Author Topic: Living with Family  (Read 6258 times)

inthebiz

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Living with Family
« on: October 12, 2012, 09:35:52 PM »
I spent a few years in southeast Asia and was amazed at how close families were both figuratively and literally. In most cases actually, siblings with their own children all shared one home. I also saw families that would buy pieces of land and build multiple homes (really one room huts) on the one property. If you could get family members involved, wouldn't this be the ultimate Mustachian way?

In what ways could a family (grandparents, parents, siblings and their children) pool resources to improve the quality of life for everyone and help all achieve FI earlier?

The first thing that comes to mind is everyone living under one roof. I understand for some families that would require a mansion to have the space and thus defeat the purpose, but I'm thinking with my parents, two non-married working brothers and my family of four, we could just all live in my parents 5 bedroom home! We all chip in, eh?

What about pooled investments? With more assets working together we could really get some growth.

What do you guys think? Too extreme? Other ideas?

needmyfi

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Re: Living with Family
« Reply #1 on: October 12, 2012, 09:53:18 PM »
Not as many people live near family anymore  The Danish have a popular way of imitating this social construct in a mobile society called cohousing.  The US has some intentional comunities but very few have been successful.  One that has been very successful has been Miccosouki spelling?  in Tallahassee Fl.  Googe intentional community.  Also google Danish cohousingSeems the best models are kinda condo like financially and commune like socially with shared garden and recreational space, some sharedmeals and child care and privately owned houses that can be resold.

totoro

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Re: Living with Family
« Reply #2 on: October 12, 2012, 09:57:42 PM »
I've always thought this was the best way to go. I recently purchased a triplex with this in mind. My kids know that there is an open offer to rent at a reduced rate or buy from us and live there when they are older. It makes sense for many reasons if you get along.

Use it up, wear it out...

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Re: Living with Family
« Reply #3 on: October 12, 2012, 10:01:35 PM »
I have a colleague who is part of a large extended family, and they've put together a trust to act as a shared self-insurance pool.

Adventine

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Re: Living with Family
« Reply #4 on: October 12, 2012, 10:18:26 PM »
Living with family can definitely help somebody reach FI faster, but IF AND ONLY IF your family members share the same Mustachian habits as you and if you have a healthy amount of trust in each other.

I love the close family ties that are encouraged by my Southeast Asian culture. However, the same ties create enormous pressure to help out family members in trouble, even if it is trouble of their own making.

If you live with financially irresponsible people, it's harder to 1) keep your personal finances private 2) say no when they ask for help 3) avoid them when they won't take no for an answer.

Thanks to a Third World economy that's only recently improving, many aging Filipino parents unfortunately don't have enough savings to cover their and consider their children as their retirement plan. It is also not uncommon for extended family members (aunts, uncles, cousins, second cousins) to approach rich members of the family to ask for financial help. And if they don't get what they want, they badmouth you to the rest of the family. I'm not saying this behavior doesn't exist in other cultures. But in an Asian culture, the pressure is magnified in a way that Westerners might have experienced. And in my country, financial hardship is the norm, not the exception.

On a more positive note, Filipinos find it unacceptable to put our aging parents in nursing homes. We will find a way to take care of them in our own homes, even if it hurts financially. Because family is that important.

So living with family can be the best or worst thing for reaching FI. It depends on your own family, which, unfortunately, you can't choose.

prosaic

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Re: Living with Family
« Reply #5 on: October 13, 2012, 04:55:54 AM »
Cohousing can be great if you have a shared goal or a common interest that keeps the community together. There are cohousing communities centered around conservation, homeschooling, a specific religion, etc. Heck, you could have one based on early retirement.

If its just a bunch of people who have a loose idea that they like cohousing but aren't really committed to a specific reason, then it just becomes a neighborhood that pools resources (and not for the same reason) and that can become a contentious issue and a situation ripe for conflict.

