Posted by Tim Stobbs on February 8, 2013
I was reading a comment on a website the other day about the fact they would never tell their kids their net worth. Which of course to me sounded odd, but then again I do publish mine online for strangers to read.
Yet it did get me thinking, how am I going to explain to my children when I finally retire that Daddy doesn’t need to go to work anymore? According to my plan that would be roughly when the kids will be 14 and 12 years old when this will occur. I’m somewhat tore on the idea of how to approach the topic, since on one hand I do want to be honest with them, but on the other don’t let them think they are rich (My wife and I may be, but they won’t be).
I think the approach used will change based on their ability to understand the numbers or not. I do think I will explain the basic concept of we lived below our means for many years and saved the extra money. After we invested the extra money it began making its own money. Once our invested money made more income then our current spending I didn’t need to go to work anymore unless I wanted to. From there I’ll likely just answer questions.
Yet for now I don’t hide our conversations about money. It’s just something that Mom and Dad talk about in front of the kids. Besides when I comment to my wife that our investment accounts are nearly $200,000, the kids never made a comment. To them it was only a number and frankly they don’t have any context for it.
I think it helps that we never argue in front of the kids, instead we endlessly debate things. So they are used to hearing bits of conversations on ethics, social policy, government debt, social dynamics….well just about anything that either one of us reads during a day. So money really isn’t a taboo topic in the house which should help with things when I do have to sit them down and explain: Daddy got a new job as a private wealth manager…for my wealth.
So would you tell your kids your net worth? Why or why not?