Friends are all broke!

[Scuba]

Most of my siblings and close friends have less money than me. In some cases, they did not save for retirement or mismanaged their money but mostly they were divorcees or singles with children in lower paying professions. Where this tends to be a problem is when we vacation together. I would prefer staying in nicer hotels (e.g., with an ocean view or an historic hotel within a national park) and eating at nicer restaurants and visiting better attractions. Usually we are sharing a hotel room as having separate rooms would be a big budget buster for them. While I am willing to pay extra, they want to split the costs evenly and this makes it awkward.

We solve this issue by renting our own VRBO property and then inviting others to join us at no cost to them. Since their lodging is free, and we are spending about what we would anyway, we all have money left over for activities and nice dinners out. The properties have kitchens so we can eat breakfast and occasionally dinner together at home.

 

[brett]

What we find even more distressing is what has been passed on to the children of siblings and step siblings. There is a huge difference.

The children of those who have moved forward all seem tobe into post secondary education of some sort whether is be applied, business, or whatever. And in some cases graduate work. They were brought up in an environments that stressed life long learning and the necessity for some sort of worthwhile post secondary education. It was assumed that high school was not the end but rather the beginning of formal education.

For the most part, the children of those who did not move forward in their lives finished high school and went on to low paid jobs in their town. Most service industry/care home. Or took one year courses at a local college that led no where and then went into low paid jobs. It was as though, like their parents, they were afraid to move out of town in search of post secondary or career opportunities. So they will probably end up in a similar position to their parents. Shame really when there is so much opportunity out there just waiting to be grabbed.

 

[MRG]

I'm one of four siblings. Two of us got out of dodge as soon as we could, the other's remained in a crappy area.

My eldest sister, who left, did well for herself and is retired with two kids who are well off. My siblings who stayed didn't do so well. Their children stayed in the area, other than one, no one has but high school education.. They w*rk to and live paycheck to paycheck. It could be worse.

I watched co-w*rkers blow inheritences and windfalls. Some guy in his later 70s thinking it's great to be pulling 60+ hour weeks.

 

[youbet]

Interesting to see that most of the responses involve ‘financial [-]responsibility[/-] irresponsibility’.

+1.

Yeah, as soon as this thread started, it was easy to predict it would likely be dominated by "jumping on" posts putting down folks who don't do well in the financial management area. It's common for many of our members to seemingly enjoy some gossipy put-downs regarding their less financially disciplined friends and relatives........ And so be it.

I think I'm less inclined to do that because (1) I do believe there is a bit less self-determinism in life than many believe and (2) in our own case, DW and I are surrounded by folks who did a better job financially than us! This despite the fact that DW FIRE'd at 55 and I at 58 and we're doing fine financially at 70. We're just aware that we could have done better with careers, investing prowess, budgeting and other life decisions.

 

[jollystomper]

It just occurred to me that being broke in US is so much more blessed than being broke in many 3rd world countries. So much more.

+1

One of the reasons my parents worked to come to the U.S. was because visitors to their country would complain about how tough they had it in the U.S., how they had to struggle to afford things... but my parents observed even these folks had a lot more than they did.

We have friends both on the "broke" and on the well-off" side. Some of the "broke" ones are there because of the actions, but probably just as many are their through things they could not control. Same with the ones that are well off. Our opinion was that we needed to learn from both sides of folks.

And, on a sad note... two of our financially well-off friends have suddenly lost children in their 20's in the last 2 months. Which puts everything in the true perspective for us.

 

[Alvin Tostig]

Great thread. I'm on the verge of retiring (any week now), and not yet 62. As the original post, we have friends all over the map in terms of financial wealth. I know several who were very budget conscious, LBYM, and are easily enjoying an early retirement and can do whatever they want!

Yet, we know many others, who have virtually nothing in their late 50's or early 60's, and yet they made a good to excellent living. On the outside they seem fine, they always had the best cars, spent hundreds of $ on the best restaurants, entertainment, etc.

What I find as the BIG difference between the two groups - is that with the LBYM people they are astute and educated on asset allocation, the markets, savings accounts rates, etc. Talking finance is like a hobby for them.

