Who knows your $hit?

[Big_Hitter]

3 people know my &#&# - DW, my attorney and my FA

 

[youbet]

he says snarky things about my presumed economic position and I would just like to say something to shut him up. But I never have

Very wise. The ability to let inappropriate comments pass without response or defense is an extremely beneficial attribute to have Gumby. Congrats!

 

[nancyfrank232]

I believe that I have shared our financial situation with everyone here who has any interest. In my 84th year, I share actual dollars both of assets and expenses with all of my chidren, as well as the manager of our CCRC, as a factor providing our access to further help as needed.
Living in an era where LBYM was second nature, we never measured ourselves agaist our friends and neighbors, With four children and attendant expenses, our material goods... houses, cars and social conections were always in line with our neighborhod.
Retirement at age 53 was not a trauma, and we lived what we considered the good life in Illinois and Florida.
We managed to squeeze in 20 years of army and ready reserves, along with 31 years of retirment

Highest salary in 1984 was 48K, inflation adjusted to about $104 today.

With the exception of some I/bonds, along with long term care policies, a small annuity policy and a few small stocks we have no Pension or legacies.

Social Security along with the above mentioned provides about $52,000/yr in income to offset about $39,000 in expenses.

We have no debt, and no ongoing rentals of property.

So... I guess you could say we share our stuff with others. So far, no problems that I can see.

We live in the nicest, friendliest, cleanest, low traffic and politecommunitires in Illinois.

No secrets.

Congrats. That’s amazing!

Most people’s fears are way overblown

 

[ExFlyBoy5]

Did I read that right? A banker who can't be bothered to accumulate dough? What comes closer to being purely The Business of Money than banking? And, surely anybody who is in the Business of Money would be energetically building his own giant pile of it? But no...

It's incongruous, like a physician who smokes. Or a vegan who runs a cattle ranch. Or a woman publishing a magazine that exploits women (BTW, happy birthday, Christie Hefner!) However, while it's a stunning bit of data, it's also not surprising. The planet is full of folks who ought to know better not letting their expertise influence their own decision-making.

Reminds me of a friend who has an ex that is a VP for a Bank of America. She has been working there for more than 20 years and to hear it, has zero financial sense and debt up to her eyeballs. Or DW's former co-workers husband who is a neurosurgeon. He used to come over to the occasional social event we would have at the house...but he spend well over 3/4 of the time sitting outside smoking. Oh, and he was at least 100 pounds overweight. So...you just never know.

 

[ExFlyBoy5]

One last thought on sharing with the kids. Although DW and I don't have kids, I think I would involve them in sharing the knowledge we have. My Mom was very secretive about money (used to hide bank statements in the bottom of the clothes hamper!) but my Dad was very, VERY open about it. His openness was instrumental in my success in saving and not getting involved with debt. Had I not known, I would have thought that they were simply "getting along" with the SS they got as they aged since he was "but a simple man" and undoubtedly today, I would be doing my best at keeping up with the neighbors.

 

[athena53]

His openness was instrumental in my success in saving and not getting involved with debt. Had I not known, I would have thought that they were simply "getting along" with the SS they got as they aged since he was "but a simple man" and undoubtedly today, I would be doing my best at keeping up with the neighbors.

I agree on the sharing and I learned from my parents as well although they never shared numbers till I was an adult. I heard plenty of times "We can't do X because we're saving for your college educations". X was always some "want"- a fancier car, taking a plane somewhere. The living room and dining room of the house my parents had built when I was a teenager went empty for a couple of years till they had saved up the cash to buy the really good furniture they wanted. (In the meantime we used card tables and chairs for family gatherings.) And they DID pay for our college degrees- mine and that of my sister and 3 brothers!

With DS and DDIL, I want them to know that my extravagant travel habits in retirement do not mean I'll end up penniless on their doorstep someday, and that my main priority is not outliving my savings, even if I need LTC. They may need to help her parents- good, hard-working people but of modest means. I want them to know that they don't need to worry about me. I also keep them apprised of what I've put in the kids' 529 plans.