I have lived in cohousing.

needmyfi

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Re: Living with Family
« Reply #6 on: October 13, 2012, 11:10:58 AM »
Love the idea of intentional community for frugal folks!  Land ismuch cheaper per acre when large tracts are purchased.  Fee similar to condo fee could be used for shared transportation (one used Nissan Versa or Honda for each  5 units and one moving hauling truck per community) instead of swimming pools and fancy elevators.  Lots of conservation space, garden and maybe even livestock.  Community daycare,bulk buying of goods and all sorts of ways to save. Shared tools that could be rented cheaply avalable,shared wifi . Would have to have a board similar to a condo board for conflict resolution.

mustachio

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Re: Living with Family
« Reply #7 on: October 13, 2012, 12:04:50 PM »
This is a timely post since just a few weeks ago my partner and I decided to move in with family.  We went from renting a 2 bedroom house 10 minutes from my work to a single bedroom (plus a little space here and there for storage) 2 hours from work.  I'm staying at a sibling's place 35 minutes from work during the week.  I do not think this commuting arrangement is sustainable, but it works for now till I find another job.

The Good:
- We get to be around my family all the time (we all like each other!)
- I think of this as giving myself a $12,000/year raise by not paying rent or utilities (even with increased transportation costs).
- We are informally contributing financially to the household by paying for some shared food and maintenance costs.
- We are contributing non-financially to both households by taking care of some chores and maintenance (fixing stuff, cooking, gardening, cleaning, childcare, etc).
- We are living in a much nicer area (where we want to be long-term) and in much nicer housing.

Bad (or just not ideal):
- Moving was a logistical nightmare since we were also downsizing by more than 50% at the same time.  This forced a new level of minimalism, which we welcomed, but took a lot of work and is still an ongoing process.
- It took quite a bit of mental resolve to give away or sell things that were useful or that we really like (there just isn't enough space to keep it all!).
- Not seeing my partner during the week.  This has been difficult, but we are looking at my job situation as temporary.
- I need to find another job, which is not the easiest thing for me to do.

The result so far has been that everyone involved is less stressed out, but it's going to take some getting used to (new area, more communication, and getting into a new daily routine).  The financial incentive is rather compelling for me...it knocked 5+ years off my FI date (plus, I finally overcame Step 1 of ERE!).

flyfamily

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Re: Living with Family
« Reply #8 on: October 13, 2012, 02:40:48 PM »
We have acreage that is on a family homestead. Our portion is 10 acres. It's been in the family at least 100-150 years.

Residing on the homestead are the parents, a sister and brother (one owns the home; the other pays rent to them), aunt and uncle, cousins. One cousin lives with the aunt and uncle, as well.

On our portion, we have a 1 bedroom cabin.

Each relative has their own section. Of the siblings, it is divided into 10 acre portions. One of the siblings has opted to not live on her section. She is married, her husband wanted acreage of his own. Understandable.

To answer your question: Yes. I have personally seen how this concept can work and benefit all family members financially. One relative is very smart at coordinating things like planting pines (residual income with annual pine needle baling and cut down every 10? years). Another loves chickens, so she's the resident egg lady. They all also share of their fruit/nut trees. When equipment is needed, they usually chip in on the cost. We'll fall into that fold, when we move out there full time. And when things need repairing, you have one that has strength in electrical work, another more carpentry minded.

The drawback and this is just a huge, huge consideration: Being immersed with these folks on a daily basis, can't get away from it! With that said, keep in mind that these are my in laws not my family or origin! Especially being that we have lived away from ALL family for 20 years, it is incredibly overwhelming. And they can be very pushy with their opinions. Husband and I are accustomed and content with making our own decisions, we do not need other grown adults parenting us. So.. that is a matter of establishing boundaries, which can take time.

We stayed at our cabin a good part of the Summer. Having the cabin now is a huge bonus. There are times when you just can't get away! The minute my husband and I could take a breather to just think or talk, someone else would pop up. If we're in the cabin, they pretty much now leave our family of 4 alone. So, they're so far, so good respecting that boundary. Or the patriach has told them if they want us to come out more and be comfortable, they've got to give us some space.

Once husband has retired from his 1st career, the kids will still have some years in school. We may be going overseas. However, if he finds an aviation job where he just travels back and forth, we will likely go ahead and move out on the land.

We already have the electric and the cabin is a great interim place to stay. while the house is being built.

