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A father’s letter to his adult children at Thanksgiving: You’re on your own

Discussion in 'Real Estate & Other Investments' started by Scorpio, Nov 25, 2016.



  1. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

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    A father’s letter to his adult children at Thanksgiving: You’re on your own
    By Quentin Fottrell
    Published: Nov 24, 2016 12:47 p.m. ET



    No more financial support — it’s time to take care of yourselves


    [​IMG] Shutterstock


    Think of the grandchildren.
    Sometimes, The Moneyologist hears back from previous letter writers. “Sean in San Antonio” recently wrote with an unusual problem.

    A Jewish deist, he was unhappy that his son’s wife, a stay-at-home mom, had been tithing $150 every week to her church, which effectively canceled out the $7,500 annual Thanksgiving gift he gave his son and daughter-in-law. (He also gave that amount to his other two children).

    He considered changing the way he gifted the money to that one son, who has no IRAs or plans for his retirement. “He’s a great electrician but not too smart in other areas,” he wrote. “I take responsibility for that.”

    You can read Sean’s original letter here: I give my son money and his wife gives it to her church.”

    The Moneyologist warned: “If you treat one child differently than the rest, it will create discord in your family, and could ultimately result in putting distance between you and your son (and his family).”

    Since then, Sean has come up with a solution. He decided to bypass his three kids and set up mutual funds for his grandchildren instead. But he has implored his adult children to keep this gift a secret from his grandchildren, so they continue to work hard and look up to their parents as their main benefactors (rather than their grandparents).

    Sean wishes he’d given his kids more financial advice when they were younger and there’s a hint of sadness when Sean laments the empty chairs around the kitchen table at other times of the year.

    And without further ado, here’s this father’s letter breaking the news to his three children:

    To my three children,

    “Starting this year, mom and I will no longer be gifting you as we have since about 2006. We’re so happy to see you doing well financially that the gift does not seem necessary.

    We’ll be putting the amount we’d have given you, spread over 12 months and for the rest of our lives, into a mutual fund (Vanguard LifeStrategy Growth Fund VASGX, -0.07% if you must know) that you will inherit for the benefit of your own children. Along with the rest of the estate, you will receive the money from this investment, but it will be for your children, not you. Effectively, our intent is to leave the money to our grandchildren, but to give you some control over it.

    We know there will be times our grandchildren may find themselves needing help with education, transportation, or housing expenses. Maybe even for a comfortable retirement if they can keep the money invested and letting earnings grow. What they do with the money they’ll inherit (through you) depends on you, their parents, as you teach them about personal finance before they leave the nest.

    We taught you mostly by example. Only you can know how effective that was, if much at all. There should have been some kitchen-table instruction that we regret never happened. (We also regret that the kitchen table and chairs are today always available, but never taken.) For example, are you yourselves maxing out your IRAs? Are your IRAs in bad funds? Do you know what bad funds are? How much of your money automatically goes to a savings account?

    There should have been some kitchen-table instruction. We also regret that the kitchen table and chairs are today always available, but never taken.
    Grandpa and grandma

    Frugality, like anything else, can be taken to extremes. Mom and I don’t think we ever went to those extremes, but we know we sometimes came close. A few years in the 1980s (remember?) we were really broke. If money is to be wasted — the opposite of frugality — it should be wasted in youth. But it’s obvious that if money is wasted, at any time, it’s money that won’t be there later in life. We think of this whenever we see those unfortunate souls sleeping under a bridge, all their possessions in a shopping cart. It also applies, if not as painfully, to those living at home but miserable and anxious, struggling with a too-tight budget.

    So with our expected life spans another 20 years or so, and the stock market willing, each of your children (again, through you) should inherit tens of thousands of dollars. We leave it to you to educate your children so that their windfall is a blessing, not a curse.

    It would be best if our grandchildren don’t know about this account. We’d like to see them develop habits of frugality, never knowing they’re going to come into some money. Not a lot, let us remember, but probably enough, if used wisely, to make some difference.

    We love our grandchildren and want to give them a boost later in their lives. So unless you have major and convincing objections to our plan, this is how it will work from now on.”

    Grandpa and Grandma

    Do you have questions about inheritance, tipping, weddings, family feuds, friends or any tricky issues relating to manners and money? Send them to MarketWatch’s Moneyologist and please include the state where you live (no full names will be used).

    Would you like to sign up to an email alert when a new Moneyologist column has been published? If so, click on this link.

    http://www.marketwatch.com/story/a-...en-at-thanksgiving-2015-11-24?link=MW_popular
     
    Goldhedge likes this.
  2. glockngold

    glockngold Gold Member Gold Chaser

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    Even as a devout agnostic, I can call bullshit on that reasoning.
    If it's a gift, it's gone.
    If it has strings, better have a contract.
     
    <SLV> likes this.
  3. nickndfl

    nickndfl Midas Member Midas Member Site Supporter ++

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    My parents never gave me more than a roof and some food. If he was to give his kids money, then he better make sure they know how to handle it properly.
     
  4. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Giving $150 a week to a church is kinda crazy.
     
    Irons likes this.
  5. glockngold

    glockngold Gold Member Gold Chaser

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    Sure, to me & thee it is.
    But to some church folks, the church is supposed to get a tithe of 10% .
    In this case the family needs to be making $1.5k a week.
    I remember my dad (60 years ago) slipping a 10 spot in the plate.
    Money ain't worth jack anymore.
     
  6. Fjpod

    Fjpod Silver Member Silver Miner

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    The guy is making a big assumption.... That his grandchildren will turn out well. If they don't, his money is wasted anyway.
     

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