My parents are FIRE'd Hipster Mustachians (as in, they were mustachians before MMM was a thing!).
They want to give me and my DH some money to help pay for a house when we buy one approximately two years from now. Their rationale is that for us young professionals to receive a (partial) inheritance now, would be a game-changer. For us to receive an inheritance in 50 years, it would not make a substantial difference in our lives because we would be 70 and already FIRE'd. I believe there will not be any strings attached to this (perhaps I am naive, but my parents have shown no indication of being like that.)
Obviously it would be a big help for me and DH, but I'm concerned it would deprive us of a "do-it-ourselves" opportunity. It reminds me of the examples in "The Millionaire Next Door" where the parents work really hard to give the kids all the best of everything, and then guess what? By the time the third generation has rolled around, the wealth has disappeared due to a sense of entitlement, "needs", and handouts.
How can I balance my desire to stand on my own two feet, with the reality that this would improve our FIRE date substantially? How can I embody good hardworking values for my future children, if I will have to admit that I received a partial early inheritance? Am I over-analyzing this? (Yes, but critical analysis is fun.)
A note from another thread speaks to this issue:
A few months later another teachable moment arose in a popular teen sitcom where the adult children asked Mom & Dad to lend them money to buy a new home. Mom & Dad refused. The kids got angry at the parental parsimony and managed to figure out how to buy their own damn house with their own damn money. The parents applauded their creativity and said "That's why we wouldn't lend you the money. We didn't want to deprive you of the experience of figuring out how to do it on your own!" I've gotten a lot of use out of that sitcom self-reliance simile, and I think our daughter gets it now. She'll turn 20 next month.
I look forward to hearing your thoughts.
I really appreciate all of the thoughts and advice that was posted here. It really helped me to see the big picture, and address potential concerns. Some notes:
-No siblings, no problems there.
-Past behaviour is indicative of future behaviour: they paid for my first degree, no problems there. They gave me money for a car, if I wanted one - and I didn't, and they were totally fine with that money going to my second degree instead. Talk about no strings attached. So that's good.
I think I struggle against growing up in such a privileged situation. My parents both had very humble beginnings, and I think it's a point of pride for them (as it should be) that they've come such a far way. They want my life to be easier than theirs. Makes sense. But the key word that kept coming up was pride. Am I going to let pride stand in the way of FIRE? Silly.
I'm feeling a lot more comfortable with this. It won't happen for a couple years, but I wanted to straighten out my thoughts on the matter. For me, it really hinges on the fact that my parents are extremely careful with their money and they would not offer anything they could not afford. My DH's parents on the other hand, gave us a large sum for our wedding - but we never cashed the cheque, because we were worried about their finances.
Hoo boy. It'll be interesting when I'm raising my own kids, and trying to keep them from being spoiled and entitled! Wish me luck ;)
In these situations you have to know your kids, and you have to know your parents. My impression is that parents who are extremely good at earning high incomes are not so good at passing the skill on to their kids (let alone their grandkids). The high earners are spending all of their time building their income, not building financial skills in their kids. If those offspring have learned anything, it's that money falls from the heavens like rain.
However parents who are extremely good at saving a high percentage of their income are quite successful at teaching their kids the same skills. The kids won't always follow that lifestyle, but they know how to do it when necessary. When they're motivated to FIRE then that high savings rate becomes their way of life.
When I wrote that 2012 comment you've quoted, out daughter was a college junior. She had just moved off-campus and was figuring out her finances. We decided to help by giving her the type of financial incentives that we'd given her in high school, only an order of magnitude higher. Instead of paying room & board directly to her university, we parents paid the money to her in semester installments (but now she had to stretch it to 12 months instead of nine). We told her that she could keep whatever she didn't spend-- and suddenly all of her frugal upbringing snapped back into place. She brought in two roommates, cooked almost all of her meals, and became a hardcore bicycle commuter. We could tell that she had the skills to do it on her own.
