Author Topic: how much has inherited wealth helped you on your way to fire?  (Read 13175 times)

KCM5

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #50 on: October 11, 2017, 07:37:09 AM »
I find it weird that people on this thread who have received inheritances assumed that many others have too.  I'm not sure it's very common in most middle class families.

This.

Also, I'm in my early 30s. My parents are in their 50s. My in-laws are in their 60s. My grandparents are in their 70s and 80s - thank god I have had no reason to receive an inheritance! I'd like to keep it that way as long as possible. And realistically, even though my grandparents are doing fine, end of life care is expensive so I see no reason to expect to receive anything.

Laura33

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #51 on: October 11, 2017, 07:40:42 AM »
Ah, crap, I forgot the most important inheritance!!  When my stepdad died, he set up a trust for the grandkids' college education; I think it is currently in the low-to-mid six figures.  I didn't think of it, because we honestly don't plan to draw on it; my sister makes significantly less than us and has two kids to put through college, so I have been planning to preserve it for her.  But realistically, my mom would be extremely hurt if we didn't use part of the money for my kids, so we will have to accept something.
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Shane

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #52 on: October 11, 2017, 07:53:21 AM »
I find it weird that people on this thread who have received inheritances assumed that many others have too.  I'm not sure it's very common in most middle class families.

This.

Also, I'm in my early 30s. My parents are in their 50s. My in-laws are in their 60s. My grandparents are in their 70s and 80s - thank god I have had no reason to receive an inheritance! I'd like to keep it that way as long as possible. And realistically, even though my grandparents are doing fine, end of life care is expensive so I see no reason to expect to receive anything.

Maybe it's because you're still young? When I was your age it never occurred to me I would ever inherit anything either. Check back in in another 20 years, or so. Neither of my parents ever had much money. My dad, especially, was really bad with his finances. He was always in debt. Somehow, though, maybe with a little help from the small inheritance he got when my grandparents died and also an old house he inherited from a favorite uncle, my dad managed to pay off the house that he lived in not long before he died at age 75. Basically the only money we got from his estate was $40K from the sale of his house and another $40K from his IRA. That's not much, but it's also more than I ever expected to get.

KCM5

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #53 on: October 11, 2017, 08:32:27 AM »
I find it weird that people on this thread who have received inheritances assumed that many others have too.  I'm not sure it's very common in most middle class families.

This.

Also, I'm in my early 30s. My parents are in their 50s. My in-laws are in their 60s. My grandparents are in their 70s and 80s - thank god I have had no reason to receive an inheritance! I'd like to keep it that way as long as possible. And realistically, even though my grandparents are doing fine, end of life care is expensive so I see no reason to expect to receive anything.

Maybe it's because you're still young? When I was your age it never occurred to me I would ever inherit anything either. Check back in in another 20 years, or so. Neither of my parents ever had much money. My dad, especially, was really bad with his finances. He was always in debt. Somehow, though, maybe with a little help from the small inheritance he got when my grandparents died and also an old house he inherited from a favorite uncle, my dad managed to pay off the house that he lived in not long before he died at age 75. Basically the only money we got from his estate was $40K from the sale of his house and another $40K from his IRA. That's not much, but it's also more than I ever expected to get.

Yeah, probably. In the context of the question - how did inheritance help you on the way to FIRE  - I plan on being financially independent long before an inheritance is even a question. Like it seems like you dad received those inheritances in his 60s or 70s? I don't foresee needing to work at that age, so I imagine any inheritance would just be gravy.

talltexan

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #54 on: October 11, 2017, 08:40:16 AM »
Inheritance: 0

Being raised by responsible people who prioritized their children's well being, independence and education: Priceless

We fully expect inheritances to go to benefit the grandchildren, and we haven't supplied any.

My wife frequently talks about a teacher of hers who had two children. He was older, and they had both started supplying grandchildren.

One of them had one child, the other converted to catholicism and raised a brood of 7(!) children. My wife's teacher shared that he was frankly baffled as to what would constitute a reasonable and fair division of the estate in these circumstances.

partgypsy

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #55 on: October 11, 2017, 09:10:12 AM »
I find it weird that people on this thread who have received inheritances assumed that many others have too.  I'm not sure it's very common in most middle class families.

We have received no inheritance money thus far and don't expect to.  My parents have decent pensions but they are blowing through money quicker then they ever did while working and are starting to express concern about their finances.  They might have their small house left, and possibly a vacation cottage to split among us three siblings and several cousins.

However, they have given me financial support over the years - paid for most of undergrad costs but for 12K (none toward grad) and my wedding and provided a lot of free child care.  That counts for a great deal but it isn't inherited.  H received a small inheritance from his grandmother when he was much younger, so that's been gone for years.  His parents are living on SS.

I was going to reply that I thought getting some form of inheritance was common, but what I've now read (see below), that is not correct. it is the norm NOT to receive any kind of inheritance. I think my views may be distorted because I live in a walk-friendly neighborhood that has become very popular, and many of my younger neighbors seem to have gotten help from their parents to get into their house, by gift or inheritance.

"About 8% of Americans get an inheritance of any kind ó and those who do inherit will likely get less than $25,000 US Dollars (USD). Less than 2% of Americans receive more than $100,000 in inheritance. This data came from a study conducted by the Federal Reserve Bank of Cleveland" I also read that the average inheritance is 177K. However if they are simply averaging the sum of all inheritances and averaging across Americans, that paints a very misleading picture.

Lanthiriel

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #56 on: October 11, 2017, 09:13:31 AM »
My parents put me through undergrad without debt, which was much more possible because I went to community college in high school and only spent two years at a state university. I also got my first car from my grandparents that I upgraded to something more reliable in college with help from my parents. This is the only help or inheritance I expect to receive as an adult. I'm estranged from my father so I imagine his money will go to his awful, much younger wife and eventually to her daughter. I'm holding my breath for the day when my mother starts asking for money.

soccerluvof4

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #57 on: October 11, 2017, 09:45:00 AM »
Zero across the board. My parents pretty much lived paycheck to paycheck but we were always clothed, fed and had a roof over our head so thankful for that.
" In life you don't get what you deserve you get what you negotiate"

Slee_stack

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #58 on: October 11, 2017, 10:04:23 AM »
I'd actually think that members here would not feel the least bit 'ashamed' or similar to mention an inheritance.  This is a forum of badassity, not snowflakes, is it not?  Why would one feel ashamed about their finances....unless they blew it on something silly...even then they'd probably admit it and accept the admonishment.

This board is filled with folks already FIRE'd or chasing it.  That mindset tends towards a matter of fact / logical approach...not a whimsical one.   Numbers are numbers...how do we make numbers meet a FIRE goal the fastest?


I inherited 10k from an aunt quite some time ago (15 years?).  I actually saved every dime of it and it has probably contributed roughly $30kish towards my goal today.
« Last Edit: October 11, 2017, 10:07:50 AM by Slee_stack »

Sailor Sam

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #59 on: October 11, 2017, 10:14:03 AM »
I inherited 10k from my grandfather, when I was 15 or 16. It was more money that I could really even imagine at that age, and I felt rich.

