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Comment by thesumofall | Hacker News Reader

Never heard about the tradition of the "Money Talk" and never got one either. Feel like it is much more worthwhile to teach kids critical and independent thinking rather than trying to teach them principles ("invest in index funds") that might (or might not) be all that useful a couple of years down the road.

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You know what I wish my parents had taken the time to teach me? How credit cards work, how student loans work, and why I should max my 401k. Yes all of those things could change with legislation, but I'd be much much better off knowing those 3 things when I graduated high school than when I finally figured them out years after graduating college.

I never got much of a talk, yet every time I did, I questioned my parents' rationale and savvy. It was simultaneously both an epiphany and a dark moment when in your early teenage years you realize you are unquestionably smarter than your parents.

Here is what I was told:

* The value of your home doubles about every 7 years. I was told this in 1994. I then asked if my father's salary doubled every 7 years. I was immediately grounded and sent to my room.

* I was told to, without question, borrow money for the best college I could. When I asked on how I would pay that back, the question was dodged.

* How much money to save? Never came up. 401K? My parents didn't have one. Credit card interest? I was told to get it as low as I could -- but never told to avoid it.

* We always seemed to buy new cars. We had a basement full of junk. Seemed to be a nice setup for a guy working at a landfill and a stay at home mom in a city that had been in non-stop decline since the end of World War II.

I ended up going against my parents' advice. Something that got me kicked out of the house, for refusing to borrow 150% of their homes' value (I got a scholarship, but far from a free ride) with my own future money I hadn't yet earned, to attend Carnegie Mellon (and instead taking a job to pay for state school, which I ended up leaving after 3 semesters). When the dot-com bubble was about to burst. Result?

At age 22 I moved back in with my parents. Not because I needed help, but because they tapped their savings after Dad was unemployed for 6 months, despite unemployment insurance, and desperately needed help (and I wasn't giving them a handout while also renting my own apartment). I was the only person in the immediate family that had a decent job. This was exasperated by the fact they took a huge HELOC (at 10.5%) to help my sister pay to attend Cornell, an offer that wasn't extended to me, but was now burying them alive. They had to help my sister because she dropped BioChem for Psych, which for 2 years hadn't yet landed her anything better than working at a Hollywood Video store.

I ended up giving them the third degree. Their books I forced open. So much credit card debt (nothing insane, but significant, and lots paid in interest). So much garbage. So much useless crap. ZERO ever saved in a 401K (it wasn't until 7 years ago that I forced my father's hand on contributing to one). Virtually no savings to draw on. Never mind the extreme animosity considering that I was repaying part of my sister's Ivy League schooling, in addition to my parents' primary mortgage (not paid off after 32 years), and their health insurance.

Crazy thing is, they were far from the biggest financial basket cases in the neighborhood.

I grew up in a similar situation, though not as dire. I definitely had to figure this stuff out for myself, and because of my own lack of research combined with memories of when my father basically lost what they had called my college fund picking stocks in the 90s (he thought things like Ricochet and wireless ISPs were the future...thanks dad, maybe 20 years early with the wrong players in the wrong country), I ended up not recognizing a great options opportunity at my company and contributing nothing to it for 2 years before our stock price increased roughly 15x (basically, I would have been a millionaire like some my other coworkers now are).

We also had the "houses are always a good investment" bit of advice, despite living in a much smaller house in a much crappier town than we could afford. They're currently back at about mid-90s levels value wise, and my family did a horrible job of maintaining our home, so the value is actually less now. This covers basically what happened: http://infographics.economist.com/2015/uscitieshpi_11_2015/?...

Needless to say, getting out a few years back was the best decision I could have made for my life and career in tech.

If you're a parent considering writing one of these letters, how can you fact-check yourself to ensure that you're not giving your children a huge disadvantage with terrible advice? I personally learned a lot from Investopedia and from messing around with Bitcoin in the early days (another opportunity where I could have made tens of thousands of dollars had I hung onto the 20BTC or so I had mined instead of selling them for $12/btc, happy to have paid for a new GPU I got just for the task).

> I ended up not recognizing a great options opportunity at my company and contributing nothing to it for 2 years before our stock price increased roughly 15x (basically, I would have been a millionaire like some my other coworkers now are).

I'm unclear - is this your parents' fault?

>> I'm unclear - is this your parents' fault?

No, it's hindsight and regret. It's funny because it would be similar to picking that stock, yet the same poster says his parents lost a lot by picking stocks so apparently that's a bad idea. It's easy to get confused about that when "you worked there" as if that automatically should have given you insider information about a 15x increase in the stock price. No, picking individual stocks is not usually a good idea and Enron taught the lesson about investing in your employer - if they go down you have no income and no savings.

so what you are saying is that you should have borrowed for college because then you would have had no money to help them with and would at worst case ended up in the exact same situation?

"buy real estate no matter where it is located it doesn't matter if there is no actual supply and demand constraint in our vast suburb in comparison to a city on an island or peninsula"

the truth is that your parents don't know anything about economics and investing, they are simply people that had children

I never got the money talk. It was just a part of conversations.

Me: "People sure have a lot of stuff these days. These self-storage places are huge."

Dad: "Yeah. I figured it was a growing industry, so invested in one back ten years ago. The company made a lot of money, but management were a bunch of crooks. They spent all the revenue on overpriced purchases from their friends and family.

No matter how good the fundamentals, you can't win if you're dealing with crooks."

Yeah. I think it could be a little more concrete than that. First, that there's a lot of cultural baggage around money, and it's important to try to know how that's effecting your decisions. Second, that all the sellers of financial products/services are trying to sell you something, they're no more altruistic than a used-car salesman.

I have also never heard of nor received such a talk. I do, however, wish I had been given one.

Well...if they're telling you to do something specific, wouldn't that stop being a "principle"?

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