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
Texanbybirth
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Re: What to do with all this MONEY ?

Post by Texanbybirth »

You have that much money and consider giving one month’s extra pay to your yard guy and cleaning lady “generous”? You should double their pay immediately and then give them six month’s extra pay at Christmas. That money will do them infinitely more good than it is doing for you.

You’re still alive and so is your son. He will always need you as a father as long as you’re alive. It’s not too late to spend some quality time with him. Go shoot guns or golf balls together, go on a hike or ride bikes together, then go get a beer or a milkshake together. You don’t have to pound him about finances, but teach him about his family history for his own sake, and listen to what he’s interested in. I bet he’s learning some interesting stuff in his MBA program.

Up your charitable giving to overseas food and medical missions by 10-100 times. Be lavish with others and it will do you so much good. Congrats to you for not giving in to first class airfare. You sound humble, which is a good place to start
“The strong cannot be brave. Only the weak can be brave; and yet again, in practice, only those who can be brave can be trusted, in time of doubt, to be strong.“ - GK Chesterton
stoptothink
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Re: What to do with all this MONEY ?

Post by stoptothink »

Texanbybirth wrote: Fri Jul 03, 2020 8:07 pm You have that much money and consider giving one month’s extra pay to your yard guy and cleaning lady “generous”? You should double their pay immediately and then give them six month’s extra pay at Christmas. That money will do them infinitely more good than it is doing for you.
The judgment in this thread is :shock: . There are countless posters on this board in a similar or better financial position than the OP, how many of them do you think are randomly offering to pay double for everything just because they could and that money might do someone else good? You going to call all of them out?
mike_in_ny
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Re: What to do with all this MONEY ?

Post by mike_in_ny »

Buy a beach or lake house -- someplace the kids and grand-kids will want to come visit you.

Beyond that, charity.
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Watty
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Re: What to do with all this MONEY ?

Post by Watty »

Rajsx wrote: Fri Jul 03, 2020 2:45 pm our son is working & completing his MBA. ...

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 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.
You may be too hard on your son, he is working on an MBA and you are saying that he is not learning about simple financial issues? :oops:

It could be that he knows more than you think but his plans are just different than what you would do in his situation.

I obviously do not know him but he hardly sounds like the black sheep in the family that you would need to set up a spendthrift trust for.
Rajsx wrote: Fri Jul 03, 2020 2:45 pm How do you feel about leaving inheritances ?
Inheritances are problematic since many people do not receive inheritances until they are getting to be senior citizens themselves.

When I was a teenager I worked several summers at a high end nursing home where all the people were well off and I recognized some of the names of families with businesses in that city. There was a mother and daughter who shared a room there. The mother was likely in her 90s and the daughter was probably in her mid 70s. The odd thing was that the mother was actually doing a lot better than the daughter because the daughter had more health problems.

I never heard what happened to them but if the daughter had been waiting for an inheritance it would have been too late for her to have gotten much use out it.

You can look up the statistics but there is a very good chance that either you or your wife will live another 30 years and there is a plausible chance that your wife could live another 40 years until she is 99. Consider how old your kids will be if they do not receive any inheritance for 30 or more years. They very well may be older than you are now.

I am sure if they receive a large inheritance when they are already retirement age they can figure out something to do with it but by then they will likely have already provided for themselves so getting the money then may not really make a lot of difference to them.

I don't have a good answer as to what to do.
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Rajsx
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Re: What to do with all this MONEY ?

Post by Rajsx »

DJZ wrote: 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.
Thanks DJZ, aprreciate you chiming in, I will look up your suggestions, my best to you
We do not stop laughing because we grow old, we grow old because we stop laughing !!
dave1054
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Re: What to do with all this MONEY ?

Post by dave1054 »

I am a recently retired physician. I totally understand your concerns. I understand your reluctance to fly first class. I also know many physicians are unhappy in retirement.

I was lucky. We recently had a grandchild. It changed everything for us. We are full time nannies getting paid nothing and life could not be better. We set up a charitable trust with Fidelity and I just point and click and send funds to my favorite charity. So much fun and pleasure.

I know too many people who gave zero to charity and family and left millions at death. I hope I and OP do not make that mistake.
New Providence
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Re: What to do with all this MONEY ?

Post by New Providence »

Rajsx wrote: Fri Jul 03, 2020 2:45 pm
...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.
That's the circle of life. One generation makes the wealth, and the following generation squanders it.

What's the point of depriving yourself if you won't be able to take all that dough with you? If you don't want to spend your hard-earned money, then, what's the plan for it? You will be gone by the time Jr. gets himself a fancy car and expensive vacations.

