Do You Hide Your Financial Success From Others?

[RetiredHappy]

Maybe this should be a separate thread (or already has been in the past. If so I apologize) but how much and when do you tell your grown kids about your financial situation and how do you broach this topic with them?

This is something I've been thinking about a lot and have read some articles about it but I'm still not sure how best to do it. How much detail do we go into? How do you walk the line between giving them some information or giving them enough info for "calculating" what they will inherit.
I mean, to the original topic of this thread, our kids have a pretty good idea of how comfortable we are but don't know the details. I consider them a different category than letting friends or other family members know about our financial situation. Any thoughts or direction?
Thanks,

I only have one son and everything will go to him. I told him that he will get an inheritance but it is not enough to last his lifetime and hence he needs to work. He knows that we lead a pretty comfortable life here - lots of travel/vacations and golf. He also knows that I won't ever let him go hungry - he has a learning disability and I will always support him. In reality, after my husband and I pass away, he is pretty much set for the rest of his life. He is very frugal and I know he won't blow his inheritance away.

 

[GrayHare]

You're a good candidate for depositing checks by smartphone...

When depositing at a bank I've also gotten the "Where'd you get this money?" question. "By selling illegal goods in the city of Vanguard, that's why the payer is 'Vanguard' on the check." Seriously, what's the point of that question? Do criminals regularly get tripped up and, whoops, admit to something illegal?

 

[FlaGator]

Maybe this should be a separate thread (or already has been in the past. If so I apologize) but how much and when do you tell your grown kids about your financial situation and how do you broach this topic with them?

This is something I've been thinking about a lot and have read some articles about it but I'm still not sure how best to do it. How much detail do we go into? How do you walk the line between giving them some information or giving them enough info for "calculating" what they will inherit.
I mean, to the original topic of this thread, our kids have a pretty good idea of how comfortable we are but don't know the details. I consider them a different category than letting friends or other family members know about our financial situation. Any thoughts or direction?
Thanks,

I recall this coming up before, but couldn't tell you how to successfully search for it. Short answer from memory-approaches were all over the map, with logical and defensible reasons for every decision. My conclusion was to do what makes sense for you and your offspring. Mine know a lot, but couldn't recite $$ to the nearest $100,000.

 

[mh]

You're a good candidate for depositing checks by smartphone...

That’s what I do [emoji3]

 

[Winemaker]

When depositing at a bank I've also gotten the "Where'd you get this money?" question. "By selling illegal goods in the city of Vanguard, that's why the payer is 'Vanguard' on the check." Seriously, what's the point of that question? Do criminals regularly get tripped up and, whoops, admit to something illegal?

It is part of the laws after 9/11/2001, where the banker/teller is trying to learn about their customer. Any transactions over $10,000 have to be reported.

 

[Closet_Gamer]

Maybe this should be a separate thread (or already has been in the past. If so I apologize) but how much and when do you tell your grown kids about your financial situation and how do you broach this topic with them?

This is something I've been thinking about a lot and have read some articles about it but I'm still not sure how best to do it. How much detail do we go into? How do you walk the line between giving them some information or giving them enough info for "calculating" what they will inherit.
I mean, to the original topic of this thread, our kids have a pretty good idea of how comfortable we are but don't know the details. I consider them a different category than letting friends or other family members know about our financial situation. Any thoughts or direction?
Thanks,

This is getting tricky for us. We've always lived hugely below our means and explicitly put our kids into a neighborhood/school that didn't have teens driving around in BMWs. Modest house, etc. (Though I do like nice cars!)

The other day my daughter and I were discussing societal wealth distribution & ethics. We got into the 1% conversation. She asked me if we were millionaires.

She knows perfectly well what we're spending on her education and her sister's. I asked her to think about that sum and draw her own conclusion about our overall situation.

They also know I'm planning to RE soon and that we're starting to shop for the beach house. They're not dumb.

But I still don't actively invite them into the conversation and I'm guessing they would be off by a lot if they had to guess at our situation.

