Discussing finance with family and friends seems fruitless

[Montecfo]

Wise?
We'll have to agree to disagree...

Nothing to disagree about. This is how those folks view it. Not how I do.

But if someone lacks the expertise and is not willing to spend the time to gain it, what approach would be best in your view?

 

[Gumby]

The last time I saw my mother was at my nephew's (her grandson's) wedding a few months before she died (we lived over 1000 miles apart). I told her I was thinking of retiring in the next year or two. She said she had heard that you needed a million dollars to retire and wondered if I had enough. I said I was working on it (we had well more than that, but I wasn't about to tell her). That is the most I ever discussed finances with a member of my family.

 

[aja8888]

I have a very good friend (30 year friendship) and we discuss our portfolios and strategies on a weekly basis over a Saturday breakfast (when we both can make it). We started doing this 30 years ago when neither of us had two nickels to rub together. Now we are both well off, and we still have these discussions along with other discussions on financial strategies for taxes, real estate and whatever comes to mind. Family discussions? Ha! Forget it.

 

[Jerry1]

As a few others have mentioned, I have a good friend that I talk with. We get pretty specific. Like aj, this friend is someone I became friend with when we first hired into mega corp about 30 years ago. Still, I’ve gained a lot from this board. My friend is just one guy, the wealth of real life information on this board is exceptional. Even some things that are not relevant to my specific situation are helpful.

As for family, mine is dysfunctional enough without telling them what all I have. I get enough crap just for what they imagine.

 

[Gallaher]

Probably because you remind them of something that they should do but are procrastinating.

This exactly.
For most of my career I managed, well paid sales professionals who had minimum education requirement of a Bachelors degree. I typically included some level of financial education in our quarterly meetings, I had to we were all remote and HR was not going to do it. The response was always very positive. Twenty years ago, these people all made over six figures a year and did not understand their 401Ks, employee stock purchase plan, incentive options etc.
As for family, they all think you earn money and then spend it.

But think about it, 88% of cars sold in the USA are financed regardless of brand. Not wise to finance depreciating assets.
It’s the American way to kick the can.
People on this forum are the oddballs.

 

[Gallaher]

I have to add another tidbit.
Couple of weeks ago I challenged my twenty year old grandson.
I offered to match every dollar he invested in a Roth IRA for 10 years. Explained how it would turn into $2.5 mil by the time he is 65, based on historical S&P 500 average. Even took him to the Schwab site and showed how to open an account. He smirked, smiled said he would. When I saw him a week later, unbeknownst to him I had $500 in my pocket to give him if he took that first step, just open the account.
He did not so I did not.
Just not his interest I guess.

 

[badatmath]

This exactly.
For most of my career I managed, well paid sales professionals who had minimum education requirement of a Bachelors degree. I typically included some level of financial education in our quarterly meetings, I had to we were all remote and HR was not going to do it. The response was always very positive. Twenty years ago, these people all made over six figures a year and did not understand their 401Ks, employee stock purchase plan, incentive options etc.
As for family, they all think you earn money and then spend it.

But think about it, 88% of cars sold in the USA are financed regardless of brand. Not wise to finance depreciating assets.
It’s the American way to kick the can.
People on this forum are the oddballs.

I worked with a guy for over 30 years and we made roughly the same amount. Between him and his wife he had like 54 cars. I've had 5. . . Guess who had more in the 401k?

We agreed I should have had a little more fun and he should have had a little less but in his case he died before he could retire so maybe not. He'd really not have been able to afford it even at 67+ the way he was going . . .

 

[FlaGator]

My sister ahs asked me for stock picking and investment advice for at least 20 years. After getting the same response (index or target date funds) she still persists. the Ex wasn't any different, bought companies she liked when she had a few bucks through Jones and wouldn't make any changes.

IME, it's a fool's errand not worth the time to discuss, much less attempt to persuade.

 

[RetiredHappy]

Most of the posts here imply that their friends and families have less money than them and are less savvy about investments. It is not the same in our situation. We used to work in high tech and the lowest paid staff was making 6 figures. Everyone who worked with us maxed out their 401K. Now that we are retired, we look around at our friends in the (retirement) community, from our estimation, based on their homes, lifestyle and past careers, 90% have way more money than us.

