to think it makes sense to save money/ buy property even if you come from a wealthy family?(29 Posts)
I guess this may be a controversial topic, but I am looking for honest opinions here!
Do you think people who come from wealthy (or very wealthy) backgrounds should work hard at saving their salaries and buying property with their own money, knowing that one the day will certainly inherit a lot of money and multiple properties?
What made me think about this is the difference in attitude between both me and my sister and my DH and DSIL.
While both DH and I come from wealthy backgrounds, we have normal jobs (that we love) and are very careful with the way we spend our salaries. We always make sure we save at least x amount, we never overspend, never made debts, live quite "frugally" (or at least not a luxurious lifestyle!). Even though we live a property owned by DH's family, we are thinking about buying a small flat in London with our own money (taking a mortgage) as a BTL investment. Our joint savings are very consistent (£100k+) thanks to the lucky situation we are in (no rent, no mortgage, no kids yet).
On the other hand, both my sister and DSIL have a very different attitude towards money: they have zero savings, spend all they earn (they both have normal salaried jobs, like we do), indulge in many treats/ luxuries and so on.
I talked to my sister about this, as I am a bit concerned about her careless attitude towards money. Her opinion is that we will anyway inherit multiple properties each + good amount of cash one day so it makes no sense taking on debt for a mortgage or saving a lot of money. DSIL seems to have a similar approach. I shall add we are all (DH, DSIL, DSIS and I) very lucky to be able to live for free in properties owned by our families.
I am on the fence about this. Are DH and I being unreasonably stingy and greedy? What are your thoughts about these two different attitudes?
I am of the view that it is never a good idea to depend on OPM (Other People's Money). There are no guarantees in life and it would be at the risk of becoming massively lazy and entitled (not to mention being a horrible role model to any future children) to sit around waiting to become rich.
It does make sense to take this attitude IMO. I do recognise there are also value/moral judgements underpinning my attitudes though, so these views are subjective.
Firstly fortunes can be lost as well as made/maintained. I have seen this twice in my in laws family. Having underlying healthy money attitudes are essential to not compounding the issue, and to recovery. You would still likely need to make changes under those circumstances but they are unlikely to be so painful. It is unwise to rely on others solely and not develop these skills, disciplines and resourcefulness in oneself.
Secondly, it is the example and training given to children. To maintain any inheritance through the generations, they need to also learn the skills etc and again make sure not to develop narcissitic/entitled personality trails, which wold be a problem in itself not easily fixed. Modelling is important here. Such traits would affect their lives and quality of their relationships other than financially so it is very helpful for them not to develop these.
On the other hand, it is a balance. You only live once, life can end at any time and you shouldn't be overly self-sacrificial. Doesn't sound like you need to be on that salary though, esp rent free in London.
I agree it's about balance. As I try again to persuade DH not to buy crappy budget food when we have tens of thousands in the bank!
We're not from wealthy families, but ordinary working class families who were careful with money. They were the generation who did well out of house-buying, pensions, etc. We have decent careers and have had steady incomes for 25+ years.
We've inherited enough from parents and grandparents to pay off our mortgage. We don't buy expensive cars or have expensive hobbies. We pay extra into our pensions.
Not everyone is so careful with money. DB has no pension and he's 43. I think he's counting on inheritance to see him through old age. I'm too cautious to think that way!
I think neither of you are being unreasonable. Providing your sisters aren't building up debt, and it doesn't sound like they are, why not enjoy yourself? They have a secure home and you only live once.
Yanbu. But everyone is different.
The only person from a very wealthy background that I know well has done the same thing.
They are mega wealthy. He went to uni and worked for his dad's company. But while there started another business and now runs that full time with his wife. He knew that if his dad company went under, he would be screwed. No reason to think it would, it's very successful. But he didn't want all his eggs in that basket.
His sister feels the same, from what I understand. But her loyalty stops her leaving. Not because she doesn't want to be independent, but because she worries that now her dad is older he needs her more.
So both feel the same but don't feel they have been able to make the same choice.
I agree that relying on Other Peoples Money (that isn't held in trust) is very risky, but then I too have met people who lost everything later in life, they are relying on parents not making bad investment decisions, or remarrying if one dies (so many threads about dcs from first marriages ending up with nothing when their parent dies leaving all to the step parent assuming they will leave the money equally between all the children, not just their own).
Unless, sadly, your parents/PIL both only have a short period left to live, you can really know what the position will be.
I completely agree OP.My husband us from a wealthy family and has three siblings. They've all had the opportunity to be spoilt rotten. We bought our own house (started off with a small flat) as I was adamant I wanted it to be ours and not part of the family estate that we'd be beholden to. (My MIL in particular was very keen to attach strings to every gift).
