Do you feel you need to earn your way to FI? (Thoughts on gifts/inheritance)

[Metalcat]

First anyone hitting FIRE almost assuredly has societal advantages throughout their childhood that many do not have.

That pretty much is the basis for any feeling of guilt that you might have. Everyone should be able to imagine people less advantaged than you. What amount of guilt would you feel if say you were born with a $10M stash? What about not having to pay for college? What about having parents engaged in your school? What about having parents not in jail and both alive? What about having any parent? Etc.

You can always go back somewhere and find people who are going to have been considerably worse off than you. 

How you deal with that is up to you.

And yet poorly educated janitors have amassed fortunes by just living frugally, saving and investing...

And they were able bodied enough to be able to work as a janitor for years on end. So there's still a major advantage there.

Nobody is saying that FIRE isn't a product of hard work and very very wise choices in the face of societal pressure to spend.

It really is an amazing accomplishment, it is. Accomplishments tend to be a combination of hard work combined with advantages. We all have advantages, it's how we use them that matters.

[BicycleB]

And yet poorly educated janitors have amassed fortunes by just living frugally, saving and investing...

In countries with stable societies with thriving investment markets (maybe 20% of the world's population during the lifetime of someone old enough to be a "typical" millionaire janitor).
Where investments can be legally accessed.
Where they're protected against criminals taking their money.
Where currencies stayed strong.
Where a janitor's wages during most of their lifetime were far higher than the world's median income.

How many janitors in Haiti have become millionaires?

[thesis]

I totally understand wanting to achieve FI independently. But I think it's pretty easy to be prideful in the process. America is obsessed with rags-to-riches tales, and will often not accept any story that is anything short of this. If you had any privilege at all, it will get called out by some clown.

When I was in high school, I had no car, but I remember once telling some friends that I wanted to save up for and buy one myself, to have that sense of accomplishment and independence. Ridiculous to me now. I've had friends who have been gifted with brand new cars by wealthy family members and did an incredible job taking care of those cars and really being responsible with such a blessing. To shun a gift in the name of autonomy seems just as ridiculous.

APowers mentioned above the desire to prove it can be done to peers, which I also completely understand (I'm about the same age). But if my FI were purchased for me tomorrow, I certainly wouldn't turn it down, though I may work a few more years just for the sense of accomplishment, which matters to me personally. Although, I think there are some fun non-paid ways I could also get that, so who knows? Besides, why would you need to prove anything to anybody else? What the path to FI has to prove is that gifts can be used wisely and not squandered. Most people on these forums could win the lottery and not end up like those people who blew it all and are now completely broke. The discipline, the mindset, is what lasts with you no matter what. People don't see it that way, they just want to see big numbers and know whether you actually "earned" that or not. Forget them.

[jlcnuke]

I don't care where the money comes from, as long as it legally becomes mine I'll be happy to have it. Of course, I'm not inheriting anything from anyone so it's not an issue. I'd happily win the lottery tomorrow and retire though. The money is a tool that I need to live the life I want, and I don't have enough of it yet. When I have enough of it, whether because the market's gains + my savings it became adequate, or Bill Gates decides to hand me a check or I win the lottery, I'll go live that life.

[DadJokes]

I don't waste time worrying about privilege and what is deserved. If we received enough that made us FI today, my wife and I would both probably quit our jobs within a year. We wouldn't stop working entirely, but neither of us would do what we are currently doing, and we definitely wouldn't work full-time. I also don't expect either of us to receive an inheritance for a long time.

That said, giving the money to charity is a noble use of it, and I can't fault you for it.

[dougules]

I'm hearing a lot of guilt.  I think guilt can be counter-productive in driving decisions. You already had so many unfair advantages even before the inheritance, but maybe you could see if you could push the guilt out with gratitude instead.  Now that you are FI it would be great to keep working to have the money to make the world slightly more fair, but don't let guilt be what makes that decision.  Take care of your mental health. 

Were you close to the person who passed away?  Is it possible some part of your guilt is grieving for them?

[John Galt incarnate!]