My dad helped me use 4k to fund 2 years worth of IRA (2k was the yearly max, way back then). I used 2k to fund a summer trip to Ireland and Scotland. The rest just kind of dribbled away and was gone by the time I was 19. I'd spent what I saw as a massive fortune. It was a very powerful formative lesson, and I'm pretty grateful.

CheapskateWife

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #60 on: October 11, 2017, 10:26:54 AM »
I inherited an old truck from my grandfather when I was in college, which served me well for about 5 years (no car payments for 5 years is pretty damn great).  While on the surface it doesn't seem like much, it set me up for a lifetime of frugal decision making.  I'm thinking that gift, when I received it, was far more impactful than any money I could have received from his estate.




Trudie

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #61 on: October 11, 2017, 10:51:38 AM »
We have received some inheritance, mostly on my husband's side and related to the sale of a family farm which his father co-owned with his two uncles.  Before we were married, one of my husband's uncles died (never married, no children) at kind of a young age.  My husband and his sister each inherited about $40K in investments from his uncle's estate.  Then a few years ago -- before his dad passed away -- his dad and mom decided they needed to do something about the farm because neither kid was a farmer and they felt inheriting it would be a burden.  They sold the farm, put most of the proceeds into a charitable remainder trust to benefit lots of super-duper charities, and my husband received a $100K share in the transaction (which was related to his uncle's portion of the farm, before he died.  It was complex farm tax stuff that we've never understood, to be honest.)  Over the years -- under gift tax exclusions -- we also received cash when the farm has had a decent year.  We've usually used these funds on our Roth IRAs and to significantly buy down our mortgage when we built our home.

In the past few years we've received a small gift from my grandfather -- around $15,000 -- which we used to fund Roths and buy investments. The day we accepted the check from him when he was 92 I told him, "Grandpa, someday I'm going to walk into the office on a random Tuesday and quit my job because I no longer have to work.  And when I do, I will smile and think of you and thank you for this gift."  That made him smile and laugh and I'm grateful he could give it to us while he was alive.  (He's dead now.)

When my MIL dies we will inherit a significant, life-changing sum.  But, to be honest, we don't factor this into our FIRE calculations and continue to save 50-60% and make plans without it.  Still, it is always in the back of my mind.  I think of it as a buffer if we need more cash in the future to buy housing (instead of borrowing in ER) or to help lighten the blow of post-retirement health care costs.  It's hard to get my head around it, really.

I guess we've consistently used the money to buy our freedom and for the most part haven't spent it on stupid shit.  I suspect that someday we'll have way more than we know what to do with, and we're already talking about how we will use it for charity and the common good.  I look forward to the day when I can set up a donor-advised fund and basically give money away in my local community.  I want to do it while I'm alive.




GuitarStv

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #62 on: October 11, 2017, 11:30:54 AM »
Inheritance: 0

Being raised by responsible people who prioritized their children's well being, independence and education: Priceless

We fully expect inheritances to go to benefit the grandchildren, and we haven't supplied any.

My wife frequently talks about a teacher of hers who had two children. He was older, and they had both started supplying grandchildren.

One of them had one child, the other converted to catholicism and raised a brood of 7(!) children. My wife's teacher shared that he was frankly baffled as to what would constitute a reasonable and fair division of the estate in these circumstances.

50-50 between the two children is fair.  How they choose to divide the money after that is up to them.

rockstache

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #63 on: October 11, 2017, 01:16:39 PM »
This is a really interesting topic. I am also surprised at the number of people who have posted about getting inheritances. I don't think there is a lot of shame surrounding them - or at least not that I'm aware of.

We have received zero so far. I know that I will get about ~$2,000 when my grandmother passes away, which won't affect anything significant. There won't be an inheritance from either of my parents (we're more likely to have to support them in their old age).

My husband might receive something from his parents given what they have earned over their lifetime, but given the aging history in his family, the fact that he will have to split whatever there is a few ways, and the fact that his parents are spendy (and fall for bad investment schemes....sigh), means it a) probably won't be much if anything, and b) definitely won't factor in to FI since we hope to be there long before either of them pass.


mustachepungoeshere

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #64 on: October 11, 2017, 01:33:13 PM »
I received $10,00 from my grandmother last year, and used it to pay off my HECS.

I havenít received any extraordinary financial support from parents: did not live at home rent-free (moved out at 18), paid for my first car, my tuition, etc.

The handouts people my age expect and receive from their parents - eveything from cars to house deposits - still stuns me.

What happened to: leave home, get a job, pay your own way?

Bucksandreds

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #65 on: October 11, 2017, 01:35:34 PM »
No debt undergrad, about $20,000 from both sets of parents total for down payment on house, $500 from grandma. Best inheritance is teaching kids to not blow money. Iím a dentist, make 3 times what I need to survive, travel constantly, will be retired young. Half of that (the other half was me) was because I learned to be smart with finances from my parents and they helped me limit my debt. Iíll do the same for my kids.  Large inheritances ( think trust fund) make for lazy, loser adults. Iíve seen it in real life. Teach your kids well and help them limit debt. That is the sweet spot.

Bucksandreds

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #66 on: October 11, 2017, 01:38:45 PM »
Inheritance: 0

Being raised by responsible people who prioritized their children's well being, independence and education: Priceless

We fully expect inheritances to go to benefit the grandchildren, and we haven't supplied any.

My wife frequently talks about a teacher of hers who had two children. He was older, and they had both started supplying grandchildren.

One of them had one child, the other converted to catholicism and raised a brood of 7(!) children. My wife's teacher shared that he was frankly baffled as to what would constitute a reasonable and fair division of the estate in these circumstances.

50-50 between the two children is fair.  How they choose to divide the money after that is up to them.

I disagree. The seven grandchildren provided by one child added more joy to the grandparents life than just one. Iím not saying that it should be split evenly between each grandchild but I would do something like this.

25% each child then 6.x% each grandchild. Itís a win for all and doesnít ďscrewĒ the child over that just had one kid.

Shinplaster

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #67 on: October 11, 2017, 01:46:14 PM »
Zero.  We have never factored an inheritance into our financial lives.   MIL died last week, and DH expects nothing by the time the estate is settled.  We are in our 60's and FIR (not all that Early), so an inheritance is not going to change our lives much.  I will probably inherit some from my Mom, but if she has to go into assisted living, her stache will get eaten up pretty quickly.  If there is something left, I think I will end up passing most on to our son - maybe an educational fund for grandson, downpayment for a house, etc.

Like others, the greatest gift my parents gave me was an example of how to budget, and how to live a good life within that budget.  DH's parents taught him what not to do - his Dad filed for bankruptcy twice that we know of, and died penniless a few years ago.
When life shuts a door, open it again. It's a door.  That's how they work.

GuitarStv

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #68 on: October 11, 2017, 02:16:20 PM »
Inheritance: 0

Being raised by responsible people who prioritized their children's well being, independence and education: Priceless

We fully expect inheritances to go to benefit the grandchildren, and we haven't supplied any.

My wife frequently talks about a teacher of hers who had two children. He was older, and they had both started supplying grandchildren.

