A question about my sister

[Lancelot]

Now that my father is gone, my brother is somehow getting by on his own. It's amazing how these things can work out.

What is the old saying? "When you subsidize behavior..."

Must have been frustrating for you but life is seldom fair.

 

[Lancelot]

I believe that the only effective remedy has to be done beforehand-don't get married, or 2nd best get some sort of preplanned escape clause that at least stands some chance of standing up in court.

No argument from me

I'm seeing more younger guys moving to Asia and what they all have in common is that they are single and only have to fend for them selves.

Yeah, some are neer do wells, but increasingly they are educated, career oriented young guys that do not set foot in the bars and are seeking an arbitrage, a better career here than what was available to them back home.

Single people don't usually end up in family court but I do remember Lee Marvin

 

[FIGuy]

This is so common with highly frugal people that there's a book on it. It's called "the millionaire next door" and it describes parts of my family perfectly. Typically, the oldest sibling launches well, especially if male and a good number of years older than the next. The youngest siblings are typically more parasitic on the parents and the parents enable them. This is just what the book authors found in research.

My family is very similar to what many are writing here. My youngest sister has been bleeding dry my parents small retirement funds for years. They think if they just "get her started" she'll fend for herself, but they just keep digging the hole deeper. She's pathetically lazy now. No ambition at all to change. I was always fiercely independent, so I don't understand it still.

Buy them each a (used) copy of the book and never give any of them another cent or you'll just be the sibling's fool too. Any money to the parents will just flow to the sibling.

 

[WestLake]

Having had many twenty-something tenants over the years, I have frequently seen this. Some parents have even written the rent checks. One of them lived in a million dollar home but a couple of checks bounced. Later on they defended the bad and unethical behavior of "the kids" and threatened to take me to court if I dinged their credit. Another example is a father who paid rent a year in advance and told me he was giving his son that year to get himself together. Well he didn't and then I got six more months in advance. The tenant eventually started calling me in the middle of the night to complain using horrible and hateful language. Finally I got him out of there.

Sad to see these people going into their thirties dependent on their parents - but as my father told me, there are many who make a "career" of getting by from sponging off others.

 

[2B]

Sad to see these people going into their thirties dependent on their parents - but as my father told me, there are many who make a "career" of getting by from sponging off others.

There is a certain amount of income that will cause most people to stop trying to "work for pay." It varies by individual. I am including the members of this forum specifically since most of us are striving for or have achieved the assets needed to reach a SWR we're comfortable with so we can retire (ie. not work for pay). This applies to children just as well as welfare and unemployment recipients. The best example I have seen is the dole in the UK where it has been in effect since WWII. Multiple generations have lived on it and beget the next generation that will also live on it. It many cases it has become the "family business." There's a fine line between a helping hand and enabling dependence.

 

[NW-Bound]

There is a certain amount of income that will cause most people to stop trying to "work for pay." It varies by individual. I am including the members of this forum specifically since most of us are striving for or have achieved the assets needed to reach a SWR we're comfortable with so we can retire (ie. not work for pay).

+10^3

Most people do not want to work! We ER's are not any different.

Heck, why is it that people spend a lot of time and effort, and money too, to go to the gym or to run a marathon, but will not dig a trench or lay bricks for pay?

... There's a fine line between a helping hand and enabling dependence.

+10^6

 

[Al in Ohio]

Getting B's and C's in college is not "not doing well", it's actually doing slightly better than average compared to all the other students in her class. You can have a 2.0 average when you graduate and can be far more successful by careers end than the 3.7 student that graduated with you based on many other variables. A smart manager these days looks at the whole package, not just a transcript. And most importantly, time will tell based on a multitude of skill sets on how successful she becomes, none of which directly correlate to grade point.

Regarding the car and the condo, are you sure these weren't a loan which agreement details you might not be privy to?



Sent from my iPad using Early Retirement Forum

 

[UnrealizedPotential]

My parents were very conservative, ditto one brother. My sister is a wastrel, but her separately living but very responsible husband has a pension and keeps her on an allowance. I doubt she has lifetime earnings herself of > $150,000.

I have one cousin who worked hard since childhood, got a pretty good inheritance, but tried to support her alcoholic brother and lately she has been unable to get work in her field. My sister told me her next likely event is bankruptcy and being on the street. She is far from SS.
She is also a spendarina, even though she has always been single. A soon as her useless brother figured out that she might not be able to continue supporting him in the manner to which he ahs become accustomed, he took off, I guess to see if he can still attract a lover to support him.

Since in America we have no control over our relatives, we have to realize that they may well get themselves into really bad trouble, but that is not our fault or our responsibility to remedy. These people will rarely do anything sensible or valuable to anyone else.