I'm curious how other mustachians feel about achieving FI by working hard, being frugal, and saving all your own money vs. receiving a large gift or inheritance.  If you received $1M today (or whatever you feel you need to be FI), would you just retire immediately?  Would it matter how old you are and how long you've worked and supported yourself?

I received an inheritance from a relative at the end of last year.  It's no small sum and currently about 25% of my net worth.  I realized today that I've technically hit the FI number I had set for myself if I include this inheritance.  But I'm not counting this money as part of my stash.  It's an inherited IRA so my current plan is to donate most of the RMDs each year.  The rest of the money will be there as a backup/safety net, but I don't want to rely on it.  So I'll likely work another 2-3 years to (somewhat) earn my own way to FIRE. 

For some reason, inheritances just feel wrong to me.  It feels like cheating.  Like I don't deserve this money that someone else worked so hard and saved for.  Am I crazy?  Does anyone else feel like this?

I never have and never will.


 Maybe it helps that I'm relatively young and have only been working full-time for 9 years and don't hate my job so working another couple years isn't so bad.  I'm not mentally ready to RE yet anyway.  If I was in a toxic job, I'm sure I'd feel differently.  I don't have any kids and am not currently planning on having any, but maybe that would change my outlook if I did.  I've also been ridiculously fortunate so far in having college paid for, help with car/house purchases, and fairly large annual gifts from parents.  So I've already been struggling with feeling that I don't deserve what I have anyway.  I am extremely grateful for what I've been given and understand that most people will never get to be in this fortunate situation.

Has anyone else received an inheritance or large gift and felt undeserving of it?  Or did you just add it to your stash and move on?  And if you earned your own way without receiving any financial help, do you feel everyone should have to do that?


Absolutely not.

[John Galt incarnate!]

Money is just a tool. A tool that allows people to not "have to" work, a tool that can make it easier to live the lives we prefer. To me whether money was hard earned or investment returns or a gift  doesn't matter, it's just money.

Agree.

[John Galt incarnate!]

I 100% do not give a shit where my FIRE fund comes from and will not work one day longer than I need to.

Your post is impenetrable.

Please clarify it.

[John Galt incarnate!]

I don’t think it’s cheating to receive an inheritance. Be grateful that the person that left the money to you thought well enough of you to leave it for you.

Count it as part of your stash, enjoy it, and be a good steward of it.

Yes.

[J&CWindingDown]

I have a perspective on inheritance that seemed worth sharing as a different angle.  We not too long ago received what for us was a very substantial inheritance - multiples of what we had saved (mid 50s professionals) and of what we ever would spend.  We knew it was coming as it mostly was from a trust that provided only income to our predecessor beneficiary, my father. It was a huge blessing knowing it was there because it allowed us to seriously dial back work and be there for my father.  Not long ago, I might have agreed that it sapped us of our motivation to continue pursuing our careers.  Now that it is over, I think what sapped us of our motivation was the stress and exhaustion of watching my father deteriorate and getting him through his final days. We were running on fumes and couldn't wait to retire and shut down the business, but now that things have calmed, it feels like there are twice as many hours in the day and I'm happily back to work (admittedly not as much and I must confess the last couple hours have been spent catching up on posts here).

As for the inheritance, we do feel fortunate to have it, but don't look at it as something unfair.  It is true we didn't earn it but someone did and decided to use their money to provide for us.  For those who think it is cheating to be able to include inheritance in getting to a retirement number, are you not planning to leave money to your own children?  The retirement numbers bounced around on this site and a 4% withdrawal rate coupled with continuing market luck could result in a nice chunk of change when the big sleep comes.

That said, because we didn't earn it we view the inheritance money very differently than we do our own savings.  The way we look at it, we earned our money and are free to spend it, while the good fortune of a family inheritance comes with the obligation to preserve it for the next generation if possible.  It is a safety net for us and our children.   