Offsprings won't have qualms about living a life a luxury, and rightly so. Life is short. Money will be spent, whether by you or your kids is up to you.
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market timer
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Re: What to do with all this MONEY ?

Post by market timer »

One question I would have is why does the son need to get in the habit of saving if he stands to inherit several million dollars? I think it is worthwhile to clarify expectations with children around inheritance. If they will inherit millions, as appears likely, let them plan accordingly and perhaps start transferring wealth now. If they will not inherit much, don't keep them in the dark. If the son is going to inherit millions, the idea that he should contribute $50/month to VTSAX seems meaningless. It's a drop in the ocean and an unnecessary habit to develop. The accumulation problem has been solved for him--where he needs help is learning how to manage and withdraw from a portfolio.

There is a certain cultural virtue that holds that everyone must earn their own way. I disagree with this virtue. Wealth brings advantages regardless of how it was acquired. Wealth means you be choosy in the jobs you select. You can be more risk tolerant if you have a large safety net. You can chase meaning instead of money. You can go part-time and build a relationship with your children while they are young.

Why not make your kids wealthy now? Practically, how I might structure it is to split the portfolio in two: (1) children, (2) parents. To sustain $120K/year, less Social Security, the parents' portfolio might need about $3M. The remaining $4.5M would go into the children's portfolio (still owned by parents). The children's portfolio would distribute 4% of its balance every year to the children while the parents are still alive. Each year, the two portfolios would be recalibrated to ensure the parents are comfortably on track to fund their retirement. For example, if the portfolio drops to $5M, the new split would be $3M/$2M parents/children, and the children would receive a distribution of $40K/year each. If the portfolio rises to $10M, the split would be $3M/$7M, and each child would receive a $140K distribution that year. The purpose here is to increase transparency about expected inheritance and provide value from that inheritance today.
barefootjan
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Re: What to do with all this MONEY ?

Post by barefootjan »

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
It looks like you have almost everything figured out, but you're trying to decide about leaving money to the kids...? If that's the case, here are my thoughts (FWIW)

If I was sure I had way more money than I needed, I'd want to leave my kids with something I can only dream of at this point: real hope that they and their children will have a habitable place to live.

Absent that - or more likely, in addition to it - I'd use my wealth to do whatever I could to address the inevitable hardships they'll face.

My best guess is that you don't have anywhere near enough money to make the kind of massive changes I'd like to see happening before I die. (I'm thinking Bill Gate's style/level philanthropy). But I bet it's enough to make some meaningful changes for a lot of people, including your own kids.
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TechGuy365
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Re: What to do with all this MONEY ?

Post by TechGuy365 »

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
Rajsx, I have a lot of respect for what you’ve accomplished. By all standards you and your wife have worked hard and achieved the American dream - successful career, accomplished kids, and being generous. I would ignore the negative judgements that inevitably come as part of discussion boards like this.

I am not a physican (I’m in high tech) but aside from that we paths in life are similar, but we’re about 10-15 years behind you in age and life stage. You didn’t mention this in your post but one thing you and I may have done differently is that we talk very openly about money with our kids since they’re young. I grew up with my parents not telling us anything about money, so in our household we talk about money very openly. We talk about assets, debts, mortgage, investment, insurance, jobs, will, degrees, everything (we have younger kids than you). I believe this set them up so they know what their mom and I had to overcome and hopefully they would understand more about money when they’re on their own.

My question to you is: what would you and Mrs. do differently so we can learn from you? I’m not asking for investment advices, I’m asking more about life advices. Would yo have taken higher quality vacations when kids are growing up? Spend more time with them? Give even more generously earlier on? Work fewer hours? Retire earlier (which I won’t, love my job too much)? Serve on charity boards? These are all things we’re contemplating now that I’m hoping you can inspire us to make better decisions for the next 15 years. Thanks.
pivoprussia
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Re: What to do with all this MONEY ?

Post by pivoprussia »

Rajsx-

Congratulations on your success and accomplishments.

You worked long and hard for your success. It did not come easily and what it took to get where you are is part of who you are. That's the part others miss. It's not like one can just turn it off like a light switch.

It is YOUR money that YOU earned. As a goal driven individual, perhaps setting some goals for your monetary future would be helpful.

Physicians are often different because they serve others as their profession. They gain respect and gratification from knowing they used their talents for good. Leaving medicine will not be easy because those things go away. But I digress a bit.

Let your money follow your passions and interest. Giving money AND time can be especially powerful as you can see the benefits of your generosity.
A random consideration would be to fund a mission/medical trip that you also participate in. Give randomly and anonymously - regardless of the amount it is fun. Pay off someone's Walmart layaway on YOUR birthday. Pay for the person's meal behind you in a drive through. Challenge yourself to these or other creative ways of doing more. Let your money follow your passions.

