Do You Hide Your Financial Success From Others?

[Keim]

I should have clarified in the US specifically - I don't know Russian RE well enough to hazard a guess (guessing since your profile says Moscow). Here in the US, you could rent that cabin on airbnb or vrbo for $40-60/night with no maintenance, utilities, or any hassle in general, plus you don't feel obligated to go to a place after the initial fun wears off. Take the $100-200k you'd otherwise spend on a small vacation cabin here, invest it, and your investment would generate enough to stay at a similar cabin 140-280 days a year.

Your mathematical factors and decision-making process undoubtedly work well for your situation. My math and decision-making factors work well for mine.

Start with the math:
1. The area my cabin is in is extremely rural-as in no services for 25 miles. There were no VRBOs in the area when I purchased it. (There is one now, at $100 per night).
2. I bought the cabin as a distressed foreclosure for under $50k. Fixing it up (a type of work I find relaxing and enjoyable) brought the value to about $80k.
So, I've already made a hypothetical return on the mathematical part of the investment.

Life isn't about total return on income; it wasn't meant to be a financial investment. It's an investment in family time.

I run a small nonprofit and can rarely get away for more than a long weekend. The cabin "forces" us to go once or twice a month and enjoy time together. We like that it is ours-set up how we want it, with our stuff. Five years after purchase we are liking it even more.

If you are bored and want to learn about the area the cabin is in and the rehab: https://www.early-retirement.org/forums/f29/rehabbing-a-summer-cabin-built-in-1972-a-91836.html

 

[kgtest]

Fellows in this group include a prior CEO of a large oil services company, a business owner that had several restaurants, retired full bird army Colonel, VP's of Fortune 500 companies, a postal delivery guy, real estate investor(s), engineering consultant, retired police sergeant, etc.
...

I had to lookup Full Bird pay...as I always thought they did it for the free booze in the officer's lounge, not the pay. Turns out a full bird USAF can bring in about $136k base annually, with 24 yrs under their belt. Add in some BAH, and BAS plus some hazard pay topped out with a pension and they do ok. Certainly not as well as your restaurateur or Oil CEO.

I recently passed up a relative in terms of pay who is gunning for O-6. I am 5 years younger than him, but I don't get that BAH or BAS with Hazard pay and pension...oh not to mention the GI bill for the youngins. Not a bad gig if you can make it that far.

 

[aja8888]

I had to lookup Full Bird pay...as I always thought they did it for the free booze in the officer's lounge, not the pay. Turns out a full bird USAF can bring in about $136k base annually, with 24 yrs under their belt. Add in some BAH, and BAS plus some hazard pay topped out with a pension and they do ok. Certainly not as well as your restaurateur or Oil CEO.

I recently passed up a relative in terms of pay who is gunning for O-6. I am 5 years younger than him, but I don't get that BAH or BAS with Hazard pay and pension...oh not to mention the GI bill for the youngins. Not a bad gig if you can make it that far.

Our full bird Army retiree is a West Point grad class of 1972 or 1973. He is still active with a few Army recruiting functions, volunteers his time a lot, and has a good following here in the Houston area. He recently held a charity golf tournament and I was invited to play. He's a real American and loves this country. At almost 70 years old, he is quite active.

The G.I.Bill helped me immensely as the $222/month I got after Vietnam paid my tuition and some living expenses when I went to engineering college. Veterans nowadays get a nice amount for their college if they apply, something like $50 K from what I heard.

 

[NW-Bound]

According to the Google, there are 20 towns in the USA named Moscow. https://theworld.org/stories/2016-03-10/there-are-more-20-towns-america-called-moscow-why

I remember a 1984 movie, "Paris, Texas".

From the Web:

There are 16 towns in the United States with the name “Paris”, but only 8 of them have a population over 1,000. Most, but not all of the Parises, were named after the city in France.

 

[kgtest]

Our full bird Army retiree is a West Point grad class of 1972 or 1973. He is still active with a few Army recruiting functions, volunteers his time a lot, and has a good following here in the Houston area. He recently held a charity golf tournament and I was invited to play. He's a real American and loves this country. At almost 70 years old, he is quite active.

The G.I.Bill helped me immensely as the $222/month I got after Vietnam paid my tuition and some living expenses when I went to engineering college. Veterans nowadays get a nice amount for their college if they apply, something like $50 K from what I heard.

If I had any sort of a golf swing it would be a true honor to shoot a round with your buddy! That's awesome he is still recruiting...never stop recruiting we need to keep those numbers up!

 

[aja8888]

If I had any sort of a golf swing it would be a true honor to shoot a round with your buddy! That's awesome he is still recruiting...never stop recruiting we need to keep those numbers up!

