stuff, cross things off your bucket lists:) There are things you can still do that you may not be able to 10-20 years from now.
There are plenty of needy people in the world if you want you can really change someone’s life for good.

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FIREchief
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Re: What to do with all this MONEY ?

Post by FIREchief » Fri Jul 03, 2020 3:01 pm

Rajsx wrote:
Fri Jul 03, 2020 2:45 pm
How do you feel about leaving inheritances ?
It all depends upon if a person loves their kids. If they do, than they should leave an inheritance at least sufficient to allow their kids the resources to keep a roof over their head, obtain necessary food and medical care and not wind up in the poor house. If not, than charity is a good choice (real charity that helps the unfortunate, not some of that other stuff out there.....). If you feel that your son is a spendthrift, there are very effective ways to deal with that (i.e. well drafted trust with independent trustee).
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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whodidntante
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Re: What to do with all this MONEY ?

Post by whodidntante » Fri Jul 03, 2020 3:06 pm

It could be that your son is banking on an inheritance or financial support. He might get his act together if you disappoint him. But there is no guarantee and a lot of people never do.

I don't understand why you are still working. You obviously do not need to.

You've been extremely generous with your kids and grandkids already. Maybe plan to reserve a million per child as an inheritance. If you don't get pleasure from spending money you can give it away. You can pledge your money to an institution you want to support. For 5 million you can probably get something modest named after you and do good in the process.

Pro-tip. You can fly business/first class for a reasonable price if you use miles and have flexibility in your plans. And there are lots of ways to get miles, the least appealing of which is to fly. I've never paid cash for international premium cabins.

With an abundance of money I would take a ride to space if the opportunity becomes available.

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TomatoTomahto
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Re: What to do with all this MONEY ?

Post by TomatoTomahto » Fri Jul 03, 2020 3:07 pm

Not doctors, but also not entirely different situation.

My wife and I disagree somewhat on the topic, but mainly in terms of “how much” rather than “whether.” I think some number per heir is sufficient with the remainder to charity, and my wife sort of calculates it the other way ($x to charity; kids get the rest).
Okay, I get it; I won't be political or controversial. The Earth is flat.

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whodidntante
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Re: What to do with all this MONEY ?

Post by whodidntante » Fri Jul 03, 2020 3:08 pm

jjface wrote:
Fri Jul 03, 2020 2:50 pm
I wouldn't mind a million if you have nothing to spend it on.
You'll need to offer something in return.

I know some good poker games. It's fun and I promise to make you laugh. :twisted:

123
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Re: What to do with all this MONEY ?

Post by 123 » Fri Jul 03, 2020 3:11 pm

If youhave concerns about the son's ability to manage and hold onto his share of any inheritance you could always use a trust mechanism to have doled out to him over some period of time. I appreciate that you would likely consider the cost of that trust mechanism to be a waste but it may be the only way to reasonably provide for the son.

In terms of charity many people donate to the schools that helped them to achieve their success.

Edited to add:

You can always donate to Bogleheads https://www.bogleheads.org/support.php
Last edited by 123 on Fri Jul 03, 2020 3:15 pm, edited 1 time in total.
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bkmcd1
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Re: What to do with all this MONEY ?

Post by bkmcd1 » Fri Jul 03, 2020 3:12 pm

Rajsx wrote:
Fri Jul 03, 2020 2:45 pm

What to do with all this MONEY ?

We often find our son wasting his money
Ask your son.

Mr.BB
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Re: What to do with all this MONEY ?

Post by Mr.BB » Fri Jul 03, 2020 3:16 pm

Let me recommend a book for you (and others) to read, especially after everything we have all gone through this past year. "30 Lessons for Living" basically it is an interview with hundreds of older adults and the lessons they have learned over the years; it is great! One of items that most of people interviewed agreed on, no matter what their age, economic situation, etc. is that they wished they had traveled more (including people who were world travelers). You and your wife have worked hard to get where you are and should enjoy all the pleasures of life (including first-class seats), life is to short for coach or economy when you don't need to

You should also look at investing in your health (if you are not already), especially with diabetes. Work with a personal trainer, nutritionist, etc. One of my favorite quotes is "Take care of your body, it's the only place you have to live."~ Jim Rohn
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."

Juice3
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Re: What to do with all this MONEY ?

Post by Juice3 » Fri Jul 03, 2020 3:18 pm

Rajsx wrote:
Fri Jul 03, 2020 2:45 pm
How do you feel about leaving inheritances ?
My mother has told me a few times that she plans to leave this Earth the way she entered, with nothing. I wish her the best of luck and will be honored if she misses her mark and I am able to pick up any of slack.
Rajsx wrote:
Fri Jul 03, 2020 2:45 pm
I am 64
Net worth of $7.5M
a physician by profession
Retire next year,
55/45 Asset Allocation
Spend around $130k/yr
Leave around $3 to 4m
Even at that conservative AA, I would expect 3 to 4M estate to also be conservative/low with a withdraw rate of under 2%.

