Wealth Hoarding
Discussion
My parents started buying property a few years ago to rent out as an alternative to their poorly performing pensions. Which has been pretty successful for them which is of course great.
The problem is they still draw the same income from our family business. They don’t actually need any extra money, the property company isn’t paying a wage it is just piling up cash which they use to buy more property. My mother has absolutely no plan to ever spend any of this it’s all just “good investment” for one day.
I keep pointing out to them that they are in their 70s what are they investing for. Old age? They are already there. All my mother wants to do is amass more and more wealth. My Dad wants to spend it to enjoy his retirement.
I just don’t get the mind set of just having more for the sake of it. Anyone else know people like this?
The problem is they still draw the same income from our family business. They don’t actually need any extra money, the property company isn’t paying a wage it is just piling up cash which they use to buy more property. My mother has absolutely no plan to ever spend any of this it’s all just “good investment” for one day.
I keep pointing out to them that they are in their 70s what are they investing for. Old age? They are already there. All my mother wants to do is amass more and more wealth. My Dad wants to spend it to enjoy his retirement.
I just don’t get the mind set of just having more for the sake of it. Anyone else know people like this?
ntiz said:
My parents started buying property a few years ago to rent out as an alternative to their poorly performing pensions. Which has been pretty successful for them which is of course great.
The problem is they still draw the same income from our family business. They don’t actually need any extra money, the property company isn’t paying a wage it is just piling up cash which they use to buy more property. My mother has absolutely no plan to ever spend any of this it’s all just “good investment” for one day.
I keep pointing out to them that they are in their 70s what are they investing for. Old age? They are already there. All my mother wants to do is amass more and more wealth. My Dad wants to spend it to enjoy his retirement.
I just don’t get the mind set of just having more for the sake of it. Anyone else know people like this?
My wife's parents are similar, although her father is having more success than yours, at spending some of it.The problem is they still draw the same income from our family business. They don’t actually need any extra money, the property company isn’t paying a wage it is just piling up cash which they use to buy more property. My mother has absolutely no plan to ever spend any of this it’s all just “good investment” for one day.
I keep pointing out to them that they are in their 70s what are they investing for. Old age? They are already there. All my mother wants to do is amass more and more wealth. My Dad wants to spend it to enjoy his retirement.
I just don’t get the mind set of just having more for the sake of it. Anyone else know people like this?
Her mother is tighter than 2 coats of varnish, he's pissing it away on cruises (ok, not so much the last couple of years), fine cigars, expensive whisky and building a new house to enjoy retirement in.
They're late 60s, might still have another 30 years in them, so I understand wanting to make sure now, that they'll be financially sound, then.
ntiz said:
My parents started buying property a few years ago to rent out as an alternative to their poorly performing pensions. Which has been pretty successful for them which is of course great.
The problem is they still draw the same income from our family business. They don’t actually need any extra money, the property company isn’t paying a wage it is just piling up cash which they use to buy more property. My mother has absolutely no plan to ever spend any of this it’s all just “good investment” for one day.
I keep pointing out to them that they are in their 70s what are they investing for. Old age? They are already there. All my mother wants to do is amass more and more wealth. My Dad wants to spend it to enjoy his retirement.
I just don’t get the mind set of just having more for the sake of it. Anyone else know people like this?
Older generation just aren't comfortable being frivolous. They have had it banged into them to have savings 'just in case'The problem is they still draw the same income from our family business. They don’t actually need any extra money, the property company isn’t paying a wage it is just piling up cash which they use to buy more property. My mother has absolutely no plan to ever spend any of this it’s all just “good investment” for one day.
I keep pointing out to them that they are in their 70s what are they investing for. Old age? They are already there. All my mother wants to do is amass more and more wealth. My Dad wants to spend it to enjoy his retirement.
I just don’t get the mind set of just having more for the sake of it. Anyone else know people like this?
If they're happy, be happy for them - at least you know they'll have access to the best health care when they need it and when the inevitable time comes for them to pass on, they'll be at peace knowing they can provide a good nestegg for you and any other brothers/sisters
Have a friend whose MiL is sitting on a fortune based in the IoM whilst his daughter (her grand daughter) can't scrape the deposit for a house for her and her family.