One of them had one child, the other converted to catholicism and raised a brood of 7(!) children. My wife's teacher shared that he was frankly baffled as to what would constitute a reasonable and fair division of the estate in these circumstances.

50-50 between the two children is fair.  How they choose to divide the money after that is up to them.

I disagree. The seven grandchildren provided by one child added more joy to the grandparents life than just one. Iím not saying that it should be split evenly between each grandchild but I would do something like this.

25% each child then 6.x% each grandchild. Itís a win for all and doesnít ďscrewĒ the child over that just had one kid.

[[Citation needed]]

Acastus

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #69 on: October 11, 2017, 02:20:52 PM »
My Dad died in debt. With my help, my Mom might manage to die penniless. They helped give me a great education, so there is that. I inherited some jewelry from my grandmother, and it is a fine keepsake. That is about it for monetary inheritance.

Inlaws gave us a couple cars and some money for my kid's college fund. Dad inlaw is still kicking, and I hope he has several years left.
« Last Edit: October 11, 2017, 02:26:22 PM by Acastus »

cerat0n1a

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #70 on: October 11, 2017, 02:39:13 PM »
When I was born, there were all these houses, hospitals, schools, shops and roads around the place. Loads of really cool stuff had been invented, laws & education ensured that the other people around mostly co-operated with each other really well and there was no problem getting water, electricity, food etc.

If my ancestors (and those of other people) hadn't been so smart and hard working, I would never have got to the point where I could think about FIRE. So I guess inherited wealth helped me hugely on the way.

ixtap

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #71 on: October 11, 2017, 03:16:24 PM »
Inheritance: 0

Being raised by responsible people who prioritized their children's well being, independence and education: Priceless

We fully expect inheritances to go to benefit the grandchildren, and we haven't supplied any.

My wife frequently talks about a teacher of hers who had two children. He was older, and they had both started supplying grandchildren.

One of them had one child, the other converted to catholicism and raised a brood of 7(!) children. My wife's teacher shared that he was frankly baffled as to what would constitute a reasonable and fair division of the estate in these circumstances.

50-50 between the two children is fair.  How they choose to divide the money after that is up to them.

I disagree. The seven grandchildren provided by one child added more joy to the grandparents life than just one. Iím not saying that it should be split evenly between each grandchild but I would do something like this.

25% each child then 6.x% each grandchild. Itís a win for all and doesnít ďscrewĒ the child over that just had one kid.

[[Citation needed]]

Yeah, I know a lot of grandparents who are quite stressed out by the additional grandchildren. Nonetheless, I do like your math.

marion10

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #72 on: October 11, 2017, 03:23:36 PM »
I inherited about 30,000 when I was 19 from my grandfather- but never saw any of it (It was some real estate that was to be split among me and my siblings. My father, as trustee, sold it and embezzled the money.) My parents did pay for my college and I had a wedding, paid for by them, where I received what I needed to set up housekeeping. My husband received nothing from his parents, my mother in law died in a nursing home on Medicaid- all her assets had been used for her care. His father died a few years earlier. Financial aid and his parents paid for most of his college.

I expect to inherit almost noting from my mother- she lives modestly, but I expect if she can no longer look after herself, then her house will have to be sold. I send her a small amount each month and another sibling pays some of her bills (cell phone). I've been able to put both my kids through school without them incurring any debt. That is all I expect them to receive.
« Last Edit: October 11, 2017, 03:26:19 PM by marion10 »

BlueMR2

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #73 on: October 11, 2017, 03:39:33 PM »
I have received a grand life total of $0 inheritance so far.  I do expect to inherit something from my Mother eventually though, but I expect to be social security age before that happens, so it's not been a factor in any of my calculations anyways.

Funny, seems like everyone else I talk to gets generous inheritances every time someone even remotely related to them dies.  Then they go and blow it all immediately and are back to being broke again in weeks...

ontheheel

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #74 on: October 11, 2017, 04:14:40 PM »
My grandmother died when I was in 8th grade and left a significant sum of money (~$750k) to my parents. My dad was an airline pilot and made a very good living at the time, so this was way above and beyond.

It's funny what happens when you receive a windfall - it's very easy to become a spendthrift. They added onto the house, put in a pool, redecorated, put in new floors, took us on a couple of memorable trips, and paid for our college educations in full, as well as private high school. However, even all of that doesn't come close to adding up to the total amount, and yet it was completely depleted within a decade from regular spending and an appetite for toys. Not only that, but they had gone into credit card debt, did a cash-out refinance, and secured two car loans in the process. They have since straightened out their budget and gotten on track, although their spending levels still make me uneasy. They've carried a lot of regret from blowing through that money so quickly - not so much at the loss of the money itself, but the fact that they lived so frivolously and have very little to show for it.

Before this time, my folks were diligent with their money, and I remember them meeting together every week to talk about their budget and using an envelope system to stay on target. Getting that kind of wealth so suddenly messes with your mind, and locks you into the hedonic treadmill if you indulge it.

As they approached 60, they really didn't have much saved up, but they did have a very generous pension from the airline (33 yrs) that saved the day.

Looking back, I am extraordinarily grateful for the education I received, especially since my wife financed her entire BS and MSW with debt. I'm also grateful for the memories that we made as a family on our trips, and the time we spent together. The bad that came from that was being ingrained from an early age that shiny gadgets are a mandatory part of life - something that I still fight. I have awesome parents who have always been there for my brother and I - my dad even flew the Super80 for over 20 years just so he could be home every night and choose his schedule around our lives rather than moving up to larger aircraft and making more money.

I also saw their story as a cautionary tale when it comes to windfalls - they were lucky in receiving it (in the sense of random chance, not in my grandmother passing away), and even luckier to survive the post-9/11 airline layoffs, and even luckier to retire two months before the airline declared bankruptcy and slashed pensions. Had any one of those things not lined up, they would both still be working, would have lost the house a long time ago, and life would have looked much different. I feel both a pull to do the same things that they've done, as well as a strong desire to learn from their mistakes.

I haven't received any direct inheritance from anyone, but know that if my parents don't do a repeat with their current retirement windfall, that we will likely receive a sizeable chunk some day. I hope that day is a long way away, and don't factor that into any of our retirement planning. Through MANY mistakes, years of grad school, low-paying jobs, and a few good decisions mixed with career breaks, we went from -$75,000 on our wedding day to a current NW of ~$120,000 over our first ten years. Trying to accelerate that as much as possible, while also having conversations with my dad about SWR, hedonic adaptation, and happiness so that we can both live to ripe old ages and leave something to our kids.

Frankies Girl

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #75 on: October 11, 2017, 04:15:48 PM »
Large inheritances ( think trust fund) make for lazy, loser adults. Iíve seen it in real life. Teach your kids well and help them limit debt. That is the sweet spot.

And that attitude/sweeping judgement is likely why anyone that has inherited is made to feel guilty or embarrassed and dislike discussing this sort of thing in general. This is a very narrow-minded view, and implies that those that did get anything notable didn't deserve it and always end up being lazy and losers with the money. It's not black and white, and it is very insulting to anyone that did end up inheriting a large amount of money. So every trust fund and heir is a loser? Seriously?