[Daisyedwards800]

If you've received help with your education expenses, any random help from parents to get you started, a security deposit, a Costco run or 5 while in college, a person to call if you have a financial or health emergency who would be able to help with expenses, and haven't relied solely on yourself since you were 18, you've already been lucky and had a clear advantage.  I think we all know that help early (even if only say $200) on is far more important than a windfall later in life, because the help you get early on helps you get that career or that first apartment or that first suit for your interview.

[ender]

I will say that I hope to be retired before I would receive any inheritance or other large gift of money from somewhere.

I think there's some element of pride to that for me.

[cats]

I have more of a problem with gifts than inheritances.  With a gift, the giver is presumably around and able to see (or make assumptions about) how you are spending the money.  Obviously depends on your relationship to the giver but it seems a gift will always have some kind of "string" attached: that you will use the gift a certain way, that you will maintain a certain kind of relationship with the giver, etc.  I don't really have anyone in my life that I would be comfortable accepting a gift of a life-altering quantity of money from at this point.  Note, my parents did raise me and pay for about half of my college education and helped out in numerous ways when I was younger so I can't say I have never accepted or benefitted from gifts, and it's certainly possible that I would be in a very different situation without that earlier financial assistance.  But I would not accept any kind of large financial gift from them right now as they would absolutely have ideas about what the money was to go to and our ideas about what money should be spent on have diverged considerably as we have all grown older.  Inheritance is a bit different as the person giving you the money isn't around to pass judgement.  That said, we are not expecting it as part of our FI plan, as our parents are all still in good health and it's also quite uncertain what might be available to be passed onto us.

Inheritance is a bit different as the person giving you the money isn't around to pass judgement.  But I do think there's something a little morbid and tasteless about counting on an inheritance to FIRE (as if you are waiting for someone to die so you can get on with your dream life).  If you are able to FIRE once you receive the inheritance, by all means do so, just don't make out a detailed plan in advance of inheriting that is dependent on the inheritance to work.

[Zikoris]

I 100% do not give a shit where my FIRE fund comes from and will not work one day longer than I need to.

Your post is impenetrable.

Please clarify it.

It is completely irrelevant to me whether I FIRE due to working and saving, or if some old gazillionaire decides to randomly leave me a pile of money. I feel absolutely no inherent need to earn my way to FIRE, and would not work one day longer than I needed to out of any sense of obligation to "earn my FIRE".

Though it's totally irrelevant in my case because I am 99.999999% certain nobody's going to give me anything, and am totally fine with that. Any kind of inheritance would be long after I'm already FIREd.

[Linea_Norway]

And about other people judging you... I have two friends to have received inheritances.

With the first friend, I don't know how much he inherited, but he can now afford a really amazingly expensive apartment, paid for by his own hard-ass saving, his GF's hard-ass saving and his inheritance, as well as a smallish mortgage. I still consider that he did most of the affording himself. And even as not, why not do something nice with your inheritance. Although I think for myself that he could rather have FIREd than living in that apartment. He was the first person I told about the concept of FIRE some years ago, as he is a very frugal person. But I think he doesn't have a clue on how much he would need for that. I just hinted to him now that we are going to "eat up" our clown house and downsize to something smaller. He answered he could do that as well "in time".

The other friend has inherited something like 4-5 Mil euros. Not sure what he is currently doing with it. He lives a bit far away and his facebook posts typically don't show his working things. I just checked and it shows where he works, still in a lawyer type of job. I don't think of him as another person than I did earlier. If I ever meet him again or his wife, I might try to tell them loosely about the concept of FIRE, or at least that we will be doing that from next year. Not sure whether their spending habits align with FIRE though, because they have a more spendypants lifestyle than we do.

[KathrinS]

When I was in primary school, my grandfather gave a large gift to his children, my mother included. I'm an only child, so ever since then it's always been understood that this will at some point be passed on to me. Growing up, my mother told me that I could pursue whatever career I was most interested in without considering the money.

However, now that I am working full time, I'd much rather 'earn' my way to FI than rely on gifts and/or receiving a large inheritance at some point. To me, it feels extremely empowering to know that I can earn a living and save for retirement without relying on anyone else. FI is a huge achievement for anyone, and it feels good to see my own hard work pay off. 

