“How did I get my million dollars? It was simple. One day, I bought an apple for a nickel. That night, I cleaned and polished it. The next day, I sold it for a dime. With that dime, I bought two apples. That night, I cleaned and polished them, and sold them the next day for twenty cents. I repeated that process every day, without fail, until I had amassed $6.40, whereupon my grandfather died and left me $999,994 in his will…” – A Yahoo commenter named Dave
A funny thing occurred on Yahoo Finance the other day. A fellow blogger by the name of Anton was able to get interviewed for a focus piece on how he became a millionaire by age 27. When I first read the article, I was pretty pumped. I thought to myself, Neat! Another guy showing the world that it’s possible to get rich through disciplined savings and investing! I had experienced some similar luck with investing, earnings, and savings in my 20s as well so I thought his overall story was believable.
I never once questioned how he got to $1 million because he offered solid tips, invested in real estate, and spoke so eloquently on camera. But I guess the massive amount of attention he got from being featured on Yahoo’s front page for a couple days wore on him. He admitted on his Facebook page just days later that he had actually inherited 75%-80% of his net worth from his parents who died years ago!
Immediately, everybody started bashing Yahoo Finance and Anton for the deception in the comments. They’ve got the toughest crowd online. Despite all the blowback, if his new revelation about his inheritance is true, he’s still a millionaire!
WHY ARE WE SO ASHAMED OF INHERITING BIG BUCKS?
Anton didn’t seek Yahoo Finance. Yahoo Finance sought him out. I’m not sure why Anton had to lie by saying he is a self-made millionaire when he could have just said, “I made my millions the old fashion way. I inherited it,” with a smile on his face. Hopefully Yahoo Finance would have still run the piece, but something tells me they would have passed. We’re all simply ashamed of not having made money with our bare hands.
We know from a previous post on Financial Samurai that the average inheritance amount in America is around $180,000. But that’s nothing compared to the average inheritance amount for Australians at $500,000! Anton fits right in with the average Aussie, who as far as I can tell, is having a fantastic time! Every time I’m up in Lake Tahoe, there are Aussies there for three months at a time on their travel abroad YEAR. They are always merry, and now I know why.
Our parents have all had decades to accumulate a massive amount of wealth because they’ve experienced a tremendous bull market over their careers. I shared with you in my Massive Generational Wealth Transfer post how six of my adult neighbors are living off their parents. Well guess what? I was invited over to my 7th neighbor’s house and she revealed to me that she gifted her 38 year old son a 4 bedroom house in San Francisco. That’s at least a $1.3 million wealth transfer.
Hard work, risk taking, and perseverance are no longer necessary ingredients for wealth. Having parents who bought real estate, saved, and invested for decades are all it takes for many 25-50 year old adult children to become wealthy. Parents are gifting their adult children money while they are still alive, because they’ll be able to experience the joy of helping their kids out. Why wait until death when there’s such a surplus of wealth?
There used to be a time when adult children would be ashamed of still living at home with their parents after college. But after countless movies and articles about how commonplace it is, society has accepted and even embraced the benefits of continued cohabitation as a way to bolster one’s finances. Just read the 100+ comments from my post, How To Get Girls If You Live At Home With Mom And Dad to see how it’s no big deal. I have 20-something year olds tell me all the time they are living at home without even batting an eye.
I remember rich guys in high school and college would roll up in their nice cars, which were given to them by their parents, while I walked or biked to class. The girls didn’t care that the guys didn’t work for their cars. They wanted to go for a nice ride too. My point is that even if you inherited your fortune, people don’t care so long as they can benefit as well.
THE HONOR OF AN INHERITANCE
The only reason why you’d be ashamed of inheriting your parent’s or grandparent’s money is if you DISHONOR their money by spending it frivolously on stupid things. If I ever inherit any money, I will probably set up a scholarship under their name, take care of the trees they planted, and make sure their money lasts for as long as possible.
Nobody asks for an inheritance. It just happens.
So for folks out there who want to publicly share their wealth to the world, really consider being more discreet. It’s also a good idea to never tell anybody how much you fully make, especially if it’s way beyond the average or median. The fame is nice for a bit, but it is fleeting. People will come out of the woodwork to try and discredit you. And if you do want to share everything, I think it’s OK to share that you got rich through an inheritance. It’s what you do with the inheritance that counts the most!
Common situations people should own up to:
* Parents bought you a car. Say it proudly, “Hey baby, my mom bought me this BMW. Wanna go for a ride?”
* Parents paid for your private school tuition. You can say, “So what if they paid $200,000 for me to go to private school. It just means that I don’t need to get a great job to pay them back! I expect them to pay $120,000 for my graduate school experience as well.”
* Parents or relatives hooked you up with a job even though the company doesn’t recruit from your school. You can say, “It’s not what you know, it’s who you know.”
* Parents bought you a condo right out of school. You can say, “Renting is flushing down the drain! Always buy property as soon as possible.”
* Parents bought you a fancy $10,000 Rolex or $6,000 Grace Kelley handbag. You can say, “Never spend more than you have. That’s the simple key to getting wealthy.”