The others sadly do not have much of a clue or are not interested. Families who make $150K - $200K and upwards and put little or nothing in their 401K's. My wife is a realtor, and it's amazing how many people appear to be living well, yet foreclosing on their homes (not because of the downturn in the R/E market), but more so in instances where they purchased a house for $200K 25 years ago, and they kept leveraging with Home Equity Loans to buy these nice things, and instead of owning their house outright, they now owe $400K and could not longer make the payments, and then foreclosed.

We are friendly with a fun couple that have all the best things you could ever want, but never have any money to do things....the one check they wrote to us in 20 years of course bounced...a very small amount so we didn't want to make a scene. They do fight alot but it's not about saving - it's more about spending!

One day recently, the wife said to my wife , "we make 170K and are not really putting anything away". I guess this will mean that when we retire, in order to keep up the lifestyle, we will need at least that amount". I almost felt a responsibility to educate them about the 4% withdrawal rule and how they would need about $4.5 million to live the same lifestyle...but why put added stress on them?

The first group of people who are educated about personal finance know about my retirement plan and fully get it. The other group, when I hint that I'm walking away from work in the next few weeks or going PT, have completely puzzled looks. I don't get into it with them - but I'm sure they feel I lucked out somehow.

 

[youbet]

when I hint that I'm walking away from work in the next few weeks or going PT.........

After all your efforts to reach FIRE status, why would you even consider continuing to work PT? Is it that your career is really enjoyable? Or more that your financial situation is still marginal and you're very young? Or?

 

[Mdlerth]

The seal of the confessional

Yeah, as soon as this thread started, it was easy to predict it would likely be dominated by "jumping on" posts putting down folks who don't do well in the financial management area. It's common for many of our members to seemingly enjoy some gossipy put-downs regarding their less financially disciplined friends and relatives........ And so be it.

Perhaps it's a good thing to do your gloating here and get it out of your system. That way you can preserve happy relationships with those less financially disciplined friends and relatives.

 

[bclover]

Paraphrasing OP's question to "do you have any friends or relatives who aren't exact clones of youself?" I'd answer YES.




With some thought and observation, this is a weakness you can likely overcome if you wish to continue relationships with these "friends." Do you have anyone in your life who is significantly better off financially than you that you enjoy a positive relationship with? If so, think about how they're handling the situation where you're friends yet you can't afford what they can. Or, think about what you do have in common with friends of less financial means and how you can emphasize those things in your relationship.

Awesome post.

Yes I have friends who are not as financially well off as me and I have friends who have waaaay more money then me. I don't choose my friends by their portfolios.

I never understand this threads, do people seriously go around determining other folks net worth like that.

Op, I have a good friend who is going through a rough time financially mainly because she is now trying to take care of an elderly mom and she's a single mom to a college kid. No she cannot come out and "play" as much as others but guess what, we compromise. Case in point

On the 19th we are having a "Grace and Frankie" watch party with the gals.
One's bring the pizza, I'm bringing the booze someone else will bring the dessert and the evil person will bring the snacks that are good for us and that we won't touch. lol. We'll have a blast, it will be inexpensive, which after the holidays ain't such a bad thing and we'll be supportive friends.

If you call yourself a real "friend" their income should be one of the last things coming between you.

 

[kcowan]

In Puerto Vallarta where we snowbird for 5+ months, everyone seems to be about equal because it is tough to spend your way to a higher lifestyle here.

Take Uber or a taxi. Go to the same restaurants. Maybe buy a premium wine at the restaurant. Walk the Malecon.

Sure maybe they live in a $700K oceanfront condo. But unless they entertain, no one knows. We can rent a condo to entertain.

 

[daylatedollarshort]

Great thread. I'm on the verge of retiring (any week now), and not yet 62. As the original post, we have friends all over the map in terms of financial wealth. I know several who were very budget conscious, LBYM, and are easily enjoying an early retirement and can do whatever they want!

Yet, we know many others, who have virtually nothing in their late 50's or early 60's, and yet they made a good to excellent living. On the outside they seem fine, they always had the best cars, spent hundreds of $ on the best restaurants, entertainment, etc.

What I find as the BIG difference between the two groups - is that with the LBYM people they are astute and educated on asset allocation, the markets, savings accounts rates, etc. Talking finance is like a hobby for them.

