Thanks all for your inputs. I agree that all helps that we can give to our children are good but still fear it can result in disasters if not handle properly. It’s a question of how to help our kids effectively and without bad consequences.
My thoughts are :
1. Educate them : like Steven’s children, mine achieve highly in academic but know nothing about finance/wealth. I don’t know what to teach them other than some basic finance management principles. I know wealth is a “want”, not a “need” and it can bring us both happiness & unhappiness. Most people don’t know how much is enough. Needs and wants are two different things. We often have to give up one thing in life in order to get another.
2. Become a guarantor : I have lots of worries about this option, similar to what Wrappack wrote. I only do it when I feel it is a must and there isn’t any other option. I may know my children but I don’t know their future partners.
3. Lend/give money : I lend money to family members and friends up to an amount that I know I could afford to lose without feeling bad about them. I don’t like to see money matters damage good relationships.I want to give my children money when they need than to leave them money when I die. I’ve seen in many cases parents give money to their children then think they have the right to control/ interfere into their children’s family affairs. I’ve also seen many children in return don’t value what they’ve got and become lazy and dependent. Money when comes easily often goes easily.
30 years ago my father offered to send me money so I could buy a house and established myself in Sydney. I could even buy 3 houses there with the money he wanted to send over. I was a student then, married with 1 kid. I didn’t even have $2 to pay for the hospital fee for my son’s treatment but I refused his offer. The reasons were I didn’t want to rely on my father and I didn’t want him to have any chance to interfere into my family life. My father lost most of his money in the war and he is still struggling to help my brothers using his last lot of money without any good result or appreciation from them. I try to talk him out of it but he insists. At his age his children should look after him not the other way around. I feel sorry for him. Looking back I think I made the right decision but feel sad because I can’t give him lots of money as I wish I could. Sometimes I wonder what would happen if I accepted the money! I’m in my father’s shoes now and try not to make the same mistake.
Huey
We have a 7 week old daughter. We have opened a bank account for her which we are placing money in every week. When she is old enought we will be educating her on how manage this money i.e. some to invest, some to spend, give to charities etc.
I really want my child to have a better understanding of money than I had, and I believe the earlier I can start teaching her the better. Perhaps I can help her invest in her first dolls house!!!
Cheers,
Karen[
]Here here Karen.
I agree 100%. My son is 6 and already starting to appreciate that investing is like gardening. Plant the seed and it will grow as long as it is nurtured.
So it is with our children… I wish my parents weren’t the ‘school of hard knocks’ advocates the seemed to be. As personal wealth has shifted to older generations (ie Baby Boomers) I feel it is obligatory to now give something back, and what better place to start than with our children.
…emotion clouds good judgement but is a defining element of character.
Hi Huey
I dont think you should help your children. My parents have never helped me financialy and I think it is one of the best things they have done for me. I now own three propertys and I know they would never let me fall in a hole but they taught me to look after myself and not to rely on other people. To me that is one of the most valuable things I have ever learned.
On the other hand I do not have children of my own so maybe I would feel differently if I did but I dont think so.asti27.3 said:
I dont think you should help your children. My parents have never helped me financialy and I think it is one of the best things they have done for me.Well I guess you were just lucky when they taught you how to cross the Highway! Just watch and hope you don’t get squashed? (I realise this is not a financial context)
I have children, and strongly believe that there is a distinct difference between HELPING your children and giving them HANDOUTS.
If they show the drive & self motivation then CULTURE it, don’t sit back and let the corporate world CRUSH them before they have had a chance to stand up straight….]
Oh, and did you think about the difference (ie wage/property gap) from just a few years ago until now??
******
…emotion clouds good judgement but is a defining element of character.Wow! I can see my problems clearly now. I know but always do everything for my children readily & unconditionally. Like father like daughter, It’s the root of my problems. HELP ME! I have to learn NOT to. [:p]
Huey
the truth is there is neither a right or wrong answer. many children grow up to be great people with or without their parents help. its how you go abt it that will make the difference. if you choose to help them financially with a house it is also up to you to explain to them the reasons you are doing it, your fears, expectations etc etc so that they dont take it for granted, so that they understand responsibility etc etc.
alternatively if you decide not to help them out – in order to avoid resentment, jealousy etc again you need to explain the reasons for yr decision, yr expectations, fears etc etc so they understand they are not being abandoned at that at the end of the day
if they ‘really’ need urgent help – offcourse you will be there to help them.no right ot wrong answer – all abt communication and both parties understanding why these decisions are made.
Hi Guys,
Just a bit off the subject…
but dont little boys… one day marry girls…. just like their mum… (i mean, in the same way, like the mums look and take care of them as they grow up…)
Or is this… not as common these days…
Cheers,
sisI think you’re dreaming SIS! If he wants me to do all his cooking and cleaning….
Let’s just say he won’t be doing much else either![
]Cheers
MelHi Guys,
thought i might bring up this old post,
yesterday… in the last few minutes in the afternoon, i recieved a call from my sister… for the last few weeks, ive been really talking hard and reasonable to her…
Just for the small info, my sister is 17, works fulltime and finished school last year…. all of us probably do know, that housing prices are very expensive now, and it is much harder to purchase a house at a young age…
what happened yesterday… is that, i secured a contract and purchase of a property in my name, but for my sister sake… the deal is quite simple as her birthday is 4 months away, but there is no way the banks will give her the finance as she dont have any large deposit, equity or security available and because of her age…
the thing is with this deal, my name is on both the contract and on the loans, but my sister will be paying the difference as this property is quite heavily geared, but also has equity available, through good negotiation (very well undermarket price),
the best part is my sister is very happy and excited but also, may have a small interest in property now emerging….
… but when she does turn 18 in July, the equity and the property will be her security in purchasing more property, but it could also work out to be that we could end up being a brother and sister team in PI [
]Honestly the feeling of my sister, being also overwhelmed, and the knowing she is also worried about her future, makes me both happy but puts a smile on my face… [
]Cheers,
sisYou are a champ sis.
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Congratulations SIS, you’ve done well. Your sister must be very happy.
I still wonder if your method is cost effective because you will have to transfer the property to her name later. Do you do it that way because you don’t want to become her guarantor?
Regards
Huey
Hi Huey,
this is sorta what will happen,
as for the moment, the property and loans are all in my name, but my sister is subsidicing the difference of the rental and repayments, cause there is plenty of equity in the property, and based on some IRR caculations, ive given my sister several choices, one of which she she can access the equity, of the property, to finance more properties, or i sell later down the track for her… but she will be able to have full benefit of the capital gains, really its more of an investment vehicle, that will give her, a large sum of cash, but plenty of equity from its capital growth, or capital gain if she decides to sell or not, but having this property and what hopefully becomes available from it, to really kick start her portfolio, but put her right into the property game.
either way, with the guarantor, im honestly not worried, maybe because she is my sister, but i know she really wants this, and that just like a brother….
ill be looking out for her… (just making sure, that she dont get into any debts or money problems… everythings else is up to her)
Cheers,
sisHey SIS, you know how we had that conversation where you said I was like a sister to you……….? [
]Cheers
MelHi Mel,
yes i do, remember that conversation sis’ [:p]
…. big brother is watching over you… [8D]
Cheers,
sisIwould not go garauntor for a loan,Ithink if they want it enough they will find a way to do it .Iwould help with a deposit maybe,but Ihave 3 children & have helped by paying for driving lessons ,licence & 2cars so far 1 more to go in 2 years & its financially draining,I think it depends on how motivated they are because #1 brought back the car when due for rego ,quit job &didnt want to pay it.#2just got licence & is paying off car.Postie
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