why do we hide talking about money?

[Nutria]

I also see a great deal of belief that it is a matter of intelligence or education, I find that a bit snooty and short sided.
I have seen some " educated" people who think they know it all about finance but in a reversal of fortune ending in a position with very little they fall apart.
I have also seen people with low income but the ability to stretch it so far it was amazing.

Like it or not, there are less than intelligent people out there. A scary number of them. (And I resent you jumping to the conclusion that me saying there are some dim people out there means that all poor people are stupid.)

Money handling is a skill and with any skill to improve takes practice and adjustment to how you approach the skill as things change.

Which some people think they are adequate at, even though they aren't.

[Nutria]

What I often find ironic is how many people will hang on every word from a "guru" like Dave Ramsey or Suze Orman but pay no attention or even get offended if they get the very same advice from a friend or family member. And I don't mean that in any way against Dave or Suze. I think they both give great advice. But most of what they teach is very basic common sense money management skills.

1. Personal finance is personal. No one likes other people butting in where it's not wanted.
2. Money generates strong emotions.
3. People get jealous.
4. People sometimes read too much into what is said. (For example, just today, Smallsteps jumped to the conclusion that me saying there are some less than intelligent people out there means that all poor people are stupid.)
5. People who know aren't always good at "walking a mile in the other person's shoes" and communicating in a way that the person in need will listen to.
6. And -- last but not least -- remember the ant and the grasshopper. Since Ancient Greece, there have been those who interpret it not as "be industrious and save when there's plenty for when there is little", but as "greedy thieves steal other people's stuff even when turned by the gods from humans into ants."

[scfr]

LAL (OP) - I have 3 thoughts on your situation.

1. If your parents have $1M and are in their 80's, it's possible they will be just fine even if they only earn 1.5%! Do you really think they'll run out of money in their lifetimes? If the answer to that is "no" then maybe the answer is to just try a little bit of acceptance that the situation is what it is?

2. Why not find a new advisor to recommend to your mom that YOU trust?? It sounds like your mom likes having a "professional advisor." And yes, I know you could probably do just as good a job as a so-called pro. But if the goal is to help your parents earn a higher return on their investments and get them away from a possibly unethical advisor, why not do what needs to be done to accomplish that? I'm pretty practical in nature and am willing to do a lot of compromising when needed to achieve a better, even if not ideal, end result. This is what I'd do in your situation.

3. The possible theft issue is another matter. I say absolutely pursue that and make reports to the authorities if necessary.

[corn18]

I have made the decision to talk about all our finances with my grown children. They know how much I make, how much I have and what my plans are for retirement. We use that to talk about how they can be successful at achieving financial independence. I also talk to my MIL about her finances because she asks me. I would love to take over her portfolio from Wells Fargo who charges her about $30k / year to manage $2M, but then I would be responsible for any losses. Don't want to deal with that.

[Petunia 100]

I have made the decision to talk about all our finances with my grown children. They know how much I make, how much I have and what my plans are for retirement. We use that to talk about how they can be successful at achieving financial independence. I also talk to my MIL about her finances because she asks me. I would love to take over her portfolio from Wells Fargo who charges her about $30k / year to manage $2M, but then I would be responsible for any losses. Don't want to deal with that.

I am pretty open with my grown children, too. My daughter reads my blog here from time to time, so certainly knows all of the nitty gritty details.

I used to keep an envelope in my closet with all of my account info, passwords, etc. Now that neither child lives near me, I send them a group email every once in awhile with that info. Just so they have it if needed.

[LivingAlmostLarge]

My dad is 89 and my mom 68, So there is a big age difference. And it affects how they make decisions. Chances are when my dad passes I will take over everything and at that time fire the advisors and start doling out and paying my mom's bills. I'm not even entirely sure she gets how everything is done. I guess it's a matter of independence. To be able to manage on their own.

[Nutria]

why do we hide talking about money?

Because it gets embarrassing. I just discovered that my mother's IRAs, and my cousin's 401k's have been returning 2% for a long time.

[disneysteve]

Because it gets embarrassing. I just discovered that my mother's IRAs, and my cousin's 401k's have been returning 2% for a long time.

But if we weren't so tight-lipped about financial matters, maybe that wouldn't have happened. If your mother or your cousin would have been able to freely discuss money with friends and family, perhaps someone close to them who they trust and respect would have given them better guidance regarding how to invest those funds. The problem is people have been raised not to talk about money so they don't ask for help or advice. They just do their own thing even though they often are clueless. Yes, there are lots of easily accessible resources but that's not the same as having an actual person to help you.

[Thrif-t]

I agree with Nutria, at least in my family there is jealousy and envy amongst family members. I myself say I make 15k less than I do because I have an older sister who works full time and I make more than her part time. She's always been jealous of my part time job. But she made a choice to quit ft work when she had kids. I kept working full time with my kids then got offered part time when I made myself invaluable to my company and was gonna quit. Older sis has a chip on her shoulder about that. She and her dh always struggled financially and she had to take little part time jobs to help out. I try to tell her its all about life choices she made, but she still thinks the world is just not fair to her. Some people you just can't convince, so for me, its better for our relationship if she thinks I make less.

I do talk a lot about finances because its my passion, but it tends to stress people out because they are so clueless and have no desire to learn. I've gotten good at just biting my tongue when I want to give advice.

[LivingAlmostLarge]

Because it gets embarrassing. I just discovered that my mother's IRAs, and my cousin's 401k's have been returning 2% for a long time.

this is what is happening to my mom. This and the fact that her money was mismanaged by prior person I can almost 100% guarantee. But in a small town there is nothing to be done after all it would "shameful" if she took it up with the police. The person was kicked out by the SEC and fined and sanctioned. Probably paid off by Merrill Lynch.