 

[nancyfrank232]

I heard plenty of times "We can't do X because we're saving for your college educations"

I always hated this as a child

I make it a point not to tell my child that “we can’t do X” or “we can’t afford Y”

My parents always said that they “can’t”, and I never liked that mindset. It always felt closed and gives permission to shut down any further thinking

My child now asks, “How can we do X?” and this naturally leads into a more constructive discussion about what effort is needed to achieve an outcome

Before that I had to train my child to understand that if they ask a closed question with a “yes/no” answer, the answer will always be “no”. This made the transition to “How” more seamless

After this, we trained next-level objections that my child should expect from parents. Such as “let me think about it”, “there is nothing we can do to make X happen”, or “ask mom/dad”, etc. and how to handle those

Children learn fast and our child is smooth with these transitions. Far beyond where I was at that age. I only wish my parents passed the same knowledge on how to manage/control a conversation, down to me

My child’s friends and their parents have meltdowns and incessant begging because the child hasn’t learned any recourse to a simple “no”

 

[brett]

I believe that there exists a huge chasm between those who ask others, experts or whomever, for retirement advice and those who actually follow it in whole or in part.

I have a SIL that declared bankruptcy in her early twenties. She apparently did not take any learning from that experience.

Now in her early sixties she is in not much better shape. Her priority is spending and concern about what others may think of her. Saving, conserving, preparing for retirement has always been a stated goal. But like so many others there was no imperative to actually follow through with some basic actions. Instead it was life as usual...spend, spend, spend. Giving her financial advice would have been akin to spitting in the wind. So why on earth bother?

My spouse used to feel sorry for her. Not now, she just shakes her head at the spending.

 

[Gumby]

. . . My child’s friends and their parents have meltdowns and incessant begging because the child hasn’t learned any recourse to a simple “no”

Yours is one way; there are others. My parents simply cured us of the desire to ask. The answer was always "no". Not "no because . . ." Simply "no". And the "no" was often accompanied by a smack for having the effrontery to ask. Any complaint or second or alternative request virtually guaranteed a beating. So we stopped asking altogether. For anything.

I'd like to think I may have tried something like you if we ever had children, because I don't think my parents' way was particularly helpful to raising well adjusted children. I will say one thing in their favor, though. We all became quite independent. We each left home as soon as we graduated from high school and never went back.

 

[athena53]

I always hated this as a child

I make it a point not to tell my child that “we can’t do X” or “we can’t afford Y”

My parents always said that they “can’t”, and I never liked that mindset. It always felt closed and gives permission to shut down any further thinking

<snip>

My child’s friends and their parents have meltdowns and incessant begging because the child hasn’t learned any recourse to a simple “no”

I saw it as my parents setting priorities. I was free to set other priorities when it was my money!

When DS was little we used to fly to Myrtle Beach from NJ a couple of times a year to see my parents. Having once flown to another gathering in Business Class using my then-husband's FF miles, he asked why we couldn't go to Myrtle Beach in Business Class. I explained that the extra cost of Business Class was about what we'd spent on a trip to Montreal a few months before- flight (PeoplExpress!), meals, a few nights in a good hotel. He understood the trade-off and never asked again. He's now more frugal than I am.

And I suspect that if your friends' kids whine and beg and stage meltdowns when told "no", it's because they've learned that it works and the parents cave in. You have to teach them very early that that will NOT work.

 

[Lsbcal]

Just got off the phone after 1 hour with our son. He is asking good questions now at 35 and actually listening to his old Dad. I tell him things like the best thing he has going for him is time in the market (compound interest) and AA is your most important decision.

I've given him some broad based funds to invest in at Vanguard. Nothing I am not doing myself. I try to be humble having seen many market environments and made my share of mistakes.

 

[ncbill]

Stealth mode all the way...I've seen other relatives living the conspicuous consumption lifestyle targeted by the scum of the earth.

 

[Souschef]

Stealth mode all the way...I've seen other relatives living the conspicuous consumption lifestyle targeted by the scum of the earth.

+1 here also. When we showed up with 2 new cars last year, if anyone commented, I just mumbled something about 2 car payments.

