How much to tell the kids/rellos/friends about your IP's?

[bespoke]

Following on from another thread I have a dilemma I need to sort out some time in the future

How much do you let your kids know about how much you are worth?

I have 1 child (3 year old) who was born when I was 40, so there won’t be another. I want her to have her own achievements and grow her own wealth without relying on ours. As she will probably be < 50 when we go, I don’t want her to spend her life bumming around knowing that a sizeable inheritance is coming her way. I wasted the brains god gave me and didn’t get my act together career wise until my mid 30’s, in fact I still haven’t got that together but that’s another story. So I don’t want her to do the same.

But then, if I get things right with my property investment it would be a good thing to share with her the tricks and traps and inspire her to do the same herself. I won’t mind giving her a hand up but not a hand out. I also don’t want her to go around telling her school friends that mum and dad have lots of houses (only 3, 4 including PPOR), hopefully more to come by then.

And on that note my husband and I have noticed that his sister & B.I.L. are being a bit funny with us, and I’m pretty sure we haven’t done anything wrong. The only conclusion I can come to is that they are a bit jealous. We don’t tell them what we have but I think my in laws do. Despite earning slightly more than us, my SIL and BIL don’t own any property and I think probably have a –ve net worth cause I know they llooovve shopping with those credit cards. We are thinking now that we shall keep our mouths shut about any future purchases to anyone. The green eyed monsters seem to rear their ugly heads when you start to get ahead.

I’d love to hear what others have done about this.

 

[joanmc]

Our kids have helped us build our wealth and as such they benefit from nice holidays etc. We will be leaving them millions when we go (hopefully a LONG way away) and it is imperative to us that they know how to make money and more importantly manage it and keep it.

We constantly tell them the money is for our retirement and that we won't buy them houses etc but of course as they get older we will help them with a "loan" they just don't know that (unless one of the little buggars reads this!).

We hardly ever give them a gift of money other than birthdays or xmas and then the most we have ever given is 200. (our kids are 20, 15, 13).

As for extended family ... we try not to discuss it as none of them invest and it just becomes annoying.

 

[attrill]

Richard Branson's book is good to read. His kids have obviously grown up around huge wealth but his daughter is a pediatric surgeon. Warren Buffet is another that has always made it clear to his kids that they would not be getting a large inheritance.

It is up to the parents to decide, but to leave a child a large inheritance without at least making sure they will manage it properly will only lead to misery for the child and the loss of all that the parents worked for.

 

[The Y-man]

. The green eyed monsters seem to rear their ugly heads when you start to get ahead.

I’d love to hear what others have done about this.

Emphasize how much you owe (not own) - gets sympathy.

Cheers,

The Y-man

 

[Aaron Sice]

i would just keep my mouth shut.

it's nice to tell your folks how you're doing - maybe just ask them not to share too much detail.

as far as kids go - they'll know nothing of what we own until they are MUCH older.

i'll teach them to save, then how to manage their money, and then how to make money from their money. small steps are best - allow them to master each step before moving them up a rung in the education ladder.

example - we're going to the royal show this year. our daughter wants to know why we're taking the train and not driving. i said because i sell my time for $x an hour and every hour int he day i value as that. so to drive in would cost me $x plus $10 in diesel and parking fees. the train costs $8.80 and is the same amount of time. so we're saving money by taking the train. she got it.

then we talked about showbags. she has $6 saved from the odd jobs around the house. she wants a barbie showbag for $8 - so she was upset she doesn't have enough. we told her she could earn more by doing some work around the house.

well, she was straight to it and knew exactly what to do. she cleaned her room and got another $1, then she cleaned the playroom and got another $1. now she has $8. so i told her - we were going to buy you a bertie beetle showbag anyway, so you can have that $2 from us and you put it into your moneybox and take your $8 and buy your showbag. she was rapped!

i reward hard work and intiative and i like to provide incentive to do it again.

 

[wylie]

Our situation pretty much mirrors that of joanmc. Our boys are 20, 17 and 13 and have grown up helping to renovate, paint, pave etc etc.

They just sort of "knew" growing up that we have a couple of IPs and thought we were "normal" until they got a bit older and realised that some kids haven't ever painted a house or ripped out a kitchen. Still, they were never interested in the value of the assets they are helping to paint and maintain.

They have never really added up with my parents have either, and they have helped paint and renovate those IPs too.

