Discussing finance with family and friends seems fruitless

[Closet_Gamer]

Tough topic for many reasons.

I've noticed discussing financial planning is harder as we get older because now we're talking about outcomes rather than life activities. Its one thing for one family member to "plan on quit smoking one of these days" while another family member gets to the gym 3x per week for 20 years. Its the grist of life and differences.

But when people are in their 60s/70s and one person has emphysema while the other is hiking in the mountains every weekend, you're now talking about outcomes. Things that can't be changed and are the result of ones own choices Therefore much more difficult to discuss and often laced with judgement in different ways.

Same thing with money.

 

[Stormy Kromer]

I also ER'd at 50, now I'm 59. No regrets.

I live in a small town and people speculate how much money everyone has. To retire at 50 is not common. Folks who know us figured out that we lived below our means and invested for the long term. DW and I live a modest style. I have had several younger friends ask me how we did it. I tell them to open an account with Vanguard and start investing and keep investing. At that point they lose interest.

Family...Never. DB would expect me to fund his laziness. My dad parents and in-laws were both children of the Great Depression and had an absolute fear of the stock market and banks. They thought that investing was only for "Big Shots". My children (age 28 and 30) have Vanguard accounts that I set up for them in their teens and are set on Auto Pilot. I showed them a projection of how much they'll have at age 60 if they just keep investing 15% of their income. They said "sounds good" and went back to work. I also have specific instructions in our wills for them to invest the money in their VG accounts and keep their Withdrawal rate to under 4%.

I don't talk money with anyone except the folks on this forum.

 

[jollystomper]

Since I retired at 50 and am now 58, I've noticed that when I bring up any financial questions to my friends, classmates and family, no one seems to want to talk about their experiences, questions, or even how they're preparing for retirement. I would think that especially for classmates that are my age, discussing upcoming retirement financial issues & strategies would be a no brainer, but it seems like financial questions are just taboo. Maybe it's just easier for people to have these discussions in forums like this one? Do others have these same issues when it coming to financial discussion?

You bringing up the subject, in the light of the fact that most have not achieved what you have, can come across as bragging. The analogy would be a scratch golfer bringing up how good they play, and questioning their hacker friends on why they are not doing the same things to improve their game. The better strategy is to say nothing. The ones who are interested will likely eventually approach you with questions, and you can share from there.

From my family standpoint, no issues with my siblings, as the 4 older of us are retired, and the 3 younger ones, while not retired, could choose to do but have their valid reasons. Some of my kids, nieces, and nephews have asked us and we have shared. On this side there is no financial jealousy, everyone is happy with anyone's success. On my wife's side it is different, the response to me bringing it up would be "if you do not need to work, you obviously have more than enough for yourself, why aren't you spreading the wealth to us?". It is more along the lines of since we are "family" it is unfair for you to have so much while we struggle (due to self-inflicted wounds). So I keep my mouth shut.

For friends, I will again answer questions if asked or drawn into the conversation (last weekend I enlightened some friends who were about to take RMDs on QCDs because they asked), but not bring up the subject. DW has "friends" who now give us the cold shoulder since she inadvertently revealed our stable financial situation. No numbers were shared, but simply indicating that we did not have financial concerns was enough to draw that reaction.

 

[Flyfish1]

It really is fascinating, I'm assuming it's mainly jealousy or fear of being labelled a big shot and wealthy and thus facing some degree of ostracism. Amazing human traits. I wonder what it's like in places like Denmark? Do they discuss it more openly? Or does everyone try to conform and hide their wealth?

My parents are in their late 80's and my father in law the same and refuse to say anything about money. Not that I bug them too much about it. None of my friends will speak about it except one. He happily admitted his "guy" said he could retire on $200K a year, and in two seconds I responded well you must have at least $5M. He almost drove off the road he was so shocked I could calculate his nest egg in a few seconds. Then I had to explain the 4% rule, which he never heard of and the basic math behind it. Amazing to me.

 

[FREE866]

I tell them to open an account with Vanguard and start investing and keep investing. At that point they lose interest.

LOL
It's just so funny how some people avoid the whole idea and decision making process of investing. Then on the other extreme you have people that get involved with investing but just spend decades making short term decisions and losing money.

 

[pacergal]

Never share numbers with friends. Even with family/siblings/kids, I do not share exact numbers. But we do talk about finances/savings/budgeting. DH and I will most likely share numbers with kids as we age.