But we must be doing something right...DD1 has an internship earning about $500 per week, more over the summer. Her company just sent her paperwork that she can get into the Roth 401K later this year. She brought me the info and we agreed she will sign up when she's eligible for the match.

 

[FIREd]

I live my life and let people wonder. Never complain, never explain.

 

[MichaelB]

I live my life and let people wonder. Never complain, never explain.

Well put ...

 

[Exchme]

Maybe this should be a separate thread (or already has been in the past. If so I apologize) but how much and when do you tell your grown kids about your financial situation and how do you broach this topic with them?

This is something I've been thinking about a lot and have read some articles about it but I'm still not sure how best to do it. How much detail do we go into? How do you walk the line between giving them some information or giving them enough info for "calculating" what they will inherit.
I mean, to the original topic of this thread, our kids have a pretty good idea of how comfortable we are but don't know the details. I consider them a different category than letting friends or other family members know about our financial situation. Any thoughts or direction?
Thanks,

Our kids (in their 30’s) are thrifty and hardworking. We decided that we wanted to start making gifts up to the gift tax exemption amount - we would get to see the benefits, they would get a financial boost and hopefully learn to handle money. We figured that we needed to show them that the gifts meant we would not be eating kibble in our old age but that we were not yacht club wealthy either.

I put together thoughts on general financial topics – writing an investment policy statement, indexing, advisors, IRAs, Roths, insurance, rebalancing, etc. We then had a sit down, walked them through that and showed them our numbers, including graphs of our net worth over the last few years. Then presented the check.

It could not have gone better, by us opening up, they asked lots of great questions and it came out that they were making lots of mistakes – not maxing out Roths, holding too much cash, one had been talked into an annuity and was otherwise 80% bonds, one lacked a will and was missing the chance to refinance the mortgage. They enjoyed the talk so much that they even asked to share the general write-up (without our numbers of course) with friends. So for us, it was super positive.

 

[DawgMan]

Our kids (in their 30’s) are thrifty and hardworking. We decided that we wanted to start making gifts up to the gift tax exemption amount - we would get to see the benefits, they would get a financial boost and hopefully learn to handle money. We figured that we needed to show them that the gifts meant we would not be eating kibble in our old age but that we were not yacht club wealthy either.

I put together thoughts on general financial topics – writing an investment policy statement, indexing, advisors, IRAs, Roths, insurance, rebalancing, etc. We then had a sit down, walked them through that and showed them our numbers, including graphs of our net worth over the last few years. Then presented the check.

It could not have gone better, by us opening up, they asked lots of great questions and it came out that they were making lots of mistakes – not maxing out Roths, holding too much cash, one had been talked into an annuity and was otherwise 80% bonds, one lacked a will and was missing the chance to refinance the mortgage. They enjoyed the talk so much that they even asked to share the general write-up (without our numbers of course) with friends. So for us, it was super positive.

I like the general train of thought here. My only hesitation is gifting to kids on an annual basis. When my wife and I were in our early years of marriage, my FIL started gifting his kids $5K a yr at Christmas. That went on for 3 yrs and then stopped. I would hear my wife and her siblings talking before Christmas time "What are you going to spend Dad's $$ on this year?". And then it stopped and you could feel a level of disappointment as the expectation of $$ was becoming built-in. Human nature, so I get it, but different than how I was raised as inheritance was never anything I ever expected.

Fast forward to today, my hybrid approach was to gift from time to time $$ to kids with suggested (require or not required, I'm not sure??) uses. Eg. Kid 1 - pay off car debt, Kid 2 - maximize Roth, DW and I are still not sure, but are leaning this way.

The one thing we are doing is putting $$ into more extravagant experiences with kids & G-kids which can get allot more expensive when you have 4 kids/spouses and almost 4 G-kids. Just renting a house at the beach for a week is $12K! None the less, this has become our priority before gifting cash on any regular basis. All subject to change as we move forward.