To be honest, even with all the help they willingly gave in the past (and many jobs they did were paid, but they were not told they would be paid until after they did them) they are a bit "over" renovating now, so it is hard to know what the kids will be like when they become "their own man".

In fact the last place we bought, the boys didn't do very much at all, and I had a good think about things..... what we expect from them, what we "hand" them, etc.

 

[JamesGG]

Our parents took the approach of telling us exactly what they were doing - and most importantly, why - in terms of building wealth, as we were growing up. I still get emails from Dad from time to time about new deals that he's bought into or sold.

Growing up in and amongst it all has gone a hell of a long way towards me doing the same things myself, believe me. They also made it very clear to the three of us that we had to create our own lifestyle, without relying on them to fund it.

I figure that when I've got kids, I'll probably take the same approach. I do now, too, with the young guys that I'm mentoring in the office here.

As far as other friends go; they're generally aware that I do stuff but unless they ask, I don't tell too much. Most of them aren't so interested, anyway, and it doesn't have any bearing on how we get along.

 

[twobobsworth]

We stopped telling friends after purchase 2, and with the "looks" from family after making purchase 3 we won't be mentioning any more.

I think being honest with your kids is always the best. I doubt they'll ask you how much you are worth.

 

[Witzl]

My fiancee and I have had this chat a few times now, but just in regards to how much info we give to our parents, family and friends.
We dont have kids yet, so havent gone down that path yet (we're only 27!).

We've already found that some of our friends started treating us differently, and have already lost a couple of friends through *weird* circumstances that we can only put down to us changing our tune to be more financially wise and buying IPs.
After a few incidents of friends saying things like "WHY THE F*** ARE YOU DOING THAT!!??" and other such stupid il-informed commentry when discussing the purchase of our IPs, we decided just to not tell friends anymore.
Funnily enough, when we bought the PPOR no one batted an eyelid.

Family on the other hand...we have to be selective with whom we talk to about what we are doing and how much information we give.
My dad is super frugal and very risk adverse, to gives a good perspective on being cautious.... but is very supportive. My mum doesnt understand how on earth we've done it, but thinks its fantastic.
On my fiancee's side... its just easier not to talk about it to her parents. They think we are mad, and just dont understand it and have occasionally said a few nasty things. So we just keep it to ourselves.

I like reading what others have done with regards to teaching the lessons to their children. This is something i want to get right when my time comes.

 

[jingo]

Our parents took the approach of telling us exactly what they were doing - and most importantly, why - in terms of building wealth, as we were growing up.

This is the approach we are taking with our daughter. She is only 5, but has been involved in inspecting many properties with us. Obviously she doesn't understand exactly why we have been buying IP's, but in time she will.

I think sharing information with your own children is important for them to learn first hand how to build and manage wealth. Then to be able to manage the assets they will eventually be left with.

I don't discuss our wealth building process/progress with our relatives and only with one friend who owns a few IP's and whose in laws own about $15Mil in RIP. With other friends I don't go there!

Regards Jason.

 

[investor2009]

How much do I tell

Kids/ Don't have any, thats why I've been able to become rich so fast in the first place.

Rello's/ Even my rellos are jealous of my efforts which really dissapoints me.. Especially my Dad whos worked hard all his life.

Friends/ Only tell the friends you never wish to see again about how well you're doing. Thats my experience so its best to keep your mouth shut. Unfortunately.

 

[jingo]

Kids/ Don't have any, thats why I've been able to become rich so fast in the first place.
.

Lol!

We have actually became much wealthier since our child was born! How strange is that!! (We've accumulated most of our IP's since she was born!) (But I know where you are coming from!!)

 

[Nth Brisbanite]

I tell my adult kids what I am doing but don't give them all the details unless they ask. Three of them have investment properties in addition to their PPOR. I don't have problems talking with them about what I do but when it comes to the wider family and friends, I've learnt not to talk about investing with them as I too get "wierd" (jealous) looks.

Some people are great when it comes to helping you out when you are down. However when it comes to sharing your adventures and achievements it's best not to say anything.

 

[Jonathon]

With friends, I'm delighted to sit down with them to talk about investing in property, but only if they ask. Similarly with broader tax planning and financial advice, I'll only discuss it with them if they ask for advice.

It gets a little difficult when you see them making mistakes, for example paying down debt on an investment property instead of paying off the PPOR mortgage, but if they don't ask then I won't interfere...they know I'm more that happy to help if they ask.