Here's a scary thought: It has nothing to do with money or being "spoiled" by wealth. It has everything to do with the person inheriting, and their individual character. You can teach a child just about anything you'd like, but their following those teachings is another matter altogether. You might get lucky and have children that all basically have a level head on their shoulders, but don't rule out the fact that you may also end up with a kid or two that just can't handle it, or chooses not to restrict or deny themselves once they are grown.


TL/DR: spendthrifts can be born, AND made to be that way. Don't assume outside factors always dictate their character as an adult, or overestimate your influence on building said character. Do your best to instill some good values and responsibility but then hope like anything that they also have a decent character and the ability to play the long game so they will avoid going nuts with money if given a large amount.




I apparently am one of the few folks on here apparently that has had a life-changing inheritance (or at least is willing to admit to it). I received an inheritance that made me instantly FI, and within 2 years after (to figure out how investing works and get all the ducks in rows) both my husband and I retired.

And while I did not hope for or expect a single penny, I know and appreciate just how incredible a gift this was - it is humbling and scary and exciting and sometimes a source of extreme sorrow. I'm still working through my feelings even years later.

My parents taught my sibling and myself how to be responsible with money and debts, how to save, and to have a good work ethic.

I was already well on my way to retiring in my mid 50s and the only thing I lacked was investing knowledge, but figured I had decades to get that stuff down (no clue about FIRE stuff at the time). I am frugal, had no debts, and was a hard worker with a long career with much recognition.

My sibling, raised by the same parents, is fucking terrible with money. Has been since they were a child. No impulse control, buys things because they deserve it, massive consumer debts. No ambition, no work ethic, no marketable skills. Spotty work history doing very low skill work (fast food, warehouse clerk, phone sales) with mostly no work at all over the last decade.

Considering sibling was raised the exact same way as me, you'd think we'd be roughly the same in terms of responsibility and being decent with money, but we are far apart in terms of basic world views really.

Inheriting a life changing sum didn't change who I was. I already was a hard-working, frugal person and I didn't change into a loser overnight and start throwing piles of money away on gold-plated cars or anything. And my sibling (who isn't a terrible person, just a terrible with money person) didn't turn into a frivolous spender just because they suddenly had instant wealth. They were already a spendthrift decades ago.

I took my inheritance and learned how to invest and grow it to hopefully provide a scholarship and some pretty kickass charitable trusts when I'm gone, but in the meantime, I'm doing just fine, and likely will never worry about money another second for the rest of my life.
« Last Edit: October 11, 2017, 04:21:34 PM by Frankies Girl »
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mcneally

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #76 on: October 11, 2017, 04:20:04 PM »
I find it weird that people on this thread who have received inheritances assumed that many others have too.  I'm not sure it's very common in most middle class families.

Receiving an inheritance in the tens of thousands isn't going to be life changing, but I would argue that inheriting at least that much is very common in middle class families. Unless someone has high end of life costs, I think almost by definition most middle class people are going to leave an estate >100k before the split among recipients. I don't mean this as an insult, but if you're living off just  SS, we're using a pretty generous definition of middle class. I guess if you have a pension, you could be living comfortably but have minimal assets. Even if the only asset is a paid off house, you're usually talking about splitting 6 figure number however many ways.
« Last Edit: October 11, 2017, 04:42:12 PM by mcneally »

VoteCthulu

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #77 on: October 11, 2017, 04:36:28 PM »
I inherited a car battery charger and a chair from my grandparents. I may or may not get a modest inheritance from my parents some day, but I expect to retire in the next 2 years and they should live a long time after that (knock on wood).

I definitely agree that my most valuable inheritance has been being taught not to be a spendy-pants.

darkchocolate

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #78 on: October 11, 2017, 04:52:12 PM »
My parents paid for my college and raised me in the bay area. That's more than a head start.

mrspendy

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #79 on: October 11, 2017, 05:10:56 PM »
great grandparents gave individual blue chip stocks to each child whenborn  "to pay for college". grandparents gave $40K -$50K ish to each of their 4 grandchildren when i was in high school "to pay for college". parents did well financially and paid the bill for college, which left the funds gifted to us as ours to keep. 

So I ended up with ~$200K of investments when I graduated college from "inheritance", though my grandparents are still alive; more accurately it's "intergenerational transfer", not inheritance.

I worked/work hard and graduated from a top 10 school. I don't think my inheritance "spoiled" me any more so than I am spoiled by growing up in the environment I did; it's not like I don't have to work; i also didn't know about it until 18 ish, which i think helps. And I started reading Kiplinger magazine in 8th grade and always loved finance/investing, so I knew that $200K wasn't life changing in the "don't need to work anymore sense". Coming out of college I thought I needed about $10mm to retire, so a $200K head start never felt like much in terms of "i can retire now"; even though in actuality it's freaking gigantic, I realize it more every day.

I didn't blow it entirely on coke or a ferrari or something like that, but rather used it to justify spending 100% of my takehome salary after maxing out retirement accounts. It certainly stunted the development of my frugality muscles, but I can't say I would have had those if I started at $0 after college.

The same grandparents intend to split their estate (low 7 figures) amongst four grandchildren into a trust that will pay for their unborn great grandchildren's education. I am incredibly grateful but I also don't know the precise terms and think they are way overfunding it; I worry what might happen to what's left, a more extreme version of what happened to me. If the terms gift the remainder to the child, then that could be a problem. Each grandchild is likely to inherit $500 - $800K as their portion of the trust and all are in their late 20's / haven't had kids yet. So it probably will be a big pile of dough by the time the kids get to college age (in 20+ years).

Basically, my family has a long tradition of massively overfunding college education. there are worse things.

To answer the question more directly I estimate that about 40%-70% of my wealth ($800K) is from the inheritance. It gets mucky because if you're comfortable in maxing out your 401k and putting it all in one stock (a bank in 2011-2013) because you have $200K, is the wealth that you make from that "inherited". Likewise when you do so with other investments. an initial head start leads to more head starts. Even money I make now never feels like it's totally "mine"
« Last Edit: October 11, 2017, 05:47:16 PM by mrspendy »

Bucksandreds

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #80 on: October 11, 2017, 05:49:03 PM »
Large inheritances ( think trust fund) make for lazy, loser adults. Iíve seen it in real life. Teach your kids well and help them limit debt. That is the sweet spot.

And that attitude/sweeping judgement is likely why anyone that has inherited is made to feel guilty or embarrassed and dislike discussing this sort of thing in general. This is a very narrow-minded view, and implies that those that did get anything notable didn't deserve it and always end up being lazy and losers with the money. It's not black and white, and it is very insulting to anyone that did end up inheriting a large amount of money. So every trust fund and heir is a loser? Seriously?

Here's a scary thought: It has nothing to do with money or being "spoiled" by wealth. It has everything to do with the person inheriting, and their individual character. You can teach a child just about anything you'd like, but their following those teachings is another matter altogether. You might get lucky and have children that all basically have a level head on their shoulders, but don't rule out the fact that you may also end up with a kid or two that just can't handle it, or chooses not to restrict or deny themselves once they are grown.