As a physician, and I have a great deal of respect for many of things you said you value in your post, I might challenge you to consider if you can give back to this COVID world we all occupy. I have not seen much about Not For Profits focusing on Covid research. Someone like you would be well positioned to push forward a scientific and humane agenda that is not substantially politically influenced.

I think any answer to your question that brings you happiness and adds value (not always monetary) to the world is a right answer.

Best of luck on your journey.

Monsterflockster
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Re: What to do with all this MONEY ?

Post by Monsterflockster » Fri Jul 03, 2020 3:39 pm

Rajsx wrote:
Fri Jul 03, 2020 2:45 pm
Sometimes this thought comes in my mind, I know a little strange .

I & DW come from humble beginnings & after decades of hard work, living below our means, savings & favorable Wall Street investments we find ourselves with a net worth of $ 7.5 m. We are very fortunate & we never thought we would find ourselves in this situation. But the question is still there, what do we do with this Piggy Bank of ours ?

I am 64, a physician by profession & will retire next year, DW is 59 a House Wife. our daughter a physician married to another physician has 2 kids, our son is working & completing his MBA. We live comfortably in a paid off house (included in the Net Worth), spend around $130k/yr. Nothing extravagant but do not deprive ourselves of anything reasonable. Most of the regular Household maintenance duties are hired out like Lawn & house maintenance, Cleaning etc..
Both kids went to private schools, we paid for their education including graduate school, daughter went to an IVY & son to a state School. We gift the grand kids 529 Plans on their Birthdays & Christmas & deposit equal amounts in Son's savings. We continue to travel, vacation in & outside the country.

I manage my own all Vanguard mostly index funds, with a 55/45 Asset Allocation & at the rate of present yearly expenses most calculators show we may leave around $ 3 to 4 m when we pass unless we increase our expenses.

Here is the problem, we do not feel comfortable with extravagance, find it difficult to fly 1st class, do not eat out several nights a week due to issues with weight & Diabetes. in general we do not tolerate wasteful spending as that was the modus operandi for past several decades & that is the way we were raised. We do not want to buy a larger house as it is for only two of us now & also it means more maintenance chores.
We donate regularly to our Church(Temple) although its affairs & ways are different now than when we joined. We donate to organisations which help educate not so fortunate. We entertain with our group of friends & are reasonably active socially.

We often find our son wasting his money, apart from signing up for an Annuity in his 401k at work, he does not educate himself on simple financial issues. Our kids were born in the lap of luxury, in some ways it is not their fault as they have not yet seen the struggle which many face, he has not learnt the virtue in saving.

I do watch my Portfolio closely, keep learning from Bogleheads & other finance books but like many we will be leaving money to the family when we pass, who may potentially spend our Piggy Bank, their inheritance in lesser ways than how it was saved for & built.

How do you feel about leaving inheritances ? I will be thankful of any thing I can learn from the Forum, thanks in advance
Strange flex but ok...

JackoC
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Re: What to do with all this MONEY ?

Post by JackoC » Fri Jul 03, 2020 4:05 pm

Juice3 wrote:
Fri Jul 03, 2020 3:18 pm
Rajsx wrote:
Fri Jul 03, 2020 2:45 pm
How do you feel about leaving inheritances ?
My mother has told me a few times that she plans to leave this Earth the way she entered, with nothing. I wish her the best of luck and will be honored if she misses her mark and I am able to pick up any of slack.
Rajsx wrote:
Fri Jul 03, 2020 2:45 pm
I am 64
Net worth of $7.5M
Retire next year,
55/45 Asset Allocation
Spend around $130k/yr
Leave around $3 to 4m
Even at that conservative AA, I would expect 3 to 4M estate to also be conservative/low with a withdraw rate of under 2%.

I might challenge you to consider if you can give back to this COVID world we all occupy.
I annoy people on this forum sometimes by giving expected return estimates that rain on the parade of their plans which assume higher ones, but that seems the product of a very low one. 130/7500=1.73%. I'm not sure how the current gifts or 529 plan contributions are figured in, I figure investments we give to kids (similar age to OP, but no grand kids yet) as part of what we're 'leaving', I include money we give them which they spend as spending. Anyway I estimate expected return of our portfolio after expenses, taxes and inflation (~55% stock-like, ~15% investment properties, around 30% 'safe') at ~1.9% from heirs' perspective assuming basis step up, ~1.6% assuming those gains are eventually taxed (some will be in our lifetime, and the basis step up could go away), not considering estate tax (the future details of which are not 'per current law', they are simply unknown). IOW 1.73% even straight 55/45 does look like a withdrawal rate to maintain CPI adjusted initial principal indefinitely on an expected basis. Of course returns could be lower; the 'worst case' is generally 'utter ruin' :happy .

