“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.
Recommendation To Build Wealth
Manage Your Money In One Place: Sign up for Personal Capital, the web’s #1 free wealth management tool to get a better handle on your finances. In addition to better money oversight, run your investments through their award-winning Investment Checkup tool to see exactly how much you are paying in fees. I was paying $1,700 a year in fees I had no idea I was paying.
After you link all your accounts, use their Retirement Planning calculator that pulls your real data to give you as pure an estimation of your financial future as possible using Monte Carlo simulation algorithms. Definitely run your numbers to see how you’re doing. I’ve been using Personal Capital since 2012 and have seen my net worth skyrocket during this time thanks to better money management.
Updated for 2019 and beyond.