My last year at work, several co workers asked me how I was able to retire "early" (I was 60). I talked about LBYM, saving/investing, discussed the deferred comp program at work.
Only one person I knew ever actually opened a def comp acct.after I talked about it. She was so happy to see it going up every month, until the stock market went down. Then she closed the acc and pulled her money, she couldn't handle the volatility. (and lost even more to taxes when she withdrew!)

It is rare to find a good friend or family member who you can have frank discussions with.

 

[Texas Proud]

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.

A couple of comments on your two posts...

I have financed the last few cars I purchased from a dealership... got ZERO interest rate... no way I am passing up free money...

As far as a 20 something (or younger), if the parents have not taught them anything about finances there is very little chance of them doing what you said... they just do not see it... now, of course there are exceptions like my DD's boyfriend who is very interested in saving... not sure how much his parents have taught him though...

My DD gets it... I have matched her ROTH contributions the last few years... but the problem now is that she did not work a lick this past year... only did her college work... nothing during the summer either...

 

[Flieger]

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.

This is amazing to me. I think many in my generation feel it is a taboo subject even with their direct relatives. I sure hope that changes.

While I agree that with the statement for "outsiders", I constantly talk to my kids in particular, about finances, saving, etc. I feel it is a responsibility, just as much as providing for them (directly) when they were under my roof. I also share information on our current situation as they will likely have to deal with my finances in the future. I want to know they have a strong foundation and understanding.

Flieger

 

[Chuckanut]

If I had a dollar for every time a person told me they can’t do their own basic investing because “I’m not good at math”, I could have retired 5 years earlier.

 

[Chuckanut]

Sure. But if someone does not know what to do and not wanting to become educated it seems wise.

I known number of people like that. The good thing is that they did listen to the financial advisor and at least had a descent pile of dollars available to them when they retired. Eliminate the FA and the reality would not be a bigger pile of dollars at retirement. It will be few if any dollars.

It’s called the easy way out.

 

[Kings over Queens]

Great discussion. My adult kids know everything about our finances and we know everything about theirs. They all have roths, brokerage accounts, etc., and our example and involvement is one of the reasons they are successful, at least I like to think that. Daughter was just home from Denver for Christmas and she took me aside for a 30 minute review.

I think back to one of our first financial lessons was when they were around 8, 6 and 5. I took enough cash from the bank to pay the monthly bills, and sat them down at the kitchen table with the pile of cash and the monthly bills. Each kid took a bill from the pile and we explained what it was for. "that's the mortgage, we owe the bank x dollars, some is interest, that what it cost to borrow money, and the other is for the house." An explanation for each bill. Then the kids took the equivalent amount of money for the bills they took and wrote checks to pay them. Yes, we made our 5 year old daughter write a check. lol

It was a great lesson that they remember to this day. The thing that shocked them the most I think is when we were done and told them "we do this every month."

My cousin, 40, just asked me to give her and her husband a primer on investing. I was honored and surprised at the same time. That took a lot of vulnerability to ask and I'm happy to help her.

 

[Kings over Queens]

I known number of people like that. The good thing is that they did listen to the financial advisor and at least had a descent pile of dollars available to them when they retired. Eliminate the FA and the reality would not be a bigger pile of dollars at retirement. It will be few if any dollars.

It’s called the easy way out.

I was catching up with a buddy the other day, he's got a much bigger job at mega corp than I ever did and access to many more financial resources as well. We were discussing annuities and financial advisors, he's pro, I'm con. His comment, "I don't know enough about it and am happy to pay for the security of an annuity." (just to pick that example) Ok.

He was shocked to learn that his RMD age was now 75.

He's focused on his job. I'm focused on my finances. Who's right?

 

[marko]

This is amazing to me. I think many in my generation feel it is a taboo subject even with their direct relatives. I sure hope that changes.

Flieger

My point was directed toward friends and acquaintances as the OP stated.

At the direct family level, i.e. parents v children, such discussions are critical and I've stated many times on this forum how there should be a three step process starting at early teens. (in reality, there is such a thing, however informal)

Young people who will someday come into several millions of dollars and/or the family business need to be slowly brought along to understand the responsibilities, risks and expectations of such. Slowly coming to realize how much money is involved and what a danger it can become. You can't wait until you're 25 when grandpa drops to suddenly discover that your life is about to take a different turn.