Our goal basically is to maintain current principal inflation adjusted, and give it to kids. I don't know if there's any way to explain 'why' except that's what we both want to do. It's also because while our actual withdrawals are below my estimate of expected return, we buy what we want. And this forum isn't generally the place to ask for inspiration to break through a natural reluctance to spend. :D

Your reply suggested charity and it's surely an option. Our approach is fairly high % of spending to charity (much higher than when we were working and raising kids) but when we die the money will all go to our kids. We're happy with that %, and thus tend to think of charity as a dependent variable, ie. if we decide on ways to spend more on ourselves then we'll give more to charity to keep the % constant.

Normchad
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Re: What to do with all this MONEY ?

Post by Normchad » Fri Jul 03, 2020 4:15 pm

Based on the numbers you’ve provided, there is a very good chance that you will have *more* than $7M left after your passing.

Personally, I’m leaving everything to the kid. But I have just one, and she has her head screwed on straight.

My thinking about spending has shifted over time. I know now, that I will have enough to last the rest of my life. So a lot of what I already have, I know is going to the kid. And so I’ve loosened up the purse strings a bit, figuring I might as well spend it now. And if I can spend some of it now, to help her, I will do that too.

I still have reservations about leaving a lot of money to somebody in a inheritance. Those are fading away now for me, but they are still there. My fear has always been that a large inheritance would be detrimental overall to their success and feeling of self worth in the world.

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FelixTheCat
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Re: What to do with all this MONEY ?

Post by FelixTheCat » Fri Jul 03, 2020 4:15 pm

Rajsx wrote:
Fri Jul 03, 2020 2:45 pm
How do you feel about leaving inheritances ? I will be thankful of any thing I can learn from the Forum, thanks in advance
My feelings about inheritances depend on the child. I know hard working children that would do fine with an inheritance. Then there are the children who do absolutely nothing in life waiting for their inheritance.

Leave the kids something and donate some to charity. Hope this helps.
Felix is a wonderful, wonderful cat.

aristotelian
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Re: What to do with all this MONEY ?

Post by aristotelian » Fri Jul 03, 2020 4:16 pm

This is what is called First World Problems. Maybe start with upping your charity by 10X?

Savermom
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Re: What to do with all this MONEY ?

Post by Savermom » Fri Jul 03, 2020 4:18 pm

If you have not gone to an estate planning attorney yet, you need to. Also, I would advise leaving your money in a Trust with your children as beneficiaries. This way they do not get the money outright. Therefore your son cannot waste all of it and then not have any left. Also, it could last for future generations. You could set it up so that each child can get 1 percent 2 percent or whatever or a certain dollar amount. They could also get additional principal distributions for medical, education, or support if they prove that they cannot otherwise afford it. Of course you can also leave some money to charity.
Last edited by Savermom on Fri Jul 03, 2020 4:20 pm, edited 1 time in total.

kjvmartin
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Re: What to do with all this MONEY ?

Post by kjvmartin » Fri Jul 03, 2020 4:18 pm

My grandfather passed with a seven figure net worth.

He was very frugal and no one would have ever guessed his net worth earned based on his possessions. Local government pension and held dividend utility stocks.

A cautionary tale about legacy: Other than advice, he never helped a living relative financially for 88 years. We are talking when dirt-floor-poor teenage grandson bikes over lunch, he would break out the calculator to split the cost. You sound a bit more generous. On the other hand, my grandmother (his ex wife) had no bank account at death but would give you the shirt off her back (she probably bought it on sale, lol).

Let me tell you which one was taken in by the kids and which one passed in a nursing home. I implore you, make a real difference in the lives of your relatives while you're there to see the smiles on their faces.

Student2
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Re: What to do with all this MONEY ?