 

[nancyfrank232]

And I suspect that if your friends' kids whine and beg and stage meltdowns when told "no", it's because they've learned that it works and the parents cave in. You have to teach them very early that that will NOT work.

+ 1 I agree

From what I’ve observed, parents have either trained their kids to beg by caving or use the authoritarian method of shutting off opportunity for discussion/negotiation with “no”

 

[Cayman]

You all know more than most about our finances. We share our budget (annual spend amount) and NW info with DD about once per year.

She knows we intend to pass it all to her (we have a low annual spend rate), and she knows she'd better work and save herself because stuff happens, and our stash could be gone before she inherits (unlikely, but possible). We figure she's ahead knowing the score, and prefer to be transparent with her. No games, no secrets with her.

 

[Henman004]

I didn't read through all 140+ comments, but I get the idea that the vast majority of people here don't share their numbers. I do share mine, which doesn't seem to be the norm, but I'll also tall about why.

For context: I've been in the military for 16 years. I joined right out of high school, at 18, and started investing by 20. I was able to put away about $8K that first year, and that was pretty much all I had to my name. Today, I am able to put away over $20K per year, and I've grown my portfolio to over $360K.

I teach a Personal Finance and Basic Investing course maybe 4-6 times per year. It's almost always very young service members, and since they are at an impressionable age, it's a great opportunity to get them started on a successful financial path. When I teach the course, I always include my numbers going all the way back to 2006. It's one thing to show these young folks the theory of compound interest with some made up numbers and averages. It's another thing to show them what growth over time really looks like, and how they need to maintain composure during hard times. They get see the 52% unrealized loss I lived through during the Great Recession. I think it really helps put things into perspective for them. I talk about how easy it to actually invest. I explain that I use index mutual funds, rebalance quarterly, and spend about 4 hour per year doing actual work on my portfolio. These methods seem to inspire the and make them want to adopt these good habits. Many of them end up talking to me one-on-one after the fact.

I actually think not talking about money is one of the great problems we have in our society. We are taught from a young age to be tight-lipped about money. We carry that lesson into adulthood and we pass it on to our children. I remember growing up and not knowing our household income, not understanding credit, being told to never discuss your salary. I think this culture of never discussing money is to the detriment of our ability and other's ability to learn. This may have turned more into a rant, rather than a comment. I do appreciate the other side of this argument, and I am happy to discuss it further.

 

[nancyfrank232]

^ +1

ignorance is the best way to encourage poverty

 

[Gumby]

...

For context: I've been in the military for 16 years....

I teach a Personal Finance and Basic Investing course maybe 4-6 times per year. It's almost always very young service members, and since they are at an impressionable age, it's a great opportunity to get them started on a successful financial path. When I teach the course, I always include my numbers going all the way back to 2006. It's one thing to show these young folks the theory of compound interest with some made up numbers and averages. It's another thing to show them what growth over time really looks like, and how they need to maintain composure during hard times. They get see the 52% unrealized loss I lived through during the Great Recession. I think it really helps put things into perspective for them. I talk about how easy it to actually invest. I explain that I use index mutual funds, rebalance quarterly, and spend about 4 hour per year doing actual work on my portfolio. These methods seem to inspire the and make them want to adopt these good habits. Many of them end up talking to me one-on-one after the fact....

I appreciate your doing this. I recall from my time in the military that financial ignorance is rampant and causes substantial distress. If you can just get them to stay out of debt, let alone save and invest, you have done a great service to them and your country.

One thing to consider is that you are very senior to them. They do not view themselves as being in the same universe as you and they are more likely to be inspired than jealous when you share your actual numbers. Your colleagues of equal or higher rank, however, are likely to feel envy and perhaps even anger when they see that you have been prudent and wise with your money and they have not.

 

[brett]

Met with our financial adviser yesterday afternoon.

Including DW, that makes a total of three people who are aware of our financial situation.

That is how we intend to keep it for present time. There is no need for anyone else to know-not even our children.