The three siblings each had a house bought for them. They also had cars bought for them, pensions paid into for them, expensive hobbies funded etc. It shows you the real meaning of "being spoilt " as it spoilt their lives. Two of them never worked, the other could barely hold down a job as he didn't like anyone telling him what to do as he was used to being treated like the Lord of the manor. None of them married (his sister had a daughter who was sent to boarding school at grandparents expense but has just drifted since, like her mother). Any cash they were given was blown within months - we are talking significant sums here. They all drank heavily and the middle brother developed a heroin habit and died in his early 40s which devastated his parents.
The great shame is that they were all intelligent, able individuals who could have made a great success of their lives if pushed a bit harder in their youth. The trouble was things were just far too easy. None of them were happy, which says it all.
Quite why my husband turned out to be, as he puts it, "the white sheep of the family" I will never know.
I agree regarding not relying on other people's money eventually coming to you.
It's doesn't need to be a moral decision (although it could be argued that there's a moral/character element to it), just a practical one.
How do you know when you will inherit though? You could be in your 60's.
I have no time for people that speculate in property and push up the prices. Invest in something productive that helps the economy and society. High house prices are destroying wealth and making people sign up for a lifetime of debt.
Your experience is very interesting. I think your story is an "extreme" version of what may happen in DH's family (while my family is reasonably well off, his family is straight out rich). Potentially he and his two sisters could not work and live off family money for their whole life. I don't think that would be a good idea for any of them though. As much as sometimes it is a pain, work keeps you sane!!
At times I wonder if accepting to live in a house owned by DH's family was a good choice. My MIL can sometimes attach strings to gifts as well, so I know what you mean very well.
I've always felt very lucky that we got to live rent-free in a nice flat in London and I definitely am grateful to DH's family for that opportunity. At the same time, I sometimes worry one day MIL will make me regret this decision..
Well of course we don't know when we will inherit. At the same time, we are all (DH, DSIL, DSIS and I) lucky enough to live in family properties already, so it is not like we are in a hurry to buy our own houses to have a roof over our heads.
Please understand that I feel very lucky and grateful about this while situation, I don't want to come across as an entitled brat!!
Maybe put it to them that are they happy that they are going to end up passing on much less to their children, than they received?
The age you'll inherit matters as well if that's how they are planning on funding their retirement - DFIL is the only relation of an Aunt of his who will be leaving everything to him in her will. She owns a large house in a desirable part of Cornwall and has other money/investments as well. However, DFIL is already in his 70s, and his Aunt is going strong in her late 90s. If he had planned to use that inheritance rather than his own savings to fund his retirement, he wouldn't have been able to give up work over 15 years ago.
As it is, his Aunt has been able stay in her own home and hasn't taken any bad financial decisions that might wipe out her savings.
AS the house you live in belongs to your MIL, I would assume if you and DH split up, you'd have no claim to it?
Good points. I think the difference is whether the "wealthy relative" actually shares his financial power with the inheritance recipient throughout his own life or only after his death.
For example a wealthy aunt could (potentially) not give any financial help to a nephew until she dies and leaves everything she owns to him, while perhaps wealthy parents share their wealth with their kids throughout their lives (in different forms/ amounts obviously, every situation is unique!).
As for our house, my DPILs were kind enough to put my husband name on the house deeds.
People that live like that aren't very grown up or independent ime. Our families have given us money over the years but we didn't need it or expect/ask for it.
We want to retire early and will not be relying on inheritance. It could be a huge mistake.
Our DPS are late 70's and early 80's we want them to go on forever.
I would hate to have to be frugal though, It's important to live now regardless of what you think you may inherit.
Money can finish in every moment. It always make sense to save money.
If they have a reasonable amount of financial support through family, then I don't really see the problem with them spending what they earn.
I don't thnk either approach is right, theirs is just different to yours, and that's ok. Life is short, to many people it makes sense to enjoy it while you can and to seek experiences rather than possessions.
No, I think you should always earn your own money. I could potentially inherit millions of pounds. Or my parents could decide to leave it all to a cat charity. They could live until I'm in my seventies. There are no guarantees at all. It's best to have your own ways to make a living. You already have the financial security behind you (as have I) so you can live well as well as earning well.
I always say: live the lifestyle you can afford to pay for yourself, not the one that others can pay for you to live.
I'm always a bit at people who think inheritance is a sure thing. If someone needs a care home, it will cost in the region of £800-1500, depending on where you choose to go and the type of care required. Unless your relative is completely fecking loaded, money can get swallowed up easily.
to me, it depends on how they will cope if the OPM runs out/fails to materialise
you say they have salaried jobs so presumably they would still be able to live and will be accruing some form of pension
if they can cope cheerfully and gracefully on that and not bother anyone, then that would seem to be their problem and they will be no worse off than the rest of us who had no family money in the first place
If your DS and DSIL inherit and then use that to fund their retirement, they won't leave anything for their own children, and that line of wealth will die out. If you pay for yourselves, your children can inherit, and so on, until eventually someone actually needs the money and spends it.
Everyone is different. If that's the way they choose to live then it's up to them.
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