Post by Student2 » Fri Jul 03, 2020 4:19 pm

It sounds like you are a model Boglehead, LBYM most of your life and accustomed to a modest lifestyle while still enjoying life. You might consider what others have suggested and think about inflating your lifestyle a bit. It may be hard to go against a lifetime of habits, though. You mention your children and some concern about your son, in particular,
Our kids were born in the lap of luxury, in some ways it is not their fault as they have not yet seen the struggle which many face, he has not learnt the virtue in saving.
If you provide everything your children need, they may never need to learn how to succeed (save) on their own. I've thought about this a little myself although I don't expect to have anywhere near the 'problem' you describe. Some have suggested you use a trust (typically called a 'spendthrift' trust if it's to protect against someone quickly burning through an entire inheritance) and this might be one way to address your concerns. This specific problem and one solution for it was also discussed in the book https://www.amazon.com/Millionaire-Next ... 1589795474: will the inheritance to your children, but not until they are in their forties (or later). By then people's financial habits are typically more stable so, the thinking goes, they may be less influenced by a large inheritance. If you would still have concerns, the trust may be a better option, expenses nothwithstanding. There are lots of different types of trusts, most of which will have costs you may not wish to bear but will ensure the money is distributed how you want. I'm no expert and dont' expect to need anything very exotic, but in general, the fewer the conditions the better was the consensus. Obviously this would need help from a legal estate planner to set up. You could also consider using a donor advised fund to contribute to charity, yet retain control of your money while you are willling/able to.

One option I'm drawn to, depending on how much I'll have to 'worry' about, is to set up a plan to cover family members' and their descendants' post-secondary education expenses or, better still, as a source of low-cost education loans! (Boglehead thinking 8-) ) This would be available as long as the money lasted and I would consider it well spent if it lasted long enough to cover expenses for any great grandchild equivalents.

All in all, a nice problem to have.
Last edited by Student2 on Fri Jul 03, 2020 4:26 pm, edited 1 time in total.

pcsrini
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Re: What to do with all this MONEY ?

Post by pcsrini » Fri Jul 03, 2020 4:21 pm

Congrats on all your achievements. Must not have been easy.

Since the kids are doing well, and thriving, it's perhaps best to accept that that they will make some financial and non-financial decisions along the way that you may not be comfortable with. But these will be life lessons which will help them grow. And if they are comfortable spending more freely, its perhaps OK because they may value money differently from how you might, and they will be more influenced by their peers. One suggestion is to not set expectations on what they might receive as an inheritance in the future, so that they continue to be productive members of society. Whether you towards the end decide to give it to charity or leave it as an inheritance, it should just be an icing on the cake, and not alter their life trajectory. They will feel great about what they have accomplished on their own.

smitcat
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Re: What to do with all this MONEY ?

Post by smitcat » Fri Jul 03, 2020 4:23 pm

"I manage my own all Vanguard mostly index funds, with a 55/45 Asset Allocation & at the rate of present yearly expenses most calculators show we may leave around $ 3 to 4 m when we pass unless we increase our expenses."

With SS in your near future and expenses at $130K per year you are very likely to have much more on hand at passing. What you do with it and how you plan for the tax issues is your challenge but its likely larger than you are figuring.

Perhaps a plan that involves your kids in charity work that gets them to know how much their assistance can mean to others less fortunate could be a 3 way win. Good luck with whatever you do.
Last edited by smitcat on Fri Jul 03, 2020 4:25 pm, edited 1 time in total.

mbasherp
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Re: What to do with all this MONEY ?

Post by mbasherp » Fri Jul 03, 2020 4:24 pm

Donating through the most effective charities, like Give Directly, often magnifies the value of your donation 10 or 100 fold.

Perhaps your children can still learn a lot from you, as you improve others’ lives around the world!

I’ll recommend the book “Doing Good Better” which I first learned of on this forum. It’s about effective altruism with maximum benefit.

flyingaway
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Re: What to do with all this MONEY ?

Post by flyingaway » Fri Jul 03, 2020 4:24 pm

Why not retire NOW and spend more time with your family members.?

Mrxyz
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Re: What to do with all this MONEY ?

Post by Mrxyz » Fri Jul 03, 2020 4:33 pm

Encourage/force son to take a finance course? Teach/make him learn about money management which can benefit anyone.....
Donate to local hospitals?

Elysium
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Re: What to do with all this MONEY ?

Post by Elysium » Fri Jul 03, 2020 4:38 pm

I must say I am disappointed after having to read through all that to find out there is nothing really in the end you are asking other than some grievances about your son not "living up to your standards" with most of the rest being humble brag. As a physician who also has been successful in building wealth over time and raising kids successfully, you should have no trouble finding how to productively spend your money. Instead we get no ideas at the end from your side. There are a thousand things you can do if you truly wish to be offering help to other causes. Start by reading several books outside of your comfort zone, learn about the many issues facing the world, and find some good causes to be associated with. After all $7.5 mil is not a lot of money if you truly wish to spend some for cause. Oh and leave your son alone to figure out his own life, the message he is sending is that he doesn't approve your ways.

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Stinky
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Re: What to do with all this MONEY ?