I was surprised how much of an effort the West Point grads put into recruiting kids out of high school. It's quite a process of identifying potential candidates, setting up interviews, then the selection process, etc. He also is involved in a program where veterans who get into trouble (drugs, ect) can be rehabbed and charges dropped if they complete a program with a sponsor. He sponsor one every several months and works on a rehab program with them. Not all are successful though.

A lot of important stuff like this gets done behind the scenes and is not something you see in newsprint. I wish I had his energy and commitment to do work like he does.

 

[TheWizard]

Sounds like no one likes to hear hard work and sacrifice as secret ingredients to success!

Right.
There's a certain spending culture out there, wherein people who spend $10k per month are twice as wealthy as those who spend $5k per month, regardless of credit card balances...

 

[TheWizard]

I must have the homeless look down because if I visit a different bank branch than usual to make a deposit, I'll get ID carded. Once a teller told me, "This is a big check you're depositing! We need to verify." The check was for about $500. Tellers routinely convene when I deposit money to pay taxes. "How can this person possibly have more than $1000 to deposit?!?"

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

 

[TheWizard]

We moved to a neighborhood where almost everybody has more money than we do. No jealousy detected.

Not that it matters, but how would you know?

 

[retire to nature]

+1
Jealousy is a big emotion when it comes to financial success. It's just the way it is.

+1 here too. IMO, Jealous is the most scary emotion from my exprerience.

 

[Out of Steam]

One of my neighbors and I were talking about a particular provision in our state tax law last week and I mentioned that if your federal AGI was below $100k, you could take the deduction. He asked, in all seriousness, "how do you get your AGI below $100k?" I told him "It just is. But it's plenty for us."

I did all our 2020 tax planning assuming our Federal AGI would be below $100K. My wife had made some money working before the pandemic, and our AGI was slightly above. Had to send the state about $1100.

The bottom of the 22% bracket for a married couple taking the standard deduction is also very near $100K, tending to grow small errors in withholding into significant bills.

 

[F.I.R.E User]

In general, most people would think you are not doing well at all but it doesn’t matter what others think. As long as you are in the right circle of friends who are in the same F.I.R.E community as you. Congrats. I hope you also took care of your health along way.

 

[FlaGator]

I was surprised how much of an effort the West Point grads put into recruiting kids out of high school. It's quite a process of identifying potential candidates, setting up interviews, then the selection process, etc. He also is involved in a program where veterans who get into trouble (drugs, ect) can be rehabbed and charges dropped if they complete a program with a sponsor. He sponsor one every several months and works on a rehab program with them. Not all are successful though.

A lot of important stuff like this gets done behind the scenes and is not something you see in newsprint. I wish I had his energy and commitment to do work like he does.

Off topic, but....
I grew up near Luke AFB in AZ, but was only exposed to military lifers after moving to the FL Panhandle with it's 3 bases along a 150 mile stretch. Between Naval Aviation, AFSOC, fighter pilots, Army SF, civilian employees and contractors, I've seen that the commitment runs very high here. The compassion for troubled vets, vets now finding their way, and people in war-torn countries is surprising, and heart warming.

We enjoy the country we have because of people like them. Thank them for their service and commitment.

These people share their "wealth" everyday

 

[teetee]

I shop at Walmart and dollar tree. Via zoom meeting they can see my braided wired headphones that should have been replaced years ago. My smart phone is 5 years old.

None of my friends, colleagues or relatives ever asked me about my net worth.

I am still working for my RE but if I ever get asked about my wealth, I will just say I don't keep track so I don't really know.

 

[F.I.R.E User]

I shop at Walmart and dollar tree. Via zoom meeting they can see my braided wired headphones that should have been replaced years ago. My smart phone is 5 years old.

None of my friends, colleagues or relatives ever asked me about my net worth.

I am still working for my RE but if I ever get asked about my wealth, I will just say I don't keep track so I don't really know.

Any of your friends’ pursuing F.I.R.E?

 

[teetee]

Any of your friends’ pursuing F.I.R.E?

Not that I know of. But again, the topic rarely comes up in a daily conversation. I don't exactly know why.

 

[Closet_Gamer]

Life isn't about total return on income; it wasn't meant to be a financial investment.

This.

We don't own a vacation home but plan on picking up a beach house next year. I anticipate spending 3-4 months per year there.

I could certainly rent various places for less than the purchase & upkeep will cost me, but I want a place that is ours.

We can leave our stuff, not worry about whether its a good rental or not, pack up and go with little planning, and have the kids/relatives come and go as they please without so much scheduling drama. I want to drive in on a Tuesday and leave on a Friday rather than deal with the weekend traffic nightmares.