As for inheritance, that is a truly personal decision that only you and your wife can decide. None of us can know your situation well enough to give sage advice for YOUR family. I know plenty of grad school folks who went there just so they didn't have to get a job. Certainly not saying your son is this - but other posters tried to point to this as evidence of how wrong you are.

Money does not solve life's problems. Having no money is worse, but having it can be complicated.

Cheers
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LiveSimple
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Re: What to do with all this MONEY ?

Post by LiveSimple »

Sure too much money is an issue as well, if not deal with better, now.
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4nursebee
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Re: What to do with all this MONEY ?

Post by 4nursebee »

Good job.

Your son is better off now than I was at his age. Now @52 we have FIRE money.

I'd start with the Condon book, Beyond the Grave. It goes over many of the things you are concerned about. https://www.amazon.com/Beyond-Grave-Rev ... B00LEYI4S6
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chicagoan23
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Re: What to do with all this MONEY ?

Post by chicagoan23 »

market timer wrote: Fri Jul 03, 2020 10:33 pm One question I would have is why does the son need to get in the habit of saving if he stands to inherit several million dollars? I think it is worthwhile to clarify expectations with children around inheritance. If they will inherit millions, as appears likely, let them plan accordingly and perhaps start transferring wealth now. If they will not inherit much, don't keep them in the dark. If the son is going to inherit millions, the idea that he should contribute $50/month to VTSAX seems meaningless. It's a drop in the ocean and an unnecessary habit to develop. The accumulation problem has been solved for him--where he needs help is learning how to manage and withdraw from a portfolio.

There is a certain cultural virtue that holds that everyone must earn their own way. I disagree with this virtue. Wealth brings advantages regardless of how it was acquired. Wealth means you be choosy in the jobs you select. You can be more risk tolerant if you have a large safety net. You can chase meaning instead of money. You can go part-time and build a relationship with your children while they are young.

Why not make your kids wealthy now? Practically, how I might structure it is to split the portfolio in two: (1) children, (2) parents. To sustain $120K/year, less Social Security, the parents' portfolio might need about $3M. The remaining $4.5M would go into the children's portfolio (still owned by parents). The children's portfolio would distribute 4% of its balance every year to the children while the parents are still alive. Each year, the two portfolios would be recalibrated to ensure the parents are comfortably on track to fund their retirement. For example, if the portfolio drops to $5M, the new split would be $3M/$2M parents/children, and the children would receive a distribution of $40K/year each. If the portfolio rises to $10M, the split would be $3M/$7M, and each child would receive a $140K distribution that year. The purpose here is to increase transparency about expected inheritance and provide value from that inheritance today.
This seems exactly right to me. Saving 50 bucks a month for someone in line to inherit millions is a ridiculous exercise. Rather than teaching them how to save, you need to teach them how to manage. That is your #1 job if you want your life savings to make a difference after you’re gone. Get your money into the hands of your kids now and make sure they know what they are doing with it. If you think they are too spendy then say so and react accordingly.

And if you are happy with your current level of personal spending, don’t increase it just because you can. You already know that won’t make you any happier.
"The Basic Choices for Investors and the One We Strongly Prefer" | | https://www.berkshirehathaway.com/letters/2011ltr.pdf
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Re: What to do with all this MONEY ?

Post by abuss368 »

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
We had a CPA colleague that gave us the idea to have the inheritance provided for in stages by age - 40, 45, and 50. I figured if my children were not financially disciplined by that age they never will be and that we tried our best.
John C. Bogle: “Simplicity is the master key to financial success."
Point
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Re: What to do with all this MONEY ?

Post by Point »

Charity is the way we will deal with most of our assets after death. Our kids have had the opportunity to learn and act accordingly. We had some success with matching funds to shape behavior via Roth savings and our daughter. That’s something you might consider. At this point the future is up to them.
exoilman
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Re: What to do with all this MONEY ?

Post by exoilman »

aristotelian wrote: Fri Jul 03, 2020 4:16 pm This is what is called First World Problems. Maybe start with upping your charity by 10X?
+1 DAF Put highly appreciated stock gains and get tax deduction.
Seasonal
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Re: What to do with all this MONEY ?

Post by Seasonal »

Rajsx wrote: Fri Jul 03, 2020 2:45 pmHere is the problem, we do not feel comfortable with extravagance, find it difficult to fly 1st class
Talk to your children about your issues. Perhaps you can influence your son's behavior. It might even be possible to leave him money conditioned on behaving the way you want, although this path can be fraught with problems.

If you like to travel, international business class provides most of the benefits of 1st at a much lower price. Larger rooms in luxury hotels can be very nice. Think of it as comfort rather than extravagance.