 

[FireFool]

So, here is another area I struggle. I could start gifting my kids (4) every year X$, but then I feel like they will start expecting Papa Bear donations every year effectively stifling their drive which makes them stronger (what it did for me). I have chosen to be very selective in how I "fix" kid financial issues (i.e. in their eyes loans, special 1 time gifts). IMO, human nature takes over and entitlement gland starts pumping. I would rather them get a big lump when they are 50+ something assuming they have adopted the same principles.

Everyone has to do what feels right to themselves and their situation, but my view on this is the polar opposite. I've concluded that that my wife and I have more than we'll be able to/care to spend in our lifetimes. We have started gifting more to our children figuring that they can better use it now than late in their life. Now this is greatly influenced by their present situation in life being that all three have what I'm guessing as 6 figure salaries and lead reasonable lives for their incomes. I have no doubt that they could support themselves in a good lifestyle while still saving for their own retirements. None of them have identifiable vices like gambling or drugs that would be further fueled by additional funds. My thought is that instead of them getting huge inheritances after both my wife and I die, which could conceivably be when they themselves are in their 60's or 70's - 40 years from now, that we set them up where they have more confidence/funds to retire early themselves. I might have a completely different perspective if they had drug problems, marriage problems or were financially irresponsible. I truly am blessed to be retired early with extra funds and more importantly children I can be proud of.

 

[FireFool]

A funny thing happened to me along those lines. A neighbor said, "Do you mind if I ask how much you paid for your house?". I said "Yes", and that was the end of that conversation.

It's public record, at least in the state I live in. Zillow.com comes close enough throughout the U.S. to not alienate a new neighbor over a question like that. I don't tell people how much I have in totoal assets, but something like this I categorize as an innocuous question.

 

[rayvt]

So, here is another area I struggle. I could start gifting my kids (4) every year X$, but then I feel like they will start expecting Papa Bear donations every year effectively stifling their drive

No lie.

We had been giving each of ours $1000 a year, every July 4th. The one year we got busy and didn't set the checks.

Daughter in law called my wife and asked "where is it?"
"We counted on that money in our budget and now we are short because we didn't get your check, so please send it ASAP."

Needless to say, that put the end to that.

Now -- when/if we send them money-- it is an oddball amount at a random date. A date that is NOT a holiday, and is never the same date.

 

[The Cosmic Avenger]

It's public record, at least in the state I live in. Zillow.com comes close enough throughout the U.S. to not alienate a new neighbor over a question like that. I don't tell people how much I have in totoal assets, but something like this I categorize as an innocuous question.

In our state not only is purchase price and property ownership public record, but if you know how you can also look up mortgage contracts, deeds, liens, and property taxes. Still, if I didn't like the neighbor, I might have the same answer as Souschef; let them do the legwork if they know how, but if I'm not feeling kindly towards them, why would I give out that information voluntarily?

 

[The Cosmic Avenger]

No lie.

We had been giving each of ours $1000 a year, every July 4th. The one year we got busy and didn't set the checks.

Daughter in law called my wife and asked "where is it?"
"We counted on that money in our budget and now we are short because we didn't get your check, so please send it ASAP."

Needless to say, that put the end to that.

Now -- when/if we send them money-- it is an oddball amount at a random date. A date that is NOT a holiday, and is never the same date.

They're lucky to get that...I don't think I would be as nice in your shoes! We never expected anything from my parents, although after a while we considered it like a bonus at w*rk; something we planned for, but did not plan on.

 

[Nords]

So, I wrestle with this... like most on this site, I have been a planner starting with meager means and just applying certain principles/planning. While I have been fortunate to make a good living, I have applied the same principles of saving/investing and managing the the creep (relatively speaking). Now, at 55, as I plan the next chapter, I find an itch to try and help/advise friends/family who are struggling with these simple principles that have produced way above my expectations. While not always the case with everyone, I struggle with letting people "behind the curtain" to see my numbers despite the fact it might have a real positive impact on them in terms of saying "hey, you can do this too", effectively providing credibility to any guidance. Having lived significantly a life of LBYMs, I have always stayed quiet as I believe people (many friends/family) would all of a sudden become judgmental if they knew my number (despite the fact that I could help illustrate they too could do it too)... "let him pick up the check, no big deal for him, he must have inherited $$'. I have defaulted to staying silent and letting them think what they want.
[...]
None the less, in one respect, I think IF we did let more behind the curtain we could effectively inspire others with our story. We share much on this site, but there is a whole 80% of the world out there that just does not get these principles that come easy to us that we can help. Just curious what your experience has been and how deliberate you are in sharing specifics with your friends/kids?

