The point is that they could be doing more with what they have, in a way that directly benefits them.And I do not see a problem.
Underspending can actually be problematic, especially for heirs. I brought on a client late last year who was a DIY type his whole life but had been diagnosed with a terminal illness, so he was bringing in a private bank as trustee of their $20MM investment portfolio (two simple rev trusts in each spouse's name with the other spouse as primary beneficiary). He'd been an executive in finance and had a pension of like $500K a year; they didn't even spend that, so the $20MM pile just continued to grow and grow. They were very proud of dining out only occasionally at places like the Olive Garden, and they were a referral from a colleague who had met them at the breakfast buffet at a Hampton Inn on vacation. They lived in a $350K home and were not flashy whatsoever in terms of appearance or dress.
they all just live normal lives as if this money isn't there.
From your description, the couple is happy, spends what they want on things they want and does not waste money buying things they would rather not have. I gather they are not eating discarded food from garbage cans. They are not living under a bridge to save money on housing. They are not skimping on needed medical care. They seem like well-grounded people who have simple needs (almost everyone has simple needs), simple wants (not as common) and do not feel obligated to buy expensive stuff just because they can afford it. They certainly should work through estate planning. Other than that, they should continue to live their lives as they want.
I suspect that a large share of people in the same age and financial demographic behave the same way.
I know some of them. We do not hear about them because they do not make ostentatious displays of wealth. Meg probably never hears from them because they have no reason to talk to a private banker.
No knock on private bankers. They are great for those who want it. But many people who can afford it don't need them.
Living a normal life as if the money is not there sounds ideal to me.
Supporting children while you are alive and when they need it most, using the lump-sums to help them learn about how to handle finances, get them geared up for what's to come in the next 10-20 years.
I don't think the bar should be "they aren't living under a bridge to save money..."
Statistics: Posted by learning30 — Sat Aug 24, 2024 5:35 pm