You remind me of a friend. 34 years old, still deep in debt. Her father had a restaurant, but needed her for the Wirtepatent (license). Made her sign all kinds of contracts to keep the restaurant going. After a couple of years they went bankrupt. No GmbH or AG, so she and her father were fully liable. He didn’t have a job and never got one on paper again. So she had to pay it off while he was living a great life by working black. She could never prove that he had the money and income to pay it back himself.
I allowed myself to split this into a separate discussion. It’s an interesting topic to me. I would like to know: how much about your financial situation do you share with your parents/siblings/partners? I guess if you’re married then you probably share everything.
For example, I do not know exactly how much my parents own. They know how much I have because I tell them on occasion (they ask and I guess it’s kind of a low level instinct to want to brag about it to your parents so that they’re proud of you…). But my dad is unemployed since years and I don’t want to give him the sense of complacency that if he won’t ever find a job again and money runs out, that I will support him. That would be awful, because to me he’s still able to do some work, he has just neglected his body for years (got fat) and slacked off at work (I guess he never imagined it would get so hard to find a job at his age and he did not sharpen his skills, like English). But try to tell him something and he will explode with anger.
So recently I was feeling a bit uneasy about this whole full disclosure of my finance to my parents. What are your thoughts?
I disagree. Nothing is unconditional. If you had a son and you paid for his education and then he still didn’t have a job and would not look for one, because he knew you were loaded, would you just calmly send him more money?
I figured out that neither my wife nor my close friends are interested enough in financial topics, so I rather started a blog and share the data with the world instead.
My parents are typical Swiss people whenever I tell them about some gains of the Bitcoin portfolio their first thought is that I should make sure to not tell anyone because it will attract jealousness and envy. Also older Swiss people treat money as a general taboo topic.
The situation of my parents is actually much better than mine, and they know it. In my family, we don’t talk much about our wealth. Perhaps because we all have good jobs, are homeowners and don’t have any history of misconduct with money.
We can discuss a lot of personal stuff, but we are acting like strangers when it comes to wealth. We know we could support each other mutually if we had too, but that can’t happen since it would immensively hurt our pride to request financial help from one another.
If that can make you feel better, having this kind of conversation with my parents would be impossible too. As an example, both are at risk from coronavirus, I recently tried to (very politely) explain that their attitude was a bit offhand in the current pandemic context, given their respective health issue. The result is that I started an uncontrolled fire, it’s an useless effort, things go south immediately, they just won’t listen, that’s the way it is. They won’t take any lesson from us. In their mind, nothing has changed in 30 years, we are the kids, they are the grown-ups, we don’t get to judge what to do, even if we actually have very valid reasons to argue.
My parents also don’t know. We simply don’t talk much about these things.
I am currently planning on leaving my job in a major corporation; it’s become dull and unsatisfying and I start to feel that I’m wasting precious time (that I won’t get back) just to pile up more money.
So I plan to take some time off, enjoy life, and then we’ll see. I’ll go back to work, maybe part-time, who knows. Let’s call it “intermediate temporary pre-FIRE”.
Anyway, I told my parents about it… eyebrows went up: “But no, you have to continue working, like everyone else, until 65, what’s this talk of quitting a fantastic and well-paying job!”
Numbers wouldn’t have made any difference. Of course I was a little proud: look how well I’ve done for myself!
I share everything with my wife when she’s interested. I’m the ”asset manager” and she’s happy getting regular reports. It’s our money anyway and she absolutely has the right to know what it’s doing. She’s just not that interested and probably doesn’t know what an ETF is.
My parents know how much I earn and how much we save per month but not our NW. I agree that there’s a degree of proud telling them that you are doing well.
I have a relatively accurate understanding of my parents’ financial situation because my dad gives me regular updates. I think that’s smart because he is using me as a backup for that info in case anything would happen. My dad had a succesful business but he wasn’t that clever with investments. He usually just bought whatever funds his own bank was offering. At least he understands compound interest and inflation and he’s very patient. He has never panicked about huge market moves so I guess he’s comfortable with his allocation.
Btw one of the smartest things our parents can do when they get older is to prepare for their death by creating an index of their assets, liabilities etc. Sounds morbid but my dad even tells me when he changes the password to his desktop computer.