 

[2HOTinPHX]

Over the years at work there were a couple of times I sent out an email to my teammates (most much younger than me) at work to at least get them thinking about saving and planning for retirement. I included some links to some videos on index funds and compound interest and starting early. Got just a a couple of thanks but no other responses or questions.
Wife tried to help a neighbor retiring that doesn't even know how much they spend monthly. She spent sometime showing neighbor how to set up a basic spreadsheet to keep track of spending. Neighbor hasn't followed thru so mehhh...wasted time.
We try to remind ourselves....
Not my circus not my monkey

 

[Sunset]

I sure wish it wasn't so taboo. But the upside is this forum!

The latest anecdote: A few months ago DW and I went to visit one of her friends, another dual military couple in retirement. We talked about how to pay for kids college and the other couple was adamant about not sharing (with their own kids) any details of their college money available to the kids. DW and I were baffled. It's so amazing because these are the issues that everyone in America deals with, but the vast majority can't or won't talk about it, even within their own families in many cases. I grew up with the same taboos, but I'm sure not continuing them within the family.

My parents were very open and honest about paying my way through University.
NOT A PENNY

Maybe your friends don't want to talk about it, because they have no money to give ?

 

[savory]

This discussion got me thinking about any cultures that treat discussion/approach to finances differently. I didn’t spend too much time but I found this ‘sales pitch’ from a consulting company interesting. It doesn’t provide an answer but it does seem to provide a starting point for investigating cultural issues that both help and hinder financial discussions/approaches. There likely is more info out there.

The Culture of Money Around the World - Oban International

 

[Alan]

Fortunately my 2 adult children (40s now) are interested in planning for retirement and we do talk about it, in fact later today I’m going over to my son’s house to help him look up his UK State pension record and see about making additional voluntary contributions for some of the years he missed while working in America. This new interest because I told my kids about the WEP repeal as they would both have been hit hard with WEP reductions due to paying into both countries State pension schemes.

6 months back my daughter sat down with me and her finances and we ran FIRECALC and looked at her expenses as she realizes she can probably retire this year. Her partner is working on retiring in about 5 years.

I don’t discuss finances with many of my friends except in the general sense although this past few years I have been helping my neighbor consolidate his private pension pots, and also to look up his UK State pension record. He is a taxi driver in his early 60s and had no idea how much his State pension is worth. He is also working on paying off his house and I run the numbers for him every few months.

 

[marko]

IMO, you never discuss money in any detail. Ever. It's one of the most personal things in life.

Especially if you're an ER and they're not. You might be trying to help but they likely think you're gloating. If they want help, they'll ask.

The only exception might be for young relatives starting out. "Get that company match!"

Due to any number of reasons, they could be one paycheck from total disaster and here you are telling them to "just buy some Apple stock". It's a really short walk to resentment.

People tend to justify where they are financially and often willingly go down the drain rather than grab a life preserver.

 

[steelyman]

Why is this important to you (especially if your personal financial situation is in order)?

 

[Koolau]

I only have one friend that I discuss financial stuff with. Even then, we don't share actual numbers.

I know the kids are all doing at least something toward retirement and they all have houses - in the process of being paid off. One has rentals properties. We started (and funded) Roths for the kids, so there's that. We also are making certain they have good insurance coverage. Otherwise... Crickets.

It's all pretty taboo.

 

[marko]

Of note, even in this anonymous forum, most people couch actual dollar amounts or use hypotheticals and percentages.

It's quite personal.

 

[Aerides]

Talking finances with anyone but your absolute closest friends and family (and I mean super close), is a bad idea. No matter what you might think you have in common, it's rarely a good topic. OP is right, it is almost taboo.

At best, it's a party foul. It's inevitably going to reveal who has more, who is doing better, etc., and that's just not good conversation for friends.

 

[Bryan Barnfellow]

I've mentioned this before. When I was a w*rking stiff, I had a very smart colleague who, on her 55th birthday, went down to HR and signed up for the 403(b) benefit (nonprofit equivalent to a 401k)! She said, "I guess I have to start thinking about retirement now."