Post by Stinky » Fri Jul 03, 2020 4:46 pm

In addition to leaving bequests for my children and charities, I’ve wondered about leaving money (in trust of course) for my grandchildren.

We’re already funding 529 plans for each of them, but I’ve mused about leaving 20% to charity, 40% to children, and 40% to grandchildren.
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camden
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Re: What to do with all this MONEY ?

Post by camden » Fri Jul 03, 2020 4:57 pm

You would easily be able to fund an endowed full tuition scholarship at your alma mater med school and then watch someone (or someones) graduate and start internship/residency/practice career free of the huge debt burden most newly minted MDs carry these days......I think they would remember your name.

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rob
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Re: What to do with all this MONEY ?

Post by rob » Fri Jul 03, 2020 5:08 pm

You certainly need some estate planning from a real professional (no someone on the internet). Talk to them about funding 529's vs an education trust for the future. Be very careful how you select that person to avoid a sales lead!

Since you mentioned travel.... I know this is limited right now internationally but some great options domestically: What about renting a nice house somewhere and invite the family with grandkids for a week/two.... Lots of great options in great locations to match the general interests; Maybe rent a car or two so family can wander a little wider. It will help with your spending reservations cause it's for the grandkids after all :D

Think about a continuous gifting plan to kids/grandkids... You may not want it to wait until your end dates.

Look at the DAF plans that allow some flexibility on gifting.

Enjoy... Congrats on the success....
| Rob | Its a dangerous business going out your front door. - J.R.R.Tolkien

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Matahari
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Re: What to do with all this MONEY ?

Post by Matahari » Fri Jul 03, 2020 5:15 pm

OP, I understand your concerns, having some of the same considerations myself.

We have been trying to spend more to help out local eateries and such during the pandemic. There is only so much takeout one can do, so we have been tipping very, very generously. I understand that you may consider it an extravagance to do this; however, it is a small and direct way of helping out. Also, food charities are more in need than ever at this time.

In your field, I'm sure that you see essential workers who toil for low wages. You might surprise them with appreciation in the form of gift cards.

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BolderBoy
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Re: What to do with all this MONEY ?

Post by BolderBoy » Fri Jul 03, 2020 5:18 pm

Rajsx wrote:
Fri Jul 03, 2020 2:45 pm
Here is the problem, we do not feel comfortable with extravagance, find it difficult to fly 1st class...
I would definitely start flying 1st Class or even by private jet.
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect

Doug007
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Re: What to do with all this MONEY ?

Post by Doug007 » Fri Jul 03, 2020 5:30 pm

Look into helping fund the world's biggest problem. Aging and death. This is an area that is desperate for adequate funding but so few people recognize this as the dire need it is, and the potential for vastly improved lives. This is science, not science fiction. Look into it. Start by watching Aubrey DeGrey videos to understand.

Dave55
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Re: What to do with all this MONEY ?

Post by Dave55 » Fri Jul 03, 2020 6:10 pm

Rajsx wrote:
Fri Jul 03, 2020 2:45 pm
Sometimes this thought comes in my mind, I know a little strange .

I & DW come from humble beginnings & after decades of hard work, living below our means, savings & favorable Wall Street investments we find ourselves with a net worth of $ 7.5 m. We are very fortunate & we never thought we would find ourselves in this situation. But the question is still there, what do we do with this Piggy Bank of ours ?

I am 64, a physician by profession & will retire next year, DW is 59 a House Wife. our daughter a physician married to another physician has 2 kids, our son is working & completing his MBA. We live comfortably in a paid off house (included in the Net Worth), spend around $130k/yr. Nothing extravagant but do not deprive ourselves of anything reasonable. Most of the regular Household maintenance duties are hired out like Lawn & house maintenance, Cleaning etc..
Both kids went to private schools, we paid for their education including graduate school, daughter went to an IVY & son to a state School. We gift the grand kids 529 Plans on their Birthdays & Christmas & deposit equal amounts in Son's savings. We continue to travel, vacation in & outside the country.

I manage my own all Vanguard mostly index funds, with a 55/45 Asset Allocation & at the rate of present yearly expenses most calculators show we may leave around $ 3 to 4 m when we pass unless we increase our expenses.

Here is the problem, we do not feel comfortable with extravagance, find it difficult to fly 1st class, do not eat out several nights a week due to issues with weight & Diabetes. in general we do not tolerate wasteful spending as that was the modus operandi for past several decades & that is the way we were raised. We do not want to buy a larger house as it is for only two of us now & also it means more maintenance chores.
We donate regularly to our Church(Temple) although its affairs & ways are different now than when we joined. We donate to organisations which help educate not so fortunate. We entertain with our group of friends & are reasonably active socially.

