Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
12 yo overheard net worth discussion
Old 05-09-2016, 07:34 PM   #1
Recycles dryer sheets
ugeauxgirl's Avatar
 
Join Date: Jan 2016
Location: Rural Alabama
Posts: 251
12 yo overheard net worth discussion

DH and I were talking about an article re average net worths of Americans by age- DH said something like, "ours is 22 times that" at which point 12 yo picked up the article and did a quick calculation (future engineer) and gasped. Are y'all millionaires? After a moment of silence, I said we were and then told him that finances are private and he is not to discuss this with anyone. I hadn't planned on disclosing this much for a couple of years, but now that I have, I think I should probably add to the discussion. Or should I wait for him to ask? Anyone have experience or suggestions here?
__________________

__________________
Projected retirement 2018-2020
ugeauxgirl is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 05-09-2016, 07:37 PM   #2
Full time employment: Posting here.
jjquantz's Avatar
 
Join Date: Jan 2014
Location: Northern Virginia
Posts: 848
I would think a 12 year old could begin to handle a discussion of the way that assets can generate income and how a million bucks won't last very long if you don't realize that spending money faster than income is generated is a very poor plan. Especially, if he is good at math.
__________________

__________________
jjquantz is online now   Reply With Quote
Old 05-09-2016, 07:58 PM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2007
Posts: 7,527
Quote:
Originally Posted by jjquantz View Post
I would think a 12 year old could begin to handle a discussion of the way that assets can generate income and how a million bucks won't last very long if you don't realize that spending money faster than income is generated is a very poor plan. Especially, if he is good at math.
+1 especially if the little guy is a future engineer.

My 11 year old understands the basics of how we're FI. We have a lot but it has to last us many decades so we can't spend it all. We're able to afford months of summertime travel because we drive modest cars and live in a somewhat modest house (compared to the median priced houses in the area).

She tells others that her parents are both retired but I've never heard her mention our net worth or even any hint at it.
__________________
Retired in 2013 at age 33. Keeping busy reading, blogging, relaxing, gaming, and enjoying the outdoors with my wife and 3 kids (5, 11, and 12).
FUEGO is offline   Reply With Quote
Old 05-09-2016, 08:08 PM   #4
Recycles dryer sheets
ugeauxgirl's Avatar
 
Join Date: Jan 2016
Location: Rural Alabama
Posts: 251
I have discussed some of that- just not in specific terms. I have "finance lessons" every now and again with my kids regarding assorted subjects. We have discussed living on 4% of your assets and I used a million dollars to illustrate the math- I just didn't tell him how much we have. And I doubt he has any idea how much we spend. Too early to disclose this much?
__________________
Projected retirement 2018-2020
ugeauxgirl is offline   Reply With Quote
Old 05-09-2016, 08:12 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2007
Posts: 7,527
Quote:
Originally Posted by ugeauxgirl View Post
I have discussed some of that- just not in specific terms. I have "finance lessons" every now and again with my kids regarding assorted subjects. We have discussed living on 4% of your assets and I used a million dollars to illustrate the math- I just didn't tell him how much we have. And I doubt he has any idea how much we spend. Too early to disclose this much?
I wouldn't keep it a secret but you don't have to provide monthly balance sheet updates either. I'd have to hide my spreadsheets and Personal Capital net worth screen to keep it a secret. Then again I publish my NW on my own blog so it's kind of out there already.
__________________
Retired in 2013 at age 33. Keeping busy reading, blogging, relaxing, gaming, and enjoying the outdoors with my wife and 3 kids (5, 11, and 12).
FUEGO is offline   Reply With Quote
Old 05-09-2016, 08:22 PM   #6
Thinks s/he gets paid by the post
 
Join Date: Nov 2011
Posts: 2,364
I would not encourage it, rather wait for him to ask, then direct the discussion on how he too needs to put away money for himself. Start a bank account for him if he does not yet have one, for example.
__________________
GrayHare is online now   Reply With Quote
Old 05-09-2016, 08:43 PM   #7
Full time employment: Posting here.
Aerides's Avatar
 
Join Date: Nov 2015
Posts: 695
I think since the cat is out of the bag, you'd do better to have more conversations - asking what HE already thinks and knows about money, and set him straight. Depending on his friends and what he reads, he may have very different ideas from reality.
__________________
Aerides is offline   Reply With Quote
Old 05-09-2016, 09:01 PM   #8
Thinks s/he gets paid by the post
Huston55's Avatar
 
Join Date: Jul 2011
Location: The Bay Area
Posts: 1,802
I think you should use it as an opportunity to teach your 12 yo financial concepts; work them into his daily life (i.e.: establish a family bank, wherein you keep his deposits from allowance, etc., pay him a very high % rate, and simultaneously teach him the power of compound interest, LBYM & savings.)

