It's dawning on me where family members are headed financially...

[DieHard_772]

 You can tell a lot about someone's financial future by their actions today.  Tonight my wife and I were discussing the probable fates of our family members if things continue the way they have been.

First, there's me and my wife:
 we save all we can, we are both investing in our IRAs/HSAs, we both invest in our businesses and go to personal growth workshops,
I read self-help and business books all the time, and we are getting richer.  We plan our grocery spending, mostly eat at home (and love it!), and We are gradually moving our savings higher and higher into mustachian territory.

Then take my brother:
he has a lucrative six figure career currently working for someone else but he has his own business which has also brought in six figures in the past.  He
makes good money, has not shown a lot of interest in investing or Mustachianism, but he does max out his IRA and is really smart about a lot of thing, and prospects are high for him continuing to earn great money for his entire career. 

Then there's my mom: 
She has a $176k mortgage and a $22k business loan and very little to no income outside of  Social security and renting out a room in her house (which doesn't quite cover the mortgage).  She got an inheritance from my grandmother's passing and is slowly using that up (has about $50k in it remaining).  Has maybe $20k (?) in annuities as well.  She has said that she is having to dip into these to cover the property taxes.  She lives frugally and cheaply.  Meanwhile, she has resisted working her entire life, and her chances of making a substantial income are dwindling by the day because of her age and lifestyle choices. She seems to think things will magically work out.  If she has a practical head on her shoulders, it doesn't show up that much when it comes to money. 

Then there's my sister:
 She is  in between jobs, has 2 kids, husband who makes modest (but not great) income, and they have at least $40k in debt (including $25k in student loans), live in subsidized low-income housing (though in a community they really like),
chronically use credit cards because they aren't in control of their spending, the last I heard they spend $800+ per month in food because they go to Whole Foods all the time,
and as far as I know, the only savings they have is about $90k from his last job (which is not bad), but they do very little in the way of saving.  They know next to nothing about
investing, that I can tell, and while she is interested in MMM, and has visited the site and told me she likes it, she seems perpetually distracted by daily life, and doesn't really show a full-time commitment to getting their finances in order.  Meanwhile, he loves to spend, knows next to nothing about investing, and doesn't really seem that interested in learning, nor has he been that open to Mustachian type choices. 

The writing on the walls for each of us:
It's not hard to see where we each are headed.  My wife and I are going to grow richer and richer, build up our networth while we grow our business income, and have a beautiful life of financial prosperity and joy.  My brother is also going to do very well, because of his high earning ability, and hopefully he will become more and more interested in investing his earnings.

My mom, meanwhile, will need help to get by.  Fortunately, we love her and will do whatever we need to do.  Which will be good, because it will probably come down to my brother and
I taking care of her financially.
My sister, meanwhile, will continue to struggle, and unless she gets REALLY serious about turning things around, they will continue to have high debt and low savings/retirement.

The writing is on the walls!  It is sobering to realize, but empowering, because at least I can plan accordingly.

[Zamboni]

I've heard that the best predictor of future behavior is past behavior . . . but people can change.

Meanwhile, remind yourself that they are all adults making their own choices . . .

[DieHard_772]

I've heard that the best predictor of future behavior is past behavior . . . but people can change.

Meanwhile, remind yourself that they are all adults making their own choices . . .

Yes, it is true that they are adults making their own choices.
And, my mom's choices effect me, because I feel that need to do everything in my power to make sure she is taken care of.
This is probably good for me in the long run, because it spurs me to be richer.

My sister's choices especially effect her two daughters, who are being raised in a family that is financially deluded.  Sad but true.
I can only raise the warning flags and hope they change course.

[DieHard_772]

I almost started hyperventilating reading about your mom and your sister.   I just cannot imagine what it  must be like to be living that close to the edge.

I am so grateful that everyone in my family (including my inlaws) is sensible about money.   

Holy $#% thanks for the dose of reality!  I am not crazy then!  I probably got so numb to it that I forgot that I have been hyperventilating for years about it...
actually, since I was a kid living with my mom... always close to the edge.