We often find our son wasting his money, apart from signing up for an Annuity in his 401k at work, he does not educate himself on simple financial issues. Our kids were born in the lap of luxury, in some ways it is not their fault as they have not yet seen the struggle which many face, he has not learnt the virtue in saving.

I do watch my Portfolio closely, keep learning from Bogleheads & other finance books but like many we will be leaving money to the family when we pass, who may potentially spend our Piggy Bank, their inheritance in lesser ways than how it was saved for & built.

How do you feel about leaving inheritances ? I will be thankful of any thing I can learn from the Forum, thanks in advance
I feel fine about leaving an inheritance. But I also don't mind dying broke, just much harder for that plan to work out. My wife says that receiving an inheritance is not always helpful for someones life. If you don't like the way your son "spends" his money or saves his money, as stated above you can use an irrevocable trust or similar (I am not an attorney, consult your estate attorney) so that he is entitled a set amount per year. I have a friend whose mother left her estate to her that way and it forces my friend to spend within her means. It sounds like you are not holding back in providing your wife and yourself comforts, but try splurging a little, its actually fun. My mom on her deathbed who was extremely thrifty (she grew up in the depression), told my brother she was too tight with money and he should spend more freely than she did.

Dave

NewMoneyMustBeSmart
Posts: 298
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Location: Midwest

Re: What to do with all this MONEY ?

Post by NewMoneyMustBeSmart » Fri Jul 03, 2020 6:18 pm

Rajsx wrote:
Fri Jul 03, 2020 2:45 pm
Sometimes this thought comes in my mind, I know a little strange ... But the question is still there, what do we do with this Piggy Bank of ours ?
It doesn't seem strange to me, but we may be in a similar population. Abstractly, once the problems of scarcity are solved, the problems of plenty are vast and difficult.

We decided to form a private foundation in the name of an ancestor with our family name and give through that. Our kids are younger buy we hope they will steward it after we are gone.

I can give you more info in DM if interested.

Ultimately you gift money to the foundation while you are alive and then think of it as an endowment that can do good while you are alive and after.

You could also do similar with Donor Advisor Fund ("DAF").
-- | Few are those who see with their own eyes and feel with their own hearts - Einstein

iamblessed
Posts: 626
Joined: Sat Jun 09, 2018 11:52 am

Re: What to do with all this MONEY ?

Post by iamblessed » Fri Jul 03, 2020 6:39 pm

Keep doing what you are doing. Many times kids get better with money as they age.

realclemsongrad
Posts: 15
Joined: Sat May 16, 2020 4:37 pm

Re: What to do with all this MONEY ?

Post by realclemsongrad » Fri Jul 03, 2020 6:47 pm

That is an amazing achievements with some hardwork and discipline. Kudos to you and your family.

If I was in your shoes, I would splurge on small things like flying business class international, after all you put in all the hardwork for it. I would not consider it frivolous.

We have several friends in the same shoes. Some of them are putting money into finding scholarships for state schools or community college.

lws
Posts: 145
Joined: Tue Apr 25, 2017 6:12 pm

Re: What to do with all this MONEY ?

Post by lws » Fri Jul 03, 2020 7:00 pm

I feel good about leaving inheritances.
I can't take it with me to the other side.
If they blow the gifts they will have to live with the results.

oldlongbeard
Posts: 67
Joined: Tue Oct 23, 2018 11:07 am

Re: What to do with all this MONEY ?

Post by oldlongbeard » Fri Jul 03, 2020 7:09 pm

Read your own signature, OP. Sounds to me like you've stopped laughing. All the $ hasn't brought you never ending happiness. You may consider volunteering to help those MUCH less fortunate than yourself. Many times the help to the giver is greater than the "help" they provide. By volunteering, I mean you physically get involved, NOT ONLY in a monetary way.
Kudos on your hard work, and savings.

Greg

m@ver1ck
Posts: 321
Joined: Fri Sep 14, 2018 2:18 pm

Re: What to do with all this MONEY ?

Post by m@ver1ck » Fri Jul 03, 2020 7:10 pm

Maybe start a business related to any hobbies you might have. Since most business fail in the first three years, you might very well solve this problem of having too much cash. If it does succeed, you can use it to help others while enjoying yourself. You'll also come into contact with a lot more people - some maybe unfortunate enough that will benefit from a legacy.

A HiFi store comes to mind, if you're into music. Long running joke - how do you get to a million in HiFi? Start from two.

In any case, thanks for the post - I've got my own if not as ambitious financial goals - but its nice to contemplate the end goal - and that it's about the journey not the FIRE number.

