My dad and I talk about money fairly regularly. As a money blogger, this is probably par for the course. Except my parents still don’t know about this blog. Not exactly anyway. For those of you who follow me on Twitter, you’ll recall that my husband let the cat out of the bag last fall to them that I blog (he was super pumped about my Plutus nomination). I owned up to blogging, but being the
good stubborn daughter that I am, though, they still have no idea what my blog is called. No amount of guilt was spared on my mother’s behalf, but I still haven’t budged.
I am their daughter, after all.
My parents have always been fairly open with me about money. I learned more from their examples than any abstract conversation we’ve had. But that doesn’t mean that I don’t love a good hypothetical scenario or a debate about a real-life situation. Enter: my dad. For all the money talk we do, very rarely do we start or end on the same page. But I like it that way, and not just because I’m stubborn as all get out.
I like it that way because it’s very beneficial. In fact, I would go so far as to say that disagreeing with my dad has taught me more about money than any conversation in which we reached the same conclusion ever could have.
Related Post: FIRE is in My Blood
The Finance Guy
My dad hired a finance guy right before he retired. I don’t know much about him. To be honest, I’m not even sure he’s a fiduciary. He could just be what he appears to me—a guy with a nice car that drops off Christmas cookies that he baked with his daughter. Or at least that’s what we’re supposed to assume based on the photos plastered all over the Christmas card.
We argued about this for months. “You’re paying for those cookies! You’re paying for that car!” I gave my dad Vanguard’s phone number. I showed him the online dashboard with my Roth and our taxable account. I printed off our fee sheets. I begged, I pleaded, I tried to be the voice of reason.
And then I gave up.
This disagreement really solidified my belief that Vanguard is the right choice for our investments. But I also dropped the conversation because my dad is a smart man, and he can make decisions for himself. Nevermind the fact that my husband and I aren’t both retiring at the same time and figuring out what to do with a business and rental properties we just sold. And if I’m being totally honest, I really had to walk away from the conversation when I dropped HP off at their house one day in his Vanguard onesie. “You’re paying for that outfit!” Yeah, Dad, I know.
Life Insurance
The very first sponsored post I wrote was about term life insurance. I was so excited that I called my dad and rattled off all the reasons why term life insurance made sense. He listened carefully, echoing his support for truths like affordability and flexibility to adjust your coverage as your net worth grows.
But he also hammered on the fact that this was a system where you could give a lot and get nothing in return. “That’s the point! That’s a good thing. Why do I want to bet against myself?” Around and around we went. It was probably one of the most boomer versus millennial conversations we’ve ever had, though we don’t typically camp out along those generational lines (My dad says I’m the hardest working person he’s ever met, and I could go through life without ever trying $20 avocado toast.).
What I never could have expected, though, was that a few months after this debate, I was tasked with a freelance assignment that had me ghostwriting about the pro and cons of taking out whole life insurance as a gift for grandchildren. To say I had already done most of my brainstorming is an understatement.
And I really did learn a thing or two that most millennials don’t talk about (or maybe don’t even know about). Take insurability. If you develop or are finally diagnosed with a chronic illness after battling symptoms and question marks for most of your childhood (hello!), it is entirely possible that you will never be eligible for term life insurance, at least not for the affordable coverage rates that we like to wax poetic about in the PF blogosphere. However, if someone’s grandparent takes out a whole life insurance policy for them when they are little, this insurability guarantees that they will be able to qualify for more coverage later in life. I’m still not signing up for whole life insurance for us or for HP, but our conversation certainly gave me a jump on my research and made me realize that this topic, like most money topics, isn’t quite as simple as it might seem
Learning to Agree to Disagree
For every personal finance person who writes that it is important to take the emotion out of money, there are infinitely more people who have emotional reactions to money conversations online. Don’t believe me? Spend five minutes in the personal finance Twittersphere as of late.
And you know what? I’m glad people are passionate about their convictions. But I sincerely hope that everyone learns to step outside of themselves and find someone like my dad to agree to disagree with. Let’s face it. We are never going to convince everyone that our way is the right way. The reality is that there is no one right way to get your money affairs in order. That’s the personal part of personal finance. But what we can all do more of is to make your case and walk away. Walk away stronger in your own beliefs and hopefully with a mind filled with another idea or perspective or two. And maybe, just maybe, that person you disagreed with will come around in due time. I’ll let you know if the Christmas cookies show up again this year or not.
So Tell Me…Have you ever found a disagreement about money philosophies to be beneficial? Can you think of a time when they’re not?
Such a great post and great lesson for us , penny thank you for sharing with us great knowledge , i appreciate you to your decision 🙂
I still have those “discussions”. Usually with people who are not oldsters, but even then, sometimes with others in the AARP set. The truth is, there is no one right answer for everyone. So much of what is right for an individual, what will make them comfortable and happy, is tied up in who we are, what our experience is, and what we think we “know” to be true. I’ve really given up trying to convince people that my little window of perspective is the right one. We discuss what our philosophies are, then let the other folks draw their own conclusions.