TL/DR: spendthrifts can be born, AND made to be that way. Don't assume outside factors always dictate their character as an adult, or overestimate your influence on building said character. Do your best to instill some good values and responsibility but then hope like anything that they also have a decent character and the ability to play the long game so they will avoid going nuts with money if given a large amount.




I apparently am one of the few folks on here apparently that has had a life-changing inheritance (or at least is willing to admit to it). I received an inheritance that made me instantly FI, and within 2 years after (to figure out how investing works and get all the ducks in rows) both my husband and I retired.

And while I did not hope for or expect a single penny, I know and appreciate just how incredible a gift this was - it is humbling and scary and exciting and sometimes a source of extreme sorrow. I'm still working through my feelings even years later.

My parents taught my sibling and myself how to be responsible with money and debts, how to save, and to have a good work ethic.

I was already well on my way to retiring in my mid 50s and the only thing I lacked was investing knowledge, but figured I had decades to get that stuff down (no clue about FIRE stuff at the time). I am frugal, had no debts, and was a hard worker with a long career with much recognition.

My sibling, raised by the same parents, is fucking terrible with money. Has been since they were a child. No impulse control, buys things because they deserve it, massive consumer debts. No ambition, no work ethic, no marketable skills. Spotty work history doing very low skill work (fast food, warehouse clerk, phone sales) with mostly no work at all over the last decade.

Considering sibling was raised the exact same way as me, you'd think we'd be roughly the same in terms of responsibility and being decent with money, but we are far apart in terms of basic world views really.

Inheriting a life changing sum didn't change who I was. I already was a hard-working, frugal person and I didn't change into a loser overnight and start throwing piles of money away on gold-plated cars or anything. And my sibling (who isn't a terrible person, just a terrible with money person) didn't turn into a frivolous spender just because they suddenly had instant wealth. They were already a spendthrift decades ago.

I took my inheritance and learned how to invest and grow it to hopefully provide a scholarship and some pretty kickass charitable trusts when I'm gone, but in the meantime, I'm doing just fine, and likely will never worry about money another second for the rest of my life.

Would not expect someone who inherited FI money to be self aware about the pitfalls of the typical behavior of a person who inherits FI money.

mm1970

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #81 on: October 11, 2017, 06:36:56 PM »
Inheritance: 0

Being raised by responsible people who prioritized their children's well being, independence and education: Priceless

We fully expect inheritances to go to benefit the grandchildren, and we haven't supplied any.

My wife frequently talks about a teacher of hers who had two children. He was older, and they had both started supplying grandchildren.

One of them had one child, the other converted to catholicism and raised a brood of 7(!) children. My wife's teacher shared that he was frankly baffled as to what would constitute a reasonable and fair division of the estate in these circumstances.

50-50 between the two children is fair.  How they choose to divide the money after that is up to them.

I disagree. The seven grandchildren provided by one child added more joy to the grandparents life than just one. Iím not saying that it should be split evenly between each grandchild but I would do something like this.

25% each child then 6.x% each grandchild. Itís a win for all and doesnít ďscrewĒ the child over that just had one kid.
My grandfather did this interesting thing.

First, remember, that boys are more important than girls, because they are the breadwinners.

Thus, there were 2 trusts:
1.  Big one ($500k)
2.  Small one ($180k)

Now, there were 4 boys and 3 girls.  Let's call them men and women, because grandpa was in his 80s when he died, after all (and he left the money in trust until his 2nd wife died.  She lived 19 years past him.)

Boy #1 died young.  Left a wife and 6 kids.
Boy #4 joined the family business. He got his inheritance while alive, part of the business.
Boy #2 and #3 are left.

So, big trust, split between boy #2 and #3.  What happened to the widow?  Well, she's not a boy.

Little trust: 4 girls (including the widow).
#1, #2, #3 get 1/4
Widow gets 1/8
Widow's 6 kids each get 1/48 (although one of them died before grandpa, so ended up being 1/40)

Anyway.  Each of my grandfather's children had between 2 and 6 children of their own.  That's a lot of grandchildren.  So, he split his estate among his direct descendents, but did specify that in the case of his children pre-deceasing his second wife, that their portion go to their direct descendents.  (Which is how I inherited, as my mother AND my aunt died before my step-grandma).

In any event, it seems like just leaving it to the kids directly makes the most sense to me.  But it's totally up to the person with the money, ya know?  I mean, what would happen if my whole family (hubby and kids) died?  Would we split it among our siblings, our nieces and nephews, etc?  Well, we've got some family members who are good with money and some who would blow it.  So, no.

mm1970

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #82 on: October 11, 2017, 06:42:56 PM »
I find it weird that people on this thread who have received inheritances assumed that many others have too.  I'm not sure it's very common in most middle class families.

Receiving an inheritance in the tens of thousands isn't going to be life changing, but I would argue that inheriting at least that much is very common in middle class families. Unless someone has high end of life costs, I think almost by definition most middle class people are going to leave an estate >100k before the split among recipients. I don't mean this as an insult, but if you're living off just  SS, we're using a pretty generous definition of middle class. I guess if you have a pension, you could be living comfortably but have minimal assets. Even if the only asset is a paid off house, you're usually talking about splitting 6 figure number however many ways.

I wasn't even considered middle class.  My dad was living on SS in a small, rural area in a paid off house.  That man could get blood from a rock (in case you want to know where I get my MMM tendencies, the last gift he gave me was his copy of Walden).  He started getting SS at...59? 60?  I was still in college.  His SS was less than $1000 a month.  His pension was maybe $200 a month.  Still, the man managed to save $10k over the next 20 years. 

My "inheritance" was 1/7 of that $10k, plus 1/7 of the value of the house (it sold for full price, $62k).  We were by no means what people consider middle class.

As far as being old/  young, whatever.  He died at 81, I was in my late 30s.  My mom died when I was in my early 40s.  I only got 1/3 of her portion of her inheritance from her father because she died before his second wife.

In any event, probably the $20-25k I inherited was "life changing" for one of my siblings.  (The one who loves to spend money.)  Somewhat so for one other sibling whose spouse can no longer work due to injury.  It was not life changing for me.  Although maybe it will be.  I really want a second toilet in my house.

Laura33

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #83 on: October 11, 2017, 07:28:54 PM »
Large inheritances ( think trust fund) make for lazy, loser adults. Iíve seen it in real life. Teach your kids well and help them limit debt. That is the sweet spot.

And that attitude/sweeping judgement is likely why anyone that has inherited is made to feel guilty or embarrassed and dislike discussing this sort of thing in general. This is a very narrow-minded view, and implies that those that did get anything notable didn't deserve it and always end up being lazy and losers with the money. It's not black and white, and it is very insulting to anyone that did end up inheriting a large amount of money. So every trust fund and heir is a loser? Seriously?

