<p>Yep, children can get mad expensive over time.</p>
<p>I included private school from K, but did not include pre-school, ballet school, or summer programs. </p>
<p>Kids are expensive, but worth every penny, and priceless.</p>
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<p>Check eBay!</p>
<p>lol I wonder if anybody has ever tried to sell their kids through ebay just for kicks</p>
<p>Well if I convert it to yen…</p>
<p>I always figured I would have to pay someone to take my kids.</p>
<p>Back to the question of “how do you know if you’re a millionaire?” … </p>
<p>HopeHope: how much is that 65 year old’s net worth if she is hit by a truck today? Using your example, if #2 person has $750K in cash, where is she keeping her money and at what interest rate? That might be enough to live so she doesn’t touch her principle.</p>
<p>My medical bill for my twins’ premature birth and NICU stay was in the neighborhood of $500,000. Thankfully I had outstanding insurance. So they were already halfway to million dollar babies! </p>
<p>The night our twins got into their ED schools, within 15 minutes of one another, I commented to H that was the fastest $100,000 we had ever spent (meaning for the upcoming year). I won’t lie – that’s precisely what we worked so hard for.</p>
<p>Re millionaire – a million doesn’t really seem all that much at those point, which I recognize is out of touch. We own our home outright, live below our means, pay cash for cars, and have never had credit card debt.</p>
<p>^^ limabeans - Well that’s exactly my point … net worth is just a snapshot, whose meaning differs for each person. Recently my neighbors transferred ownership of their house to their children, but retained life use. Technically the value of their house belongs in the net worth of their kids. At some point in the future, far distant future hopefully, the children will actually receive some benefit from that portion of their net worth. Meantime, it’s just a number … and IMHO meaningless without context.</p>
<p>NewHope, I am sorry to derail the thread a little, but you raise a point I’ve always been confused about. People talk about “transferring ownership of their house to their children”. Isn’t that just another way of saying “giving” ? Can anyone help me by explaining why these transfers don’t result in owing gift tax?</p>
<p>My DH finds it crass to talk about money all the time or how much money a person has. He is very private about money and never likes to talk about it outside the immediate family. We have begun to share some of this with our kids as they work on good fiscal responsibility and because they are both over 21 and need to know some of this stuff, should anything happen. </p>
<p>Hayden-
Thats a good question. I am not a financial advisor nor am I up on all the tax laws, but I wonder if the tax implication woudl hit only when they sell the house. Maybe the house is in a trust.</p>
<p>You know you are a millionaire when you and your spouse are invited to have a free dinner at a local restaurant or when you receive a call telling that you and your spouse won a free Carribbean cruise and you have to accept the offer within 48 hours.</p>
<p>hayden - An Accountant could provide a better explanation that I. My understanding is that the house can be transferred either incrementally or in a single transaction. The single transaction may or may not trigger gift tax, depending on circumstances. The incremental method can avoid this completely. Husband and wife each transfer $13K of the home’s value annually to each child (in this case, three children). Those transfers would not trigger gift tax. So $78K of value in the house are transferred annually, without triggering gift tax considerations. (If the husband and wife each transferred $13K annually to both each child and each child’s spouse, $156K/year could be transferred.)</p>
<p>DW and I have looked into this for our own situation. One fly in the ointment is the possibility that house values would rise/fall significantly over time, which might require periodic reassessment of the home’s value. And of course there’s the cost of legal fees to establish and maintain the arrangement.</p>
<p>As with any financial situation, YMMV.</p>
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<p>This brings up an interesting question. Do your college-age / young adult kids know how much you (parents) make and / or how much you’re worth? Mine don’t and I really don’t have any intention of letting them know.</p>
<p>coolweather-
If we went to all those “come for a free meal and listen to ways to insure/ invest/save/retire/ <<<fill in=”" the=“” blank=“”>>> I’d have to spend more time on the diet thread!! That said, could get lots of free meals on someone else’s nickel and save lots of $$. :D</fill></p>
<p>^^ PG - Mine don’t either, principally because they don’t have enough financial knowledge to put the information in context. “Roth IRA? What’s that?”</p>
<p>RE: the house transfer, Google GRIT Trust and it explains one way to do it in order to avoid estate taxes, but keep the parents in their home.</p>
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<p>Yes.</p>
<p>They have access to our largest financial accounts too. Before son got his
summer job, I said that he could trade for me. Then he got a job so I showed
our daughter (she hasn’t found a job yet) how to trade and now she executes
trades for me. I want to get her more involved in keeping track of our assets
and in managing them.</p>
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<p>Just go to the free low-carb dinners.</p>
<p>I get those a lot but I’ve never been to one.</p>
<p>I’ve talked to financial planners before but they are usually useless as
far as investing goes.</p>
<p>^ Lo carb doesn’t work for me, bc. I am still working off the weight that I found again when I tried it for a few days (and… well… there was my birthday celebration that followed). Back to low fat/low calorie.</p>
<p>We may listen to financial planners so my DH feeels reassured that what he is doing is reasonable.</p>
<p>
Yes, the last couple of years in high school I started talking to our kids about finances because it’s an area I felt I didn’t get enough education from my parents. We didn’t sit with the books, but we did talk at the dinner table about how a salary of x isn’t nearly so big when you have y in income taxes and z in real estate taxes to pay. When my oldest got his first big paycheck from an internship after his sophomore year in college I suggested he might want to set up an IRA which he did. </p>
<p>We’ve had both the “a million dollars is not a lot of net worth when you are about to spend $400,000 on college educations” discussion , and the “I could spend a million dollars easily on a great kitchen” discussion (that horrified my husband, but no fear, we’ve been here 10 years and so far all I’ve done is replace a broken fridge and broken dishwasher.) I’m both frugal and lazy when it comes to home renovations even though I am an architect.</p>