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I think there's a happy medium between teaching your kids about personal finance and going over the details of your estate with them. Perhaps it's because my kids are still young adults and teenagers, but they don't need to know exactly what we have in our portfolio. General budgeting and investing information? Sure, but they don't need to see our quarterly statements. Not yet, anyway.
I think I'm more surprised that another poster has discussed his financial standing with his parents. Neither set of our parents have any idea how we've arranged our finances or what we have amassed. It's none of their business how we manage our money, and, it's better that it not become fodder for discussion or worse, gossip, with other members of our families.
When I told my parents in the summer of 2013 that I had become a millionaire, it had occurred to me that my share of their estate could be reduced because I was doing so well financially. My mother had dementia by then. It also occurred to me that every time we were with relatives, mom might ask "What did you say you were?" The millionaire next door, mom. I told them anyway.
Neither of these scenarios happened. My father mentioned the value of an annuity he had taken out in my name. It was a bit higher than I had calculated. My father did not volunteer any information about his own financial status.
By Christmas, my father was dying of colon cancer. My sister and I had to handle everything. The financial sheet father had given us years ago was out of date. It took me a couple of years to track down all of the investments.
I tell people in my age group that they need to talk to their children about their finances so the children will have the information they need when the parents inevitably die.
I like what CaptainNJ said- "when my children are old enough, i intend to share with them exactly how much i have and exactly what i plan to do with it. i feel it will help them learn how to manage money and also eliminate any questions about my plans for myself and them."
thanks. i am basically taking what my dad has done and trying to improve on it. not that i have any right to complain, i was given every advantage in life and i utilized those advantages to be doing very well. but i just want to do even better for my kids.
Quote:
Originally Posted by mshultz
When I told my parents in the summer of 2013 that I had become a millionaire, it had occurred to me that my share of their estate could be reduced because I was doing so well financially. My mother had dementia by then. It also occurred to me that every time we were with relatives, mom might ask "What did you say you were?" The millionaire next door, mom. I told them anyway.
i do get a little worried with my dad knowing too much. i dont think he will adjust the inheritance between me and my brothers, i am more concerned with how he will handle things today. like i said above, i have no right to complain and my concerns may be unfounded. however, my dad does like to be in control so i worry that he will feel like he loses leverage if i am doing too well and dont require his assistance.
as far as my finances not being any of my kids' business, a big part of why i want to be open with them is i want them to be open with me. not to control but to help and they feel comfortable always speaking to me about finances. also, there will most likely be estate planning issues so my business is their business. i dont want them to think that they have to wait until after i die to know the plan. i currently keep accounts for my children that i fund and invest. so we are partners in their success.
if our kids inherit our estate they need to potentially see a estate attorney because they may be over their states limit when combined with their assets for their kids to inherit things without state estate taxes .
I have calculated my total net worth before but never my total investment assets. I was sure I wasn't at the $1 million mark solely in investments. But I did the calculation and it turns out that I was wrong. I hit that mark earlier this year. I'm 34.
Personally, all this means to me is that what I'm doing is helping me work towards my ultimate goal. By itself reaching this milestone didn't elicit even a slight excitement it me. My ultimate goal is tor retire as early as possible. I'm working on something that may triple my net worth to $3 million in less then 4 years so I can retire. However, this requires a few things out of my control to go my way. In other words, I need a little luck along with the effort I'm putting in. If I reach that goal then I will be excited. If not then I should be guaranteed to get to $2.5-$3 million in investment assets by 46.
As others have said while $1 million is a rare achievement that most will never accomplish; the amount of financial freedom it brings is nowhere compared to when the term "millionaire" was coined. An example of this is the book "The Millionaire Next Door." To be considered a millionaire by that books definition (the year it was published) you would need to have over $1.6 million. And that's if we go by the BS inflation index the government uses. I suspect the actual number is closer to $2 million/
Thinking about having $1M is extremely limiting if you ask me.
It's a lot of money.
But if you have a business, it can grow in value from say $1M to $5M almost overnight. It's hard to get to that $1M, but once you hit it, it can quickly become a distant memory. And $5M can turn into $25M just as quick. And so on and so forth. Money, especially large amounts generated though leveraged business operations, can snowball quickly.
This is really true. I have a number of percentage ownerships in income-generating buildings and nobody really shared all that much with me throughout my 20s about what these things are worth. No idea if that was intentional or not as I’ve always been very self-motivated, so it wouldn’t have deterred my ambitions. But before I turned 35, I was given a balance sheet summarizing all of my assets and their valuations. I was completely shocked by the number as the last time I had seen anything like that summarized it was way lower and even my opinion of what it must have grown to was a lot less than what it was. Investments can grow fairly quickly especially in cases like that where even if you spent the cash flow (which I didn’t), then you’re still sitting on an appreciating asset.
We had about $60k when we hit about 26/28 from here and there Roth IRA contributions and my wife's job as a teenager and in her early 20s. Now 7 years later we are about a month from $500k in investments. I'm suspecting we hit $1 million in the next 4-5 years. So if that happens it would be at about 38 and 40 years old.
1M means a person won't be choosing between running the furnace or eating that day.
Most overweight people make the wrong choice.
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