Regarding whether a 12 yo being able to multiply two numbers makes him engineering material, well, I think the jury's still out.
__________________
You may be whatever you resolve to be.
Huston55 is online now   Reply With Quote
Old 05-09-2016, 09:40 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 5,184
I think it's a good time to talk about how much things like cars, houses, groceries, medical, vacations, etc, cost to show that $1M doesn't mean you have money to do whatever you want.
__________________
RunningBum is offline   Reply With Quote
Old 05-09-2016, 10:00 PM   #10
Recycles dryer sheets
 
Join Date: May 2011
Location: Austin
Posts: 223
Each my kids got to spend $1M at their fourth grade, as a school project.

In another project, they made products, and spent a fixed amount of game bucks to buy the finished products from each other.

I believe financial literacy is part of Texas school curriculum.
__________________
HillCountry is offline   Reply With Quote
Old 05-10-2016, 05:59 AM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
braumeister's Avatar
 
Join Date: Feb 2010
Location: Northern Kentucky
Posts: 8,606
Wow, that is very encouraging, HillCountry. Hats off to your school system!
__________________
braumeister is online now   Reply With Quote
Old 05-10-2016, 06:13 AM   #12
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,113
Quote:
Originally Posted by HillCountry View Post
I believe financial literacy is part of Texas school curriculum.
This is news to me, and very welcome news at that.

Since everything I hear about public school education seems to be negative I guess I shouldn't be surprised I didn't hear anything about this:

Quote:
House Bill 5, passed by the State Legislature in 2013, requires Texas schools to offer personal financial literacy courses as part of their enrichment curriculum. At its April meeting, the State Board of Education approved making personal finance a required high school class, and mandated schools offer a career and technical education personal financial literacy course. The curriculum for those courses is currently under construction and will be implemented in the 201415 school year.
http://www.bizjournals.com/dallas/ne...financial.html

EDIT: And it looks like it may be showing positive results:

Quote:
Not surprisingly, data released this month from the the Financial Industry Regulatory Authority's Investor Education Foundation, which seeks to promote financial literacy, reveal high school students who are required to take personal finance courses have better average credit scores and lower debt delinquency rates as young adults.

The study found "notable improvements" in credit outcomes for 18- to 22-year-olds in three states Idaho, Georgia and Texas where financial education mandates are considered rigorous by the Council for Economic Education.
Quote:
Credit scores for those individuals in Georgia jumped nearly 11 points, or 1.8 percent, compared to average credit scores prior to the mandate, while young adults from Idaho increased their credit scores by 16 points, or 2.6 percent. Those in Texas raised their credit rating by 32 points, for a 5.2 percent gain.
US schools get failing grade for financial literacy education
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 05-10-2016, 07:45 AM   #13
Recycles dryer sheets
 
Join Date: Aug 2015
Location: Bee Cave, TX
Posts: 141
Quote:
Originally Posted by Aerides View Post
I think since the cat is out of the bag, you'd do better to have more conversations - asking what HE already thinks and knows about money, and set him straight. Depending on his friends and what he reads, he may have very different ideas from reality.
really agree with this.

also increase your umbrella insurance - he tells one friend at school or in the neighborhood and word travels fast. Never under-estimate the greed of others.
__________________
dirt_dobber is online now   Reply With Quote
Old 05-10-2016, 07:56 AM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
 
Join Date: Feb 2006
Location: Washington, DC
Posts: 8,644
I would discuss it further and focus on the issue of retirement accounts. I.e., the money is locked away in a "lock box" where it has to stay and build up to replace income many years from now. It doesn't mean we are "millionaires" in the sense that we can buy a bunch of junk now and it doesn't mean we are way richer than our peers - just better protected than people who don't or can't save for retirement.
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline   Reply With Quote
Old 05-10-2016, 08:50 AM   #15
Recycles dryer sheets
gromit's Avatar
 
Join Date: May 2010
Location: Atlanta
Posts: 154
I see good serious advice in the replies above, so I can't resist trying to add some less than serious ideas to keep the 12yo from getting too smug over the wealth.