More seriously - if you're into music at all, its.easy to spend a 100K on a nice system. Talk to me about a 500 series Naim system. :-)
Last edited by m@ver1ck on Fri Jul 03, 2020 7:14 pm, edited 3 times in total.

flaccidsteele
Posts: 574
Joined: Sun Jul 28, 2019 9:42 pm
Location: Canada

Re: What to do with all this MONEY ?

Post by flaccidsteele » Fri Jul 03, 2020 7:11 pm

Congratulations!

Do whatever you like

When you’re young you trade time for money
When you’re middle age you trade money for convenience
When you’re old you trade money for health
The US market always recovers. It’s never different this time. Retired in my 40s. Investing is a simple game of rinse and repeat

TheDDC
Posts: 1035
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Re: What to do with all this MONEY ?

Post by TheDDC » Fri Jul 03, 2020 7:13 pm

What on earth are you spending $130k a year on??? For two people? Start there.

-TheDDC
Rules to wealth building: 90-100% VTSAX piled high and deep, 0-10% VIGAX tilt, 0% given away to banks, minimize amount given to medical-industrial complex

RocketShipTech
Posts: 546
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Re: What to do with all this MONEY ?

Post by RocketShipTech » Fri Jul 03, 2020 7:21 pm

TheDDC wrote:
Fri Jul 03, 2020 7:13 pm
What on earth are you spending $130k a year on??? For two people? Start there.

-TheDDC
Lol. And at the same time decrying their son’s spending habits.

I guess it’s true what they say about apples falling from trees.

goldendad
Posts: 247
Joined: Tue Apr 10, 2012 10:29 pm

Re: What to do with all this MONEY ?

Post by goldendad » Fri Jul 03, 2020 7:32 pm

As a previous post stated - not a physician, but similar outcome. Also 64. Fairly frugal lifestyle. Tithe to our church (always have). What we have done is upgraded our travel experiences - better hotels, etc. A couple of cruises in a nicer room. We do eat out more. We have 2 young grandchildren with probably a couple more to come. I did some projections and have funded an account to pay for all of them to attend a state university. I am considering buying a used luxury car. Still thinking about that one.

Topic Author
Rajsx
Posts: 517
Joined: Wed Mar 21, 2007 10:07 pm
Location: Florida

Re: What to do with all this MONEY ?

Post by Rajsx » Fri Jul 03, 2020 7:36 pm

A few points to address some of very helpful replies -

1) "We’re already funding 529 plans for each of them, but I’ve mused about leaving 20% to charity, 40% to children, and 40% to grandchildren"

- I & DW may have to work out some proportions like that, thanks !

2) We do have a Revocable Trust, to work around the Probate & such issues, we will look into monthly/yearly payments to our son if he does not mend his ways.

( In many ways he is a good kid, he is 28, takes care of his own expenses, says he pays his CC bill monthly, does not ask us for money, earns $60k and is doing Executive MBA part time. Upon my insistence he has arranged for a automatic monthly Bank transfer of $50 to VTSAX for the last 4 years. I hope & suspect that he may get a better grip on his finances once he is done with his Masters Education

3) We do tip well, people providing services like house cleaning, Lawn Service etc... get a months money extra on Christmas.

4) We have a Donor Advised Fund with Fidelity through which the Donations go regularly to place of worship, Education for the needy, American Heart Assoc. & my Medical School. I volunteer Tuesday Evenings in a Indigent Clinic for the needy.

5) As raised above, we have the same concern that the privilege & inheritance hopefully will not work to kids detriment & kill their own ambitions.

I will follow up on -

A) I need to work on my & DW's resistance to spend lavishly.
In many ways people behave like their immediate peers do & our group of friends outside of work are non Medical & we wanted it that way, to escape talking shop at the parties.
I agree, spend now, if not now then when should be the Mantra.

B) We will bump up Donations & look for newer avenues to give. I will look up some books on this.
The reason I bring this issue of mine up on this Forum is because I find people with similar 1st world issues which they have crossed themselves & in the past I have found this exercise helpful.
Last edited by Rajsx on Fri Jul 03, 2020 7:46 pm, edited 1 time in total.
We do not stop laughing because we grow old, we grow old because we stop laughing !!

fourwheelcycle
Posts: 905
Joined: Sun May 25, 2014 5:55 pm

Re: What to do with all this MONEY ?

Post by fourwheelcycle » Fri Jul 03, 2020 7:39 pm

Rajsx wrote:
Fri Jul 03, 2020 7:36 pm
A few points to address some of very helpful replies
Rajsx, I tried to send you a private message, but you have not enabled PMs.

capran
Posts: 111
Joined: Thu Feb 18, 2016 10:45 am

Re: What to do with all this MONEY ?