[sol]

Your mom is totally fine.  She lives modestly and has two wildly successful children who will make sure she doesn't have to eat cat food.  If she was a wasting her money you could say she has a problem.  Instead, it sounds like her kids are her retirement plan.  I know my parents certainly sacrificed a great deal in order to give me opportunities to succeed in life, and I have no qualms about returning the favor.  Yes, they could have been much richer by now if they had focused on their careers and their money instead of investing in providing a loving family life full of books and science fair projects and bike rides and museums. 

Your sister sounds like an average American, and if she's not the primary income earner in her family because she is raising her children then the blame lies mostly with her husband as the person responsible for their finances.  Sometimes, people choose life partners for reasons other than how many self-help books they've read.  Maybe try not to begrudge her the merc?

[DieHard_772]

Your mom is totally fine.  She lives modestly and has two wildly successful children who will make sure she doesn't have to eat cat food.  If she was a wasting her money you could say she has a problem.  Instead, it sounds like her kids are her retirement plan. 

Lol, thanks for the reframe!  You got some good points.  And yes her kids are going to be her retirement plan.  I just don't know if she knows that.  And the truth is, I still got a ways to go before I can easily fund that.  But I think I have some time, and I'm sure it will be okay.  Yet I just today really saw the writing on the walls...

[DieHard_772]

Your sister sounds like an average American, and if she's not the primary income earner in her family because she is raising her children then the blame lies mostly with her husband as the person responsible for their finances.  Sometimes, people choose life partners for reasons other than how many self-help books they've read.  Maybe try not to begrudge her the merc?

Yeah, man, she is in that respect quite the average american (although in many other respects she is NOT... I think she is a great candidate for a Mustachian, she just needs to gain some more clarity I think and really lead her family in this direction).  And yes, they clearly married for other reasons than his income.  It just scares me sometimes, and I feel an inner urgency to try to "lead the troops" in a positive direction instead of what to me seems like a calamity waiting to happen.  Yet it is after all, they're life, and all I can do is be my best example possible. 

Truth is, she likes Mr Money Mustache and is open to the ideas I have brought her.  I shouldn't begrudge her the fact that she hasn't implemented it all already...

[DieHard_772]

Are you close to your sister's kids?   I would at least try to be open with them about financial matters, and offer information/advice  if they seem interested as they get older.   Show them that there is another way to handle things.  Because as they get older they just may be hyperventilating, too.

I'm starting to focus on this.  I bought a few books on investing for teens that I am giving my niece.  We'll see what sticks.
Hopefully that will help the parents.

[Freedomin5]

And even more, if you share bits and pieces of how you save, and act as a bit of a role model, your niece can then have a comparison point to her own family.

I have a nephew from a family of terrible savers and spenders. Whenever we are in town, we like to invite him to fun activities that are sometimes expensive and sometimes not, and then when he is duly impressed, chat about how he can plan for his future in a way that will allow him the same financial freedom. Not sure if it will be successful...we are definitely going against the current here.

[Zamboni]

Sometimes an aunt or uncle has more effect on how a child views things than their own parents. Particularly teenagers are listening to other adults in their lives (it may not seem like it, but they are . . . )

I have rolled my eyes so many times at my son's quipping "when I get rich, I'm going to get a hummer and a lot of pairs of Jordans and a mansion." I tell him those aren't the choice I would make, but if he earns the money he can do what he wants with it. I show him my index funds periodically.

And then my brother told him the story about "the richest man in our little town." The richest man is actually the janitor at the local high school. He has a second job as the night janitor at a local factory where my brother delivers parts. He has been investing in small homes and renting them out since he immigrated to the US . . . now he is worth millions and millions. You would never know it by looking at him, though, because he still lives in a tiny house and still works as a janitor. He says he keeps working so there is "no time for any fights with his wife."

The next time my son talked about what he would do with his future millions a few months later, he said he would live in a really small house and invest in stocks. He'd still buy lots of fancy shoes, though. When I pressed him on this, he said he thought 20 pairs of shoes would be the right number, and then he would donate a pair to charity for every new pair he bought after that to maintain a steady 20 pairs in his house. So, there is progress to be made. I'm sure the tiny house idea came from my brother's story.

Also, you are kind regarding your mother. I told my parents, who have both made their own bad choices many times, that they should not expect me to be their retirement plan. I wouldn't let them starve or live on the street, of course, but that is about the extent of it. If it gets to that point, then I will take over their finances completely if they want my help at all.

