It's beginning to look a lot like Christmas...we collected our son from university a week ago, and now our daughter has arrived from Switzerland. There's still some quarantining and a Covid test to be done, but our little family is together and getting ready for Christmas🎄
With the kids back in town (although at 25 and 22 years old, they're hardly kids), I'm expecting some interesting money conversations - after all, one works in a bank (for people with more money than me) and the other is studying economics.
Something I'm interested in is how my kids view my FIRE decision and what they, as part of the younger generation, think about FI. I wonder what financial aspirations they have, do they see financial independence as desirable, is it even achievable, or does it feel like an impossible and demoralising subject? How do they view the direction I've chosen, and did I give them the right financial lessons as they grew up? So, me being me, I thought I'd ask them:
What do they think about money?
Both are quite proud when they make good financial decisions, and my view is that if you take pride in something, then you normally do it well.
My daughter is sure that money's important, but doesn't like that so much of the world seems to revolve around it. It can be liberating that it gives access to things, but also restrictive if it excludes you when others have more money to do things you can't afford.
My son keeps it simple: money's important as an enabler to do the things you want. More is nice to have, it makes things easier..."I'd like lots of it!"
What lessons do they think I taught them, and what did I miss?
They think our pocket money regime was a good introduction to budgeting. We gave them a bit extra but they had to pay for their entertainment, clothes, gifts for friend's birthday etc.
They also went to university knowing their budget, and that a phone call home to ask for more wouldn't work. At the time, my daughter thought it was tough but now sees it as a good lesson. In a nutshell, they grew up knowing that money doesn't grow on trees.
My son talked about a longer term view of saving and investments - I don't recall this being a lesson he got from me, but it's a sensible way to think.
My daughter feels we could have done more to explain how important it is to be financially savvy, to have some emergency funds set aside or some savings. Things like pensions are another thing that they entered adult life not knowing anything about.
Were we open about financial matters and are their generation different?
They feel that we're relatively open about finances, but more so now than when they were younger. To an extent, they both felt it was something of a taboo subject, something I hadn't realised until today.
Amongst their friends, it's a mix. They feel comfortable talking about finance to their close friends, but recognise there is still a significant taboo around the subject. My daughter finds the Swiss much less open to discussing finances, so it seems the famed Swiss secrecy is still intact!
I was interested to hear that my son describe many of his friends as being pessimistic about their financial prospects. My view is that there are many choices and actions in our control to deliver a successful financial future, and it seems a shame that they aren't confident in these.
How did school prepare them for dealing with their finances?
Not very well. There were a few lessons on credit cards because one teacher thought it was important, but not much more than that. Nothing on taxes, savings, pensions, mortgages, loans, budgets. They're amazed it wasn't focused on more.
What are their views on the concept of FIRE?
They probably wouldn't have known about FIRE if I wasn't interested in it. They envisage it requires a lot of planning or discipline, but both see it as achievable. The financial independence aspect is the attraction as that's the part that opens up options, be it to work less or perhaps focus on a passion project.
Do they have any FI, or even FIRE plans?
My daughter wants to get to FI, feels it's achievable but miles away. Early retirement isn't necessarily the target though. She feels that she has a plus point by being disciplined with her savings. Controlling lifestyle inflation is another target, something she feels she's making progress on.
My son has an instinct to invest in property, although he's not sure it's the smartest thing he still thinks it can be a good investment, projectable and quite consistent. His current ETF investments are doing very well, and he enjoys checking them frequently!
Do they know how I got to FIRE?
Their view of the main ingredients are:
Regularly tracking my finances.
Took some risks in my career, particularly by relocating/moving countries.
Buying and then selling a property in Dubai.
Being reliable in my career, the go to person when something needed doing.
Learning from bad investment mistakes and moving to better ways.
It's a fair summary. What I think they missed is leading a balanced life. Making sure we saved, but doing things to enjoy the journey too. I'd also add avoiding debt, particularly bad types of debt, to that list.
What do they think about my early retirement?
One of them said they think it's "cool", so I'm writing that down for posterity! They like that I have the option to do what I want: work, not work, go places, lots of freedom.
My daughter observes that I've become more open to other views, interested to learn about different things and different viewpoints. She also thinks I have more routine now - I'm not convinced, I think I just have a different routine. She says I spend more time seeing friends, am particularly appreciative of what we have and am more frugal, but in a sensible rather than a bad way.
As to my son's views, he noticed that since retiring I had a beard for a while, then I didn't and then I did again - top marks for observation! In addition, I'm more willing to try things, to have more of a "I wonder what this could be like, shall I try it...why not, let's do it" approach as well as finding pleasure in the simple things more, and just generally being more relaxed.
So now I've heard from my kids, what do I think? I think I'm lucky to have them here for Christmas, I'm lucky that they like talking to me about these things and I'm lucky that they seem to be making more good financial decisions than bad ones. And while this may not be anything to do with this blog post, I'm very proud of them too. I reckon we have a couple of future FI candidates right here.