Being that the land is many generations over paid for..yes. We are far ahead of the game if we live on it. My husband will also have a pension, and we've already estimated that with a very conservative mortgage and the fact that we will already be debt free, we will be able to cover PITI and all basic living expenses on his pension alone. If he stays within the Aviation sector, estimated salaries for his background can range between 65k-100k (depending on what he does), so we pretty much would have the house paid off or close to it at the end of year one. (This is a low COL area so yes, you can build a house for approx 100k.. and we're planning a modest one since the kids will be nearing high school and it will eventually be just the two of us)

Editing to add regarding finances: We would absolutely NEVER pool our finances. They own their land, we own ours. Aside from going in on a side of beef, paying a share on a tractor, we would not be comingling our finances with them.  They all have shared minutes on their cell phones and that alone drives husband and I crazy listening about it. There's some things that are worth the expense to not have to worry about Aunt so and so running out all of the minutes for 10 relatives before the month is over... However, we will exercise our option to say, 'No', if offers like that are made.

« Last Edit: October 13, 2012, 02:48:58 PM by flyfamily »

inthebiz

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Re: Living with Family
« Reply #9 on: October 14, 2012, 07:15:51 PM »
All very interesting responses. Thank you. I took some time researching intentional communities. They seemed less oriented around the financial advantages of community living and more around a common religion/spirituality. Kind of a weird impression at first glance if you ask me.

Getting some family together to buy a chunk of land and build smaller houses/cabins sounds really appealing though. I like the sound of that. I've been looking for some land in middle TN and there are some great prices there.

@flyfamily it sounds like things are working out as good as can be. Im thinking along the lines of what you have going on.

Nords

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Re: Living with Family
« Reply #10 on: October 14, 2012, 08:42:59 PM »
Getting some family together to buy a chunk of land and build smaller houses/cabins sounds really appealing though. I like the sound of that. I've been looking for some land in middle TN and there are some great prices there.
Ohana housing is popular in Hawaii (due to the high cost of land) but... it's definitely a cultural adjustment. 

I think that unless you've grown up in this situation then everybody feels as if their independence is a bit threatened.  The adult children may feel that their lifestyle is under scrutiny by their parents, the old dysfunctional family dynamics may reassert themselves between the two adult generations, and the grandkids have to adapt to different rules imposed by different generations.  The elders may feel that they're being watched for any signs of infirmity, or being exploited for free childcare, or even financially exploited.  The grandkids may also exploit their grandparents' generosity to the point of making the parents look like authoritarian cheapskates.

After 18 months of caring for my father's finances while he deals with Alzheimer's, I'm realizing that I'm still humongously angry at him for 25+ years of sparse contact.  Of course being angry at him serves no purpose and doesn't help me either.  But there's probably enough to keep a team of psychs & group therapists busy for months.

I've lived with my parents-in-law, rented real estate to them, and shared financial resources with them.  The conclusion of this multi-year experiment is that 5000 miles is about the right separation between us.

Our adult daughter has joined the Navy and probably won't return "home" (wherever she decides that is) until at least 2019.  When she does, and if grandkids ever enter the picture, we've told her that we're "Reserve Grandparents":  a weekend a month and two weeks a year.

totoro

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Re: Living with Family
« Reply #11 on: October 14, 2012, 09:24:41 PM »
I leave it to my kids to decide if this will work for them.  All I can do is make the opportunity available and attractive.  I do believe I will have my mom with us and I wish I had been more set up to care for my grandparents at home.

As for childcare, I would be happy to be able to spend time with my grandkids if I am able.  They will always be welcome and I look forward to the chance to have small children around again.  What a gift to be FI and a grandparent.     

I've always thought cohousing could be wonderful.  Depends a lot on the personalities involved though (having had terrible roomates tends to reduce idealism :)).  I believe that separate space is necessary for sure, but close proximity and the support and companionship this brings can be excellent when it works.  I think the key is to have folks not take advantage of each other and give while retaining independence.

As for dependence and the requirement to support family that exists in Asia and third world countries, well, I think we have a unique opportunity to do things a bit differently in North America.  We don't have to embrace the British requirement to set up separate households and we don't have to be bound by the overwhelming obligations to elder support or support of less well off relatives.  Really, it could end up being the ideal if we are able to set new rules.

I do plan to hire live-in care if we have grandkids or become infirm.  I don't plan to move to a home unless my needs are overwhelming for others.  FI makes this possible too.