[GU]

And even more, if you share bits and pieces of how you save, and act as a bit of a role model, your niece can then have a comparison point to her own family.

I have a nephew from a family of terrible savers and spenders. Whenever we are in town, we like to invite him to fun activities that are sometimes expensive and sometimes not, and then when he is duly impressed, chat about how he can plan for his future in a way that will allow him the same financial freedom. Not sure if it will be successful...we are definitely going against the current here.

Yep.  I have a Godson whose parents are great people but financially illiterate.  I started putting a couple hundred bucks every year into a Vanguard fund for him.  Once he gets to around 10 years old, I'm going to show him the fund, and use that as a jumping off point to teach him.  And I'll give him control of the fund eventually.

[GU]

Sometimes an aunt or uncle has more effect on how a child views things than their own parents. Particularly teenagers are listening to other adults in their lives (it may not seem like it, but they are . . . )

I have rolled my eyes so many times at my son's quipping "when I get rich, I'm going to get a hummer and a lot of pairs of Jordans and a mansion." I tell him those aren't the choice I would make, but if he earns the money he can do what he wants with it. I show him my index funds periodically.

And then my brother told him the story about "the richest man in our little town." The richest man is actually the janitor at the local high school. He has a second job as the night janitor at a local factory where my brother delivers parts. He has been investing in small homes and renting them out since he immigrated to the US . . . now he is worth millions and millions. You would never know it by looking at him, though, because he still lives in a tiny house and still works as a janitor. He says he keeps working so there is "no time for any fights with his wife."

The next time my son talked about what he would do with his future millions a few months later, he said he would live in a really small house and invest in stocks. He'd still buy lots of fancy shoes, though. When I pressed him on this, he said he thought 20 pairs of shoes would be the right number, and then he would donate a pair to charity for every new pair he bought after that to maintain a steady 20 pairs in his house. So, there is progress to be made. I'm sure the tiny house idea came from my brother's story.

Also, you are kind regarding your mother. I told my parents, who have both made their own bad choices many times, that they should not expect me to be their retirement plan. I wouldn't let them starve or live on the street, of course, but that is about the extent of it. If it gets to that point, then I will take over their finances completely if they want my help at all.

So true.  The closer in relation you are to someone, the less likely they are to take your advice seriously.  It's a defect in human reasoning. 

Sometimes you just have to plant a seed, and give it time to grow, so to speak.  I gave my brother a copy of "The Millionaire Next Door" about 10 years ago.  He finally read it recently, and scheduled a lunch meeting to hash out his finances.  I was kvelling.

[pachnik]

Sometimes an aunt or uncle has more effect on how a child views things than their own parents. Particularly teenagers are listening to other adults in their lives (it may not seem like it, but they are . . . )

I have rolled my eyes so many times at my son's quipping "when I get rich, I'm going to get a hummer and a lot of pairs of Jordans and a mansion." I tell him those aren't the choice I would make, but if he earns the money he can do what he wants with it. I show him my index funds periodically.

And then my brother told him the story about "the richest man in our little town." The richest man is actually the janitor at the local high school. He has a second job as the night janitor at a local factory where my brother delivers parts. He has been investing in small homes and renting them out since he immigrated to the US . . . now he is worth millions and millions. You would never know it by looking at him, though, because he still lives in a tiny house and still works as a janitor. He says he keeps working so there is "no time for any fights with his wife."

The next time my son talked about what he would do with his future millions a few months later, he said he would live in a really small house and invest in stocks. He'd still buy lots of fancy shoes, though. When I pressed him on this, he said he thought 20 pairs of shoes would be the right number, and then he would donate a pair to charity for every new pair he bought after that to maintain a steady 20 pairs in his house. So, there is progress to be made. I'm sure the tiny house idea came from my brother's story.

Interesting story about your son's change in attitude after he talked to your brother.  I have a niece and nephew who live very close by.  They are both in their teens now.  I am going to start talking to them about money, spending and saving.  And consumerism and work.  I've hesitated in the past but i won't anymore.

Thanks Zamboni for this story. 

[GU]

You can tell a lot about someone's financial future by their actions today.  Tonight my wife and I were discussing the probable fates of our family members if things continue the way they have been.

