Dad are we rich?

[dvalley]

How would you answer that? My 12yo asked me the other day on the way home from her school. I didn't know quite how to answer it on the spot so I said "we're neither rich nor poor but I feel we're closer to the rich side because we live comfortably and there's nothing we need that we can't afford to buy and we should feel lucky and grateful for that. Of course, there will always be things that we couldn't afford but those things aren't needed for a happy life".

For some background most of her friends sport the latest smart phones, get dropped off to school in fancy cars and live in pretty expensive houses. Many of these folks are genuinely well off but I'm sure a quite a lot of them are trying to keep up with the joneses.

 

[MBAustin]

This is a teachable moment on all kinds of levels:

- "rich" can mean lots more than how much money one has

- many people spend money they do not have (credit card debt)

- don't assess people by what they have, look at what they do/how they behave

- saved/invested money is just as important to a happy life as spent money

You get the idea. I think you did a good job for a first time "out of the blue" conversation, but that's opened the door for more conversations about money and life that will be a huge blessing to your daughter as she grows up.

 

[timo2]

How would you answer that? My 12yo asked me the other day on the way home from her school. I didn't know quite how to answer it on the spot so I said "we're neither rich nor poor but I feel we're closer to the rich side because we live comfortably and there's nothing we need that we can't afford to buy and we should feel lucky and grateful for that. Of course, there will always be things that we couldn't afford but those things aren't needed for a happy life".

.

in the current vernacular, that would be called a 'crucial conversation'. They usually do appear unexpected like that.

 

[LOL!]

Simple answer:

"Yes, we are rich."

"Next question."

 

[Fedup]

I would say we are far from rich, but we are comfortable.

 

[candrew]

- don't assess people by what they have, look at what they do/how they behave

+1

 

[Car-Guy]

How would you answer that? My 12yo asked me the other day on the way home from her school. I didn't know quite how to answer it on the spot so I said "we're neither rich nor poor but I feel we're closer to the rich side because we live comfortably and there's nothing we need that we can't afford to buy and we should feel lucky and grateful for that. Of course, there will always be things that we couldn't afford but those things aren't needed for a happy life".

At 12, I think she was looking for a yes or no.

 

[Whisper66]

I had great fun with our kids trying to get them to expand their thinking through our discussions. If one of mine at that age had asked if we were rich, I would have asked them to define what they mean by rich. Then had a good conversation would follow. Kids are great fun to watch learn and grow.

 

[ExFlyBoy5]

I certainly agree w/ Austin on this. Rich is a term I try NOT to associate with money. For me, it is much more inclusive. It's freedom, it's health, it's good quality of life. To simply define "rich" in strictly monetary terms is not a great way to explain it...at least as far as I am concerned.

*IF* I were to define "rich" in monetary appearances *ONLY* where I live, then it would appear to outsiders that I was certainly *not* rich. My home is significantly older than the McMansions around me, our cars are not the latest and greatest (and aren't German), my cell phone is a bottom of the line phone I bought 3 years ago...well, you get the picture. BUT...I am retired, and while my neighbors get up bright and early in the morning to shuffle off to the salt mine, I sit on the deck watching the birds and enjoying a great cup of coffee. So, who is *really* the rich one?

At 12, I think she was looking for a yes or no.

Edit: I would say a "yes" or "no" answer for a 12 yo is inappropriate. 10? Perhaps. But 12? Give the kid credit for being smart. I did some quick math and realized that when I was 12, I was already in "business" for myself washing cars for $2 at a local apartment complex (this was actually my second business, the first was taking my red wagon around collect bags of garbage for 25 cents a piece). My great parents had already started teaching me about $$$ and hardwork.

 

[Llep]

I would say we are far from rich, but we are comfortable.

We're comfortable was the answer I got from my mom as a little boy when I asked her if we were poor!

 

[jollystomper]

I had great fun with our kids trying to get them to expand their thinking through our discussions. If one of mine at that age had asked if we were rich, I would have asked them to define what they mean by rich. Then had a good conversation would follow. Kids are great fun to watch learn and grow.