1. Make sure the 12yo overhears your next "private discussion" on how you also have over a million dollars of debt and are keeping it secret. If anything gets out, this info will travel the fastest.
2. Let your 12yo know that he/she isn't a millionaire, but just gets to live with millionaires until out of school. After that, the rent to move back in and live with millionaires would be cost prohibitive.
3. Talk up the Bill Gates/Warren Buffett concept of giving away wealth, only stretch it to sound like giving away all of your wealth is a great idea.

__________________
gromit is offline   Reply With Quote
Old 05-10-2016, 09:03 AM   #16
Thinks s/he gets paid by the post
ExFlyBoy5's Avatar
 
Join Date: May 2013
Posts: 1,977
Quote:
Originally Posted by Aerides View Post
I think since the cat is out of the bag, you'd do better to have more conversations - asking what HE already thinks and knows about money, and set him straight. Depending on his friends and what he reads, he may have very different ideas from reality.
I would agree with this. I was thinking back to when I was 12 years old and what concepts I understood. I was already learning about delayed gratification (I *really* wanted an Atari 2600 but had to save for it) and at that time I was fascinated with weather (still am) and was making my own forecasts from "available data"...so I think around 12 years old is a very good time to start having pretty serious conversations about $. It won't be lost on him.
__________________
Founder and Head Lounger @ The Life of Leisure Institute
Retired in 2014 at the Ripe Age of 40.
ExFlyBoy5 is online now   Reply With Quote
Old 05-10-2016, 09:49 AM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
easysurfer's Avatar
 
Join Date: Jun 2008
Posts: 7,890
Might be a good teaching opportunity. At 12, him being curious and a future engineer type, how about telling him that the road to being a millionaire isn't so far fetched as it seems and the recommend to him some books or websites. Before long, he might be suggesting how to have several million .
__________________
Have you ever seen a headstone with these words
"If only I had spent more time at work" ... from "Busy Man" sung by Billy Ray Cyrus
easysurfer is online now   Reply With Quote
Old 05-10-2016, 12:20 PM   #18
Recycles dryer sheets
ugeauxgirl's Avatar
 
Join Date: Jan 2016
Location: Rural Alabama
Posts: 251
Quote:
Originally Posted by donheff View Post
I would discuss it further and focus on the issue of retirement accounts. I.e., the money is locked away in a "lock box" where it has to stay and build up to replace income many years from now. It doesn't mean we are "millionaires" in the sense that we can buy a bunch of junk now and it doesn't mean we are way richer than our peers - just better protected than people who don't or can't save for retirement.
This is an excellent point. I will do that. Thanks all for your suggestions- and I have explained the concept of "its our money- you just get to live here." Not long ago my grandfather died and I pointed out to son that my dad who is 70 just got an inheritance. If he wanted to enjoy spending money before HE is 70, he should expect to earn his own!
__________________
Projected retirement 2018-2020
ugeauxgirl is offline   Reply With Quote
Old 05-10-2016, 12:46 PM   #19
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,471
Congrats on your child's awareness, math ability, and ability to speak up and ask such a question! That's great.
__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is offline   Reply With Quote
Old 05-10-2016, 03:06 PM   #20
Thinks s/he gets paid by the post
DrRoy's Avatar
 
Join Date: Dec 2015
Location: Michigan
Posts: 1,723
My kids are in their late 20's and I have never shared our NW with them. They know we have investments and will retire soon, and that money has never been a problem in the family. They are both just now finishing college after never being very good students earlier or having a lot of ambition. I have some concern that if they knew what they might inherit some day they might not develop the mindset to save much for themselves. One son has saved from his income but the other has very little excess. Still, they both have been self-sufficient for 5+ years. I expect to tell them more in the future but do ont know when the time is right.
__________________

__________________
"The mountains are calling, and I must go." John Muir
DrRoy is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Net Worth by Age Anon FIRE and Money 18 09-14-2004 05:34 PM
Net worth sunrunner4@hotmail.com Life after FIRE 23 08-11-2004 12:23 PM
Updated Net Worth Figures - How Do You Rate? intercst Other topics 0 01-22-2003 07:00 PM

 

 
All times are GMT -6. The time now is 12:16 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.