I’d suggest that if family & close friends can’t handle the personal details of a financial discussion, then there are more problems with the relationship than with financial details. That’s how it’s been with some of my (former) close friends and how it is with some of my relatives.

I’ve helped people reach financial independence for well over a decade, and I’ve learned that we have to want to change. They have to be seeking inspiration or understanding. If people don’t ask then they’re not ready to change. We’re good at teaching, but that only works if the students are ready to learn.

Our neighbors all know that we’re FI and that I’ve written books and blog posts... but most of them don’t see (or don’t care) how that’s relevant to their finances. I’ve given a second copy of my first book to one particular neighbor because (when they asked again) it was clear that they’ve forgotten that they’ve asked for a copy before. Other neighbors not only enjoy the book and ask questions but borrow our other books by FI authors.

Other than DW, I have defaulted to avoiding discussing specific with my adult kids. They will most likely have a very significant check coming their way later in life when the dirt nap hits.

On the receiving side, however, I find it very frustrating that my aging in-laws won't discuss finances with us at all. They are both 85 and starting to slow down. Any offer to help them with their bills and finances are met with solid rejection.

As Dalmore says, avoiding the discussion could backfire.

The inheritance part is straightforward (because you’re dead), but will they be ready to handle huge sums? Have they had a chance to practice with six figures before they have to deal with seven figures? The bigger number is mathematically another order of magnitude (an emotional challenge) even though the process is similar (financially & logically).

Disability is more problematic. I really resented having to figure out my father’s finances when Alzheimer’s took his cognition, and I had to handle them for a protracted legal petition (conservatorship) followed by six years of supervision from the probate court. It would’ve been so much easier with a little estate planning and the appropriate powers of attorney. He knew I’m FI but he never thought that he’d need any help with the mechanics of managing his finances.

Ironically his father did exactly the same thing to him in the 1980s, and Dad swore many times during the next 25 years that he’d never do the same to “us boys”... until he did.

So, here is another area I struggle. I could start gifting my kids (4) every year X$, but then I feel like they will start expecting Papa Bear donations every year effectively stifling their drive which makes them stronger (what it did for me). I have chosen to be very selective in how I "fix" kid financial issues (i.e. in their eyes loans, special 1 time gifts). IMO, human nature takes over and entitlement gland starts pumping. I would rather them get a big lump when they are 50+ something assuming they have adopted the same principles.

We've got pretty much the opposite approach from many of you. To each their own of course.
In terms of family, since we've built for multi-generational wealth, we went fully transparent with our kids when they became young adults. They need to understand the scope and scale and they now do. They will be more tightly linked in as we go and they continue to full adult-hood. I expect one of them to take an active role.

We start this discussion with our daughter & son-in-law every year:
“Should we gift you again, or are we causing affluenza? Is it stunting your growth?”
They’re earning and saving and investing for their own FI, and they don’t need our help. Having the discussion (and giving them the choice) helps us all sort through the questions & issues.

We frame it as “You’re getting a little of your inheritance every year, while it has a bigger impact on your life and while we’re all still around to talk about it. You can figure out how to manage your money (with our help) and someday you may have to help us manage our money too.”

We’ve had some pushback: “Are you guys sure you won’t need that money for yourselves? Wouldn’t you rather spend it on travel or give it to charity?” That’s led to even more useful discussions which helped everyone understand our accounts, our asset allocation, and where the compounding is taking us.

Yet they’re still reaching a 40% savings rate on their own gross income, without our gifting.

I'm quite careful to provide percentages rather than amounts, though I suspect if someone combed through all my 23,259 posts over the last 9 years that they might be able to get some ideas.