Increase charitable donations.
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Re: What to do with all this MONEY ?

Post by RocketShipTech »

market timer wrote: Fri Jul 03, 2020 10:33 pm One question I would have is why does the son need to get in the habit of saving if he stands to inherit several million dollars? I think it is worthwhile to clarify expectations with children around inheritance. If they will inherit millions, as appears likely, let them plan accordingly and perhaps start transferring wealth now. If they will not inherit much, don't keep them in the dark. If the son is going to inherit millions, the idea that he should contribute $50/month to VTSAX seems meaningless. It's a drop in the ocean and an unnecessary habit to develop. The accumulation problem has been solved for him--where he needs help is learning how to manage and withdraw from a portfolio.

There is a certain cultural virtue that holds that everyone must earn their own way. I disagree with this virtue. Wealth brings advantages regardless of how it was acquired. Wealth means you be choosy in the jobs you select. You can be more risk tolerant if you have a large safety net. You can chase meaning instead of money. You can go part-time and build a relationship with your children while they are young.

Why not make your kids wealthy now? Practically, how I might structure it is to split the portfolio in two: (1) children, (2) parents. To sustain $120K/year, less Social Security, the parents' portfolio might need about $3M. The remaining $4.5M would go into the children's portfolio (still owned by parents). The children's portfolio would distribute 4% of its balance every year to the children while the parents are still alive. Each year, the two portfolios would be recalibrated to ensure the parents are comfortably on track to fund their retirement. For example, if the portfolio drops to $5M, the new split would be $3M/$2M parents/children, and the children would receive a distribution of $40K/year each. If the portfolio rises to $10M, the split would be $3M/$7M, and each child would receive a $140K distribution that year. The purpose here is to increase transparency about expected inheritance and provide value from that inheritance today.
This is great advice, but reading OP’s posts, it doesn’t feel like OP is concerned that his kids earn their own way so much as he is jealous his son hasn’t needed to suffer as much as he has. It is a sad attitude to be the basis of the father-son relationship.
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8foot7
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Re: What to do with all this MONEY ?

Post by 8foot7 »

Rajsx wrote: Fri Jul 03, 2020 2:45 pm we ... find it difficult to fly 1st class...
It gets easier
bighatnohorse
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Re: What to do with all this MONEY ?

Post by bighatnohorse »

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
Inheritances are squandered in a few months in about 75-percent of cases - according to Thompson & Associates teachings.
Check with your employer - see if they have a charitable giving department. We were given an entire estate planning course by a hospital for free because we have donated in the past and are considering it for the future.
One of the many things covered was inheritances. The Thompson & Associates course will take several months to complete. Good luck and fortune to you!
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Re: What to do with all this MONEY ?

Post by bltn »

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
Rajrx

Congratulations on a career of diligence in saving and lbym. My own career was similar in that regard . And I was raised in a family of modest means supported by a hard working father and a housewife mother, both of whom instilled the value of frugality, by necessity.

My two most important financial goals for my savings were to achieve financial security and to leave the means for a measure of financial security for my children . A family inheritance has been part of my family s history. My father s parents left him a modest inheritance which he used to help buy his small business. My parents left me a somewhat larger modest inheritance which I placed in trust for my two children. My sister and her husband are using their portion of our family inheritance as an important part of their retirement support. I believe that leaving a significant inheritance to the children may make a difference in their lives.

My current plan for our children s inheritance Is a combination of what I consider two good ideas. A significant portion of our assets will be left to the children outright, through TOD to avoid probate costs. The rest of our assets are in revocable trusts which will convert to irrevocable trusts to provide a secure stream of income for our children and their children. This trust money will be protected from liability risks and from divorce, or the early death of my children and remarriage of their spouses which could cause problems for the inheritance for my grandchildren.

Financial assets left to the children are important, but not as important as the education we have provided for them to have successful careers. Both have completed graduate schools and are in the early stages of promising careers.

One final thought regarding timing of the inheritance. My father received his inheritance in his 50 s and I received mine in my 50 s. Would the money have been useful earlier? Perhaps, but receiving it later meant I had to rely on myself to achieve security. I never knew about the amount of the inheritance until a shortly before I took over the management of the estate for my mother. I think that worked out well in terms of promoting my self reliance. I will consider transferring funds to the kids prior to our deaths, but at the moment it is not a pressing matter.

Very interesting thread for discussion .
Last edited by bltn on Sat Jul 04, 2020 8:01 pm, edited 1 time in total.
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tre3sori
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Re: What to do with all this MONEY ?