+1

I learned, whenever my kids asked me a question, to first answer with a question of my own, to understand their context.

One of my kids was 18 when he asked me that, I questioned him why he thought we were rich, and his interesting answer was "because you never seem worried about money." That led to a great discussion about observation, planning, sacrifices, and the difference between being rich and being content.

 

[Texas Proud]

Something similar to others...


But I would first ask 'What do you mean by rich?'......


Since that word means something different to every person I would want to know what she was thinking...

 

[fritz]

I'm 65, youngest daughter is 36. She asked me that question after I had emailed her and her sister written instructions on what/how to handle our finances when we're no longer able or gone. It is all set up to transfer to them, but the instructions tell them the what, where and why.

Chuckled and told her no (we've always followed the LBYMs scenario). DW and I have agreed that when one of us goes, the other will inform them of our finances (get them both actively involved). We will also inform them when (hopefully) either of us recognizes the other is cognitively impaired and can no longer handle finances.

They are both good with money (also follow the LBYMs lifestyle) and understand investments. They learned from us. They know we live on our investments (no pensions and don't care for annuities). They know we're comfortable, but now how comfortable. We'd like to keep it that way, as wealth can change the way people think of you. We've already somewhat experienced this with family/friends when we quietly retired early at 58/57 and they eventually found out.

 

[REWahoo]

When one of my kids asked that question my response was, "No, your mom and I are comfortable. You and your sister are poor."

 

[JG in Hangzhou]

Interesting. My daughter has this on her mind a lot and has recently gotten serious about not wasting money. I think it is because living in China, we rent in an extremely high income area so she goes to the best school. Our neighbors are excessively rich, modest apartments sell for >$1M here now. We are semi-retired, and live within a modest $50K/year budget which allows us to live quite well here, outside of purchasing real estate, but her Chinese classmates often brag about how much money their parents have. On the contrary, my wife and I talk about whether we really need things or not, rather than wasting money. Our frugality has led our daughter to think we might be poor, despite our taking frequent international vacations, and sending her to summer camps.
My answer to her used to be that I don't think anyone thinks that they are rich.

But actually, here in China, some people might, as the gap between them and the rest is quite visible.

Anyways, I'm curious how much money you need these days for your neighbors to think you are rich and retired early, versus lazy and out of work...

 

[FUEGO]

+1 our oldest daughter attends a pretty well-to-do school. I told her to keep the fact that her phone cost $30 a secret from those sporting the latest $700+ iphones/Samsungs. Also some interesting conversations surrounding unlimited text plans that her friends have versus the 500 free texts she gets with her plan (but we covered how to text for free using a free app).

We're pretty open about money so I don't think our kids are in the dark as to our financial situation. We drive an older car versus the typical classmate. We live in a lower income area than most classmates. So some of her classmates assume she's poor.

Then her friends hear about us "summering in Europe" for 9 weeks and assume it costs $100,000 (based on misleading tween tv shows where middle class people visit Paris for a month and stay in five star hotel suites with a butler) and friends think we're filthy rich. We're only spending $10,000 which is what many families of five would spend on a long weekend in Paris. And we aren't visiting Paris while in Europe.

Same thing happens when they find out both of her parents are retired and in their 30's (some other parents are undoubtedly retired too, but at a more normal late 50's or in their 60's). They assume we're filthy rich mega-millionaires because how else could you afford to live without huge heaps of wealth.

Interesting conversations and helpful in steering them toward responsible money management since the kids see the lifestyle advantages of having more money than you need.

 

[Bestwifeever]

I would definitely ask why they wanted to know. It probably is because their friends are sharing financial information about their parents, but it may be because little pitchers hear mom and dad talking about it (and the kid may then be sharing that info with their friends).

When one of my kids asked that question my response was, "No, your mom and I are comfortable. You and your sister are poor."

I said something along these lines to DD back in the day about one of her friends who had been bragging about the two vacation homes her family owned, that they were actually her friend's parents' homes, because the parents worked very hard.