Here's a scary thought: It has nothing to do with money or being "spoiled" by wealth. It has everything to do with the person inheriting, and their individual character. You can teach a child just about anything you'd like, but their following those teachings is another matter altogether. You might get lucky and have children that all basically have a level head on their shoulders, but don't rule out the fact that you may also end up with a kid or two that just can't handle it, or chooses not to restrict or deny themselves once they are grown.


TL/DR: spendthrifts can be born, AND made to be that way. Don't assume outside factors always dictate their character as an adult, or overestimate your influence on building said character. Do your best to instill some good values and responsibility but then hope like anything that they also have a decent character and the ability to play the long game so they will avoid going nuts with money if given a large amount.

+1.

My mother literally saved every penny she ever got throughout her childhood.  It should not be remotely surprising that when she inherited 4x her annual salary from her mother, she spent not one penny of it on "stuff."  My stepdad also managed to inherit more than a half-million bucks and not change his lifestyle at all; the biggest thing he did with it was loan my brother the money to pay off his student loans (in default because my brother's depression/anxiety meant he couldn't keep a job for a number of years).

I can already tell you that if my kids won the Powerball, my DD would use it to buy All The Things, and my DS would buy himself an awesome computer and a bunch of parts to build robots from and put the remaining however-many-millions in the bank.  It is just how they are wired.  I would hope that our "nurture" (a/k/a "tough love") has helped DD learn to save and put needs above wants and all, so that if she did have a huge windfall she'd perhaps not fritter all of it away.  But there is just no way in hell she wouldn't significantly increase her lifestyle.
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rantk81

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #84 on: October 11, 2017, 07:36:46 PM »
A few years ago I inherited about $12,000 from a relative that passed away.

I just did what I always do when my checking account hits "over xyz amount of dollars" and swept it into my investment account.

On the whole, that amounts to less than 1% of my whole net worth, so not that significant really in terms of FIRE stash.

I do feel a twinge of guilt, because I'm fairly certain she would have wanted me to "enjoy it" instead of just investing. 

Step37

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #85 on: October 11, 2017, 08:57:31 PM »
Iíve received a few chunks from my grandmother. The first was 20k at 18, to pay for university. I did not end up completing university (did a year and a half... no direction/no idea what I wanted to do), but I did manage to spend that money within a few years (yeah, yeah... facepunch). The most substantial thing I bought was some furniture for the apartment I moved into with my future husband (probably used some for part of the wedding as well; I really donít recall).

The next was 10k around age 23 for a down payment on a 100k house (excellent start in life to be sure). Ended up relocating cities for husbandís work after only two years, stayed there for three years, then back to original city. Got another 10k so that weíd be able to avoid CMHC fees (mortgage insurance) on the 145k house. We are still in that house and itís paid off ó another 5k was received around age 30. It was ďinvestedĒ in a very nice piece of furniture (I KNOW ... ugh. I really have changed my spendy ways).

So, 45k early inherited. Itís definitely been a big help in (very nearly now) achieving FI, as we were able to get into the housing market when prices were still very low here.

My grandmother (and grandfather when he was alive) has been very generous to her three children and their children. She will leave a reasonably large estate (Iíd say 1-1.5 million), which as far as Iím aware will divide evenly between her three children. I would not be totally surprised if my mom decided to gift some of that to me and my sister, but I am in no way factoring it into my plans. Itís absolutely unnecessary and will not change my lifestyle.
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CindyBS

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #86 on: October 11, 2017, 09:50:15 PM »
I suspect a certain amount of whether or not you have gotten an inheritance is age related as well.  Most people age 20-40 still have living parents, and may even have living grandparents.  For my middle aged peers, it is almost unheard of to have any living grandparents and about half have lost a parent by now.  Fast forward 20 years or so and I'm sure most of my peers will have lost their parents as well. Having more of your relatives die definitely increases your chance of inheritance.

I inherited money at age 18, but only b/c if was from a childless relative who died in his early 50's.


Dicey

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #87 on: October 11, 2017, 10:18:43 PM »
I've told this story here before, but I love to tell it, so I'll add it to the pile.

When my grandfather died, his will gave my mom, his only child, $50k, with instructions to disperse it as follows: $6k to each of her six children and the rest ($14k) to her and my dad. The entire balance of his estate was equally distributed between his three sisters. One was wealthy, one middlin' and one was poor as a church mouse. His kindness gave all three of them security in their old age. Brilliant!

As for my $6k, I had a year's salary in the bank and wanted to buy a house. I was 30, and single. I was hesitating when I received his generous gift. It made me brave enough to pull the trigger. I have owned real estate ever since and it's a big part of my FIRE story. Thanks, Grandpa A for giving me the boost I needed!

Fast forward almost thirty years. My brother and I are in the midst of settling my parent's estate. I estimate that the six of us will recieve somewhere around $25k each. DH and are FI and I'm RE. I expect to give most of it to charity. I think my parents would approve.
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Ananas

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #88 on: October 12, 2017, 04:04:03 AM »
I think many people, who've inherited more, tend not to disclose that fact very often.  I know I don't.
My mom died when I was 18. Me and my brother inherited about 40% of our family business that my dad started in the late -80s. This was in the late -90s.  Over the years the business itself has dwindled, because it was in niche that doesn't really exist anymore. Much of my current net worth is from the re-invested dividends of that family business, probably about 2/3 - 3/4.

I'm already FI with a stash of a few million euros. On top of that our company continues to invest its capital and provides a yearly dividend. I also know that my dad is unable really spend all his money, so its very likely that sometime in the next 20 years there will be another windfall as he turns 70 next year. We also discuss these issues with each other at least a few times a year and have some investments together.

What has it given me? some amount of shame that I'm not self-made. Peace of mind, since I don't have to take out a mortgage, unless I would want to buy a stupidly expensive house or apartment. I can work any job I want, or I could live relatively well and not work at all. Currently I work as a lawyer for the government with something that helps people. I did decide that I will help others with my job.  I make a decent amount of money at my current job and save maybe 30 % of it, because I have nothing I really want to spend it on. Since I have no mortgage or debt service, the money from my job is plenty. I indulge in travel a few times a year.

Having money also saved me, because when I had a bad case of depression I could get help immediately, rather than waiting for the health care system to work it out.  I'm nothing but grateful for the inheritance, but I'd still trade it all for a few more years with my mom.

dcamnc

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #89 on: October 12, 2017, 06:46:49 AM »
I did inherit about 85k when my grandmother passed, and will likely inherit between 500k and 1M when my parents pass (in their mid 70's now). I'm going to be honest, it did help me. When I got the 85k I was still a unmoustachian, normal American spender, in a little debt. Of course me being a big dummy, I blew a little of it. I didn't want to blow the rest, so I started researching finance stuff, which lead me to sites like this. I've since paid off all my debt, and multiplied the 85k several, several times. The inheritance did have a positive impact on me, in that it kick-started me to change my spendy ways, and realize that I can retire a millionaire if I stick to the plan.

Case

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #90 on: October 12, 2017, 07:09:09 AM »
I find it weird that people on this thread who have received inheritances assumed that many others have too.  I'm not sure it's very common in most middle class families.