* Parents set up a multi-million dollar trust fund. You can say, “I’m not afraid to go after my passions and take risks in life. Failure is for the weak and timid!”
OR, you can be really humble and not say any of these things to piss people off. Just attribute your wealth to luck and your parents and say you’re working hard to make your own wealth one day! You can very easily register a domain name, start your own business, and see what you’re made of.
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My comment is about inheritances and how they really do divide people and they divide families, they way they do this is because people are not equal anymore and obviously inheritance is a LAZY way to get rich and that’s why it upsets people so much, you do nothing and a big stack of cash lands in front of you! i can speak from experience as i am not from rich or wealthy parents and i am self employed but earn very little even though i work really hard and life is hard, i do not had a man or husband to lean on and if i did that would help a lot but i want to be a self-sustaining woman. i had a Aunt who i have have lived 5km from all my life, she lived on a family farm of my mothers parents and she did work on that farm, where the brother ran it as the father died young, she never had any expenses as lived at the family home and never had a vehicle either, she relied on the brother and i used to even call them husband and wife, i never called them that to them but i said it to myself :) anyway, about 2 years ago she ended up being not able to walk anymore because of her back pain, ended up being she had invasive lung cancer and she passed on a few months later…she was anorexic most of her adult life and we believe she smoked for about 10 years before she died. She died with no husband or partner or no children and has amassed 3 million, about 1 million of this she inherited. To my and my mothers horror, when we finally asked the other sisters about her will, as they tried to hide it from us we found out it was written in the will that no money to be given to either of us! All the money and two properties when to the other 2 sisters and their daughters and some neighbours who live close to us even got larger chunks of cash, up to $200,000.00! i can say i loved my aunt dearly and miss her so much each and everyday and i am in so much pain and hurt because of this as i know what was written in her will was not her wishes, i know she loved me and my mother as when we last visited her a few months before she died she was very loving toward us. The other 2 sisters and daughters wouldn’t share any of it with us so you can see the greed of some people, all they want is the money and that’s all they care about. i know in my heart that one of those sisters told my aunt to cut me and my mother out of my aunts will, i just know it deep in my heart as there is no way my aunt would have done that but now i will never ever know but i don’t want to see those people that have her wealth and are having a great time because i suffer each and everyday and its not just because of the money but the hurt of not having her around ever again and the hurt of thinking about those last words that were written and i know she never hated me but that’s the last thoughts i will have of my aunt the rest of my life and can never speak to her about it. i know i sure needed some of that 3 million and there is no reason why i shouldn’t have had some…very, very sad. i wouldn’t wish this sadness upon anyone. Everything is a reminder of her and the only way i can forget it is moving to a new country, which would be nice but not really practical…a beautiful sunny island would be lovely :) can always dream i guess…
Thanks for posting this. It really hits home for me as I recently received a large inheritance and have been thinking a lot of these points through (how I view it, how others would, who to discuss with, etc.) Luckily, it happened at what I would consider an ideal time in my life (mid 30’s). I have already established a successful business (in finance) with a work ethic and appreciation of money to go along. I now view my opportunity to do things at an earlier stage in life than if I did not have this blessing (as opposed to thinking about quitting now, which the money would allow for). Also, I view my job as to be a shepherd of the money, hoping to be able to leave my children with a lifestyle better than my own.
It always surprises me though when speaking with a friend or client that absolutely does not want to leave an inheritance to their children, regardless of size. I mostly assume that the reason for that view is that they may feel that they are not able to do so and do not want to set up another financial goal that they will not hit. I cannot believe that the “it would mess my kids up” and/or “it would destroy their work ethic” could either be the true reason for the belief that an inheritance is bad. Speaking as someone who is on the receiving end I can honestly say, with first hand knowledge, that it is truly the way parents raise children that impacts how they will handle an inheritance. Letting kids know about it early, talking about money as a family, and instilling the values of wealth and the hard work that builds it early on in a child’s life, and continuing that education is very important.
I have two sets of parents; one set that has done very well financially for themselves and another set that makes terrible financial choices. Now, I don’t expect to inherit anything from either parent, though it would be nice if my financially set parents left me a little something (there’s rumors, but I don’t trust what I hear – most will be donated to charity I’m assuming). I’m just hoping that both sets have enough money for their own medical costs! The second set I’m more worried about, obviously, since they have loads of consumer debt and money tied up in a piece of property that they are having trouble selling (it’s a co-op and the board dislikes my parents.)
Now, in the case of Anton, I’m guessing he didn’t want to admit he inherited the money because what PF blogger wants to come clean and say, “Hey, I didn’t make my money, but here’s what you should do.”? He probably felt his advice wouldn’t be taken seriously since he didn’t have first hand knowledge himself.
My parents have been poor their entire life. They made bad financial decisions (going on vacations, maxing out credit cards etc) and never had good jobs. They would have to do cash advances on their credit cards sometimes to pay the mortgage. I won’t inherit anything, but I have learned from their mistakes. Because I’ve seen them struggle so much, I’m really financially conservative and slowly building my savings.
Always a silver line. Great job learning from their mistakes!