Post by tre3sori »

In German there is a word for rich kids who get neglected by their parents because they work so much/are too involved with their hobbies: affluent neglect (Wohlstandsverwahrlosung). The rather large inheritance can be viewed as compensation for all the hours that have not been spend with the kid and the lack of human capital that results from such neglect. (Not saying or implying anything about your kids of course.)
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Re: What to do with all this MONEY ?

Post by maroon »

Right now the OP has the opportunity to spend money in ways to immediately and perhaps dramatically improve others' lives. For example, I've read several articles about anonymous donations to local food resources. I'd love to be able to help,and OP has the chance!

Regarding inheritances, I'm not expecting any. Right now I'm supporting my MIL, who'll soon need assisted living. So trying to figure out how to budget/pay for that. Meanwhile, my parents are running out of money and are hinting at financial support. I'm trying to stave that off because I just don't have the income to support me, spouse, MIL (especially in assisted living), and my parents. OP can send me some funds and I promise I'll put them to good use. :happy
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Re: What to do with all this MONEY ?

Post by playtothebeat »

You mention not eating out because of issues with weight and diabetes. If you mean issues with your or wife’s health, spend some money on getting those worked out. Find a good personal trainer, dietician etc.
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8foot7
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Re: What to do with all this MONEY ?

Post by 8foot7 »

This thread sort of reminds me of this one post a couple of years ago where the poster only wanted to leave an inheritance/trust distribution to their kids after the kids turned 60 so they would know what it meant to save.

I’m sure it seemed logical at the time, but dumping a bunch of money on people who have already worked for 30-40 years and saved enough themselves to be financially independent is, in my view, fairly useless. There is something to be said for grit and earning one’s own way but there is also something to be said for being helpful to your own children when it will have a meaningful impact.

I also couldn't help but notice a tone of disappointment in your post regarding your son. In my view someone earning 60k who is enrolled in an executive MBA and takes care of his own expenses is not someone who deserves parental scorn for his financial choices. It might not have been the road you chose, but your son is an individual human being with his own wants, needs, path. While we don't have all of the details here, the picture you have painted does not demonstrate the actions of someone who should be spoken about the way you seem to here. I would advise you to figure out the source of your feelings regarding your son and explore coming to grips with them and moving past them. All the money in the world isn't worth a son feeling like he has constantly disappointed his father, or a father feeling like his son is an inferior man.
Last edited by 8foot7 on Sat Jul 04, 2020 11:01 am, edited 1 time in total.
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Rajsx
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Re: What to do with all this MONEY ?

Post by Rajsx »

Thank you for all your replies, it gave me & DW a chance to gain incite into how to set up our affairs now rather than later. Thanks for referring the above mentioned 3 books which we will read to learn ways on how to do things.

As our accumulation phase is ending & the drawing down phase will be starting in a year from now this discussion was necessary for us. You sharing your experiences & your time mean a lot to us. Thanks again.

Hopefully this will change some of our acquired behaviors & help us share enthusiastically with kids, grand kids & towards our beliefs & issues we hold dear. DW agrees to fly first class next time & keep her purse strings a little loose.

This was very helpful to me to understand & hopefully look at money in a little different light.

Best regards
Last edited by Rajsx on Sat Jul 04, 2020 10:50 am, edited 1 time in total.
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Re: What to do with all this MONEY ?

Post by exoilman »

abuss368 wrote: Sat Jul 04, 2020 7:23 am
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
We had a CPA colleague that gave us the idea to have the inheritance provided for in stages by age - 40, 45, and 50. I figured if my children were not financially disciplined by that age they never will be and that we tried our best.
+1
stoptothink
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Re: What to do with all this MONEY ?

Post by stoptothink »

maroon wrote: Sat Jul 04, 2020 9:58 am

Regarding inheritances, I'm not expecting any. Right now I'm supporting my MIL, who'll soon need assisted living. So trying to figure out how to budget/pay for that. Meanwhile, my parents are running out of money and are hinting at financial support. I'm trying to stave that off because I just don't have the income to support me, spouse, MIL (especially in assisted living), and my parents. OP can send me some funds and I promise I'll put them to good use. :happy
In the exact same boat, expecting to support both my in-laws (completely) and my parents (partially) in the next few years. We've already, in our 30's, had to provide quite a bit of support to in-laws (they've lived with us completely free off-and-on over the last 4yrs, out of financial need). I'd be happy to take some of OP's funds, and I promise to only use it to financially support others :sharebeer .
Redlion
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Re: What to do with all this MONEY ?

Post by Redlion »

Mr.BB wrote: 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
Travel is a common passion but realistically now is not the time to Travel and it could be several years before travel gets back to normal, At least if you fly first class you are more likely to avoid the Virus.
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Re: What to do with all this MONEY ?