Also to OP, it isn't very cool to come asking for suggestions, then reject them. If you don't like them, don't apply them. You are definitely not our responsibility. I am often amazed at how much information and experienced help members are willing to give to strangers who have never given them anything, and are not now offering anything of value in return for the advice they are requesting. Advice from experienced, self made millionaires, many with some age on them, is very valuable
.
Ha

Great post Ha.I couldn't agree more.

 

[REWahoo]

I am often amazed at how much information and experienced help members are willing to give to strangers who have never given them anything, and are not now offering anything of value in return for the advice they are requesting. Advice from experienced, self made millionaires, many with some age on them, is very valuable.

"Very valuable"? What changed over the past 10 days?

The money advice here is sometimes good, sometimes not. But the personal advice is often less than wise.

 

[haha]

"Very valuable"? What changed over the past 10 days?

Must be the arrival of summer and sunny days.

 

[REWahoo]

We all need more sunshine in our lives. Wait...except those of us who already have too darn much.

 

[Golden sunsets]

Hey everyone. This doesn't exactly fit the topic of this forum but I was looking for something for Dave Ramsey's style, but the only forums there you had to pay for. I googled Financial Independence Forum and found this, so I went with it.

Dave Ramsey addresses some stuff like this but nothing exactly that I saw. I'm 23 years old, I'm doing pretty well, good job, saving a good amount, no financial dependence on my parents for anything, all that. I'm working towards retiring early. My sister is 21, she's still in school so my parents are mostly supporting her. She has a part time job but only $14/hr for 10-12 hours a week. She's not incredibly wasteful (by normal standards) but she's not frugal either. What most concerns me is what my parents pay for her. Now, this is really their business, not mine, but I can't help but worry that it's unsustainable and will be ongoing. My parents are both retired, and have a networth of just slightly over 1M, most of that is in home equity. They own their home and 2 cars outright, but they only have about 400K-500Kish in financial assets, and they're spending it quick. They recently bought my sister a $27,000 car and a $69,000 condo in town. I don't know what her expenses are exactly but I expect something like $2000 a month, and that's without rent/mortgage or tuition. I'm worried that they are seriously depleting their savings quick. I don't think my sister will be able to maintain what life style she has once she graduates, she goes to a local state school (which is fine, I went to the same school and got a good job before I graduated) but she's majoring in psychology and isn't doing well at that even (not failing, but mostly Bs and Cs - I asked and she said her GPA was 2.8 or so), so I am worried it will be hard for to find professional work. Even if her part time job turned full time, that's still only $2240 a month, and after taxes more like $1600. And I am skeptical she'll even get that, it sounds like that business isn't doing well. To clarify, she's not a bad person or anything, she just doesn't watch money or think about her future at all.

I'm worried that my parents will either deplete their savings too quick trying to finance her and will go broke, or will cut her off and she'll just pile on debt until nothing can be done. I've been trying to talk to her about school (trying to get her to major in something more profitable instead, she just finished sophomore year so it's not too late), or about just making sure she does better so she's in the best position of all psychology graduates. She always says she's gonna get straight As next semester, and next semester is always the same, a couple Bs and a couple Cs. I tried talking to her about her spending yesterday for the first time, but she doesn't even know what she spends. Also, it's hard for me to do much since I don't live in town any more (my job is about 800 miles away from my hometown, I'm planning on going back for Thanksgiving), so it's harder for me to help from here. I tried asking my parents what they thought and they basically said it's not my business (which they're right, but I'm just worried about them).

I'm wondering what advice you guys have. Should I try to do anything? If so what can I do?

To the OP; I don't understand your parents financial situation. They are retired, with no pension, Only in their 50's, $400,000 to $500,000 in savings, SS years away and annual expenses of $70,000 per year? With those assets they should be spending no more than $12,000 to $15,000 per year using a SWR of 3 percent. Even if they sold their home and rented, increasing their portfolio to $1,000,000, using a SWR of 3 to 3.5 percent doesn't begin to meet their expenses not to mention purchasing a condo and car for your DS. I guess I wonder how they thought they could retire.

Are they looking to SS to eventually meet their spending needs?

 

[dmdunca44]

To the OP
I agree that there is little you can do to curb your parents' spending and support of your sister.

Are you worried that they will run out of money then look to you for support?
If that is your concern it might help to realize that low income seniors have some resources: you can check for low income senior housing (either in your location or in theirs). Once they are 65 they will qualify for Medicare or if poor enough, for Medicaid. I'd focus my energy on learning what resources (other than yourself) will be available to them. Our county has a senior resources office and they publish an annual booklet of useful information.

Other than that, as difficult as it may be, you need to let go and look after yourself.


Sent from my iPad using Early Retirement Forum

 

[gauss]

I'm not as worried about my sister's spending as her potential income. She spends a lot, but not incredibly outrageous. With a decent income she's not going to retire young but she's not going to be super indebted either. ...