We have received no inheritance money thus far and don't expect to.  My parents have decent pensions but they are blowing through money quicker then they ever did while working and are starting to express concern about their finances.  They might have their small house left, and possibly a vacation cottage to split among us three siblings and several cousins.

However, they have given me financial support over the years - paid for most of undergrad costs but for 12K (none toward grad) and my wedding and provided a lot of free child care.  That counts for a great deal but it isn't inherited.  H received a small inheritance from his grandmother when he was much younger, so that's been gone for years.  His parents are living on SS.

I think for the purposes of this thread, and maybe in general, it's important to include everything when discussing inheritance.  This includes money gifts while growing up, paying college, what fancy hobbies parents finances, etc...  It can all effect one's ability to FIRE, and when.

My family raised me middle class-ish.  We didn't have a lot of extravagances, but we didn't have any worries.  That said, my parents had me start saving money at an early, mostly that was was via gifts from relatives and such, a smaller amount that I earned through neighborhood jobs.  It helped me get a head start on investing.  In the long term, it will only amount of a fraction of my total FIRE networth, but it's still something.

More importantly, my parents paid for college.  They did this through a pre-paid tuition deal which was available in my state, and I think turned out to be a great deal (pay for college years in advance and lock in tuition rates.... not sure how it would compare vs compound interest, but it's still a decent deal).

My parents were also able to afford music lessons for me, etc..., which probably contributed to crafting my personality in ways.

Inheritance I think can be defined in terms of tangibles, intangibles, and the in betweens... all of which affect the ability to FIRE.

MrThatsDifferent

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #91 on: October 12, 2017, 07:09:55 AM »
When I was 17 I got $3k from my grandmaís passing. She was awesome, Iíd rather have had more time with her. I used it to pay for my first international trip. I donít expect or want anything else. My partner will receive a great deal. Iíve said, thatís yours when it comes, not mine.

spokey doke

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #92 on: October 12, 2017, 08:37:56 AM »
Large inheritances ( think trust fund) make for lazy, loser adults. I’ve seen it in real life. Teach your kids well and help them limit debt. That is the sweet spot.

And that attitude/sweeping judgement is likely why anyone that has inherited is made to feel guilty or embarrassed and dislike discussing this sort of thing in general. This is a very narrow-minded view, and implies that those that did get anything notable didn't deserve it and always end up being lazy and losers with the money. It's not black and white, and it is very insulting to anyone that did end up inheriting a large amount of money. So every trust fund and heir is a loser? Seriously?

Here's a scary thought: It has nothing to do with money or being "spoiled" by wealth. It has everything to do with the person inheriting, and their individual character. You can teach a child just about anything you'd like, but their following those teachings is another matter altogether. You might get lucky and have children that all basically have a level head on their shoulders, but don't rule out the fact that you may also end up with a kid or two that just can't handle it, or chooses not to restrict or deny themselves once they are grown.


TL/DR: spendthrifts can be born, AND made to be that way. Don't assume outside factors always dictate their character as an adult, or overestimate your influence on building said character. Do your best to instill some good values and responsibility but then hope like anything that they also have a decent character and the ability to play the long game so they will avoid going nuts with money if given a large amount.

+1.

My mother literally saved every penny she ever got throughout her childhood.  It should not be remotely surprising that when she inherited 4x her annual salary from her mother, she spent not one penny of it on "stuff."  My stepdad also managed to inherit more than a half-million bucks and not change his lifestyle at all; the biggest thing he did with it was loan my brother the money to pay off his student loans (in default because my brother's depression/anxiety meant he couldn't keep a job for a number of years).

I can already tell you that if my kids won the Powerball, my DD would use it to buy All The Things, and my DS would buy himself an awesome computer and a bunch of parts to build robots from and put the remaining however-many-millions in the bank.  It is just how they are wired.  I would hope that our "nurture" (a/k/a "tough love") has helped DD learn to save and put needs above wants and all, so that if she did have a huge windfall she'd perhaps not fritter all of it away.  But there is just no way in hell she wouldn't significantly increase her lifestyle.

I can relate to some of this...my parents were depression era kids and were the biggest penny pinchers out there...worked hard, lived frugally, and saved relentlessly in order to give their kids a better life.  I have inherited that frugality, along with what they left my siblings and I.

DW has even greater frugal tendencies than me, and while I knew her parents were pretty well off, I had no notion, until after we were married, that she had a bit of family money too.

So what do we do...work (never had a big income), save, give, and reap the privilege of doing the above with a safety net.  And it is a huge privilege, but I do not feel shame at all, but a humbling sense of the privilege I have.  Also, as the many posts on MMM attest, I don't tend to talk about it, even in an anonymous forum, because when others know the relative privilege you have (e.g. being FIRE'd, or on the road to it), they can resent it.
ďThe best thing about graduating from the university was that I finally had time to sit on a log and read a good book.Ē
― Edward Abbey

Case

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #93 on: October 12, 2017, 08:53:53 AM »
Inheritance: 0

Being raised by responsible people who prioritized their children's well being, independence and education: Priceless

We fully expect inheritances to go to benefit the grandchildren, and we haven't supplied any.

My wife frequently talks about a teacher of hers who had two children. He was older, and they had both started supplying grandchildren.

One of them had one child, the other converted to catholicism and raised a brood of 7(!) children. My wife's teacher shared that he was frankly baffled as to what would constitute a reasonable and fair division of the estate in these circumstances.

50-50 between the two children is fair.  How they choose to divide the money after that is up to them.

I disagree. The seven grandchildren provided by one child added more joy to the grandparents life than just one. Iím not saying that it should be split evenly between each grandchild but I would do something like this.

25% each child then 6.x% each grandchild. Itís a win for all and doesnít ďscrewĒ the child over that just had one kid.

[[Citation needed]]

Agreed, I could certainly see this causing disputes.  First off, it's the parents choice to do what they want with their money.  But, if they want to be fair, I think even splitting amongst children is the way to go, unless one child disowned them (etc...).  It's the parents children choice to have X number of children, and the cost of multiple children has a multiplier of X.

Off topic, but my own personal opinion is that the more children you have, the more greedy you are being.  Finite resources in the world.

Cwadda

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #94 on: October 12, 2017, 09:39:36 AM »
I find it weird that people on this thread who have received inheritances assumed that many others have too.  I'm not sure it's very common in most middle class families.

We have received no inheritance money thus far and don't expect to.  My parents have decent pensions but they are blowing through money quicker then they ever did while working and are starting to express concern about their finances.  They might have their small house left, and possibly a vacation cottage to split among us three siblings and several cousins.

However, they have given me financial support over the years - paid for most of undergrad costs but for 12K (none toward grad) and my wedding and provided a lot of free child care.  That counts for a great deal but it isn't inherited.  H received a small inheritance from his grandmother when he was much younger, so that's been gone for years.  His parents are living on SS.

I think for the purposes of this thread, and maybe in general, it's important to include everything when discussing inheritance.  This includes money gifts while growing up, paying college, what fancy hobbies parents finances, etc...  It can all effect one's ability to FIRE, and when.

