Inheritance & How It Impacted Your Money Life

[vnatale]

I am just saying that if the life lived was very well but not at the current level and invested more, then both working life and retired life could Be at the same level. This is certainly what I wanted - to have the same or better life in retirement.

I 100% agree with that. I never want to go back on anything in terms of lifestyle.

[stoptothink]

He also seems like he is NOT "The Millionaire Next Door"? What are $250,000 cars??!! How many do they own??!!

Well, his wife's soccer mom car is a Lamborghini Urus. He has a highly modified Audi R8 (MTM twin turbo ~800hp, >$200k all in), that he rarely drives, and his daily driver is a modified Audi RS6 Avant. They also have an F350 to tow the boat, the razor, and all the 4-wheelers.

He comes from a typical middle-class background; his dad was semi-successful, but a single earner and there were 9 kids in the family. From what I know, his wife comes from a little bit more money, but not like what they have now. IMO he kind of got caught up in being able to buy everything he and his family ever wanted, but over the last few years he's just becoming done with it. I don't know the details about their overall financial situation, but he's made it clear that any normal family should easily be able to live for the rest of their lives on what they already have...but they haven't live "normal" for the last decade.

It is too bad he bought into the current lifestyle. If he had invested the money spent, he could have surely been retired now.

Above stated that even after all of that he could still do it today; "He could easily retire tomorrow and live VERY well the rest of his life, but not how they have been living."

I am just saying that if the life lived was very well but not at the current level and invested more, then both working life and retired life could Be at the same level. This is certainly what I wanted - to have the same or better life in retirement.

While I don't know exact details about their situation, he says that any family with a semi-normal lifestyle could retire tomorrow with what they have saved and I'm sure his business is worth a pretty penny. It's an interfamily battle because the entire family is now used to this extravagant lifestyle (that only he is willing to cut back on) and I think he is scared about his kids not being self-sufficient in the future (none have shown any interest in one day taking over his lucrative business) so he thinks he'll have to continue supporting them in adulthood. Something is going to crack because he's really getting tired of working so much.

[Dottie57]

Well, his wife's soccer mom car is a Lamborghini Urus. He has a highly modified Audi R8 (MTM twin turbo ~800hp, >$200k all in), that he rarely drives, and his daily driver is a modified Audi RS6 Avant. They also have an F350 to tow the boat, the razor, and all the 4-wheelers.

He comes from a typical middle-class background; his dad was semi-successful, but a single earner and there were 9 kids in the family. From what I know, his wife comes from a little bit more money, but not like what they have now. IMO he kind of got caught up in being able to buy everything he and his family ever wanted, but over the last few years he's just becoming done with it. I don't know the details about their overall financial situation, but he's made it clear that any normal family should easily be able to live for the rest of their lives on what they already have...but they haven't live "normal" for the last decade.

It is too bad he bought into the current lifestyle. If he had invested the money spent, he could have surely been retired now.

Above stated that even after all of that he could still do it today; "He could easily retire tomorrow and live VERY well the rest of his life, but not how they have been living."

I am just saying that if the life lived was very well but not at the current level and invested more, then both working life and retired life could Be at the same level. This is certainly what I wanted - to have the same or better life in retirement.

While I don't know exact details about their situation, he says that any family with a semi-normal lifestyle could retire tomorrow with what they have saved and I'm sure his business is worth a pretty penny. It's an interfamily battle because the entire family is now used to this extravagant lifestyle (that only he is willing to cut back on) and I think he is scared about his kids not being self-sufficient in the future (none have shown any interest in one day taking over his lucrative business) so he thinks he'll have to continue supporting them in adulthood. Something is going to crack because he's really getting tired of working so much.

The kids are teens. So I would downsize now. They can’t expect the gravy train to continue. So best they learn as teens. Wife is beyond the pale and my understanding. Time to come back to earth.

Only justification husband needs is that he wants to enjoy his life. He should not be treated as only a font of money.

[Dottie57]

I have a slightly different take on a inheritance. When my father passed 10 years ago(mom went 5 years before), I became successor trustee to his trust. I had no idea how much my parents(both who never went to college, sent 2 children to college and successful careers) had accumulated. Their net worth was almost $1.5 million with no debt. Everything was split 50/50 between my brother and I.

It really humbled me that they were able to do this and because of this I realized that I had been really deficient in my own personal finance. It spurred me to honor them by doing better and I went on a tear in shoring up our finances and automating our investments. This lead to Bogleheads and our current good(pretty good) nest egg. It seemed almost disrespectful to squander the inheritance and a desire to pass more on to the next generation. We were doing "okay" before, but after doing my due diligence, realized all the things we were doing wrong before. It was a wake up call. Not that everything we do is perfect, but being a good stewart of the gift our parents had given us, seemed to be the honorable thing to do.

