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It Took Decades

Richard Quinn

IF YOU’VE WORKED a lifetime—while prudently saving and investing—so that in old age you’re well off financially, should you feel guilty?

If your retirement income is greater than the income of most American families, including those still raising young children and facing college costs, as well as the cost of their own retirement, is that embarrassing?

A few years back, during a discussion about how people spend, save and invest, my son-in-law—who’s a financial advisor to high net worth families—casually said to me, “You’re wealthy.” What? Me wealthy? I’m not even close to qualifying as one of his clients. I was shocked by the comment.

Had I completely lost perspective? I’m well aware of the data on Americans’ income, net worth and savings rates. Rather, I think my shock reflects the fact that my road to wealth (I still cringe at that word) has been a long one. I started work at age 18, retired at 67 and have continued to collect investment gains in the 10 years since. My wealth isn’t that out of line with the average—meaning the mean, not the median—for Americans in my age group.

I suspect many seniors have been on a similar long journey—“long” being the operative word. When I listen to some millennials talk, I get the impression they believe us old folks rolled out of bed at age 18, instantly found financial success and that the road to where we are today was without potholes and bumps.

Half of my investment wealth is the 401(k) balance I’ve accumulated since 1982. Another chunk is my former employer’s stock, which I amassed over my career of nearly 50 years by taking advantage of the company’s stock purchase plan and reinvesting dividends.

What about the rest? Much of it was accumulated in the years after sending our four children to college—a decade of high costs that ended in 1998. Those were the lean years, when I worked fulltime, while running a small side business just to get by.

A big portion of my net worth is real estate. Some of that came from living in a modest home for 44 years that we purchased for $59,000 and recently sold for $505,000. The proceeds allow us to live in our current condo mortgage-free. I also bought a vacation home 33 years ago for $159,000, which I rented most of the summer to help pay the mortgage. It’s now valued at $425,000. In retirement, I drive a luxury car—my one frivolous purchase. But in my defense, I saved for more than a decade, so I could pay cash for it at age 70.

I have friends and relatives who have not done as well, partly because of life choices and partly because of misfortune beyond their control. Should that cause me guilt?

This wealth accumulation thing meant tradeoffs—in how I spent my time, and how my wife and I spent our money: working 12 or more hours a day, many times on weekends, and avoiding excess spending, because saving money always came first. In the 55-plus condo community where we now live, many of the residents retired after selling businesses that they owned for many years—another road to wealth—but where the decades of effort is often overlooked by those who envy the end result.

I have two financial goals left: to be sure my wife can maintain her lifestyle should she be on her own and to leave as much money as possible to my four children. Some people will disagree with that second goal. But I view it as an obligation.

Indeed, the accumulation of even modest wealth comes with obligations. As I see it, if you can, you should help with the grandchildren’s college, support your children if they run into temporary financial difficulties, and donate to charities and local volunteer organizations. If you can, you should also be generous in mundane ways, such as leaving large tips.

Back to the original question: Should those of us with accumulated wealth feel guilty for a lifetime of saving and investing? I still struggle with the question. But I know one thing for sure: Those of us with wealth (there’s that word again) should be grateful for our good fortune—financially and otherwise—even if we worked for what we have.

Richard Quinn blogs at QuinnsCommentary.com. Before retiring in 2010, Dick was a compensation and benefits executive. His previous articles include Making CentsScared Debtless and What If. Follow Dick on Twitter @QuinnsComments.

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parkslope
parkslope
1 year ago

If you have other financial assets that you won’t need to touch for 20 years, then why treat your house differently?

R Quinn
R Quinn
1 year ago
Reply to  parkslope

I do some things similarly. I don’t count cash when calculating net worth. No could reason, just a mental cushion.

Walter Abbott
Walter Abbott
1 year ago

Not one bit.

Stu
Stu
1 year ago

Throughout the history of western religion, both fear and guilt was used by the church to control the people. Today, those that want to manipulate you still know that guilt is an effective tactic.

We see this almost everyday with Social Justice, Inequity agendas. Heck, even fat shaming is a form of guilt.

We owe it to ourselves, to throw off the psychological bias toward feeling guilty about yourself. Mental health 101.

