Hi all,
Was curious what you guys' experiences are with your parents and finances, particularly those of you who have parents who are well-off or wealthy. Have your parents tried to get you thinking about investing at an early age? Do they encourage talk about what they're doing and what you could do to make your money work for you? Whether it's investing wisely in mutual funds or stocks, or real estate?
Or do they clam up when you ask them about anything remotely related to money? Do they tell you to look for good deals on liabilities rather than assets?
Situation with my parents: both are 2nd generation Chinese in their 70s who grew up low-middle class then became relatively affluent about halfway into their careers. They have resided in the Bay Area (East Bay) for the better half of their lives and and retired before 65 (7-8yrs now for my mom and at least 10 for my dad). My mom is still working up to the $40k max she can earn "retired" as a consultant for the school district (this is so she can "keep her mind sharp" in her words). My dad (nuclear engineering to IT mgmt at the power company) is receiving a pension and likely my mom is too (though, I'm not sure how that works if you're working after retiring for the same school district though). They own a few investment properties (one of which I co-own with them and live in) but these were mostly afterthought acquisitions - just because they were affordable at the time and heck why not (one was a condo that my grandparents lived in, so possibly a partial inheritance with that one). Both are staunch believers in higher education and getting great job, working hard, and running the rat race (lol) etc. Despite having saved up A LOT they never seem to have seen or realized the thing called "passive income" - I guess that's what their pensions are for :). My mom is extremely frugal and looks for deals on anything she can look for a deal on. So much so that she compulsively gets stuff for free or heavily discounted (think along the lines of those crazy couponers who now have to worry about where to store all the crap they just got for free or cheap but not quite as bad). In fact, they suffer from a minor case of Hoarders - if most of you were to visit their home and look in certain rooms or the garage, you would be appalled.
Anyway, I just informally asked my parents about the couple of other rental properties they own and what they rent for, and immediately my mom asked "Why? Why do you want to know?" in a defensive tone. I told her I wanted to know because I'm interested in acquiring rental property. Then they got all vague and secretive about it, with my dad interjecting "I don't know how much we charge" lol. After a little more prodding, my mom said "we charge $500 under market on one and $200 on the other" and the conversation just sort of trailed off to something else. A little later, my mom came back and said "So I think rental properties are a bad idea - you're going to get bad renters in bad neighborhoods and then you'll be stuck in a bad situation. I think you guys should just focus on looking for a bigger house to move into with your two kids"
Huh? A major asset owner who is obviously cash flowing is encouraging her son to shop for good deals on a non-cash flowing asset first rather than cash-flowing assets? I'm a bit confounded. Now, you could probably argue at this point that they don't see their rental properties as assets but as liabilities. That's true of my mom especially - everything is a liability to her, but that's her own undoing because she literally worries about *everything*. She then told me that my dad consolidated all their mortgages on the rental properties and their house and are paying $1000 a month for everything. They've owned these properties in the Bay Area for a very long time so they could easily pay everything off but choose to defer to making mortgage payments so they can get a small tax write-off. Even then their rental income cashflow exceeds their mortgage payment so it's not a huge deal I guess.
All that said, they have never been that open about their finances other than general blanket statements where they talk about how they're very well off. All I know otherwise is that they've been using financial advisors and tried pushing one on me hard.
I'm sure they don't want to come off as braggards nor do they want their children to think they can take advantage or to take them for granted. But wouldn't most people who have successfully created wealth for themselves be more than willing to divulge information and keep teaching their kids to make sound financial decisions AND investments? Referencing "The Millionaire Next Door" I guess this goes back to figuring out if they're actually PAWs or UAWs - but it's hard to know that with how closed off they are about sharing anything. Maybe my mom's paranoia is stemming from her thinking I just want to take all her money...lol. Thinking about it more, though they are very likely millionaires, I wouldn't be surprised if they were still in the UAW category or perhaps on the threshold at best. Whenever we ask them for advice they just tell us things like "you should use this financial advisor she's great" and "no don't buy real estate - you'll have to do deal with awful renters. it's not worth it" - but then they're not willing to share with us how they made it work and examples from their own finances to illustrate why we would want to use their financial advisor. I'm still confounded about my mom telling me not to buy rental properties so as to not have to deal with bad renters when they have been renting and are just fine - I don't recall any stories of them dealing with awful renters.