First, there's me and my wife:
 we save all we can, we are both investing in our IRAs/HSAs, we both invest in our businesses and go to personal growth workshops,
I read self-help and business books all the time, and we are getting richer.  We plan our grocery spending, mostly eat at home (and love it!), and We are gradually moving our savings higher and higher into mustachian territory.

Then take my brother:
he has a lucrative six figure career currently working for someone else but he has his own business which has also brought in six figures in the past.  He
makes good money, has not shown a lot of interest in investing or Mustachianism, but he does max out his IRA and is really smart about a lot of thing, and prospects are high for him continuing to earn great money for his entire career. 

Then there's my mom: 
She has a $176k mortgage and a $22k business loan and very little to no income outside of  Social security and renting out a room in her house (which doesn't quite cover the mortgage).  She got an inheritance from my grandmother's passing and is slowly using that up (has about $50k in it remaining).  Has maybe $20k (?) in annuities as well.  She has said that she is having to dip into these to cover the property taxes.  She lives frugally and cheaply.  Meanwhile, she has resisted working her entire life, and her chances of making a substantial income are dwindling by the day because of her age and lifestyle choices. She seems to think things will magically work out.  If she has a practical head on her shoulders, it doesn't show up that much when it comes to money. 

Then there's my sister:
 She is  in between jobs, has 2 kids, husband who makes modest (but not great) income, and they have at least $40k in debt (including $25k in student loans), live in subsidized low-income housing (though in a community they really like),
chronically use credit cards because they aren't in control of their spending, the last I heard they spend $800+ per month in food because they go to Whole Foods all the time,
and as far as I know, the only savings they have is about $90k from his last job (which is not bad), but they do very little in the way of saving.  They know next to nothing about
investing, that I can tell, and while she is interested in MMM, and has visited the site and told me she likes it, she seems perpetually distracted by daily life, and doesn't really show a full-time commitment to getting their finances in order.  Meanwhile, he loves to spend, knows next to nothing about investing, and doesn't really seem that interested in learning, nor has he been that open to Mustachian type choices. 

The writing on the walls for each of us:
It's not hard to see where we each are headed.  My wife and I are going to grow richer and richer, build up our networth while we grow our business income, and have a beautiful life of financial prosperity and joy.  My brother is also going to do very well, because of his high earning ability, and hopefully he will become more and more interested in investing his earnings.

My mom, meanwhile, will need help to get by.  Fortunately, we love her and will do whatever we need to do.  Which will be good, because it will probably come down to my brother and
I taking care of her financially.
My sister, meanwhile, will continue to struggle, and unless she gets REALLY serious about turning things around, they will continue to have high debt and low savings/retirement.

The writing is on the walls!  It is sobering to realize, but empowering, because at least I can plan accordingly.

I've certainly played this game with my spouse before.  If it makes you feel better, my mom has $0 in savings of any sort, retirement or otherwise, and $0 of home equity (she rents).  There is no inheritance coming, no annuities, etc.  She is in her late 50s, and currently putting my sister (from her second marriage) through college by taking out loans!  Things could be a lot worse.  And despite all of that, my mom has a decent standard of living--there are tons of people in way worse situations.  As some people already commented, your family isn't in that bad of shape. 

[surfhb]

Good thing none of the things you listed will have any effect on you! 


Sent from my iPhone using Tapatalk

[ambimammular]

If you can, take a chance on showing your sister's kids the light. You could be the guide they need.

My dearest friend grew up in a paycheck-to-paycheck house. She was smart enough to see the inconsistencies of eating out and filling up carts from Walmart with just crap, and then not having enough to get new shoes for school when the time came. It never sat right with her, but she didn't know any better, and kind of went with those habits after she moved out.

After she and I met and she saw how our family was living and (not) spending. She said it's like we showed her what she was like on the inside all along.

Now she's got a decent emergency fund, a Roth started, and savings goals. She once gave me this awesome compliment that she could hear my voice in her head when she shops on Amazon.

All to say that just because her kidlets are growing up in an indulgent household, doesn't mean that that's their fate. (You and your sibs came from the same house too after all.) You could be the guide they need.

[DieHard_772]

And even more, if you share bits and pieces of how you save, and act as a bit of a role model, your niece can then have a comparison point to her own family.