The others sadly do not have much of a clue or are not interested. Families who make $150K - $200K and upwards and put little or nothing in their 401K's. My wife is a realtor, and it's amazing how many people appear to be living well, yet foreclosing on their homes (not because of the downturn in the R/E market), but more so in instances where they purchased a house for $200K 25 years ago, and they kept leveraging with Home Equity Loans to buy these nice things, and instead of owning their house outright, they now owe $400K and could not longer make the payments, and then foreclosed.

We have quite a few neighbors and former co-workers with very good incomes who still lived above their means. It makes DH and I glad we found each other since we're both live below our means types. One family near us had two luxury cars and a boat in the driveway, kids in private school even though the public school are very good here and then we see the house foreclosed on. In a related thread on what could you cut, I think that means most posters here are generally pretty careful with money, always thinking ahead and would be able to sell the house, cars and boat and switch the kids to public schools long before they lost the house and all its equity.

 

[ABQ2015]

We solve this issue by renting our own VRBO property and then inviting others to join us at no cost to them. Since their lodging is free, and we are spending about what we would anyway, we all have money left over for activities and nice dinners out. The properties have kitchens so we can eat breakfast and occasionally dinner together at home.

That's a good idea but would not work in my case as I've tried to pay for the hotel room or pay a larger share many times but my two friends do not feel comfortable taking my money. But I'll be moving near one of them soon and plan to make frequent trips to the Oregon coast as will be only 3 hours away. Will probably rent a VRBO near the beach and invite her or her daughter's family to come along if they like. Since I'm renting it anyway maybe that will not bother her. Having lived in a land locked state most of my life, it is such a treat to stay on the water and watch and listen to the waves and walk on the beach.

 

[Luck_Club]

We have quite a few neighbors and former co-workers with very good incomes who still lived above their means. It makes DH and I glad we found each other since we're both live below our means types. One family near us had two luxury cars and a boat in the driveway, kids in private school even though the public school are very good here and then we see the house foreclosed on. In a related thread on what could you cut, I think that means most posters here are generally pretty careful with money, always thinking ahead and would be able to sell the house, cars and boat and switch the kids to public schools long before they lost the house and all its equity.

Slightly off topic but need to vent:

Trying to convince the bank of this very thing. Have 4 sources of income, strong equity in multiple properties, marketable securities, 13 year banking relationship; and the bank acts as if they would be more comfortable with a single high earning W2.

 

[daylatedollarshort]

Slightly off topic but need to vent:

Trying to convince the bank of this very thing. Have 4 sources of income, strong equity in multiple properties, marketable securities, 13 year banking relationship; and the bank acts as if they would be more comfortable with a single high earning W2.

I share your pain. We have found credit unions more willing to look at NW and portfolio income than banks for some reason.

 

[Souschef]

Slightly off topic but need to vent:

Trying to convince the bank of this very thing. Have 4 sources of income, strong equity in multiple properties, marketable securities, 13 year banking relationship; and the bank acts as if they would be more comfortable with a single high earning W2.

Find another bank. My DS had that problem with B of A, even after a long term banking relationship.

 

[RobbieB]

If you have your portfolio at Merrill Lynch and your bank is B of A you get a free large line of credit on your securities.

 

[Scuba]

That's a good idea but would not work in my case as I've tried to pay for the hotel room or pay a larger share many times but my two friends do not feel comfortable taking my money. But I'll be moving near one of them soon and plan to make frequent trips to the Oregon coast as will be only 3 hours away. Will probably rent a VRBO near the beach and invite her or her daughter's family to come along if they like. Since I'm renting it anyway maybe that will not bother her. Having lived in a land locked state most of my life, it is such a treat to stay on the water and watch and listen to the waves and walk on the beach.

Yes I think people perceive an invitation to join you at a VRBO property you rented without any input from them very differently than offering to pay for their hotel room or more than your “fair share” of other costs. The former feels generous without leaving folks feeling like they’re accepting charity. And it allows them to have more money to enjoy going out while they’re with you. Win-win in my experience. Enjoy the beach!

 

[audreyh1]

We solve this issue by renting our own VRBO property and then inviting others to join us at no cost to them. Since their lodging is free, and we are spending about what we would anyway, we all have money left over for activities and nice dinners out. The properties have kitchens so we can eat breakfast and occasionally dinner together at home.