I couldn't that believe she had wasted her first 25 years at the university not only failing to invest her own money, but also effectively turning down a 12% annual match (IIRC).

-BB

 

[rembrandt]

 

[donheff]

I have a couple of friends who are interested and will discuss these topics at length. Many people who should be talking about finances and retirement are anxious about the topic and avoid it. Some just find it boring.

 

[Surewhitey]

I've had a few discussions with friends and family. Usually very vague to details, just stuff they may find useful. Sister & BIL are hands off and asked for my opinion for their 401ks, so I gave them the expense ratio talk... They listened to that, at least. I suspect they'll be the 65 working crowd though.

One friend who takes the real estate approach talks his opposite (and sometimes reckless) approach and then I talk simplicity with our approach. It always seems to work for both of us, but I fear for their debt and cash flow future. We enjoy talking about it in our own way.

I try to keep it light and it works most of the time.

 

[Purslane]

I think most people looking at the way I dress would conclude that I obviously have no money, so there would be no point in talking to me about it.

I was once asked by the cashier at the grocery store if I was paying with an EBT card. So yeah, I get that. Lol.

 

[jazz4cash]

"Farmed it out" = hired a SHARK to steal 1% or more of their investment portfolio each year...

I agree but I know some folks that would have nothing if they didn’t use an advisor so that would be worse than paying 1%. Most in my family have accumulated very little in the way of assets for various reasons including not using an advisor. It’s Catch-22 though because the less you know the more you need an advisor but it is also harder to select a decent advisor. That’s when I wish I could offer some gentle guidance but they look physically uncomfortable if the subject comes up.

 

[Still Learning]

Agree that financial discussions with others is generally to be avoided unless interest is shown both ways. That has only happened twice to me.

First and most important is our newly married daughter. Started spending time with her husband starting about 18 months ago who is 5 years older. It was interesting to find they both were working full time with side work, had very little debt, lived within their means, saved a bunch/spent a bunch and still had a bunch of cash savings and 8 acres of land purchased with cash. He has a state job with good retirement/benefits package she works the service industry and both are interested in early retirement. She is currently 32 and he is 36.

Before the holidays they approached us to inquire how we retired at 61 and could we discuss investing? Absolutely could but I wanted to set two conditions: 1) we would not discuss either parties specific finances and 2) we did not expect them to follow our path to retirement. Subsequently I prepared a "book" which I reviewed with my wife before our first "meeting". Thankfully 2 days before our meeting sanity returned to me and I set the book aside and prepared a 2 page work sheet........ So after supper (always feed them first) we started.

Item 1- at 3 months of marriage what were their immediate and long term priorities?
Item 2 - returned a favor to my wife's parents who sat us down after marriage to explain how to develop a budget, including the need for medical & life insurance at this point in their marriage.
Item 3-thankfully they both were current with tax filings but had not a clue what they did with the cash from their secondary jobs. So next item was to develop in best detail their complete income and expenses for the prior 12 months.
Item 4 - explored the easy types of investing, basically self management and financial planning by others. Did not include his state package because he already had that maxed and CDs they were already purchasing including our marriage gift. Took them to the computer and showed them the Vanguard website and selected an ETF, reviewed the prospectus and reviewed the details most important to be to determine if it was a good potential investment. Then showed them our ETFs which were returning 20% -32%.
Item 4 - they both were more interested in having someone else manage their investing. That's okay at least they would start investing beyond CDs and some minor day trading. So reviewed Schwab, Fidelity, Vanguard, local financial planners and some of the banking & investing houses. The assignment was to contact at least one in each sector, say they were recently married and looking to start a retirement account with an initial $25K.

Last week they told us they had completed all their assignments (WOW!!!!). Their initial priorities are children and start construction of a new house, all completed with only cash outlay-just awaiting better loan rate environment while they keep saving & buying CDs. Long term priority is retire early from full time employment and keep their side business going initially. Told the stories of checking investment options and..............they want to proceed with Fidelity.