I don’t share a lot with my siblings although my sister probably has an idea about my salary and we talk about investing. She is anyway making more money than I do and with her lifestyle she would be the perfect Mustachian. My brother has been struggling a bit financially due to no fault of his own. We sometimes talk about business management and taxes but not about money per se.
Lastly, I’m in a whatsapp group with some old friends who are financially comfortable. We’ve worked together in the past and shared salary info with each other (I wholly recommend this btw). We share investment ideas, successes and complain about our failures. We know the portfolio size of each other but not the NW.
That’s generally a good advice. I recently put together a keep note about the location of each of our assets. If I don’t use my Gmail account for 3 months my wife would get access to it and with the stored passwords to basically all assets (modulo the SMS / Authenticatior codes). Would your loved ones know how to dissolve the IB portfolio?
Yeah, it’s crazy. When I was a kid, I thought “wow, my parents have so much responsibility and power”. I had much respect for adults and to this day it’s very hard for me to start talking “du” instead of “Sie” to some adults (in Polish we also have the polite form). And now I’m in mid 30s, and my dad still sends me to bring him a beer like I’m his errand boy. The parents of my gf are over 70 and it’s still them who take care of her. They always cook, they drive the car, they help her with the tax declaration etc.
Haha, I once told my dad that probably when I’m 40, I will not need to work anymore. And he was like “what are you talking about, you cannot predict the future, the stock market can crash”. And then I thought to myself: well, if I have to support my dad because he was too lazy to work, then maybe indeed I cannot retire by 40… And that’s what inspired this thread.
Clever. Is this a Google feature? I’ve been thinking about doing something similar. I’d like to have an overview of accounts on paper with instructions on how to access (just the company names with URLs etc.) I use LastPass as my pw manager and I could somehow share those credentials but what to do with 2FA? IBKey is biometric and many other things work with FaceID or fingerprint. I also have many codes on Google Authenticator and I’m not aware of an easy offline backup for those.
How did you you do that?
In case of death bank accounts can be a problem too. I know a person whose partner died. They had a joint account at the bank and suddenly it was blocked because it was considered as part of the estate. This presented a huge issue because she couldn’t pay any bills anymore. We have always had separate accounts and we try to split the emergency fund between us two.
My family and friends don’t really know much about my finances. They are aware that I have a high paying job, but would by no means estimate how much I actually earn. Same goes with net worth: They certainly consider me financially savvy, but would not even come close when estimating my net worth. On the contrary, I know quite a bit about my family’s finances and those of some friends, as over the years at one point quite they’ve asked for support with their taxes or had questions about investing. Still, for most of them finances are off limits to discuss, so no one really asks me directly. In the rare occasion one does (typically non Swiss friends), I’m quite open about what I do (investing) but won’t give any specific numbers.
Certainly FIRE or just living below their means and frugally in general is not for anyone. But exactly because of that I would never share too much. You’ll have worked your ass off, for others to benefit from (and sure, big difference between someone unlucky and someone just not taking care themselves). It is the big conflict I myself have not yet answered (and is quite a few years out): Who and how am I going to say that I retire from a regular work life? Because once people now much money you have, they’ll want their piece of your cake. Can get quite ugly if those people are the ones you treasury.
Except my mum: she’s really nosy and would love to know how much I make and how much I have, for this exact same reason I don’t tell her
In general if you met me you might think I am poor from my old clothes or the fact that I am always careful about the costs of things. I like that because I would never want people (especially old friends) to feel envy towards me, not because they might one day ask me for money or kidnap my children, but because I’d hate to be the source of negative emotions in them.
Unfortunately, we often can’t educate our parents, which is why, in Switzerland, it’s rare for children to bear a responsibility due to their behavior. Unless they get social help, and you have enough wealth that the State/Gemeinde decides you should participate which is something we are exposed to.
I know the financial situation of my parents because of this, one of them has opened to us (their children) since the other is a liability. I like to talk about finances and am pretty open about my situation with my trustworthy parent and my sibling, though that’s not a topic that gets often on the table.
All in all, I don’t feel a need to hide anything but would be pretty firm and quickly resort to a lawyer if I felt like someone is putting a liability on my future in order to escape their own responsibilities and live a luxurious, lazy life at my expenses. Meeting basic living needs is a different matter, I’d jump in in an heartbeat if someone close to me was facing hardship and couldn’t meet them (we’d then assess the situation and try to find a long term solution to that).
I may be a bit too serious/dire for this topic, though I guess, @Bojack, that we share a partially common situation.