My personal experience with friends and classmates in this situation has been that is the typical approach, yet even then there are those who've gone off the rails with often catastrophic results. But it should really be a need to know basis outside of those intimately involved. None of anybody business.

 

[imjustawarrior]

When I was w*rking, there were a few people that I could speak with. It was mainly me explaining things I learned that would benefit them (backdoor Roth, HSA for retirement).

I no money is taboo for some, but I think it is because many people think if they ignore it, everything will be okay. I think others just don't care. They are more concerned with everything else going on.

One of my good friends at work told me that his FA was taking him and a group to China to look at investments, and the trip was free. This guy was a brilliant engineer but so naive. He didn't want to hear anything I had to say. I think he was paying for status. It didn't work with me so he wasn't happy with me.

 

[brett]

We have never discussed our finances with family, children, or our friends. Ever. Our adult children have no idea of our net worth. Fortunately both have smarts and common sense when it comes to finances. Nor do we have any plans to discuss same at this point in time.

I have discussed very specific certain tax issues and some very general investment strategies with one friend who has some of the same tax challenges. He also enjoys a very simple lifestyle the would bely a first impression of net worth. Other than travel.

We have friends at both ends of he wealth spectrum. Finances, net worth, etc is not really something that gets in the way of our friendships. Perhaps that is because it has never really a subject of discussion.

 

[Flieger]

My point was directed toward friends and acquaintances as the OP stated.

At the direct family level, i.e. parents v children, such discussions are critical and I've stated many times on this forum how there should be a three step process starting at early teens. (in reality, there is such a thing, however informal)

Young people who will someday come into several millions of dollars and/or the family business need to be slowly brought along to understand the responsibilities, risks and expectations of such. Slowly coming to realize how much money is involved and what a danger it can become.

My personal experience with friends and classmates in this situation has been that is the typical approach, yet even then there are those who've gone off the rails with often catastrophic results. But it should really be a need to know basis outside of those intimately involved. None of anybody business.

I misread/understood your post, apologies. With the exception of one childhood friend (best friend) I agree 100%.

Flieger

 

[klec]

Since I retired at 50 and am now 58, I've noticed that when I bring up any financial questions to my friends, classmates and family, no one seems to want to talk about their experiences, questions, or even how they're preparing for retirement. I would think that especially for classmates that are my age, discussing upcoming retirement financial issues & strategies would be a no brainer, but it seems like financial questions are just taboo. Maybe it's just easier for people to have these discussions in forums like this one? Do others have these same issues when it coming to financial discussion?

I agree. A couple of golf buds and I routinely discuss these issues during a 4 hour round … particularly when we're walking. I think we all welcome an approach taken by our friends. That said, we are in the minority.

 

[aja8888]

This morning, I am heading over to DD's house with my updated "When I am Gone" book which includes everything she needs to know and do when I go to the other side (I'm 81 now). It includes a big section on finances and copies of account summaries. No surprises is the intent. I trust her and why not?

 

[Lorenzo]

Since I retired at 50 and am now 58, I've noticed that when I bring up any financial questions to my friends, classmates and family, no one seems to want to talk about their experiences, questions, or even how they're preparing for retirement. I would think that especially for classmates that are my age, discussing upcoming retirement financial issues & strategies would be a no brainer, but it seems like financial questions are just taboo. Maybe it's just easier for people to have these discussions in forums like this one? Do others have these same issues when it coming to financial discussion?

It would be interesting to know exactly how you phrased the "financial questions." I'm not assuming anything, just pointing out that the precise way it is phrased could make all the difference in others' receptiveness.

I wonder whether if one were to approach others with not just humility but maybe even admitting a bit of cluelessness and seeking (or at least feigning seeking) their advice, they might be more receptive and open to conversation than if one were to give the impression they were seeking to compare what they have been doing or are considering doing with what the other person has been doing. Even on an anonymous forum like this, I realize that in availing myself of the wealth of knowledge here I may also face the uncomfortable feeling of comparing myself with others.

As someone alluded to in a post above, maybe what stage of life one is at weighs heavily in others' receptiveness to discussion:

I've noticed discussing financial planning is harder as we get older because now we're talking about outcomes rather than life activities. Its one thing for one family member to "plan on quit smoking one of these days" while another family member gets to the gym 3x per week for 20 years. Its the grist of life and differences.