Have you talked to your sister about the huge benefits of getting an internship or co-op job in her field of study now during summers? This worked wonders for me coming up through the system. Having the job experience under her belt when it comes time for the interviews for permanent positions could be priceless.

 

[rothlev]

It sounds like your parents will have a big problem. Hopefully your dad is willing and able to go back to work .


Your sister sounds perfectly normal ie: average to me. It is not her fault if your parents are too generous.
What is she majoring in? Her grades are fine. Her income is fine for part time income of a student. What makes you think she won't be self supporting after she graduates?

 

[cooch96]

This isn't advice but it is related. My DF called yesterday sobbing, asking me to "save his life." He wanted me to give him a $25k line of credit so he can keep chasing his dreams (which are currently Dallas real estate and Honduran rain forest management). This will not happen; I have a wife to support and will not let him drag us into his fantasies further. I promised him a few hundred and some more for Xmas. I also told him to apply for SS, since he turned 62 this year.

After reading this thread, I'm more convinced that tough love is correct and still counts as love. I'm just not sure where to stop. I want to help, he did his best to raise me, he loved me and I love him, but is giving money helping? How many strings do I attach to my support? I'm going to have to have some long conversations with him. This is emotionally exhausting.

 

[AnIntentionalRoad]

I want to help, he did his best to raise me, he loved me and I love him, but is giving money helping? How many strings do I attach to my support? I'm going to have to have some long conversations with him. This is emotionally exhausting.

I would not attach any strings to money given to family. If you want to give them money, make it clear it is a gift and there is no repayment desired. Otherwise it could cause serious resentments from either side into the future.

I don't think there is a universal right or wrong answer as to whether or not to give money to family. Each family and situation is different. Just don't loan!

 

[Katiek]

To the OP, as sad as it sounds, you don't have any control over your parents or sister and can't get them to act in a way you think best (even if it is the best). I wouldn't worry about your sister, she's young and she may not really get motivated to work hard and get extra jobs until she realizes she needs the money. Supporting her will only encourage her to keep up her above her means lifestyle.

For your parents, could you encourage them to go to a fee based financial planner to develop a plan for their retirement finances? If you want to help them maybe you could offer to pay for a consultation. I wouldn't discuss this in the context of your sister taking advantage of their financial resources, but more of an overall "You need to have a plan for your future" - your Dad seems to at least be concerned about the issue. Maybe hearing the hard truth from a third party would be easier than hearing it from you and they may be more likely to accept a "professional's" advice.

 

[EastWest Gal]

I think your response to your DF was on the money. Since he asks you to "give him a $25K line of credit" he is asking you for an open ended loan. You are not your parents' bank. If you give him the money for pipe dreams, it's guaranteed you'll never see it again. If he went to a bank for a loan or a line of credit, they would look at all his finances, his credit score, his tax return for the last 2 years, as they well should. And if a loan is for business purposes, the bank would also want to see a business plan.

If you feel compelled to support him, treat it as a business transaction and do everything a bank would do--look at his 1040s, check his credit rating (he can check his own while you watch), and ask for a business plan. If he has no business plan, you would be throwing money away to lend him any money.

If you "give" more than $14K, it will be subjected to a gift tax. If you loan him money, do it by the book, collect interest and expect regular monthly payments.

If he is uncomfortable with sharing his finances with you as you are with the idea of a line of credit, he may decide to give up on the idea.

Katiek's suggestion of a fee based financial planner is excellent.

 

[jim584672]

My advice, stay out of everyone's business.

What do you care if they crash and burn? When they come to you for money simply ignore them. Problems solved.

 

[Taxman59]

I would not attach any strings to money given to family. If you want to give them money, make it clear it is a gift and there is no repayment desired. Otherwise it could cause serious resentments from either side into the future.

I don't think there is a universal right or wrong answer as to whether or not to give money to family. Each family and situation is different. Just don't loan!

I have a sister that was a magistrate. She was considered the expert (she wrote a book on her specialty). She was terminated do to politics, so now she is unemployed. Long ago, she helped me before I had a job, so I turned around and helped her. I, however, put a cap on the assistance as well as referred to the $$ as a gift. I never expect to see the money again, and if I do, then it will be a bonus trip for the DW and me (maybe include my sons as well!). If you make a gift, be sure to be clear to your sister that it is a one time gift.
Good luck, it can be gut wrenching to put a family member through the tough love program.

 

[travelover]

From the OP's profile:

Last Activity: 08-14-2014 12:35 PM

 

[racy]

You can't save them all.

You might try showing them the numbers on how this is all going to pan out, but based on your descriptions of their personalities and reactions I doubt it will have any effect.

You are right. Your parents will be broke very soon if they keep this up. Your sister may very well sink into a lifetime of servitude to the credit industry.

Save yourself.

+1