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

[rugrat]

This is interesting.

Personally, my kids are still young, so while I am honest - what they take away from it is sometimes interesting. My 3.5yr old DD for example, knows we are building another house, for other people to live in: but she comes up with her own explainations as to the why. I beleive honesty is the best policy with children, of course that doesn't mean you cann't sensor things that are over their heads (or just none of their business).

Family - My immediate family (I have five siblings) We tell everything. How much we tell generally depends on interest level. DH's family is another story. We are already considered 'rich' by them (perceptions, hey?) because we manage our money better then all of them. It is hard because DH wants to be able to share with them, but we really have to limit how much we say. Extended family aren't really in the picture, neither of us converse with them anyway.

Friends - work in progress. It really is a case by case basis. I don't keep i secret from anyone, but I don't advertise either. It is hard sometimes, you might just make a simple innocent comment about saving money - and they will ask what for - a house - oh are you upgrading - no it's for a rental property - then depending on the reaction, it can get quite awkward. Sometime I almost feel they expect me to tell them about how much of a struggle it will be with so much debt, or how I am going to have to go to work fulltime to afford this or some such. But that's not even close to true, so it can make for some weird conversations.

The thing about alot of my friends is many of them are SAHM's who's partner earns alot less then mine, and they do struggle with money. So I don't want to go rubbing it in - IYKWIM? But that means I am sometimes not telling them about something that can at times consume alot of my time and energy and passion.

 

[Sheryn]

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.

My Mother managed the money in my parents house and would never discuss anything regarding 'money' and made numerous mistakes which I can now see from hindsight.

Me/us - we discuss and ask lots of questions.

Our kids - we discuss money matters with them.

28 year old son - didn't need help with $'s to purchase PPOR (earns more than his sister) We are extremely proud of him/

26 year old daughter did need help with $'s.

Son is now arranging finance to buy 1st IP [which he will self manage if I know him].

SHARE YOUR INFORMATION/EXPERIENCE


I have read some wealthy people plan on making their kids / family members earn their own money and have cut some family members off as different beliefs and lifestyles etc.

You never know what life will throw at you.

My Father believes that family wealth should go to the sons in the family, so I do not expect anything as he has different beliefs to me.


Sheryn

 

[BayView]

Warren Buffet is another that has always made it clear to his kids that they would not be getting a large inheritance.

Smart guy; probably said that so the kids wouldn't bump him off for the dough.

I reckon it's great to share your knowledge/experience/success with your kids.

There are too many losers in the world spreading their knowledge to their kids....

 

[twobobsworth]

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

It's because of my kids that I've pulled my finger out and actually started investing.

 

[HomeBuyAU]

Actually this is a good thread to read for someone getting into investing. I can totally relate to how it would cause jealousy with friends and family. I mentioned to a family member recently that I would be buying another house soon (my first IP) and she said " what, another one?" as if quite amazed I was buying another house so soon but there was no jealousy, just not understanding about investing . She also purchased her first home recently too. So I will keep it to myself in the future as I could see it leading to problems especially with other family members who might get jealous or suddenly want to become a bit more chummy.

As for kids, well I don't have any but I believe if we do later then I would share everything with them. Nothing would be hidden ( in reason) and we would be an open and sharing family. If they are brought up properly then their attitudes would be right so they should be able to make proper decisions. If they are brought up to be little spoilt brats and you hide everything from them, sneaking around to visit your IP's and hiding your financial documentation etc then the children will grow up to be sneaky etc as well. I would rather have kids that grow up to be responsible, understanding that can make their own decisions and if they can't show that then they won't get their inheritance until they can prove they will handle it right.

 

[jingo]

My Mother managed the money in my parents house and would never discuss anything regarding 'money' and made numerous mistakes which I can now see from hindsight.

Me/us - we discuss and ask lots of questions.

Our kids - we discuss money matters with them.

My parents would not discuss money matters either. Everything was so secretative. I really don't and cannot understand why! I like your approach above. My wife and I will teach our daughter how to invest and manage money responsibly, and, in time, will gladly show her what we have/ are doing. Who knows, she may even have a suggestion of two to improve things!

Regards Jason.

 

[Sheryn]

My parents would not discuss money matters either. Everything was so secretative. I really don't and cannot understand why! I like your approach above. My wife and I will teach our daughter how to invest and manage money responsibly, and, in time, will gladly show her what we have/ are doing. Who knows, she may even have a suggestion of two to improve things!