But when people are in their 60s/70s and one person has emphysema while the other is hiking in the mountains every weekend, you're now talking about outcomes. Things that can't be changed and are the result of ones own choices Therefore much more difficult to discuss and often laced with judgement in different ways.

 

[Montecfo]

I known number of people like that. The good thing is that they did listen to the financial advisor and at least had a descent pile of dollars available to them when they retired. Eliminate the FA and the reality would not be a bigger pile of dollars at retirement. It will be few if any dollars.

It’s called the easy way out.

Among friends that have discussed such things at some level, one is a really good friend and smart on most things. But he put all his money with the FA on the radio! My buddy somehow has no idea what to do but the FA did: sold him annuities. Buddy seems to not want to discuss too much.

Another couple that is contemplating retirement soon ALSO put money with this same guy. They admit they are clueless.

Two other friends are with an FA I know and met with as a favor once upon a time. I was not impressed at all for many reasons.

Oh well, if asked I will offer my thoughts. But they may be better off there if alternative is putting it all into CDs or gold.

 

[Flieger]

This morning, I am heading over to DD's house with my updated "When I am Gone" book which includes everything she needs to know and do when I go to the other side (I'm 81 now). It includes a big section on finances and copies of account summaries. No surprises is the intent. I trust her and why not?

Agree 100%. I have one of those for DW, and one for DD's.

Flieger

 

[Joylush]

I tend to think it’s their loss. I have twins, age 33. They both received a great financial education and know I am known for being good with money. I’ve offered to mentor and guide both of them. One listens and learns, the other is simply reckless/uninterested. Both had similar income levels. My daughter’s net worth is currently over a million dollars. My son has a negative net worth. Deciding on how to construct my will is painful.
I have a fairly recently discovered nephew in his mid 20s. He is the counterpart to my daughter and reaches out to me for advice constantly. He will do very well. They either have an interest and drive to make good financial decisions or they don’t. I have found there are more people who just don’t have it.

 

[Joylush]

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

I can see this as being wise. If they know themselves well enough not to trust themselves then paying for advice can be much more wise than doing nothing. I used to think people who used tax withholding as a form of savings for large purchases as being completely daft . I’ve known a few. But when compared to those who instead use credit cards to make their purchases it doesn’t seem so dumb. Different things work for different people.

 

[Sojourner]

Since I retired at 50 and am now 58, I've noticed that when I bring up any financial questions to my friends, classmates and family, no one seems to want to talk about their experiences, questions, or even how they're preparing for retirement.

It's worse than that, actually. Not only do people not want to engage when asked about personal finance and retirement, they don't want to truly engage even when they ask YOU about it.

Case in point: a dinner party I attended a few months ago. At some point, while we we all gathered in the kitchen casually talking and chatting as a group, I was asked "And what do you do for a living?". When I mentioned that I was happily ER and had been for some number of years, their eyes opened wide with amazement and they asked me how I did it. But the second I began explaining the power of LBYM and methodically investing in low-cost, passive index funds, everyone's eyes started to glaze over. People really just don't want to hear the boring truth about how to get rich slowly. They really, really don't.

 

[orbops]

It's a shame that the general consensus is that financial discussions with family/friends/co-workers is probably off limits. I've always believed that the more open you are, the more you can learn from others' mistakes, strategies, and successes. I've learned much more about upcoming Medicare financial planning from my cousin who just turned 65, and why in some cases it's better to keep money in a 401K instead of rolling it over. Another cousin who has retired made me realize that once in retirement - one can splurge on stuff like now traveling business or 1st class, buying orchestra seats for a play/concert, or even using valet parking.

My wife has told me that when she was a teenager, she asked her parents how much money they made after their school had a finance discussion - and they replied that it was classified. 20 years later, we were shocked when they asked us if we could pay off her father's credit card debt of $50K - which there was no way we could at that point in our lives. Fast forward to after her father retired, we found out they are living solely on their monthly social security checks, and that her father had made bad investments from his boss' stock tips, and had lost all his retirement money. (Me asking my father in-law for details is strictly taboo, so I never asked any questions). I just keep thinking that if there had been more open dialogue for my father in-law (whether it was other friends/family/co-workers), maybe they would be in a better financial position now.