I have a nephew from a family of terrible savers and spenders. Whenever we are in town, we like to invite him to fun activities that are sometimes expensive and sometimes not, and then when he is duly impressed, chat about how he can plan for his future in a way that will allow him the same financial freedom. Not sure if it will be successful...we are definitely going against the current here.

Love it, being a role model for my nieces has been a desire since day one.
  sounds great what you do for your nephew, thanks for the ideas

[DieHard_772]

If you can, take a chance on showing your sister's kids the light. You could be the guide they need.

My dearest friend grew up in a paycheck-to-paycheck house. She was smart enough to see the inconsistencies of eating out and filling up carts from Walmart with just crap, and then not having enough to get new shoes for school when the time came. It never sat right with her, but she didn't know any better, and kind of went with those habits after she moved out.

After she and I met and she saw how our family was living and (not) spending. She said it's like we showed her what she was like on the inside all along.

Now she's got a decent emergency fund, a Roth started, and savings goals. She once gave me this awesome compliment that she could hear my voice in her head when she shops on Amazon.

All to say that just because her kidlets are growing up in an indulgent household, doesn't mean that that's their fate. (You and your sibs came from the same house too after all.) You could be the guide they need.

That is awesome to hear, ambimammular.
I am an optimist that by my example I can positively influence others.  I really have no idea whether my sister and her husband will "see the light" when it comes to their finances, yet all I can do is keep offering ideas, to them and to my nieces. 

I believe in the power of the slow drip... it is enormously powerful over time!

[DieHard_772]

I've certainly played this game with my spouse before.  If it makes you feel better, my mom has $0 in savings of any sort, retirement or otherwise, and $0 of home equity (she rents).  There is no inheritance coming, no annuities, etc.  She is in her late 50s, and currently putting my sister (from her second marriage) through college by taking out loans!  Things could be a lot worse.  And despite all of that, my mom has a decent standard of living--there are tons of people in way worse situations.  As some people already commented, your family isn't in that bad of shape.

Thanks for the reminder.  Making this post has really helped me broaden my perspective on this matter.  I agree with you that my family is really not in as bad shape as many people.  And fortunately, they have me to model these ideas.  I can't predict how it will influence them, yet I am deciding to relax about it, and realize that it's going to be okay.

I feel blessed to know what I know, and surely the people around me will benefit from it.

[DieHard_772]

Sometimes you just have to plant a seed, and give it time to grow, so to speak.  I gave my brother a copy of "The Millionaire Next Door" about 10 years ago.  He finally read it recently, and scheduled a lunch meeting to hash out his finances.  I was kvelling.

That is awesome... better late than never!

Incidentally, my brother in law (the one married to my sister) gave ME a copy of "The Millionaire Next Door," which I read and loved. 
I'm about 99% sure he didn't read it himself.
He also introduced me to many other good books in the past... even if he didn't read them.
I'm glad that I'm someone who reads good books... and even if other family members do not, I'm sure
my newfound knowledge will help them... eventually.

[Tyson]

Sometimes you just have to plant a seed, and give it time to grow, so to speak.  I gave my brother a copy of "The Millionaire Next Door" about 10 years ago.  He finally read it recently, and scheduled a lunch meeting to hash out his finances.  I was kvelling.

That is awesome... better late than never!

Incidentally, my brother in law (the one married to my sister) gave ME a copy of "The Millionaire Next Door," which I read and loved. 
I'm about 99% sure he didn't read it himself.
He also introduced me to many other good books in the past... even if he didn't read them.
I'm glad that I'm someone who reads good books... and even if other family members do not, I'm sure
my newfound knowledge will help them... eventually.

Wait, how can someone recommend a book that they haven't read themselves?  Do they just absorb it via osmosis?

[DieHard_772]

Wait, how can someone recommend a book that they haven't read themselves?  Do they just absorb it via osmosis?

You got me.
People be puzzling sometimes.

[Retire-Canada]

Wait, how can someone recommend a book that they haven't read themselves?  Do they just absorb it via osmosis?

He just wanted to give it away. It wasn't a personal endorsement of its awesomeness. If I ended up with a book about golf I'd be passing it on ASAP without ever opening it up.