 

[street]

We have one son, so I think it makes it somewhat easier. He has been very successful himself and wouldn't most likely need an inheritance.
When I was planning to retire, I told him of my plan and a number we had. He looked at me and said, if I had that I would retire too.
He doesn't know the number as of today but knows we have enough. His mother gave him a list of where we have things at, if anything ever happened to us.
In our case I'm not sure if telling him did any harm. Maybe but if we stay healthy it will be a long time till he gets anything. He and his wife make more in one year then we made in 3 years.
I think telling kids really depends on who your kids are, and many things factor in to reveal info. I say different for ever family.

 

[Andre1969]

I like the general train of thought here. My only hesitation is gifting to kids on an annual basis. When my wife and I were in our early years of marriage, my FIL started gifting his kids $5K a yr at Christmas. That went on for 3 yrs and then stopped. I would hear my wife and her siblings talking before Christmas time "What are you going to spend Dad's $$ on this year?". And then it stopped and you could feel a level of disappointment as the expectation of $$ was becoming built-in. Human nature, so I get it, but different than how I was raised as inheritance was never anything I ever expected.

I can definitely understand that, having that built-in expectation start to develop. There was one year, back in 2012, that my Mom distributed a bit of Grandmom's assets. She, my uncle, and I got $10,000 apiece. By this time, Mom was handling much of Grandmom's estate for her, but Grandmom was on board with this.

Anyway, I was under the impression that Mom was going to start doing this every year, to start getting Grandmom's estate down a bit. But, it ended up being a one-time thing. I also vaguely remember Mom attaching some strings, but after the fact. I don't know what the hell she thought we were going to do with the money, but she was annoyed that I used my $10K to pay down my mortgage some. I forget what, exactly, my uncle did, but it was something that annoyed her. I know he bought a brand-new 2013 Camry the following year, so that might have been it. But, in his defense his 2003 Corolla had well north of 200,000 miles on it, standing at death's door, and about to ring the bell. But, overall, Mom was annoyed, so there were no more distributions.

I think Mom was worried about Grandmom's estate generating too much in the way of taxes if it got too big, but in the end, we had nothing to worry about. Grandmom passed away in May of 2015. There was about $300K that got split 20% to me, and 40% each to my uncle and my Mom, and as I recall, not a penny of tax had to be paid on it.

Actually, I take that back. Grandmom had some money left in an IRA that got split among us. My 20% of it was $4800. However, I put it into an inherited IRA with Fidelity, so I'm only paying taxes on the RMDs. My Mom and uncle cashed their portions out, so they did pay tax on that.

 

[Exchme]

My guess is that OP is not a Great Gatsby character in anyone's mind as a result of his newfound conspicuous consumption. Unless OP shoots cash out of a cannon, people will hardly notice, they are focused on their own worries and hopes.

I think OP hopes the subject will come up so he can tell others about his sacrifices and success - rightly so as it takes a lot of hard work and frugal living to retire so young - but at least in my circle, it would be considered incredibly rude and nosy for anyone to ask about our money.

So the only outlet to celebrate the success of FI is our very closest, most trusted loved ones - and of course anonymous strangers on the internet.

 

[Luvtoride]

Exchme and all who commented on my question regarding sharing finance info with kids, thanks. Your experiences and thoughts are very helpful. I'm glad the discussion went so well with your kids. Along with discussing finances is the accompanying subject of "when to give inheritance money to your kids". As some of you have noted, this subject goes hand in hand.
I read in a recent article somewhere that the average age of inheritance is age 60. Is that really the time in our (or our kids lives) when the "windfall" of an inheritance is needed? Probably and hopefully not. I like the ideas about gifting to your kids on a non-regular basis in order to avoid expectations and disappointments. We have started to do this as a certain amount of funds we've put aside for each of our 2 daughters that they can draw down for large expenses as needed. They have been very thoughtful in this regard, using the money for things like roof repairs to their home and other home improvement areas.