Have the same frustration with my FiL who has finally understood why my wife kept nagging him to do some estate planning years ago. MiL is now in a care home and her share of their wealth is being eroded by fees.
Have the same frustration with my FiL who has finally understood why my wife kept nagging him to do some estate planning years ago. MiL is now in a care home and her share of their wealth is being eroded by fees.
The insecurity of old age.
In their heads they are thinking what if I get ill. (Parkinson's, Alzheimer's etc)
Full time care will burn their wealth away at a phenomenal rate.
They worry about their children and their financial security and the knock on effects it will have on their grand children.
Remember also that they could live for another 30 years.
My wife works as a carer and has quite a few clients in their 90s
Keeps them busy too. Who else would turn up at the blue chip company AGM and give the CEO some grief?
In their heads they are thinking what if I get ill. (Parkinson's, Alzheimer's etc)
Full time care will burn their wealth away at a phenomenal rate.
They worry about their children and their financial security and the knock on effects it will have on their grand children.
Remember also that they could live for another 30 years.
My wife works as a carer and has quite a few clients in their 90s
Keeps them busy too. Who else would turn up at the blue chip company AGM and give the CEO some grief?
ntiz said:
The problem is they still draw the same income from our family business.
This is the bit that stuck out for me. It can be a nightmare. For our family businesses we have a 'Principles of Distribution Agreement' which we update every three years and a Remuneration Committee comprising of my father (the major shareholder/trustee), my eldest brother (CEO and shareholder), me (partner in holdco and shareholder), CFO (non shareholder) and partner from our accountants (non shareholder).It may sound a bit cumbersome but it stops a whole load of arguments and ill feeling and makes sure that the business gets the investment in its balance sheet that it needs for long term survival and people get rewarded for the wealth they create more than for what the happen to own
Pixelpeep 135 said:
ntiz said:
My parents started buying property a few years ago to rent out as an alternative to their poorly performing pensions. Which has been pretty successful for them which is of course great.
The problem is they still draw the same income from our family business. They don’t actually need any extra money, the property company isn’t paying a wage it is just piling up cash which they use to buy more property. My mother has absolutely no plan to ever spend any of this it’s all just “good investment” for one day.
I keep pointing out to them that they are in their 70s what are they investing for. Old age? They are already there. All my mother wants to do is amass more and more wealth. My Dad wants to spend it to enjoy his retirement.
I just don’t get the mind set of just having more for the sake of it. Anyone else know people like this?
Older generation just aren't comfortable being frivolous. They have had it banged into them to have savings 'just in case'The problem is they still draw the same income from our family business. They don’t actually need any extra money, the property company isn’t paying a wage it is just piling up cash which they use to buy more property. My mother has absolutely no plan to ever spend any of this it’s all just “good investment” for one day.
I keep pointing out to them that they are in their 70s what are they investing for. Old age? They are already there. All my mother wants to do is amass more and more wealth. My Dad wants to spend it to enjoy his retirement.
I just don’t get the mind set of just having more for the sake of it. Anyone else know people like this?
If they're happy, be happy for them - at least you know they'll have access to the best health care when they need it and when the inevitable time comes for them to pass on, they'll be at peace knowing they can provide a good nestegg for you and any other brothers/sisters
The other thing is that it’s quite addictive once you start seeing a pot grow. Until fairly recently the money I had ever saved was already spoken for knowing I’d need to spend all of it to buy a house. Now I’ve bought one it’s all about making a pot of cash as big as possible as quickly as possible. But I can already feel myself wondering ‘for what’ but that feeling isn’t strong enough to stop me pushing cash in there vs spending it on stuff - and my wife is even more binary than me in that it’s either spend spend spend or save save save. Finding a balance is hard.
If you are just getting by and not managing to save etc then the whole concept may well feel totally alien. I took from your “lean xmas post’ that this could be you?
If you are just getting by and not managing to save etc then the whole concept may well feel totally alien. I took from your “lean xmas post’ that this could be you?
Normal people don't have to spend money to enjoy life or retirement, and when the inevitable happens in more ways than one, both they, and in the fullness of time you, will see how wise they were having something solid of value instead of a list of meaningless zeros when the inevitable hits the fan and the pound in your pocket is worth the square root of nowt.