Post by capran » Fri Jul 03, 2020 7:44 pm

What would you do if you found out you had 18 months to live? Do that! If COVID has reminded us of one thing, is that there are no guarantees.

DJZ
Posts: 19
Joined: Fri Jul 03, 2020 6:42 pm

Re: What to do with all this MONEY ?

Post by DJZ » Fri Jul 03, 2020 7:51 pm

Rajsx wrote:
Fri Jul 03, 2020 7:36 pm
A few points to address some of very helpful replies -

1) "We’re already funding 529 plans for each of them, but I’ve mused about leaving 20% to charity, 40% to children, and 40% to grandchildren"

- I & DW may have to work out some proportions like that, thanks !

2) We do have a Revocable Trust, to work around the Probate & such issues, we will look into monthly/yearly payments to our son if he does not mend his ways.

( In many ways he is a good kid, he is 28, takes care of his own expenses, says he pays his CC bill monthly, does not ask us for money, earns $60k and is doing Executive MBA part time. Upon my insistence he has arranged for a automatic monthly Bank transfer of $50 to VTSAX for the last 4 years. I hope & suspect that he may get a better grip on his finances once he is done with his Masters Education

3) We do tip well, people providing services like house cleaning, Lawn Service etc... get a months money extra on Christmas.

4) We have a Donor Advised Fund with Fidelity through which the Donations go regularly to place of worship, Education for the needy, American Heart Assoc. & my Medical School. I volunteer Tuesday Evenings in a Indigent Clinic for the needy.

5) As raised above, we have the same concern that the privilege & inheritance hopefully will not work to kids detriment & kill their own ambitions.

I will follow up on -

A) I need to work on my & DW's resistance to spend lavishly.
In many ways people behave like their immediate peers do & our group of friends outside of work are non Medical & we wanted it that way, to escape talking shop at the parties.
I agree, spend now, if not now then when should be the Mantra.

B) We will bump up Donations & look for newer avenues to give. I will look up some books on this.
The reason I bring this issue of mine up on this Forum is because I find people with similar 1st world issues which they have crossed themselves & in the past I have found this exercise helpful.
I too am a 64 yo physician who may have over-saved, and have little interest in most luxury goods; I ran into the same issue and have been thinking about it for about five years now. I have some thoughts about books and “new avenues” that you mention. I am finding that learning about the philanthropic world is almost as interesting as medicine was.

I read several books and can recommend William MacAskill’s “Doing Good Better” (a fun read but ultimately extreme utilitarian philosophy is a bit sterile for me) and Phil Buchanan's "Giving Done Right".

Many of the limitations of the DAF have been mitigated of late; now many allow "recoverable grants" - legally it's a grant but the receiving entity intends to repay it, sometimes with gains. For instance Habitat for Humanity has a program for giving low interest loans for home building; your grant to HFH returns to your DAF in four years, with 2% per year gain. You might want to look at ImpactAssets.org to see a range of possibilities.

This is an ongoing process for me, but it's fascinating. It's totally changed my giving, from my schools and so forth (no longer, they are overfunded and impact per dollar probably very low) to the charities recommended by GiveWell (such as mosquito nets and so forth, which dollar for dollar are very good!), to much more interesting and hopefully impactful startups in my state that may have viable products to help scale remote learning to the underserved, or climate change, or improvements in industrial water utilization, or other really interesting ideas normally associated with angel investing.

Take a look at https://www.impactassets.org/ and https://capshift.com/solutions/individu ... undations/ but there are many; paradox of choice is really the issue.

bumblebh
Posts: 20
Joined: Tue Sep 05, 2017 6:42 pm

Re: What to do with all this MONEY ?

Post by bumblebh » Fri Jul 03, 2020 7:56 pm

You are already generous with your family but be generous with others as well, perhaps you already are. Essentially what I mean is over tip, the lawn people, delivery people, waitstaff. Any one in any service industry, an extra $20, $50 or $100 would be amazing for many people who work their tails off daily. Hopefully that money goes directly into pockets to buy groceries for someone or gas or car repairs or into savings. These are just little ways that you could have a big impact on some people in addition to traditional donation.

Stormbringer
Posts: 999
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Re: What to do with all this MONEY ?

Post by Stormbringer » Fri Jul 03, 2020 8:05 pm

Rajsx wrote:
Fri Jul 03, 2020 2:45 pm
What to do with all this MONEY ?
Take your family on an annual vacation. You will get some quality time with them, create some memories, and relieve them of the stress of funding a vacation. Go to great places, like Hawaii or London. Rent a big house where you can all stay together. Make sure the grand kids get to visit Disney. Buy wonderful experiences that everyone will look forward to each year and remember forever.
"Compound interest is the most powerful force in the universe." - Albert Einstein

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