Dawgman, I'm certainly in agreement with you about vacation experiences with the kids and grandkids and that's a great way that we use our money to spend quality time together and provide a nice vacation that would otherwise be outside of their normal budgets.
I would like to understand more about their financial situations to make sure they are doing the right things i.e. 401k savings, investing, life insurance, wills, etc. I would hope that a financial sit down discussion with them would be a two way street to help guide them in areas that might need attention (80% bonds...really?).

I hope this hasn't derailed the original topic, but I guess hiding our financial success from our kids could be considered fair game here.

 

[Souschef]

It is part of the laws after 9/11/2001, where the banker/teller is trying to learn about their customer. Any transactions over $10,000 have to be reported.

I had taken $7K in cash from my safe deposit box and deposited in my checking account. The teller asked where I got the cash from, and I said,"From my safe deposit box, I am buying a car".
Actually, I took $13K out and deposited $6K in another checking account at a different bank with no questions.
BUT, if every few weeks or months I was depositing $9K or so, the Feds call that "structuring" to avoid reporting.

 

[Out of Steam]

Maybe this should be a separate thread (or already has been in the past. If so I apologize) but how much and when do you tell your grown kids about your financial situation and how do you broach this topic with them?

We've given our adult daughter (mid-20s) a fairly good picture of our finances in the past two years. I think it has been useful that she knows that we are in a secure situation, and she doesn't need to fret over modest gifts to her, etc. She now has a reasonably well-paid job and is frugal by nature.

Might have preferred to wait longer, but we thought we needed to plan for the possibility of our both being felled by COVID. Until our daughter is 30, we named an older niece to be the primary executor of our estates if we both die.

 

[steelyman]

Might be a repeat but my experience is that it’s important to let relevant people know WHERE your money is. You don’t have to disclose how much. But it can spare a lot of detective work.

 

[brett]

Our children have no idea about our financial resources. We do not hide it. They have been raised to be polite and not ask about private matters.

There is no need for them to know.

 

[travelover]

It is part of the laws after 9/11/2001, where the banker/teller is trying to learn about their customer. Any transactions over $10,000 have to be reported.

Ironically the big crooks use a bunch of shell companies and bounce the money around until it is about untraceable because they are really smart. Only the little guys get hassled over moving money around. I guess it makes for good theater.

 

[Beldar]

DW & I don't broadcast our "success", if I can use that word. It's no one else's business, and their "success" is none of mine.

The only time I've been asked is when I retired early, and at w*rk was asked why. I just was honest and said we reached all of our financial goals so there was no need to keep w*rking. "oh...".


_B

 

[RetMD21]

I think OP hopes the subject will come up so he can tell others about his sacrifices and success - rightly so as it takes a lot of hard work and frugal living to retire so young - but at least in my circle, it would be considered incredibly rude and nosy for anyone to ask about our money.

So the only outlet to celebrate the success of FI is our very closest, most trusted loved ones - and of course anonymous strangers on the internet.

I don't know OP's motivation but you all are only ones I can tell that I've oversaved.

 

[iloveyoga]

I don't know OP's motivation but you all are only ones I can tell that I've oversaved.

+1

 

[Winemaker]

Ironically the big crooks use a bunch of shell companies and bounce the money around until it is about untraceable because they are really smart. Only the little guys get hassled over moving money around. I guess it makes for good theater.

You are correct about them going after the little guy. Some of the current legislation conversation is considering dropping the $10,000 limit down to $600. It would take an army to report that many transactions, and another army to record and cypher through, looking for tax cheats.

 

[Out of Steam]

Only the little guys get hassled over moving money around. I guess it makes for good theater.

As with many things related to security and law enforcement. It's easier, and safer, to confront basically honest people than hardened criminals.

 

[Gumby]

Ironically the big crooks use a bunch of shell companies and bounce the money around until it is about untraceable because they are really smart. Only the little guys get hassled over moving money around. I guess it makes for good theater.

Sometimes they catch a big fish that way, like a certain governor of New York. https://en.wikipedia.org/wiki/Eliot_Spitzer_prostitution_scandal