Dear Quentin,
This story may remind you of a fairy tale — a cautionary one. My financial-whiz parents earned $4 million in 1970s dollars, and retired early. They hoped we three children would go into their business. My older brother and sister did, but I chose college and graduate school, paying for most of it myself as everyone clucked that I’d be poor going that route.
I got good grades, so they sent checks now and then, and helped me out more the longer I stayed in school until my Ph.D., although it was never a full ride. I paid off some modest student-loan debt.
The family fortune dwindled, and my parents left 100% to my siblings, with vague instructions to take care of me. For peace of mind, I signed over my share of the family house because I saw no way to benefit while they both lived in it. Over the years, they have weathered massive investment losses. She and my brother actually admitted to dropping close to $1 million in one day via short selling. I’m told the money is now basically gone.
These siblings aren’t bad, just human. I can’t judge their choices, because they did what our parents asked, and I was the renegade. Also, many academics do wind up poor, but I was fortunate to find a steady university job. I don’t consider my luck as virtue and their lack of it as vice, but this also presents a moral bind.
“‘I don’t consider my luck as virtue and their lack of it as vice.’”
Recently, my sister asked to borrow $10,000 to consolidate her son’s credit-card debt. I said no, claiming I lost too much in the pandemic, but I actually have plenty. I have slightly over seven times my annual salary saved, as you recommend: retirement with health benefits for life, plus Social Security for later. I’m not rich, but I am comfortable. She sensed I wasn’t being truthful, but she didn’t push it.
What if these requests keep coming? What if she and my brother mortgage the family house and lose it? And what about their amiable but underemployed kids in their 40s and 50s, who regularly seek financial assistance?
Friends say, “Don’t feel guilty,” but I still love this flawed little family. My siblings now snark that our parents “gave” me a full-ride education they never had access to, which is untrue, but they seem to find the narrative consoling. It also makes me feel even guiltier, but over what exactly? I gave them one-third of the house.
My sister is ill, and during a recent meal in a restaurant she said she would leave the house to me if I promised to use it to make sure her kids are OK. I’m trying to find a diplomatic way to say no. Do you have thoughts?
Sister from a Cautionary Fairytale
Also read: How to lose a billion dollars
Dear Fairytale Sister,
You have played by the rules of the game, and made sure you are on solid ground for retirement.
I’m sorry your parents did not give you one-third of their estate in lieu of you inheriting the family business along with your two siblings. That would have at least meant putting their nest eggs into two baskets instead of one. Your brother and sister took possession of that basket, and they appear to have broken all the eggs.
About that request for $10,000. It is her responsibility as a parent to guide her son and ensure he does not get into financial trouble — the same kind of financial mess she and your brother created on a larger scale. She and your brother squandered the family fortune. It does not seem like those reckless financial habits have skipped a generation.
Here is a quick, blunt recap: Your sister needed some cold, hard cash. Check! Your family helped you out from time to time when you were in college working toward your Ph.D. Check! Your sister made a tempting offer, suggesting she would leave you the family home when she passes away. Check, please!
This is where you get up and leave the restaurant. You could agree to being left the family home in your siblings’ will, but I suspect this is a way to show you goodwill — but that goodwill comes at a price. In return, she would then leverage your savings to help her family pay off any other debts they have incurred.
“Your sister first used guilt to persuade you, then temptation.”
None of that makes any sense. You effectively forfeited an inheritance and willingly gave up one-third of the family home. Your siblings did not offer to give you one-third of the business, and did not push back when you signed over your share of the home. Sometimes what people don’t do speaks more loudly than what they do.
It appears that your sister tried to gently coerce you — if that isn’t an oxymoron — into giving her money by reminding you of the help your parents gave you while you were in college and, when that didn’t work, she tried the old carrot-and-stick trick. You wisely said no to both. If your family keeps asking for money? “No, thank you. Alas, no. I’m sorry, no.”
So what would have happened if you had said yes to receiving the family home after your siblings’ pass? Firstly, that assumes they predecease you. Secondly, she may or may not make good on her promise and, thirdly, your nieces and nephews would probably be upset when they heard their real-estate inheritance had been given away to their uncle.
But it would put you under a compliment — and that’s the point. It starts with $10,000 for her son, and where would it end? The best predictor of future behavior is past behavior. Your siblings emptied your parents’ piggy bank, and gave it a good shake for good measure. There is a willfulness to throwing good money after bad. Don’t get sucked in.
“Handing over $10,000 would be an ‘open the wallet’ moment.”
They made bad investments, but if they had invested $4 million in the stock market in, say, 1990 and done absolutely nothing, you and your siblings could all retire today as multi-millionaires. They could have turned it into multiples of that $4 million. For that to happen, however, they would have to sit on their hands and do absolutely nothing.
That sounds harsh, I know. I’m sure your sister is a lovely person and she loves you and you love her, and I’m mostly sorry that she’s ill. But you are right to suspect that it would not end with your nephew’s credit-card debt. Once they knew you were a resource, that would be just the beginning.
Handing over that $10,000 would be an “open the wallet” moment. That happens when you walk through the door of a store and see something cheap — say, a candle — and decide to pop it in your shopping basket. In psychological terms, that’s an open-the-wallet moment: Your wallet is open, and you are primed to spend more.
You are a renegade because you forged your own path, and built a solid financial life based on hard work and playing the long game, without rancor or regret. You are right not to judge your siblings for decisions they’ve made throughout their lives, but don’t allow their choices to become your choices. Open your heart to your sister. And keep your wallet closed.
“They made bad investments, but if they had invested $4 million in the stock market in, say, 1990 and done absolutely nothing, you and your siblings could all retire today as multi-millionaires.”
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