Family values and investing

Lately I have reflected on the way in which the values of members of my family have influenced my choices regarding career, investing etc.

I have always been very close to my parents (which has perhaps meant I have followed their example). Before retirement they were public servants and value a strong work ethic, a secure job, investing in superannuation (and perhaps having one investment property). They always wanted me to be in paid employment (rather than in a homemaker role). They did not work in commercial areas and perceived starting a business as too risky and stressful. They enjoyed their jobs, paid off their house and have good superannuation.

I can see that I have also followed in their footsteps in some ways. Later in life however, I am starting to think about whether that path is the best for me/my family. Recently, my husband and I have decided to focus on property investment/development and have also bought into a business (not related to property) (while still having our secure day jobs).

I am interested to know of others experiences. Did you follow a similar path to your family or have you tried something different?

 

Sounds very similar to myself. My dad was a TAFE teacher, and my mum worked at the RTA. While both were very competent at their job, neither sought promotion to managerial positions. There was no investment thoughts until they were almost retired and they started talking to a financial planner about the management of their super etc.

I had no idea about managing money, and was terrible at saving. Fortunately my wife was an awesome saver, and definitely moderated my behaviour. She was also brought up by a school teacher and had no idea about investment, add to that she is incredibly conservative and risk averse.

I think my interest in actual investing came about while I was a stay at home parent, and the thought of being full time in the workforce again, and missing out on stuff with the kids, became less desirable. At that point we didn't even own a home. It has been a fairly epic journey for me to convince my wife to start buying investment properties, and we have pretty much hit her tolerance of debt (which at the moment is probably not far off APRAs tolerance, so that's ok).

I would love to run my own business, and I think being largely financially independent would give me the confidence to take that risk, but at the moment I'm pretty happy being back in the workforce part time, at a pretty good company on adequate pay, so we'll see.

cheers,
Inertia

 

This might come across as insensitive, but I'm assuming you're not coming from an anglo family, are you?
You're married, you've got your own life, who cares what your parents want you to do financially? That would be my view as a white male anyway. Sure, I do give my parents' views consideration, but that does not mean that I do what they want me to do.

Look at their lives, is that where you want to end up? If the answer to that question is "yes", then perhaps you should follow in their footsteps. If it's "no" then perhaps consider what you would have to do to get where you want to be.
I think it's extremely important to 'Start with the end in mind'. Let that guide where you're going. Your parents might be disappointed initially if you don't do what they want you to, but they'll still love you regardless.

 

I didn’t read the OP like that. I thought of the question more as how does the way we are brought up influence how/if we invest.

 

Oh, sorry, maybe I misread this completely!

 

This is a good combination. On one hand you have a good and reliable payslip which is useful to the bank when asking for loans. On the other hand you have passive and secure income streams from other ventures just in case you face uncertainties at work. Remember, nowadays having a public service job is "not" the most secure. Covid has shown us why.

 

Hi Inertia - your experience sounds very similar to mine. My interest in investing started when I was on maternity leave after our kids too. My husband and I both work part-time to try to maintain a balance between work and home and the idea of investing and attaining another source of income has played into that.

My husband is more financially conservative than me. I feel as though I like to think big picture and he likes to think details. I guess both are important. I am also lucky he is a good saver - better than me. My saving has improved through Covid though.

While we have bought into a business (there are several owners) the business is related to my husbands profession. My husband has a role in the management of that business but I am not involved. My husband's family similarly are not business people so this has been a whole new experience for my husband. He is enjoying it but it helps that the business was already established with processes in place, has a manager etc.

I like the idea of starting a business but I don't know what I would start. I think that is where having family members or friends in business would be very helpful. Ideally, I think I would like to manage small property developments just for our immediate family if we have the money (we have only just started one where we have a company managing the process). At the moment I do not have the knowledge or confidence to do this but may explore this option more when the kids are older.

Wishing you all the best for the future

 

Hi Spludgey - I agree with you that it is important to make your own decisions in life and have your own goals and purpose. I guess what I was trying to say is that sometimes the values of my family have influenced my own values (sometimes subconsciously). This in turn has meant that I have made choices that follow a similar path in some regards. I expect this is something that happens in a range of families. It has certainly impacted on the way I view job security and investments although this is starting to change as I get older.

It is interesting how family values impact in various ways (eg. many families seem to have similar political beliefs etc). I have found it is not until later in life that I have really started to question some of my assumptions and values regarding job security, money, investments, risk etc.

Even with a loving and supportive family like mine, I think it involves stepping out of the comfort zone to depart from what is the norm in a family and that in itself can be a bit daunting. This is where I imagine researching and networking with others to gain a broader perspective is important

 

Thanks Spoon. It is working at the moment (both my husband and I work part-time though) and would like to be able to maintain this for a while if possible so are looking at other income sources. I agree with you that even in the public service jobs are not always secure.

 

How has family influenced others approach to investing, money etc?

 

My parents made some very poor financial decisions and when teens, my brother and I both decided that we never wanted to be like them. Brother and I are very different from each other but still way more financially savvy than either of our parents. My husband and his siblings are also a complete mixture of financially-aware individuals who have each watched their parents' financial mistakes and gone along different paths.

I want to add that I believe personalities play an important role in how we develop financially. Some of us are emotionally stronger than others, and therefore more able to cut those emotional apron strings. Others don't have the strength or fortitude to make our own paths and willingly go along with whatever path is laid before us.

 

Hi Angel - that’s great that you have learnt from your parents mistakes and are ensuring you don’t repeat those.

Yes, I think you are right that personality type does play a role with investment decisions and whether you follow a similar path to your family.

 

My folks are public servants. They have their PPOR (paid off) have several IP’s in Sydney (all + cashflow), not so much in super (as they came from an era where super wasn’t compulsory, and chose to only commit minimum payments to focus on paying down PPOR debt). They weren’t on big incomes, but were excellent savers. During the last 10 years, they have travelled extensively, but were quite frugal in the early days.
Advice I was given was:
1) go to uni and get a job in the public sector (job security)
2) buy house and start investing in property
3) contribute minimum super to focus on paying off PPOR
4) don’t buy shares

I somewhat followed their advice.
- I went to uni, but work in the private sector- less job security, but you get rewarded for performance, so my pay is well over what a public servant would typically get in the same timeframe.
- I bought my PPOR and have invested in regional areas instead (can’t afford Sydney; they agree they had it easier buying in Sydney- no APRA and lower wage to house price ratio)
- I max out my super contribution (believe it’s important for retirement)
- I buy shares outside of super

I’d say the most important thing I learnt from my folks was 1) how to save and 2) choices can be made to make your money go further.

 

That’s very interesting Shazz. All the best with your future investing