Post by TomatoTomahto »

Redlion wrote: Sat Jul 04, 2020 10:52 am
Mr.BB wrote: 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
Travel is a common passion but realistically now is not the time to Travel and it could be several years before travel gets back to normal, At least if you fly first class you are more likely to avoid the Virus.
Forget first class; if we were to travel today, it would be private.
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Mr.BB
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Re: What to do with all this MONEY ?

Post by Mr.BB »

TomatoTomahto wrote: Sat Jul 04, 2020 10:57 am
Redlion wrote: Sat Jul 04, 2020 10:52 am
Mr.BB wrote: 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
Travel is a common passion but realistically now is not the time to Travel and it could be several years before travel gets back to normal, At least if you fly first class you are more likely to avoid the Virus.
Forget first class; if we were to travel today, it would be private.
I know a couple that did exactly that. Not cheap but if you can afford to do it it's worth it
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MrBobcat
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Re: What to do with all this MONEY ?

Post by MrBobcat »

Rajsx wrote: Fri Jul 03, 2020 7:36 pm
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
Time to let go dad. He's an adult and appears reasonably responsible with his financial life. Praise his successes, let go of pointing out the negatives, i.e. it sounds like you don't entirely believe him that he's paying his CC bill monthly (why are you even asking) and insisting he saves... He's 28, employed, getting his masters and doesn't ask you for money. Count your blessings.

My 2 bits on spendthrift trusts for adult children, it's a last I don't trust you from the grave.
Last edited by MrBobcat on Sat Jul 04, 2020 12:40 pm, edited 1 time in total.
TLB
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Re: What to do with all this MONEY ?

Post by TLB »

8foot7 wrote: Sat Jul 04, 2020 10:32 am This thread sort of reminds me of this one post a couple of years ago where the poster only wanted to leave an inheritance/trust distribution to their kids after the kids turned 60 so they would know what it meant to save.

I think you were referring to my post, no it wasn’t 60 it was 65. You must have missed the part where we gift 30k per year to our 4 adult children and 10k a year to 6 grandchildren. We have also helped in getting in their first homes, education and many other financial needs.
There are provisions in our trust if we pass before they reach their inheritance they will be taken care of.
We have set down with all 4 kids and they know this, if they want to work their buts off and retire early I will have done my job, if they wait until they reach 65 and if we are both dead they will have a great retirement

I have 4 great kids and everybody has their own beliefs what is right for their children and grandchildren.
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TomatoTomahto
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Re: What to do with all this MONEY ?

Post by TomatoTomahto »

8foot7 wrote: Sat Jul 04, 2020 10:32 am I’m sure it seemed logical at the time, but dumping a bunch of money on people who have already worked for 30-40 years and saved enough themselves to be financially independent is, in my view, fairly useless. There is something to be said for grit and earning one’s own way but there is also something to be said for being helpful to your own children when it will have a meaningful impact.
We gift to the annual gift tax exclusion limits ($30k per child). My oldest did not want to accept the money, until I framed it as a gift to me because I could think of the money improving her life today (whether spent or invested) rather than being given to her (hopefully) years from now, where it would be met with a shrug (not out of being dismissive or unappreciative, but rather because she’d have her own substantial money by then).

The older ones get the money directly, but the younger ones have trusts set up. One of the younger ones (age 22) has some maturing to do, but c’est la vie.
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WildBill
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Re: What to do with all this MONEY ?

Post by WildBill »

Howdy

Me thinks you worry too much. Two kids who are accomplished, working and pursuing further education? They clearly internalized your family work ethic and values.

We are in a similar situation and similar ages. The kids make some spending decisions that grate on my frugal nature, but these are details. They have strong work ethics and values and they will be fine, even if they spend too much on Uber Eats, as an example. They view it as a cost time trade off, and their calculations are different from mine.

We do two things - significant gifting of money so that they will realize their inheritances when they have the youth and energy to use them well. Mass family vacations in a nice place where everyone is happy to come and share time.

My advice is tend to your health problems ASAP.As a physician you already know that the two miracle drugs are diet and exercise. Time to write yourself a prescription for both.

Good luck

W B
"Through chances various, through all vicissitudes, we make our way." Virgil, The Aeneid
New Providence
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Re: What to do with all this MONEY ?

Post by New Providence »

Normchad wrote: 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.
So, you don't want to spend it and have reservations about leaving it it somebody in a inheritance. Then, what exactly is the point of generating wealth if you won't be able to take it with you when you die?
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auntie
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Re: What to do with all this MONEY ?

Post by auntie »

My parents had several CRUTs. (Charitable Remainder UniTrust) They donated for their favorite charities and the money was invested. They received 6% of the value of the investment every year until they died. After that the money belonged to the charity.

They had a couple of them set up so that my brother and I would also receive that income for life after both parents died.