Just like OP, I plan on investing any inheritance I receive and donating the returns, potentially to a cause that the deceased person would support. It feels like a nice way to honour someone's memory.

[John Galt incarnate!]

I 100% do not give a shit where my FIRE fund comes from and will not work one day longer than I need to.

Your post is impenetrable.

Please clarify it.

It is completely irrelevant to me whether I FIRE due to working and saving, or if some old gazillionaire decides to randomly leave me a pile of money. I feel absolutely no inherent need to earn my way to FIRE, and would not work one day longer than I needed to out of any sense of obligation to "earn my FIRE".

Though it's totally irrelevant in my case because I am 99.999999% certain nobody's going to give me anything, and am totally fine with that. Any kind of inheritance would be long after I'm already FIREd.

I was having a bit of fun when I asked you to clarify because your style of communication is utterly devoid of ambiguity, a bluntness that pleases me.

 Ambiguity begets duplicity: The world needs  more of your sort of unabashed candor.

[rocketpj]

I refuse to make plans based on inheritance - I am 100% better off in every way with my relatives alive and in my life.

If any windfall of any kind pushes me towards FI then I'm happy to accept it. 

Well, kind of FI now if I choose to be, but more FI is appealing as well.

[sui generis]

There's an emotional question and a mathematical question in the title of this thread.  Mathematically, we should all have our FI number.  If you receive an inheritance, the FI number doesn't change (unless you plan on significantly changing your lifestyle due to the inheritance).  So again, mathematically the inheritance got you to FI (or partway there) whether you like it or not or feel you should have earned it or not.

Whether it affects your future actions is a different question and can depend on your emotions and societal constructs and judgments.  Maybe you don't RE because you feel like you should work more even if you don't need to.  Maybe you donate a lot of it, and you might even "un-FI" yourself through those actions.  Clearly we have focused on the emotional question here of *deserving* rather than the simple math that technically answers the question.

But this distinction does provide clarity to me.  I'm FI one way or another, so my future actions depend on how I want to proceed as a FI person with all my advantages, privileges and disadvantages holistically.  I wouldn't put excessive focus on a gift or inheritance to the exclusion of other myriad contributions to my total net worth. It's not easy to do, because society does encourage us to be judgmental and to conform to specific constructs of our particular cultures.  But part of FIREing is rebelling against a lot of social constructs to start with and so getting comfortable with the discomfort of feeling guilt or uncertainty or other feelings is an important aspect of FIREing to me.  I spend a lot of time examining my feelings about FIREing altogether...it's part of being human and it's interesting work to try on different perspectives and not get stuck in just one, especially if it's the one society tells us to take!

[CSuzette]

I worked in the family business from a young age and helped my father make some strategic decisions that later resulted in a favorable sale. My mother has lived on that money for the last 20 years or so and when she passes my sisters and I will inherit a sizable sum. Why should I feel guilty?  As a family we worked hard and were blessed with good luck and fortune. My mother is very old now but I hope she can hang on for a few more good years. But I know that she feels like she will be passing on a gift to us. The passing down has been going on for thousands of years. If you do genealogy research one tool is the review of wills.

[Schaefer Light]

In the words of Steve Miller - take the money and run.  Based on your post, I don't think it's going to change who you are.  It might have been different had you grown up knowing you'd never need to work.

[js82]

I refuse to make plans based on inheritance - I am 100% better off in every way with my relatives alive and in my life.

If any windfall of any kind pushes me towards FI then I'm happy to accept it. 

This is how I view it.  I'd much rather have family members alive and healthy, and quite frankly I'd rather see them enjoy life doing cool things during their retirement years than save money just so they can pass it down to me.

That said, on a personal level, I feel the need to make a useful contribution to the world.  This does not mean that I feel I need to "earn" my way to FIRE.  It does mean that my concept of "retirement" probably looks different from that of many others.  If I had a giant mountain of cash, the manner in which I would choose to leave my mark on the world would change considerably.