My family raised me middle class-ish.  We didn't have a lot of extravagances, but we didn't have any worries.  That said, my parents had me start saving money at an early, mostly that was was via gifts from relatives and such, a smaller amount that I earned through neighborhood jobs.  It helped me get a head start on investing.  In the long term, it will only amount of a fraction of my total FIRE networth, but it's still something.

More importantly, my parents paid for college.  They did this through a pre-paid tuition deal which was available in my state, and I think turned out to be a great deal (pay for college years in advance and lock in tuition rates.... not sure how it would compare vs compound interest, but it's still a decent deal).

My parents were also able to afford music lessons for me, etc..., which probably contributed to crafting my personality in ways.

Inheritance I think can be defined in terms of tangibles, intangibles, and the in betweens... all of which affect the ability to FIRE.

Good points.  My parents funded my musical hobbies.  Over 10 years of musical training, they paid $12k.  I received $6k in scholarships due to my musical ability, and I also have earned about $40k total since then as a result of my musical work. I earn about $9k a year with this side hustle and will probably keep it going for life. 30 more years is $270k and that doesn't include investing it. Looks like it turned out to be a good investment and use of inheritance!

BuzzFire

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #95 on: October 12, 2017, 09:56:46 AM »
Inheritance from my parents moved up my FIRE date by 5-7 years. My twin sister and I split 2.9M plus a couple of cars and other estate items.
As a teenager, I resented my Dad's frugal tendencies. My neighborhood friends belonged to beach clubs/country clubs, parents had fancy leased cars, fancy clothes, bikes etc. We had 10yr old station wagons, refurbished bikes, modest clothes, and played golf at the crappy public course. Now I feel beyond grateful and blessed. I was able to leave my burnout career behind at the age of 44. I think most of my parent's principles rubbed off on my sister and I, and we both adhere to a lot of the MMM "rules". Probably the coolest thing was nudging  my sister to read the JL Collins stock series, and now she has a low cost lazy portfolio. Also, my wife really enjoys her job, so we live off of her salary and the stache will probably grow to a ridiculous number.
Sidenote: My sister still lives in our small hometown and ran into one of the spendypants neighbors a few months back. He lost his long time job as editor when the town newspaper went bellyup. They had to downsize to a small apartment and both work menial part time jobs in their mid 70s.

NorthernBlitz

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #96 on: October 12, 2017, 10:04:47 AM »
I find it weird that people on this thread who have received inheritances assumed that many others have too.  I'm not sure it's very common in most middle class families.

This.

Also, I'm in my early 30s. My parents are in their 50s. My in-laws are in their 60s. My grandparents are in their 70s and 80s - thank god I have had no reason to receive an inheritance! I'd like to keep it that way as long as possible. And realistically, even though my grandparents are doing fine, end of life care is expensive so I see no reason to expect to receive anything.

Maybe it's because you're still young? When I was your age it never occurred to me I would ever inherit anything either. Check back in in another 20 years, or so. Neither of my parents ever had much money. My dad, especially, was really bad with his finances. He was always in debt. Somehow, though, maybe with a little help from the small inheritance he got when my grandparents died and also an old house he inherited from a favorite uncle, my dad managed to pay off the house that he lived in not long before he died at age 75. Basically the only money we got from his estate was $40K from the sale of his house and another $40K from his IRA. That's not much, but it's also more than I ever expected to get.

Yeah, probably. In the context of the question - how did inheritance help you on the way to FIRE  - I plan on being financially independent long before an inheritance is even a question. Like it seems like you dad received those inheritances in his 60s or 70s? I don't foresee needing to work at that age, so I imagine any inheritance would just be gravy.

My parents and grandparents are big savers. I expect that we'll eventually receive a fairly large inheritance. But, I also think it will come at a time when we're FI or at least very close.

I think another interesting question for folks on here is what do they plan to do with their own money after they die. If we're all living by the 4% rule, there's a good chance that we'll have a significant amount of wealth when we pass away. What do you think should be done with it?

For myself, I assume that I'll pass it down to my kids. But, I would also be interested in setting up something like a scholarship fund for STEM education at a university that I've been involved with.

Slee_stack

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #97 on: October 12, 2017, 10:43:23 AM »
I still hope no one would feel ashamed to receive an inheritance of any kind.

I do understand minimizing the sharing of financial info to avoid awkward in-person/family situations...but on a forum with financial badassess...I think you're safe.

Case

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #98 on: October 12, 2017, 11:11:57 AM »
I find it weird that people on this thread who have received inheritances assumed that many others have too.  I'm not sure it's very common in most middle class families.

We have received no inheritance money thus far and don't expect to.  My parents have decent pensions but they are blowing through money quicker then they ever did while working and are starting to express concern about their finances.  They might have their small house left, and possibly a vacation cottage to split among us three siblings and several cousins.

However, they have given me financial support over the years - paid for most of undergrad costs but for 12K (none toward grad) and my wedding and provided a lot of free child care.  That counts for a great deal but it isn't inherited.  H received a small inheritance from his grandmother when he was much younger, so that's been gone for years.  His parents are living on SS.

I think for the purposes of this thread, and maybe in general, it's important to include everything when discussing inheritance.  This includes money gifts while growing up, paying college, what fancy hobbies parents finances, etc...  It can all effect one's ability to FIRE, and when.

My family raised me middle class-ish.  We didn't have a lot of extravagances, but we didn't have any worries.  That said, my parents had me start saving money at an early, mostly that was was via gifts from relatives and such, a smaller amount that I earned through neighborhood jobs.  It helped me get a head start on investing.  In the long term, it will only amount of a fraction of my total FIRE networth, but it's still something.

More importantly, my parents paid for college.  They did this through a pre-paid tuition deal which was available in my state, and I think turned out to be a great deal (pay for college years in advance and lock in tuition rates.... not sure how it would compare vs compound interest, but it's still a decent deal).

My parents were also able to afford music lessons for me, etc..., which probably contributed to crafting my personality in ways.

Inheritance I think can be defined in terms of tangibles, intangibles, and the in betweens... all of which affect the ability to FIRE.

Good points.  My parents funded my musical hobbies.  Over 10 years of musical training, they paid $12k.  I received $6k in scholarships due to my musical ability, and I also have earned about $40k total since then as a result of my musical work. I earn about $9k a year with this side hustle and will probably keep it going for life. 30 more years is $270k and that doesn't include investing it. Looks like it turned out to be a good investment and use of inheritance!

I've earned zippo from my music training.  But, who knows how much impact it had in my development?

The point is that all sorts of inheritance has an impact one's ability to FIRE.  And especially, there is a gray area between the lessons your parents taught you (not everyone has parents that raise them 'properly') to formal monetary gifts/inheritance.

rockstache

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Re: how much has inherited wealth helped you on your way to fire?
« Reply #99 on: October 12, 2017, 11:21:32 AM »
I still hope no one would feel ashamed to receive an inheritance of any kind.

I do understand minimizing the sharing of financial info to avoid awkward in-person/family situations...but on a forum with financial badassess...I think you're safe.

It would seem like it should be that way, but then again, on this very thread one poster discounted another poster's entire well-written comment simply because she had received an inheritance. So, I guess you're not safe anywhere!