I have passed on what I have learned to our son, who at 32 is way ahead of where we were at his age. It helps that he is cheap, but I trust that his wife will make sure they don't run out of toilet paper

Yeah, I know what you mean. My parents left just shy of 800k. My dad grew up on a farm in South Carolina. Whatever crop was in season , that was breakfast, lunch and dinner. Underwear made from feed sacks. GI bill paid for Dad’s college.

Mom - lived in 200 person small town in MN . Mom started college but had to quit when grandpa lost his job. She was the money maker at that time.

They did well and bro and I are proud of them.

[privateID]

I think alot of the comments above view this as a binary decision - include an expected inheritance in your planning or don't include an expected inheritance in your planning. I view it more as a range. This is similar to how I view many other variables in my planning spreadsheet. For example, market returns, possible SS reduction, SS taxation, SS election decisions, Roth conversions, and maybe a few others. For all these variables, it's important to know what my financial future looks like given a positive or negative turn on a variable. The potential inheritance we may receive is just another variable. I have set the expected inheritance variable to $0 to model out the future. But I have also set it to the expected value. I also set it to a mid-value. This is where financial planning spreadsheets, homegrown or something like RPM, can be so valuable. You need to be ready to handle a range of outcomes and the planning problem becomes much more difficult as you add variables to your model. I certainly don't want to choose to ignore a variable. But I do like to make the default for the inheritance variable zero.

[CyclingDuo]

My question is how many Bogleheads received an inheritance and did anyone have a family that communicated to them in their 30's that they would be receiving money?

We each received an inheritance from our respective families. It was not communicated to either of us in our 30’s. We did telegraph to all of our parents when we were in our 30’s and 40’s that we were doing fine on our own and not to worry about us. I even encouraged my father to give away his wealth to his favorite charities.

How did that impact your savings? I get that most people say act like you will not get it but they constantly talk about it and have a will set up. My wife has a sister so it will be a 50/50 split. She also has an aunt without kids that has told us we will get a chunk of money from her as well (no idea on the reality of this...)

We lost one parent when we were in our 40’s, and the rest of them passed while we were in our 50’s. Inheritance was not discussed until the very end. The inheritance at that time added a lot of complexity - at least for us - due to trusts/wills/probate/annuities. Getting everything transferred in kind as it was invested, or sold and taxes paid involved a few years of decisions. That was the reason we joined Bogleheads at the time trying to figure out what to do, and how to lessen some of the complexity we inherited to see if we could manage everything on our own, or needed to go the AUM route.

Regarding impact on our own individual savings....

In an interesting twist, it actually led to us increasing our rate of savings, slimming down our lifestyle to husband everything a bit more than we were prior to any inheritance. Perhaps it increased our feeling of financial responsibility as well as a desire to pass on what we could to our children. We did get all the beneficiary information updated, and hired a lawyer to draw up a current will now that we are in our 60's.

CyclingDuo

[gavinsiu]

My mom has not used any of her retirement portfolio, she is now in her 80s so it’s likely I will get some inheritance. However I still do not want to count on getting this money. She could end up in long term care and burn through all of her money.

When I was growing up, I had assumed that I will get nothing from my parents. In some ways it gave me and my sibling a drive to be independent. We had to assume that we had a really limited safety net. In my opinion, this was not a bad thing. I notice that in some of the wealthier friends, there is less saving because inheritance is expected. In the worse case, their ambitions is lost because they feel that they cannot find a job that makes as much as their inheritance. This does not mean that if you have inheritance you will turn into a bum. However if you are not expecting inheritance, you would work hard because you have no choice.

In addition, money can be become a puppet string. My parents did not often agreed with the choices we made or our choice of significant others. We had at time informed them that they are free to disown us. This was easy to say if we had nothing, but if we knew there was a lot of money would we be willing to do the same?

I still don’t factor inheritance. I view it as an additional bonus that may or may not come.

[prairieman]

As many have said, we did not change our lifestyles much when we inherited substantially from our parents. We were already secure and hadn’t planned our lives around it.
We kept the same house and cars, enjoyed the same activities, and continued our same habits. That said, we began splurging on trips a little more, retired a little sooner than we might have otherwise, and gave more to charities, tipped higher, and gifted more money each year to our kids (letting them know it’s from their grandparents).
We really struggled at times early in our careers, gradually becoming secure through our forties and fifties. The habits we acquired - saving, looking for deals, investing carefully, doing things ourselves - are hard to change. We were Bogleheads long before the term existed.

[vnatale]

As many have said, we did not change our lifestyles much when we inherited substantially from our parents. We were already secure and hadn’t planned our lives around it.
We kept the same house and cars, enjoyed the same activities, and continued our same habits. That said, we began splurging on trips a little more, retired a little sooner than we might have otherwise, and gave more to charities, tipped higher, and gifted more money each year to our kids (letting them know it’s from their grandparents).
We really struggled at times early in our careers, gradually becoming secure through our forties and fifties. The habits we acquired - saving, looking for deals, investing carefully, doing things ourselves - are hard to change. We were Bogleheads long before the term existed.

Seems like you did it all the optimal ways, including after you received your inheritance.
Congratulations!