This was going to be kinda brief but it evolved! And I know that the subject line is a loaded one, but here's the background:
- 54 y.o., married, retired with 21m in total assets (zero debt, the assets include a $3m home that's paid off), wife is 58
- 2 kids, son is a 20 y.o. junior in college (biology, on track to be a PA), daughter is 23 with a fashion marketing degree working in retail living at home, trying to gain internships/experience to get more solid jobs in that field
- $18m in brokerage, 30% in VTI (more or less) and remainder in bonds (mostly 1-3 year tbills)
- currently yearly income from the brokerage is 650-700k (thx to those 4.8-5% yielding tbills and VUSXX. Naturally it was a fraction of that when interest rates were 1% !!!!)
- currently fixed 'essential' yearly expenses such as utils, insurance, food, prop tax, clothes, dining, etc... are ~135k. (Side note: about 15k of that stems from helping 3-4 of my wife's immediate brazilian family members in Brazil, who are always struggling and will continue to do so until they pass. That allocation will likely go up as people become ill. I feel totally ok with this and even sometimes say 'oh just send your brother a bit extra, it costs us almost nothing')
The windfall came in Feb 2020 (my partners and I sold to private equity), and the somewhat forced mindset for the first few years was conveniently 'let's chill out' due to COVID. Since then, while we take several nice european and south american vacations each year with biz class tix, $400-500 night hotels (less in south america), we are otherwise fairly frugal. No lambos, yachts, rolexes, diamonds, second vacation homes (yet), we eat at a Michelin restaurant maybe once a year, etc... We have decent cars like Audi Q5s and such, and we're perfectly happy with those. I made a 1 time expenditure of maybe 25k on music equipment and building a home recording/jam room. But on point of frugality, I love golf but still won't go to back to Pebble Beach until my game is better. (I played it once) I'm an expert snowboarder (yes, even at 54), and my board is nicked up all over the place, and I still find it a little hard to spend $500 on a new board. Heh......
The 'challenges and big decisions' that we have now that COVID is long gone:
1. we sometimes think 'hey, I'd like to do this with some of the money from time to time' and that can be at odds with our frugality. And, some of our spending ideas diverge.
I've now been more into trying some bucket list items like maybe a yearly helicopter-snowboard trip (~10-12k), and my wife has expressed that she'd like a bit more control over her 'own part of the budget', to perhaps send more money to her struggling brazilian family members from time to time...on a case by case basis. She feels like 'hey, I'd like to spend some of this money, but I don't know how much is ok to spend, and I don't want to upset you'. Yes, she sounds like a great wife and she is, but this is ALSO making her get a little frustrated and now just a tad bit upset/resentful. Especially if I buy a new 5k guitar once every 2 years, but she feels she 'can't send any extra few K to brazil. I totally understand that double-standard isn't fair and doesn't bode will for the longer term.
I know the typical responses may be 'talk to a financial planner', or 'set a budget', but that's not what I'm looking for. The question revolves more around what experiences/challenges did anybody out there have that might be similar to above, more related to being a frugal person but GETTING COMFORTABLE with actually spending MORE, how did you navigate them when you and your partner had some different interests? Is the best overall thing to indeed just ***set a budget of allowed expenditures*** (outside of the essentials) per month/year, that we feel good about in terms of our yearly wealth accumulation goals? (meaning, if we don't want to touch the principal, we'd set a budget that allows us to keep saving some of that yearly income) Did you and your wife set your own independent budgets, so that you never had to get into questioning what the other person was doing with 'their money' and why? (if my wife wants to give her entire 'allowance' to her local church, and I want to spend mine on helicopter lessons, then there's no issues...to each his/her own?)
2. when looking at our level of net worth, are there things that we might be 'missing' from a comfort (luxury) standpoint that would make our lives easier, and have some decent bang for buck. (I ask this because have this sense that there ARE things we are 'missing' that aren't crazy. )
Things that have recently come more strongly to mind, include having a chef cook a few times a week (we cook most meals at home because we are quite healthy and we can only stand eating at restaurants so much...the food is usually very high calorie, etc...) Or having somebody wash/put-away clothes, etc. (we have a housecleaner but she doesn't do that ) In other words, basic things so we can save time from doing things that we may not always enjoy (we sometimes don't want to cook OR dine out. And of course we never really like doing clothes).
other ideas?