[ua_guy]

I assume my parents did well with saving and planning as they've been retired for a little over 10 years and according to my father, they have no worries for a very long time and they live a comfortable lifestyle.

Sometimes "the market" comes up in conversation, my husband loves to talk about it, and brother in law pipes up, and listening to dad talk....UGH. Parents also have a "financial advisor" (he's a true fiduciary) but I'm not an expert and some of the stuff he talks about just grates on me. Dad is inches from turning 75 and they've got way too much money in stock. A couple of times now, dad has sold stuff during downturns and all I can think is....if you've lost money on paper, why would you memorialize it by actually losing cash? But this advisor guy--he knows what he's doing!!! And he takes them to ball games and events 2-3 times per year, right, like that's all "free". My dad is a smart guy and could do all this on his own. I can't and won't try to get a word in edgewise, not my place. We don't talk about money, but maybe we should. Dad assumes we've been living hand-to-mouth and that hasn't been the case for longer than a decade.

[Like2Plan]

In general I can see it both ways. Sometimes, if you disclose information about your assets it opens you up for requests for funding. I'm not sure many folks look at the safe withdrawal rate and what is needed for retirement--only that you have some $$ and they need some for X, Y or Z. Also, they might even view you negatively for refusing to fund X, Y or Z. This is where the old pension system probably excelled. Back in the day I doubt anyone would come up and say-could you cash in your pension so you could give me some $$ for X, Y or Z. Now a-days I don't think folks would necessarily think about it like that because they may have already cashed in their own retirement funds to fund A, B or C.

On the other hand, I have been asked for help on investments. In one case, someone asked why their 401k balance had not grown very much over the past 20 years when the stock market was at a record high. I tried to explain that fund expenses really mattered. (IIRC, they also had a 5% load in addition to a high ER and administrative fees). Also, I have to say that the way things are done in mutual funds can be confusing and hard to understand. If folks had to pay those expenses out of pocket it might be more meaningful. Anyway, I gave my advice to invest in a low expense fund(s)--either roll in to their current 401k (fees were not as bad) or roll over to a rollover IRA into a low ER fund(s) at Fidelity or Vanguard, but get it out of where it was. That was over 3 years ago. Nothing was done. It was brought up again recently (about why did they did not get any growth?) My most answer recent answer-No suggestions.

I do have POA for my Mom, but I can't just take her money and invest in what I think is age appropriate, I have to go along with her comfort level. She is not very comfortable with much risk. (Although, in her case the sneaky *@$t@** in the room is inflation.) She doesn't seem to mind that she is losing buying power over time. She is of sound mind and is still able to manage her finances, so that is that.

[disneysteve]

Sometimes, if you disclose information about your assets it opens you up for requests for funding.

True, but as we said earlier, talking about money doesn't necessarily mean opening your books to everyone and anyone. To me, it just means generally removing the taboo about speaking about finance topics overall.

Just this morning, my mom asked me a money question. Her broker called last week and said he had some bond for her paying 4%. She got the trade confirmation and it said the interest rate was 2.5%. I explained to her that the ticket yield and the yield to maturity can be two different things. It might have been issued at 2.5% some time ago but if the price of the bond has changed and you buy it now, your personal yield will differ. So here's an example of a somewhat basic investing concept that many people don't understand and may not have anybody in their personal circle who they feel comfortable asking.

[Like2Plan]

Also, I have to say that the way things are done in mutual funds can be confusing and hard to understand. If folks had to pay those expenses out of pocket it might be more meaningful.

Also, just to pull on this thread a little more.... A lot of things in the financial world are hidden just by the way the financial business is done. A lot of the problems with the low yields might be easier explained if folks could see where the money was tracking. Right now it is as easy as pie to pay the fees because you don't have to do anything. It is all rolled up in a neat package-fund managers get their fees off the top. Regulators made additional rules a couple of years ago about disclosing some of the previously undisclosed fees in the plan documents but, what does that mean to the average person who is investing?

I know that if I had to pay the fees out of pocket--it would have an immediate and profound effect on me. I know it is not practical. But, how hard would it be to have that information posted on the year end statement? Something like: Annual Management fees deducted from the NAV are as follows: with the dollar figure listed.

Right now, I have to do a calculation. In fact, I do this about once a year (our overall ER on all our funds) because it is a little bit complicated to apply this across several different mutual funds. I set a goal to reduce our overall expenses a few years back--and I have been making headway, but it isn't anything you really notice--it doesn't have any impact in my day to day operations. We started out at about .076 overall ER (3 years ago) and we are down to about .021 now. Some things that have helped to get the overall ER lower--DH did some rollovers from his 401ks from previous employers who started charging annual administrative fees--these fees have a significant drag on the overall expenses. Also, changing from target funds to individual funds that target funds are made up from with lower overall ER. I have also done a little dabbling with the Fidelity zero fee funds (I'm not an early adopter--so, I'm mainly just doing a little bit--our international exposure). The real odd thing is Vanguard and TSP funds have the highest ERs in our portfolio. (I never thought I would be saying that. )

Have your eyes glazed over, yet? I think a lot of folks don't track this because it is a lot of work to figure out- in very busy lives.

https://www.savingadvice.com/forums/forum/financial-chit-chat/investing-banking/73048-

https://www.savingadvice.com/forums/forum/financial-chit-chat/personal-finance/74551-

[LivingAlmostLarge]

i need to get better