As for my kids, I always worked in my dad's shops since the age of about 10, so I never got pocket money, just wages. I'd like to do the same with my kids (only babies at the moment), pay them for work around the house, or similar, to show them that hard work gets rewards. But I think paying them to clean their bedroom is probably where I'd draw the line.

 

[marg4000]

All of our family and friends know we have IPs, but we have never made an issue of it, just brief statements of fact.

There has never been any jealousy because there is nothing to be jealous about - we all make different choices in life.

Just because we chose to acquire a few IPs doesn't make us any better than them. We are all approaching retirement, and I can't think of any who aren't in a comfortable position. Some have developed businesses, some have excellent superannuation, some have significant (and rapidly recovering) share portfolios. There are many different roads in life, and buying IPs is only one.
Marg

 

[Nth Brisbanite]

Kids/ Don't have any, thats why I've been able to become rich so fast in the first place.

If it wasn't for one of my adult kids, I'd never continued investing. After making a mistake with my first investment property, I'd decided not to buy anymore. Without his enthusiasm and success in investing, I'd given up a long time ago.

Investor2009, can you show me any studies to prove that kids hold you back from becoming rich. Just look at the wealthy, semi-wealthy, moderately wealthy!! How many them of them have no children. Look at your single friends compared with your friends who have children. Who is richer?

 

[HiEquity]

Our kids are four and eighteen months. The older one know we own houses that other people live in and pay us for. That's as far as it goes so far but I plan on telling them everything about how it works as they grow up. I can vividly remember a financial lesson my Dad gave me when I was about seven about renting vs buying and I have been firmly against renting ever since. Only ever rented a house when a company was paying for me as a result. These things can leave lasting impressions.

We tell our parents about every purchase and they just figure I must be earning mega-bucks in my job so that's how we can afford it all! My in-laws have had to be trained not to tell everyone else because they're as proud as punch which, while nice, has caused some issues with extended family. My FIL reckons that anytime I feel like giving him financial advice I shouldn't hold back!

We have a few friends who do some investing and we can talk about things with. However, as we have gone on ahead of them over the years some of these conversations are getting a little awkward now but it's still manageable so far. Others we just know not to mention anything...

 

[investor2009]

Look man... I'm not saying kids are bad, nor are they good.

For me, I don't want any.
If I had some, or one, I'd maybe have 1 property if I was lucky.
They cost alot to feed and clothe, and school, and drive around.
The money I save from just looking after myself goes towards investing. On my income (which is bugger all) I'd be as wealthy as the guy next door.

If it wasn't for one of my adult kids, I'd never continued investing. After making a mistake with my first investment property, I'd decided not to buy anymore. Without his enthusiasm and success in investing, I'd given up a long time ago.

Investor2009, can you show me any studies to prove that kids hold you back from becoming rich. Just look at the wealthy, semi-wealthy, moderately wealthy!! How many them of them have no children. Look at your single friends compared with your friends who have children. Who is richer?

 

[josko]

Look man... I'm not saying kids are bad, nor are they good.

For me, I don't want any.
If I had some, or one, I'd maybe have 1 property if I was lucky.
They cost alot to feed and clothe, and school, and drive around.
The money I save from just looking after myself goes towards investing. On my income (which is bugger all) I'd be as wealthy as the guy next door.

LOL. you are funny.

If I had put the same money I spent on cafes and restaurants in Crows Nest into an account instead, I would be so very much better off now.

But hey, www had just appeared and I was still working on the smallest Apple Mac anyone can remember. No SS back then!

I find children and investment strategies don't mix.

Don't think about the two working or not working together. The two stimulate completely seperate parts of the brain, not to mention the heart.

Deal with what you are doing now and the rest just falls into place.

Maybe that is why I don't tell my children about our properties. They know about the IP close by becasue we do repairs every now and then.

I do however continually give them Financial Education and I have found my 11 yr old has quite a good idea on how Mortgages work and how to manage his money.

Regards JO

 

[daniellee]

Hi

We only discuss about property investing with an aunt who also invest in property. With family, it is only on a need to know basis, and with anyone is interested; not that we had many queries.

As for friends, I had an argument with a close friend, and decided that it is best to stay quiet on our investments.

http://www.somersoft.com/forums/showthread.php?t=55089

As for kids, we intend to keep them involved in the process if they are interested, but they are not getting a cent if they do not have the right wealth mindset and skills set. The first kid is coming soon, so time to put our words into practice.

Regards
Daniel