Someone is always better off or worse off than we are.

 

[dvalley]

OP here - Sorry left out the details, at 12 like most kids her age she means rich=money. I did ask what prompted that question and her response was 'I dunno just wondering if we are considered rich or not'. I told her health, family and happiness is more important than just money. The money is just the means to live a happy, fulfilling, relaxed and a stress free life but I think by that time she might be regretting asking that question because the answer was almost as long as the ride home lol.

 

[travelover]

I get the same question from my wife. (Except she doesn't call me "Dad")

 

[FUEGO]

OP here - Sorry left out the details, at 12 like most kids her age she means rich=money. I did ask what prompted that question and her response was 'I dunno just wondering if we are considered rich or not'. I told her health, family and happiness is more important than just money. The money is just the means to live a happy, fulfilling, relaxed and a stress free life but I think by that time she might be regretting asking that question because the answer was almost as long as the ride home lol.

They might just be studying socioeconomics in social studies or reading about a rich character in English class which prompted discussions among peers or questions for her.


Another funny "we're rich!" moment - we were walking to school with our 9 and 11 year olds (last year) and one of them mentioned that we live in a huge house. It's 1800 square feet - well below average for new construction in this city.

I chuckled at the thought that they think we live in a mansion. I guess many of their friends live in similar size houses or smaller, with one friend living in a single wide trailer. Another friend lived in a rented room with her mom and grandma (and the other half of the house was rented by meth cookers it turns out...). So it's all relative. I guess our 4 BR 2.5 BA 1800 square foot house does seem like a mansion to them - we have multiple rooms we rarely use.

 

[W2R]

When I was a kid, I heard the term "nouveau riche" for the first time when my father used it about someone, in a very disparaging sense. Knowing that my grandparents were poorer than dirt poor, and that my father had done well as a surgeon, I asked him if we too were nouveau riche.

His answer was that while we were definitely nouveau, we sure weren't riche.

 

[Texas Proud]

OP here - Sorry left out the details, at 12 like most kids her age she means rich=money. I did ask what prompted that question and her response was 'I dunno just wondering if we are considered rich or not'. I told her health, family and happiness is more important than just money. The money is just the means to live a happy, fulfilling, relaxed and a stress free life but I think by that time she might be regretting asking that question because the answer was almost as long as the ride home lol.

Yes, I was thinking money with a 12YO.... but, I want to know how MUCH money they think is rich... just curiosity on my part...


When things like this come up, I say "no" as I do not think I am rich... AND I act like I am not (which, BTW, I am not)

 

[Car-Guy]

Yes, I was thinking money with a 12YO.... but, I want to know how MUCH money they think is rich... just curiosity on my part...

It's hard enough to get a straight answer or agreement on that question even with all the [-]old geezer's[/-] (sorry, experienced economist) on this forum.

 

[dvalley]

Yes, I was thinking money with a 12YO.... but, I want to know how MUCH money they think is rich... just curiosity on my part...

She doesn't quite know yet how much money is considered rich. I know this because she often asks me 'is that a lot of money?' whenever someone says something costs x amount

Edit: ^ she knows for example $1000 is more than $100 but she doesn't yet know that $50k for an avg car is a lot of money or when a house in Beverly Hills is $1.5M that's dirt cheap.

 

[2017ish]

...

Anyways, I'm curious how much money you need these days for your neighbors to think you are rich and retired early, versus lazy and out of work...

All depends upon your neighbors. Our one-lane country street has 8 mailboxes. 5 of them belong to doublewide trailers (some nice, some not; all on an acre or more). 2 to unrelated families who own construction companies and 80-100 acres each on our road. The last to a doctor/lawyer couple with 25 acres (us). When they learn of our retirement, some of our neighbors will almost certainly see us as rich, if they don't already. The other two will just wonder why one would want to quit making money and running up the score.

Basically, we don't worry about it. (If we did, I suspect we'd be living in a different neighborhood?)