HannahKatz
HannahKatz
1 year ago
Reply to  Stu

Right you are, Stu. I agree with Richard on all his points, except I feel no guilt about doing the right things and then finding that things worked out accordingly. Those who use guilt to manipulate others to their own advantage are evil.

Big spenders who run short in retirement and social justice warriors who never do volunteer work or contribute to charities are just two types of people that try to lay guilt on those who played by the rules in life and are now productive citizens who help others. The “guilters” always seem preoccupied with redistribution of wealth from those who earned it to themselves, or in the case of politicians, to those that will vote for them. Never feel guilty about doing the right things.

parkslope
parkslope
1 year ago

It seems to me that those who have had wealth handed to them are much less likely to feel guilty about having “accumlulated” wealth than those who have had achieved it the way you have, Richard.

DrLefty
DrLefty
1 year ago

This is a very thoughtful piece. My husband and I are a bit younger than you are—we’re turning 60 this year—but we’ve been surprised, like you, to find ourselves “wealthy.” Both of us came from families that were barely middle- class.

We’ve worked hard and mostly have been smart with money. Nonetheless, we also understand that we’re generationally privileged, having come of age at a time when a college education was much cheaper and the competition for jobs among college graduates was less. Meanwhile, the cost of housing, health care, and everything else has gone sky-high. People my age tend to look down their noses at people my kids’ age, saying that they’re whiny and have a poor work ethic, but forgetting ways in which the deck has been stacked against them economically. My own kids are hard workers, and so are the university students I teach, but it’s still hard to establish yourself as an independent adult these days, especially when you live in a high-cost area (we’re in California).

This is to say that I agree with your concluding points about helping adult kids and eventually grandkids and being generous with donating to charity and even tipping. It’s a way to give some of that generational privilege back and show gratitude. For me, that’s different than guilt.

R Quinn
R Quinn
1 year ago
Reply to  DrLefty

I feel each generation has had its challenges and today this is no different. Some young adults complain about student loans they incurred and yet that was their choice. On the other hand, they didn’t face a two year draft. Some say it’s harder to buy a house, but forget that in the 70s and 80s mortgage rates were sky high. My first house had an interest rate of 9-3/4% with a minimum 10% down payment. Today is different, no doubt, but not that much more challenging overall.

IAD
IAD
1 year ago
Reply to  DrLefty

I have to question your “generationally privileged” comment. It’s true college was cheaper, but so was everything else. The median money income of families in the United States was $9,870 in 1970. In 1980 it was just a little over $21k. 2016 average income was a little over $83k.

To personalize it for me, my college degree cost a little more than the average annual salary in 1980. I look to my daughter who just graduated college in June which cost $80k but just got a job making $65k right out of college. Her college cost are in line to the average income…just like it was for me. I didn’t make $65k until I was well into my career!

I think part of the problem for this younger generation isn’t so much that the deck is stacked against them, it’s that they have been sold a story that puts them in a disadvantaged state. When I was younger, I was told to study and do something I enjoyed, but it was understood that the end goal was to make money to support myself and someday a family. Today, kids can get degrees in all kinds of stuff that makes no sense (for example, neighbors kid majored in feminist dance theory) and then wonder why they can’t move out of the house and find a job that pays more than minimum wage. Decisions have economic implications, but that is often lost in the discussion.

I agree it is hard to establish oneself as an independent adult…especially in a high cost area. That challenge isn’t new! I faced the same issue in the 1980s and struggled from renting a portion of a bedroom to thinking I finally made it when I was able to afford the entire bedroom! Imagine my surprise years later when I was actually able to rent my own apartment!

I think another factor is we tend to forget the details of our struggles from long ago since what is in front of us is so prevalent. Some of the struggles are the same and some are different, but no generation had it easier or harder.

J Cp
J Cp
1 year ago
Reply to  IAD

I was utterly shocked when one of my children said that they did want mere “money” to drive their career choice and that they wanted to “change the world”.

The misguided child eventually took a job for just money when they went nearly broke changing the world. Turns out they had the talent to make mere money. It was hard not helping out and letting them nearly go bankrupt but worth it in the end.

I may be different but earning money always seemed to me to be the point of working. And working for money is so hard that letting it go doesn’t make sense!

J Cp
J Cp
1 year ago

The accumulation of wealth is critical to a prosperous economy. It is only out of abundance that people invest in companies via stock or lend to companies and others via debt instruments. Without an “investor class” our society would be much poorer. Indeed, cultures that penalize those with “excess” wealth remain mired in poverty.