When she graduated last year, the Navy paid her a $15K bonus to volunteer for advanced training. She immediately put that into her retirement accounts and saved even more in her taxable accounts. She could have blown it on a 2014 Mustang GT (like at least one classmate), but she's lived with FIREd parents for over half of her life. She's keenly focused on reaching her own FIRE.
As parents, my spouse and I feel that we have "enough". We each have our own military pensions (mine now, hers starting in 2022) and our 13 years of retirement experience indicates that we're not gonna run out of money. Our daughter seems to be doing a fine job on her own FIRE, but we all know that in a few years the Navy will offer her even more bonus money for an active-duty contract of 3-5 years. If she's having fun, then great-- the $65K/year would greatly accelerate her FIRE for Navy duty that she'd want to do anyway. But if she wasn't having so much fun after serving her commitment, then we didn't want her to be tempted to sacrifice her lifestyle for a dumpster of "blood money" (like some of her shipmates).
We decided that it made sense to accustom our daughter to having large sums of human capital dumped on her head. At graduation last year, we gifted her some of her (unspent) college fund. It's enough for her to maximize her TSP and IRA contributions, with a little left over for taxable investment accounts or a small lifestyle party. (Not that she has much time to party.) We've told her that this is a once-in-a-lifetime opportunity for us to transfer the inheritance now, when she can compound it for decades almost tax-free. We've also told her that this "profit sharing" of her unspent college fund is her chance to learn how to handle spending a lump sum over the next 12 months, and hopefully it'll immunize her when the Navy starts waving those big bonus contracts at her a few years from now.
We've done the same profit-sharing gifting again this year. So far so good. She's extraordinarily frugal and she's saving well over half of her own income, let alone the profit-sharing. Of course she's also working 60-hour weeks and has very little free time, but she's shown no inclination to feel entitled to splurge.
I tell her that I worry about affluenza. We still use that sitcom analogy with her when we talk about how we hope we haven't squished her initiative. If she went out and bought a Tesla then we might feel as if we've done enough profit sharing, but right now we're comfortable with continuing the gifting. She seems to treat it as a stewardship opportunity instead of raining money.
Your parents probably feel the same way about you. They can see that they have enough, and they can also see that you have a handle on your FIRE plans. They don't want you to feel forced to squeeze your finances to buy a home, and they want to share their wealth now rather than making you wait five or six decades. Your parents can see that you've already acquired the skills which those sitcom young adults lacked, and they see no reason to make you continue to prove your proficiency. In fact they probably feel like Dolly Levi in "Hello Dolly"-- they want to spread around their wealth a little and make things grow.
You've already shown that you know how to do it yourself, and you have no sense of entitlement. You've earned the privilege of letting your parents spoil you a little, so why not enjoy it? You can add their gift to your down payment or you can bank it in CDs for "financial insurance" if you get laid off between mortgage payments.
Perhaps your parents will feel more comfortable about visiting you in your new home without worrying that they're imposing a burden.
Instead of feeling like you're skirting the FIRE "rules", treat this as your stewardship opportunity. Show your parents that you're using their gift judiciously. Let them enjoy the vicarious thrill of your accomplishment while you take comfort in knowing that it won't turn you into a spendthrift.
A few years later, if you still feel embarrassed by the largesse, then you could suggest that you all team up to endow a scholarship fund. Simply endowing $25,000 on a university lets them offer a $1250/year scholarship in your name(s) on their students, allocated by whatever degree or other qualifications you put on it.
I wouldn't take it, because I don't need or want it.
(And we did do this fairly recently, when my mother-in-law wanted to upgrade our car to a nicer one... we declined.)
Think about what you want, and your values. If that furthers those, great. If not, decline.
I guess in my case, I feel my parents are incapable of making a gift that truly has no strings attached, even if the "string" is just that they feel entitled to stick their noses in more.
Ah, the "know your parents" part.
In this case you've described my spouse's parents, with whom we no longer discuss anything financial. In fact for the last eight years we've hardly discussed anything at all.