The income from those trusts was much more than their expenses, so whenever their bank balance went over a certain amount they would make another charitable donation. They were able to do whatever they wanted, spending as much as they wanted.

Dad was the last to die at 103, and my brother and I began receiving the income. We were in our 70s by then.

Since then I have added to mine, to increase my income, and my brother has opened another CRUT for himself and his wife, with their daughter to receive the income after their death. I would have done the same if I had any children.
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DJZ
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Re: What to do with all this MONEY ?

Post by DJZ »

Rajsx wrote: Fri Jul 03, 2020 8:51 pm
DJZ wrote: 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.
Thanks DJZ, aprreciate you chiming in, I will look up your suggestions, my best to you
Rajsx,

Best to you as well! A few other ideas:

It may make sense to try to reduce the size of your estate without using your estate tax exemption by giving $15k/year to each family member; you can also give to friends or friend’s children or other entities such as trusts. It doesn’t sound like a lot of money but you may be able to find worthy recipients to the tune of say $100k/year, so it adds up! The future growth is theirs too.

Most don’t consider larger gifts to family before your death, but if the market takes a dive, consider larger gifts to your heirs at that time. It removes it from your estate and the future growth accrues to them. I had always thought of this as not tax efficient, because you have to pay gift taxes on it, but my father gave each of his three children some AAPL about a decade before he died and that’s what’s funding my DAF these days. One of the smartest moves he ever made, tax-wise.

Also, regarding inheritances, you might consider the tax status of each account. If you give your traditional IRA to your heirs, they will need to take distributions over ten years or fewer, and pay taxes on that. So my traditional IRA is going to my DAF, and then to the charities that I have specified as beneficiaries of the DAF. The taxable account gets stepped up at death so that, and the Roth, are for friends and family.

For your health and diabetes, you probably already have a plan, but if you want to get deeply into the recent literature on the subject, take a look at Peter Attia’s podcast; he’s a physician with an obsessive health and longevity interest (https://peterattiamd.com/podcast/); it’s too technical for most lay people but as a physician you might like it.
pcsrini
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Re: What to do with all this MONEY ?

Post by pcsrini »

Rajsx wrote: Sat Jul 04, 2020 10:44 am Thank you for all your replies, it gave me & DW a chance to gain incite into how to set up our affairs now rather than later. Thanks for referring the above mentioned 3 books which we will read to learn ways on how to do things.

As our accumulation phase is ending & the drawing down phase will be starting in a year from now this discussion was necessary for us. You sharing your experiences & your time mean a lot to us. Thanks again.

Hopefully this will change some of our acquired behaviors & help us share enthusiastically with kids, grand kids & towards our beliefs & issues we hold dear. DW agrees to fly first class next time & keep her purse strings a little loose.

This was very helpful to me to understand & hopefully look at money in a little different light.

Best regards
Thank you for sharing your situation so transparently, and asking for advice. You have received the feedback graciously, and the folks who contributed their ideas have provided deep and insightful perspectives. This thread and the thoughtful responses will be helpful to many of the forum members. Best wishes to you and your family for continued success!
BillWalters
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Re: What to do with all this MONEY ?

Post by BillWalters »

So your son is 28, debt free, making more than the median U.S. household, getting an MBA on top of the full time job, and you're disappointed in him?

Come on.
bltn
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Re: What to do with all this MONEY ?

Post by bltn »

stoptothink wrote: Sat Jul 04, 2020 10:48 am
maroon wrote: Sat Jul 04, 2020 9:58 am

Regarding inheritances, I'm not expecting any. Right now I'm supporting my MIL, who'll soon need assisted living. So trying to figure out how to budget/pay for that. Meanwhile, my parents are running out of money and are hinting at financial support. I'm trying to stave that off because I just don't have the income to support me, spouse, MIL (especially in assisted living), and my parents. OP can send me some funds and I promise I'll put them to good use. :happy
In the exact same boat, expecting to support both my in-laws (completely) and my parents (partially) in the next few years. We've already, in our 30's, had to provide quite a bit of support to in-laws (they've lived with us completely free off-and-on over the last 4yrs, out of financial need). I'd be happy to take some of OP's funds, and I promise to only use it to financially support others :sharebeer .
This is a common retirement plan for earlier generations. Take care of the kids when they re young, and they take care of you when you re old.

This possibility was one basis for my parents accumulation during my dad s career.They saved to make sure they could pay for their kids college education. After that was done, they saved so they wouldn't t be "a burden on their children". I must have heard that from my mom 50 times, at least.

By leaving some of your money in a family trust for the benefit of your children and their children, you provide for some benefit for the grandchildren besides funding a 529 (which is a very great idea). I keep thinking of the saying, no family fortune survives the third generation. A natural result of the children of wealthy families not having to pay attention to money or spending.