On the issue of life insurance, both Mrs. Oldster and I own a little Whole Life, and more term. If we are lucky, the term will lapse and the Whole will cover its own premiums. I also bought a policy for my daughter when she was born. We can double the coverage when she is 19, and I plan to. It’ll be one more piece of her financial puzzle that she’ll need to understand, but not worry about. If she wants to keep it after she hits her 30s, that will be her decision. But if, like her mother, she is constantly fighting off one life threatening thing after another, she’ll have some insurance as a backstop.
I get your dad. I am a slightly early retired engineer and now a personal finance blogger. I helped manage a hundred million dollar endowment fund as part of my pre-retirement day job but I pay fees to have my retirement portfolio managed by others. I just don’t like doing it. I know how to do it but I don’t want to.
I got a copy of Bogleheads for my (newly retired) FIL and he calculated how much his (now former) Edward Jones guy was costing him each year over Vanguard index funds. $10K. Per Year. That’s >3 online classes my MIL would have to teach to make up for that. All of a sudden that $200 donation to my FIL’s favorite charity didn’t seem like such a big thing. It helps that FIL was an accountant! (He just hadn’t really thought about fees before.)
“[insurance is] a system where you could pay a lot and get nothing in return.”
I have also talked with people who’ve said something like this. I try to explain that when you buy insurance, you are transferring risk to the insurance company — the risk that something bad may happen. So, what you get in return for your premiums is relief from the risk of some bad event causing you financial hardship.
Sometimes this explanation helps, but sometimes not. Risk is a fuzzy concept. So, a lot of people have a hard time wrapping their heads around the idea.
Thanks for another interesting post!
Thanks for the compliment, Carroll! It seems to be a sentiment leftover from the time when whole life insurance was popular. He doesn’t carry any (I’m not sure he ever did). My mom had a policy from when she was little that she cashed out with very little fanfare. Sometimes I think he enjoys playing Devil’s advocate more than anything.
This is so interesting. We used to use the same financial planner as my father until we woke up and realized we were paying outrageous fees. We’re with Vanguard now, my dad is still with the other guy. We haven’t really discussed it except for me to say “you know that guy is charging you outrageous fees”. It was difficult and strange for me to make the decision to switch though because it was one of the first times in my adult life that my decision was based on my own research instead of my dad’s advice.
I do know the fees are much higher than Vanguard, but he did run the numbers and seems comfortable with it. He’s very much of the mentality that he would rather have someone else deal with it. He always kept an accountant when he ran his business. I think he actually knew his own numbers and many of the laws just as well (if not better), but that’s just how he is.
The only hope would be to get my mom on board with Vanguard. She’s the type of person who will drive an extra 5-10 miles to save $5 at the grocery store 😉
Oooh yes I have had some of the best money conversations with my Dad, although I think we have actually been on the same page on most things. I remember the first time we talked about MERs and he was like “Charging 1-2% is highway robbery!” and I was like “Cool, I guess Pops is into index funds then.”
That said, he is more traditional in other ways. He is big on real estate, even though this doesn’t financially make sense anymore in most large cities in Canada and I have told him that. But these disagreements have taught me a lot about the emotions tied to financial decisions. I think owning a home was something he what he wanted to give our family. It meant safety, security, stability to him and I think it still does. So even though I live in a renter’s market and do not value home ownership in the same way he does, these conversations have made me reflect on how and why we make the financial decisions we do. And I think that’s super valuable!
I can’t really seem to get anyone else i know on board with FIRE… they have spouses and families and are content living their own lives just as they are… I figured there was at least one person i knew out there who was just waiting to know this world existed… haven’t found them yet… 🙂
It is so hard to cultivate this community in real life in my experience. I have to get better at going to meetups from the PF/FIRE community!
Two of the money/money-ish podcasts I listen to the most diligently are diametrically opposed to what I believe in. I learn a lot from their perspective and their research. I recommend lots of folks do this. Many people I find disagreeable know a ton of stuff I don’t yet.
I have had these exact money debates with my parents! My parent thinks we’re crazy to not have any life insurance on me, to which my husband tells them that I am too baller and he’ll be fine (financially) if something happens to me. They also really like whole life insurance. I just don’t talk to them about life insurance 😉
My parents have only ever invested in their business, cash, and real estate. One parent doesn’t like stocks. This means they’re obsessed with the fact that we haven’t paid off our mortgage yet. I find it minorly annoying because they don’t believe that “having more liquid” or “the stock market returns more than our mortgage” are reasonable reasons to take our current position.
I find debates with differing philosophies to work the best when you can actually agree to disagree, respecting the other’s points. My parents and I don’t do the best job of that since we’re all very stubborn.