Regards Jason.

We charged our kids board from their after school jobs and made them save money as well.

Best thing I ever did was set up automatic deductions from their wage into a second account for them and we discussed increasing amount and goal of house deposit / purchase frequently.

 

[battler]

Our kids were always aware of what we're doing, as they helped in their younger years, and with the knowledge that at some time it will pass to them, their comment was "that's nice we can add it to our own".

We think that says it all, and couldn't ask for more.

 

[Aaron Sice]

We dont have kids yet, so havent gone down that path yet (we're only 27!).

i'm 29 and have my oldest of three about to enter PP.

get out there and breed man! you owe it to society.

 

[kathryn d]

We talk quite openly about our IPs.I haven't noticed any resentment from family, friends, or co-workers.
With co-workers, you really only need to tell and couple, and they will spread the word.
I was discussing a certain property that was for sale with a co-worker, which even for us, is still a tad bit expensive.Another co-worker knew of this place and chuckled, cause he thought we just joking.
He said I can't be too rich (to buy it), after all I'm still working there.
The other co-worker informed him I am getting ready to quit,within the next year.Occassionaly, I'm asked if I am still quitting.
My co-workers seem to enjoy the stories I tell about our tenants.I just found out I work with the brother of our newest tenant.
They see me at the lunch table with my coffee thermos, and my lunch I brought from home.

A couple of co-workers have mentioned they would like to do what we are doing.Then they say they want to sell their trailor to buy a house. I keep stressing, you can rent the trailor.One sold, and the other couldn't find a buyer. He found a tenant and is actually talking about keeping it now. Maybe something I say or do is finally rubbing off.

 

[Minxdamanx]

We talk to our kids freely, but they are both adults.

Our son is interested in buying an IP in a year or so, so he picks our brains and we share what we know.

I talk to my boss - he's a fellow property investor.

I talk to one girlfriend - but not when her husband is around as he gets a little 'odd' and starts predicting that we will fall on our face.

Apart from that - no one knows, but it doesn't really come up - none of us really discuss money/investments etc in our circle of friends and acquaintances.

 

[ianvestor]

i'm 29 and have my oldest of three about to enter PP.

AcronymFinder.com returns 206 matches for PP :/

My situation is that all my family and friends are easy to talk to about our investment properties, but my wife doesn't want us to tell anyone. It's hard for her everytime I say anything because she is used to 100% secrecy when it comes to money, and it's hard for me because I'm holding a lot back from family when I'm used to 100% openness.

 

[softmonkey]

I find it works to have just "one IP".

Having one IP doesn't threaten anyone and it's fairly common. And it still lets you talk about property investment, lets other people know you are approachable on the subject, and you can still have the occasional whinge or story about your "one" tenant. Just don't go into too many specifics about the tenant lest someone figures out they change age, gender, etc every week...

 

[Piston Broke]

i'm 29 and have my oldest of three about to enter PP.

I was an independent PPer at three

 

[Jebb]

As long as I can remember my parents had their own house and an IP 20 mins north of Perth, then in about high school my parents bought another couple. I never really thought much of it then, but I think it is because of them that I wanted to get into property investing and bought my own place at 25, paying it off in 4 years (had a huge 50% deposit from cash I had saved plus sold a car I bought in Japan at a major profit). If my parents never talked about it, I wouldn't be in the position I am today.

When I was younger, my dad was always up at the "duplex" every other month fixing something or cutting grass/trees. I only now realize why he was - saving money by doing it himself on the weekends.

 

[jrc]

Kids - yes you want them to be independent. But you need to train/teach/mentor them too. What they need to know depends on their age. Our young children have spent time with us when we've gone and done maintenance. As they grow older they will get some of the conveyancing and borrowing processes explained.
Friends - our close friends know we have IPs. It's not something we talk about. Some of them know that we have one whose purpose is to provide education for our children. Some might be a bit jealous - but they had the same opportunities to buy similar properties to us at the same time.
Rellos - some know more than others. It's not something we push down anyone's throat.

 

[Shaneelastic]

All my friends freely talk about their property and other investing activities with me, probably because I'm in the finance game.

That said they will not share as much detail with other friends.

On the original question, I knew from about say 16 exactly what my parents had, earnt and all that. It has probably set myself up well in understanding finances.

If you do get them involved you can always charge board as my parents did with me.