By virtue of my prior business situation and early business exit, hundreds of contemporaries know I'm well above average and likely "rich" in terms of numbers. We are very quiet with zero flash, but there are few secrets at this point except for actual detailed dollar amounts. It's obvious we have a lot and know how to get it and keep it.
We also live in a place with a lot of actual high net worth people, not to mention hundreds of thousands of households with high incomes and challenges getting ahead and meeting their goals. As a result, I get asked a lot and help a lot of people with their strategies and specific questions; they don't have to guess whether or not I know what I'm doing. I do.

I'm more than willing to share numbers and advice with our heirs (my sister and her kids). Outside of them, I become very vague. I am more than happy to give advice when asked. They only recently learned we were planning to retire soon.

I didn't read through all 140+ comments, but I get the idea that the vast majority of people here don't share their numbers. I do share mine, which doesn't seem to be the norm, but I'll also talk about why.
For context: I've been in the military for 16 years. I joined right out of high school, at 18, and started investing by 20. I was able to put away about $8K that first year, and that was pretty much all I had to my name. Today, I am able to put away over $20K per year, and I've grown my portfolio to over $360K.
I teach a Personal Finance and Basic Investing course maybe 4-6 times per year. It's almost always very young service members, and since they are at an impressionable age, it's a great opportunity to get them started on a successful financial path. When I teach the course, I always include my numbers going all the way back to 2006. It's one thing to show these young folks the theory of compound interest with some made up numbers and averages. It's another thing to show them what growth over time really looks like, and how they need to maintain composure during hard times. They get see the 52% unrealized loss I lived through during the Great Recession. I think it really helps put things into perspective for them. I talk about how easy it to actually invest. I explain that I use index mutual funds, rebalance quarterly, and spend about 4 hour per year doing actual work on my portfolio. These methods seem to inspire the and make them want to adopt these good habits. Many of them end up talking to me one-on-one after the fact.
I actually think not talking about money is one of the great problems we have in our society. We are taught from a young age to be tight-lipped about money. We carry that lesson into adulthood and we pass it on to our children. I remember growing up and not knowing our household income, not understanding credit, being told to never discuss your salary. I think this culture of never discussing money is to the detriment of our ability and other's ability to learn. This may have turned more into a rant, rather than a comment. I do appreciate the other side of this argument, and I am happy to discuss it further.

We take a dual approach. We’ve totally opened the books for our daughter (the co-trustee and executrix of our estate planning) and son-in-law (contingency trustee/executor). She can see all of our accounts with her own login, and she’s watching. When we mentioned that we’d bought a replacement vehicle, she said she’d seen the money moving around and wondered what was happening in our lives.

She could also technically abscond with our assets and have a heck of a party lifestyle (or give it all to a cult), but... if that happens then my spouse and I have enough pension income (and later Social Security) to rebuild our lives. So far we’ve seen the opposite effect: she’s behaving as a fiduciary and she’s much less stressed over the possibility that she’ll be ambushed by our disability.

I’d much rather equip her with the knowledge and tools to properly manage our finances (as I wish I’d been equipped) instead of keeping her ignorant out of worry that she’d screw it up.

I know a few members of this forum who’ve uncloaked IRL and share their numbers very publicly. (Volunteer yourselves if you want-- I won’t reveal your identity.) Maybe that works for some of their audience, although nothing seems to work for the very vocal Yahoo! Finance commenters.

There’s a theory that “Comparison is the thief of joy.” People at the start of their FI journey can be discouraged by seeing your net worth at the FI finish line, and they think “I’ll never be able to accumulate that much.” Because of that, with almost all of my military audience, I stick to percentages. People can see the math and the spreadsheet (indexed to 100%) and draw their own conclusions about how well the 4% SWR works through recessions.

When I’m at a financial conference (with hundreds of my fellow money nerds) or a small gathering like CampFI, then I’ll share our actual numbers if people ask. They understand the comparison issue, and they’re at the meetup to learn more. They’re not going to be intimidated or discouraged-- instead they’re inspired and even more motivated. Sharing our actual numbers helps them give themselves permission to pursue FI and quit their jobs too, and it also convinces the occasional skeptical spouse.