As you get older you don't need to spend money, you need security and safety, ask any woman worthy of the title woman how important security is to her, doesn't need to be rich as such (true some crave material/money but i did say woman worthy of the title)but totally secure in her life love and home..
Your parents are wise indeed.
As you get older you don't need to spend money, you need security and safety, ask any woman worthy of the title woman how important security is to her, doesn't need to be rich as such (true some crave material/money but i did say woman worthy of the title)but totally secure in her life love and home..
Your parents are wise indeed.
I helped my f-i-l with his finances fron when he was about 80. When 91 he moved into a care home & his house was sold.
He asked me if he had enough savings & pensions to buy for his care fees. I told him he had than enough & he asked how much he could give to each of his 2 daughters if he just kept enough to pay the care fees.
I calculated if he lived to 110, & allowing for 5% increase in fees each year, he could easily give them £100k each, which he did. They were then 61 & 69. When he died 2 years later they each received another £75k+.
He asked me if he had enough savings & pensions to buy for his care fees. I told him he had than enough & he asked how much he could give to each of his 2 daughters if he just kept enough to pay the care fees.
I calculated if he lived to 110, & allowing for 5% increase in fees each year, he could easily give them £100k each, which he did. They were then 61 & 69. When he died 2 years later they each received another £75k+.
I think my first post may have come across as a bit miserable.
To elaborate on the situation I am the MD of the family business and I do well out of it I have no axe to grind. When I took over I agreed with my parents that I would pay them the same wage they earned when they ran it for the rest of their lives. I see it as the least I can do for all the support I have had. Therefore financially very secure.
The problem is my father isn’t happy with the situation he is pretty miserable. Anything he tries to discuss to do with money is smashed down with “buy another house”.
I find it sad to watch he has a garage full of cars he is effectively barely allowed to use. My Mum refuses to go in them because of the depreciation.
My mother openly says she will never spend a penny of the money the purpose is just to have it. She expects me to pay for everything if she gets ill.
I have always told them to enjoy it all because they don’t know what’s coming. Only thing I ask is to be left the company so I can make my own wealth. Oh and the cars obviously
To elaborate on the situation I am the MD of the family business and I do well out of it I have no axe to grind. When I took over I agreed with my parents that I would pay them the same wage they earned when they ran it for the rest of their lives. I see it as the least I can do for all the support I have had. Therefore financially very secure.
The problem is my father isn’t happy with the situation he is pretty miserable. Anything he tries to discuss to do with money is smashed down with “buy another house”.
I find it sad to watch he has a garage full of cars he is effectively barely allowed to use. My Mum refuses to go in them because of the depreciation.
My mother openly says she will never spend a penny of the money the purpose is just to have it. She expects me to pay for everything if she gets ill.
I have always told them to enjoy it all because they don’t know what’s coming. Only thing I ask is to be left the company so I can make my own wealth. Oh and the cars obviously
ntiz said:
I think my first post may have come across as a bit miserable.
I find it sad to watch he has a garage full of cars he is effectively barely allowed to use. My Mum refuses to go in them because of the depreciation.
This seems a little challenging - how much incremental depreciation is really caused by some sensible usage?I find it sad to watch he has a garage full of cars he is effectively barely allowed to use. My Mum refuses to go in them because of the depreciation.
How big a proportion of their wealth is in the cars?
I seem to remember you/your father has a rather lovely Bentley, so I suppose this may be material?
It still seems odd to me to restrict use of toys that are held for enjoyment, but I have never understood cars as investment assets.
ntiz said:
She expects me to pay for everything if she gets ill.
Unless things change between now and that point (if it happens) then it'll be her money they come after to pay for care not yours. I had to sell my Dad's house and watch his savings go down each month to pay for the care home he was in. I know he thought that he was leaving a 'nice sum to pass on' but perhaps it was less than he'd imagined when he was younger and of sound mind after 4 years in the home drawing down on his savings.I do understand the mind set of having something to fall back on though: I've been made redundant twice in the past and was thankful I had some savings to live off so I didn't have to get the first job that came along (I did once and was in a position to leave it very soon after when I realised it wasn't for me). There are limits though and amassing money that late in life for no particular purpose other than having more money seems a bit pointless to me, especially if it ultimately just gets burned away paying for care that less careful savers would get for free.
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