I'm hopeful that long term I have grand-kids who grow up remembering summers at grand-dad's beach house.

In general, rent-your-toys is exceptionally good advice -- but like many things there is a tipping point where its less applicable.

 

[Luvtoride]

Closet Gamer,
I can definitely support your desire (and reasons) for owning a beach home.
We have owned a condo at the shore (about 70 minutes from our primary home) for 4 years.
The way you described is exactly how we use it spending most of our summer there, especially while working from home.
Our kids and grandkids come often and stay with us there and to them it feels like their home too.

To get back to the original topic here, having a 2nd home at the beach is not something we can hide (many of our friends visit and enjoy it too).
Perhaps one nice part is that we’ve made many new friends at the shore who are in the same situation as us since for many in our condo community this is their 2nd homes which they use summers and weekends also.

 

[Andre1969]

I can sympathize. I live in Vancouver, WA and I recently learned there is another one over in Canada.

On a somewhat related note, I grew up in the small town of Glenn Dale, Maryland. When I was a kid, watching "My Three Sons" reruns, I remember sometimes they'd mention "We're going to see Katie's relatives in Glenn Dale" or something like that. I used to think Katie was from our neck of the woods.

And when I discovered there were other Glenn Dales, I thought it odd that all the others were one "N", and most of them, only one word.

Even today, sometimes on an old tv show like "Burns and Allen" or "Jack Benny" they'll mention "Glendale" and my ears will perk up.

There was another old tv show where they used to mention a "Riverdale" from time to time. I think it may have been "Petticoat Junction" but I'm not sure. Well, my paternal grandparents lived in Riverdale, Maryland. But, as a kid, I used to think they were local, because of that!

 

[Winemaker]

There was another old tv show where they used to mention a "Riverdale" from time to time. I think it may have been "Petticoat Junction" but I'm not sure. Well, my paternal grandparents lived in Riverdale, Maryland. But, as a kid, I used to think they were local, because of that!

Wasn't Archie and his Gang from Riverdale?

 

[Andre1969]

Wasn't Archie and his Gang from Riverdale?

Yep, they were! In fact, these days there's a live action show out now, called "Riverdale" that has those characters, just in more of a sci-fi/fantasy sort of setting.

 

[rodi]

This is a tricky question in some ways. We are financially successful to have a paid off house and to have retired early, and have money to pay our bills, travel some, and pay for our kids public university education. On paper we have a lot - mainly because of the house. But our income streams and 3.5% withdrawal rate put is at less than many of our peers who are still working. I maintain a budget, sort of... weighing the value of purchases, and how much joy it will bring. Kids know we don't have unlimited funds and we aren't going to finance their spring break travels or ski trips. They are expected to work during the summer for their school year spending money. By the standards of many on this forum, we are for from wealthy. By the standards of the country at large, we are wealthy. By world standards we are fabulously wealthy.

The kids know we have enough to be retired and that, at minimum, they will inherit the house (split between them). In reality they will get a lot more.

The kids are curious but I've never shared a complete picture - just that we have enough - but if we blow it all now, we'll be in trouble. Kind of like Robbie's dilemma - if we draw out too much from the nest egg we enter the danger zone. Younger son has figured out the hard work to make $$$ can give you opportunities - he paid for a month in Europe from working a lemonade stand. (He's charming and worked the tips to the max.) Older son has finally figured out slow and steady work means you have enough to pay bills without stress. (He took longer to make the "you work/earn income means you have money to pay bills" connection.)

As for sharing - I don't really share with others. My sister has an idea. My former coworkers know that I brought lunch from home and was paying off my mortgage... that I maxed the 401k and ESPP - which meant I had less "play money". They weren't that surprised when I ERd because I'd been preaching about spending less, saving more to get the heck out of dodge. But they had no idea about the $ amounts.

 

[F.I.R.E User]

Not that I know of. But again, the topic rarely comes up in a daily conversation. I don't exactly know why.

The only way they might have a clue is if they are also pursuing F.I.R.E.

 

[brett]

We certainly do not hide it. But we do not advertise it either.

Any time we have helped a relative out it has been on the condition that it stays between us. No blabbing.

We live a modest lifestyle. Other than frequent international travel (pre covid). That gives most people a hint. That, and retiring at 58.

Mind you, there are still some people that think we squandered our home equity on travel. No point in setting them straight. People will believe what they want to believe.

 

[Luvtoride]

This is a tricky question in some ways.
The kids know we have enough to be retired and that, at minimum, they will inherit the house (split between them). In reality they will get a lot more.

The kids are curious but I've never shared a complete picture - just that we have enough - but if we blow it all now, we'll be in trouble. .

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,