 

[skater]

We talk freely to our kids about our properties. They don't know or net worth, but they are both well rounded and know what the values are in our local area. They have always been aware of the properties.

We bought the first one at auction when the youngest was in Kindy. She went to school the next day & told everyone that we had won a house. We then had to explain that we had to pay for it and had bought it so that someone else could live in it.

As far as relatives are concerned, we learnt early on to keep it to ourselves. One SIL had the following reaction when we told her of our achievements:

Ist IP - Congratulations! You are really moving on up in the world.
2nd IP - Oh, can you afford it so soon.
3rd IP - Another???
4th IP - Aren't you being a bit greedy? You can only live in one you know.

After that, we haven't told her of any further purchases.

We rarely mention our investments these days unless we are asked. Most people just don't care, aren't interested AND don't understand.

 

[Fourex]

Will agree with skater that most people I know just don't care, aren't interested and don't understand.

However being ever madly keen on the subject whenever I do bring the subject up in conversation I find if I bring it up in the third person (my friend just did a ....) enables the conversation to flow without those annoying questions we all hate.

Will however try to educate the kids when they get older (currently now 4 and 1) the pros of property investment, with a bit of luck they might listen

 

[Kristine..]

G’Day

Obviously, I talk about property investing all day, every day, and am quite frank with my customers about what we are doing if they ask, or if it is relevant to the discussion, but I don’t labour the point.

With friends, they are aware in a vague way that is, they know we have investments and occasionally someone will say ‘Do you still have the bank?’ – if I go to the Main Street and say hello to any of the traders who remember me from when I had my retail business, that is usually the first question they ask me

Family know we have investments but no-one really takes much notice. They all do their own thing, mainly shares and superannuation. All my and Mike’s sibling own their own homes.

Our own family, that is, the children, are all active investors themselves. However, this did not come about by accident, we trained them from an early age and made it clear that we would not charge them board on the condition that they bought investment properties.

No: 1 Son bought his first at 16 & half ‘off the plan’, and his second at 22

Daughter bought her first at 18 & 4 months

No: 2 Son bought his first at 18, his second at 18 & half, and his third ‘off the plan’ at 21. This should be complete about October, 2010.

No: 1 Son was such an influence on his friends that a number of them also bought property, and No: 2 Son directly influenced a work mate to buy a property – she was astounded that this 18 year old on trainee wages could buy, when she and her partner never seemed to be able to get ahead. Three months later they moved in to their first home.

Daughter is refinancing now to release equity and will probably buy her second property later this year.

As with everything, there is a difference between boasting, moaning and encouraging by example.

We have always adopted a positive attitude to money. Saying ‘I can’t afford it’ is banned in this house. If we want something we work out a way that we can afford it. The children have all had credit cards from their 18th Birthdays as I previously paid their pocket money into their own accounts and they had debit cards so had to make a deliberate decision to go and fetch the money, rather than being given cash. Their pocket money was very generous and they were responsible for all social spending including non-school clothing from that money.

They did not have to do mundane household tasks for this money and I made sure that the pocket money was independent from any emotional issues and I never withheld it for any reason.

They all received pocket money from about two years of age. Even very young children can make responsible financial decisions but they must be trained in how to make those decisions.

Since the age of 15, none of them have every asked us for money, they stopped getting pocket money on their 15th Birthdays as they were then old enough to work so that’s what they did.

With regards to our balance sheet position, I print this out every so often and we discuss it over dinner. I remind them how much we paid for each property and how sometimes it has been very difficult to keep paying for these properties, but that the rewards are certainly worth the effort.
They know that they must earn their inheritance and that we intend to live very long lives, so if they think they can do nothing and then inherit money when in their sixties I have told them that if they are not wealthy themselves by that time that I will leave it all to the Cat Protection Society.

Each generation wants the next generation to have ‘more’ out of life. More health, more wealth, more perfect self expression and more happiness.

However, these blessing do not come about by chance. Children can grow up as weeds or as sturdy, cultivated plants. The responsibility of a Parent is to raise responsible Adults. Financial awareness, proficiency and prosperity are skills which can be taught and we consider these just as important as nice table manners and abiding by the road rules.

In Australia, there is no excuse for being poor and I would consider myself a failure as a parent if my children were not actively pursuing and developing not just their day jobs (I believe meaningful careers to be very important) but their wealth as well.

Cheers
Kristine