When we vacation with family we foot the bill.

 

[ponyboy]

I had a pretty high "yield" last year, didn't seem to effect the investments either.

Im jealous.

 

[HGTVfan]

I live in a +55 community, and I am sure a lot are just scraping by. When we bought our new cars in August, I expected to hear some comments, but never did.
Unfortunately, my copilot was slammed by his late wife's medical bills, so he does not have much saved. I am happy to have him with me (he is like the brother I never had).
So, I pay for the planes for our flights, and he is grateful. Fortunately, money never comes up between us.

Love this. Life as it should be.

 

[Danmar]

Paraphrasing OP's question to "do you have any friends or relatives who aren't exact clones of youself?" I'd answer YES.

While we've grown closest to folks whose values and actions trend with our own, DW and I find that as we've learned to accept the differences between people, and not be so amazed that people are different, we have more opportunities to enjoy companionship and relationships.

Sometimes we're with friends/relatives who have more (in one case, much more) than we do and that requires an acceptance, without jealousy, that they're going to be enjoying activities we can only dream about. We also have friends/relatives with less than us. We try to graciously remember that repeated invitations to join us (dutch treat) for fine dining or travel wouldn't show good manners on our part. We emphasize what we have in common, try to be flexible and not spend much time awkwardly living up or living down to suite others.



With some thought and observation, this is a weakness you can likely overcome if you wish to continue relationships with these "friends." Do you have anyone in your life who is significantly better off financially than you that you enjoy a positive relationship with? If so, think about how they're handling the situation where you're friends yet you can't afford what they can. Or, think about what you do have in common with friends of less financial means and how you can emphasize those things in your relationship.

Intelligent post. I’m in a similar position. Most of our closest friends have similar values and “means”. All family and some friends have less means. Work around these situations by paying for family and often doing less expensive activities with friends. I am generally the first person to pull my wallet out. Seems obvious to me but maybe others have more issues?

 

[Milton]

Trying to convince the bank of this very thing. Have 4 sources of income, strong equity in multiple properties, marketable securities, 13 year banking relationship; and the bank acts as if they would be more comfortable with a single high earning W2.

Stop borrowing money and you can live life on your own terms.

 

[PatrickA5]

Our siblings are struggling. Most friends are probably better off than we are.

SIL (age 60) has $130 in savings and a credit card maxed out at $5K. She wants me to help her find another credit card, but I doubt she'd qualify. She's been on disability for years, but I never have figured out what her disability is. We help her out when we can, but she seems to have a mindset where other people "owe" her since she doesn't have money. It gets a little old after awhile, but we still help her a lot - mainly non-financial.

DB has made a fortune over the years and has nothing to show for it. Divorce and the economic downturn really hurt him financially. But, he keeps trying and has been doing a lot better the last year getting his business back off the ground. Still, I doubt he has a penny saved for retirement.

The good news is both will probably have decent inheritances in the next 5-10 years that just might allow them to have a decent retirement. Maybe.

 

[DawgMan]

Interesting responses. As others have said, we have friends in various "financial classes" we socialize with and just try and be sensitive (not patronizing) to their situations. Egs... we have friends who "host" parties asking everyone to bring an app, drinks, and what we want to throw on the grill! I do get to flush their toilet for free! I discuss with my DW sometimes as to when are these people going to learn how to host "grown up" parties. None the less, we know how this is and we enjoy their company/friendship so we know what we are in store for. OTOH, we often host the steak dinner parties with these same peeps and supply the whole package. We do it because we enjoy entertaining, I was raised when you ask people over you host, and we can afford it. I think all these friends (aka cheap bastards... did I say that out loud??) enjoy both get together s the same in terms of friendship. OTOH, we know the friends to call to go out and have the fat steak dinner with where no one is going to be uncomfortable when the check comes.

 

[dvalley]

I don't know, in SoCal it seems like I'm the one who's poor and scraping by. Unlike my friends/colleagues and neighbors I don't have two Tesla Xs nor shiny 1/2 ton trucks with more bling than my checking account could handle. There just seems to be a ton of money everywhere here. I often wonder what I did wrong despite me trying to be money conscious all my adult life.