Far from feeling guilty you should be satisfied with your wealth and know that it has helped our society far more than any misguided philanthropy.

UofODuck
UofODuck
1 year ago

I retired 5 years ago and it sounds like we are in a similar situation. Likewise, I don’t feel guilty about what we have as we worked hard and saved early and often. On the other hand, I am ever mindful that our good fortune was also helped by a bit of luck, good timing and the help and mentorship of others along the way.

We made sure that our son was able to graduate college debt free and have helped he and his wife buy their first home. Starting at age 15, we also started a retirement savings plan for our son as he is unlikely to have the same retirement benefits that his parents and grand parents had. However, it is not our goal to leave him a large sum of money and certainly not anytime soon! Having spent 42 years in the investment business, I long ago observed that inheriting large sums seldom seemed to make people happy.

Because of our good fortune, I also share your view that we have some obligation to help others. Volunteering is good, but money given to organizations the support social justice, education and food for the poor are equally important. In short, we need to “pay it forward” to help others achieve the same good fortune that we’ve had.

Roboticus Aquarius
Roboticus Aquarius
1 year ago

I don’t feel guilty about my relative wealth. I do recognize both that I’ve been lucky and privileged, and I do feel a need to give back. Don’t get me wrong, I’ve worked like a demon to get here, 100 hour weeks are no joke and I did that for way too long. We’ve saved for 25 years, and my wife has 3 degrees and is building a business. However, it’s also true that we were lucky to be born in the US, to educated parents, in good health, etc, etc, etc.

I think where one stands on these questions has a lot to do with how they feel about society, community, and the extent to which we all owe something to each other. I suspect it’s going to be pretty difficult to change anyone’s mind.

Bill
Bill
1 year ago

Similar story to yours, except we have a larger family and still have three teenagers when I’m 65 (my wife is a few years younger). Saved like crazy though for a lot of years and things have turned out fine.

Cost of college is about double what it was when I went though, relative to cost of living. Basically impossible for kids to do it without help today. When I went in 70s, I could almost break even with summer and parttime jobs. Not really possible anymore.

BenefitJack
BenefitJack
1 year ago

No guilt, relative to those who are the same age – they had, on average, all the same opportunities I did. LIke you, I started working in my teens, still working and almost age 70.
Most recent degree, while working full time, obtained in 2013 after my 60th birthday.

Just as important, perhaps more important, I have no envy of those who have much more – whether their wealth was inherited, achieved due to luck or other fortuitous circumstance, or even those who worked harder than I did.

Sarah Zweber
Sarah Zweber
1 year ago

While I am grateful for what I have, I know that my husband and I have worked hard and always saved, shopped at thrift stores, and insisted on DIY projects. I recently discovered the Frugalwoods blog, and she speaks my language. We are going to retire next year (at ages 54 and 57), and a good friend was flabbergasted when I told her. In stark contrast to our lifestyle, she and her husband spend every dime they have and would not be caught dead shopping at the Goodwill. I wish that I could help her, but her psychology around money and spending is so much different from mine. I encouraged her to analyze her finances now rather than waiting until she is 65 to figure out when they can retire! Bottom line: I do not feel guilty. Opportunity abounds for all.

Lam Jones (Classic)
Lam Jones (Classic)
1 year ago

excellent post. Guilt is perhaps the wrong word, as one should not feel guilty about benefiting from working hard to make the most of their opportunity. My own opinion is that you should feel fortunate however. It is human nature to ignore the “what could have been” and to put far too much stock in one’s own control of the results. Interest rate and tax policy over the last 40 years has been an inexorable rising tide for asset owners and prices for education and health care have also risen greatly; all good if you are on the asset train but good luck getting catching it once it has left the station. Large job loss events like recessions in 2009 and now 2020 (2 once in a lifetime events in 11 years?) are a death sentence for many people who have always worked and sacrificed as much as any and despite continuing to do so may never regain financial standing. Linking health insurance to that far less reliable employment today has shown to have been a compounding mistake. In short, this “game” is no longer work hard and it will all be fine… one also needs to pray like hell they don’t get laid off or get sick as accumulating wealth without assets (or while in debt) is well nigh impossible for millions of people these days

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