3. the kids and money
Our kids have a sense of how much we have from their cousins (one of my partners was my brother in law...though now ex-brother in law). However, they have NO expectations about getting any money from us, we don't give them any serious money (more to come on that topic) and they don't harbor the slightest 'resentment' about that either, based on how we talk to them about it. So that's good. We have recently started putting 10k/year into their OWN accounts for them to manage (my son is a budding boglehead after I gave him the lay of the land. But my daugther has ZERO clue about any of this, and is severely ADHD and wont' take meds) So VERY different situations there. Leads to some concern about our son have hundreds of k down the road, and our daughter not saving any of it.
We have a trust in place, and currently we have not set a minimum age for them to inherit (if we both get hit by a bus). We are planning to change that, but would be curious what people have done in that regard? 30 years old? 35? Not give them anything? I know that some will say 'you own them nothing', others will say 'it's your personal preference', but I'm curious what has worked WELL for people out there? (btw, yes, I'm aware of the Estate and Gift Tax Exemption Sunset and we are going to meet again with our lawyer to discuss, revise, etc... As a side note, the total assets are pretty much split between our own trust a a NING trust. Longer story there, but it saved a ton of taxes when I sold my company, mainly due to a Section 1202 QSBS Exclusion, where half of my shares were held by the NING before the sale, and their gain was literally fed tax free. I mention this because the assets in there are quite 'separate', if a beneficiary (our kids) got divorced, those assets can't be touched, etc...)
Our thinking thus far in this regard, is what I'd call a 'case by case basis', and that's what we've told them up front. If they have a plan, such as want to go to PA school or get a masters, we'll always help with education and support them through it. If/when they have kinda settled somewhere, we'd help with buying a condo. When their current cars expire and they are kicking off their careers, we might get them their 'first solid car'. Things like that... But I'm curious what others have done. The idea of handing them 10k each year to save/manage on their own was sorta to encourage them to slowly gain experience with managing money (since after all if we did both die tomorrow, they'd each have to manage $9 million) I do have one wealthy/retired golfing partner that's doing the same thing with his kids. Particular, any successful ideas with what minimum age to set, before they inherit anything?
Thanks so much for any feedback, it's appreciated. Items 1 and 3 do cause us both some ongoing stress/tension. Not a lot, but I'd like to have ZERO stress/tension, of course.
- 54 y.o., married, retired with 21m in total assets (zero debt, the assets include a $3m home that's paid off), wife is 58
- 2 kids, son is a 20 y.o. junior in college (biology, on track to be a PA), daughter is 23 with a fashion marketing degree working in retail living at home, trying to gain internships/experience to get more solid jobs in that field
- $18m in brokerage, 30% in VTI (more or less) and remainder in bonds (mostly 1-3 year tbills)
- currently yearly income from the brokerage is 650-700k (thx to those 4.8-5% yielding tbills and VUSXX. Naturally it was a fraction of that when interest rates were 1% !!!!)
- currently fixed 'essential' yearly expenses such as utils, insurance, food, prop tax, clothes, dining, etc... are ~135k. (Side note: about 15k of that stems from helping 3-4 of my wife's immediate brazilian family members in Brazil, who are always struggling and will continue to do so until they pass. That allocation will likely go up as people become ill. I feel totally ok with this and even sometimes say 'oh just send your brother a bit extra, it costs us almost nothing')
The windfall came in Feb 2020 (my partners and I sold to private equity), and the somewhat forced mindset for the first few years was conveniently 'let's chill out' due to COVID. Since then, while we take several nice european and south american vacations each year with biz class tix, $400-500 night hotels (less in south america), we are otherwise fairly frugal. No lambos, yachts, rolexes, diamonds, second vacation homes (yet), we eat at a Michelin restaurant maybe once a year, etc... We have decent cars like Audi Q5s and such, and we're perfectly happy with those. I made a 1 time expenditure of maybe 25k on music equipment and building a home recording/jam room. But on point of frugality, I love golf but still won't go to back to Pebble Beach until my game is better. (I played it once) I'm an expert snowboarder (yes, even at 54), and my board is nicked up all over the place, and I still find it a little hard to spend $500 on a new board. Heh......
The 'challenges and big decisions' that we have now that COVID is long gone:
1. we sometimes think 'hey, I'd like to do this with some of the money from time to time' and that can be at odds with our frugality. And, some of our spending ideas diverge.