My children fortunately are fairly cognizant of spending and money matters. But I continue to interact with them along the lines of money management in preparation for the time they take over the family financial affairs. I enjoy these times and they tolerate them well enough.
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Christine_NM
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Re: What to do with all this MONEY ?

Post by Christine_NM »

bumblebh wrote: 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.
This.

OP has people doing work around the house. Find out their situations and needs. I did this with just one person, and it opened my eyes to true need. Microgift is my word for it, like microloan. I don't donate to the megacharities anymore, I just give bits to individuals I know and trust, and larger amounts to one institution.

You are young yet. Don't be anxious to spend more. Do you really know how expensive your life will become in the face of physical decline?
18% cash 44% stock 38% bond. Retired, w/d rate 2.5%
KyleAAA
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Re: What to do with all this MONEY ?

Post by KyleAAA »

Donate your excess wealth to worthy causes. IMO it is unethical to leave large inheritances to offspring. Don’t wait until you’re dead, start donating now. Don’t put your retirement at risk, but you certainly don’t need $7.5mm to sustain $130k in living expenses.
reln
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Re: What to do with all this MONEY ?

Post by reln »

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 definitely struggle with this too. I saved well, invested well (100\0); but most in line to inherit are definitely not prudent, there are only 2 I trust will do well with it. I have removed the rest of my family members from inheritance. I plan on increasing my charity (through UL life insurance) and force myself to spend more but sustainably (through SPIA\DIA).
There is no right answer, good luck, and congrats.
novemberrain
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Re: What to do with all this MONEY ?

Post by novemberrain »

BolderBoy wrote: Fri Jul 03, 2020 5:18 pm
Rajsx wrote: Fri Jul 03, 2020 2:45 pmHere 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.
I have a feeling people who have flown economy all their lives (by choice) till they are old, may find flying first-class / private-jet wrong in some way. Like in the back of their mind they will feel guilty throughout the flight and even afterwards probably.
Normchad
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Re: What to do with all this MONEY ?

Post by Normchad »

New Providence wrote: Sat Jul 04, 2020 11:34 am
Normchad wrote: 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.
So, you don't want to spend it and have reservations about leaving it it somebody in a inheritance. Then, what exactly is the point of generating wealth if you won't be able to take it with you when you die?
At this point, I'm ambivalent about what happens to it after I'm dead. I have more than I need. I have no issue spending it now. I buy everything I want. I've got my Tesla Model 3 for instance....

I've never been driven to create this excess though, it just kind of happened. A combination of a lot of luck, and just not needing a lot to be satisfied. I've never had "wealth creation:" or "getting more" as a goal.

Am I the only person in this situation? Where I just have more than I need? And the pursuit of money was never my main driver?
Coastie
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Re: What to do with all this MONEY ?

Post by Coastie »

Yes, I would leave some money for my kids. Have fun with your kids-make it have conditions ever see the movie Brewster's Millions?

I grew up in foster care, so my idea of humble beginnings is much different than yours.

If I had money that I could give away I would help Boys Town or similar local youth programs.

I would help rebuild a local youth hockey ice rink, local youth baseball field-maybe get lights installed in the fields.

Anything that helps preserve American History. US Lighthouse Society is a good one. Saving US Battlefields American Rev and Civil War is another.

The US Coast Guard has excellent charities.

USA Hockey or any US Olympic sport you enjoy.
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FIREchief
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Re: What to do with all this MONEY ?

Post by FIREchief »

KyleAAA wrote: Sat Jul 04, 2020 1:12 pm IMO it is unethical to leave large inheritances to offspring.
I haven't seen this one before! :P
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
shell921
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Re: What to do with all this MONEY ?

Post by shell921 »

KyleAAA wrote: Sat Jul 04, 2020 1:12 pm Donate your excess wealth to worthy causes. IMO it is unethical to leave large inheritances to offspring. Don’t wait until you’re dead, start donating now. Don’t put your retirement at risk, but you certainly don’t need $7.5mm to sustain $130k in living expenses.
I like this and many other answers you got. GIVE ! If you give while you are alive, you get the benefit of seeing other improve their life.
It's called "giving with a warm hand". A wealthy uncle of mine died in 2005. We knew he was well off but we didn't know HOW well off he was. His wife had died 6 years earlier - his large rambling house had never been updated. He could have re-modeled it..but he never did. Or at least bought new guest room beds and sheets and towels. He wanted my husband and me to visit him often after his wife died - we were in CA and he was in Colorado and we would have gone more often than once a year if he'd had decent guest beds, sheets, towels. Even his kitchen towels were old and threadbare. Ugh.
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