I've now been more into trying some bucket list items like maybe a yearly helicopter-snowboard trip (~10-12k), and my wife has expressed that she'd like a bit more control over her 'own part of the budget', to perhaps send more money to her struggling brazilian family members from time to time...on a case by case basis. She feels like 'hey, I'd like to spend some of this money, but I don't know how much is ok to spend, and I don't want to upset you'. Yes, she sounds like a great wife and she is, but this is ALSO making her get a little frustrated and now just a tad bit upset/resentful. Especially if I buy a new 5k guitar once every 2 years, but she feels she 'can't send any extra few K to brazil. I totally understand that double-standard isn't fair and doesn't bode will for the longer term.
I know the typical responses may be 'talk to a financial planner', or 'set a budget', but that's not what I'm looking for. The question revolves more around what experiences/challenges did anybody out there have that might be similar to above, more related to being a frugal person but GETTING COMFORTABLE with actually spending MORE, how did you navigate them when you and your partner had some different interests? Is the best overall thing to indeed just ***set a budget of allowed expenditures*** (outside of the essentials) per month/year, that we feel good about in terms of our yearly wealth accumulation goals? (meaning, if we don't want to touch the principal, we'd set a budget that allows us to keep saving some of that yearly income) Did you and your wife set your own independent budgets, so that you never had to get into questioning what the other person was doing with 'their money' and why? (if my wife wants to give her entire 'allowance' to her local church, and I want to spend mine on helicopter lessons, then there's no issues...to each his/her own?)
2. when looking at our level of net worth, are there things that we might be 'missing' from a comfort (luxury) standpoint that would make our lives easier, and have some decent bang for buck. (I ask this because have this sense that there ARE things we are 'missing' that aren't crazy. )
Things that have recently come more strongly to mind, include having a chef cook a few times a week (we cook most meals at home because we are quite healthy and we can only stand eating at restaurants so much...the food is usually very high calorie, etc...) Or having somebody wash/put-away clothes, etc. (we have a housecleaner but she doesn't do that ) In other words, basic things so we can save time from doing things that we may not always enjoy (we sometimes don't want to cook OR dine out. And of course we never really like doing clothes).
other ideas?
3. the kids and money
Our kids have a sense of how much we have from their cousins (one of my partners was my brother in law...though now ex-brother in law). However, they have NO expectations about getting any money from us, we don't give them any serious money (more to come on that topic) and they don't harbor the slightest 'resentment' about that either, based on how we talk to them about it. So that's good. We have recently started putting 10k/year into their OWN accounts for them to manage (my son is a budding boglehead after I gave him the lay of the land. But my daugther has ZERO clue about any of this, and is severely ADHD and wont' take meds) So VERY different situations there. Leads to some concern about our son have hundreds of k down the road, and our daughter not saving any of it.
We have a trust in place, and currently we have not set a minimum age for them to inherit (if we both get hit by a bus). We are planning to change that, but would be curious what people have done in that regard? 30 years old? 35? Not give them anything? I know that some will say 'you own them nothing', others will say 'it's your personal preference', but I'm curious what has worked WELL for people out there? (btw, yes, I'm aware of the Estate and Gift Tax Exemption Sunset and we are going to meet again with our lawyer to discuss, revise, etc... As a side note, the total assets are pretty much split between our own trust a a NING trust. Longer story there, but it saved a ton of taxes when I sold my company, mainly due to a Section 1202 QSBS Exclusion, where half of my shares were held by the NING before the sale, and their gain was literally fed tax free. I mention this because the assets in there are quite 'separate', if a beneficiary (our kids) got divorced, those assets can't be touched, etc...)
Our thinking thus far in this regard, is what I'd call a 'case by case basis', and that's what we've told them up front. If they have a plan, such as want to go to PA school or get a masters, we'll always help with education and support them through it. If/when they have kinda settled somewhere, we'd help with buying a condo. When their current cars expire and they are kicking off their careers, we might get them their 'first solid car'. Things like that... But I'm curious what others have done. The idea of handing them 10k each year to save/manage on their own was sorta to encourage them to slowly gain experience with managing money (since after all if we did both die tomorrow, they'd each have to manage $9 million) I do have one wealthy/retired golfing partner that's doing the same thing with his kids. Particular, any successful ideas with what minimum age to set, before they inherit anything?
Thanks so much for any feedback, it's appreciated. Items 1 and 3 do cause us both some ongoing stress/tension. Not a lot, but I'd like to have ZERO stress/tension, of course.
Statistics: Posted by spindrift103 — Fri Feb 23, 2024 10:34 pm — Replies 1 — Views 282