I've debated posting this for days now because of potential backlash. I just got done talking to my mother about this, since she knows them, and we're both mystified by this. Some hippy friends of ours are poor and can never afford to do anything with their kids, like send them to camp with our kids, etc, and we're always doing something with them and their kids come over and play with my kids a lot and are amazed at the number of books we have, etc. Great people, but they're always asking me this or that. I like being the small fish in the big pond and like learning from people, so being asked a lot of questions is sort of weird to me. They own their own company and it's ok, but they never end up working that much. Let's say they probably work as $200 per hour consultants 2-3 days a week. But they're great people and great friends and a lot of fun to be around.

Well, they're moving, dang it, and I was talking to them about their house- sell or rent, you know? and the wife tells me they will rent it out. I told her I was always interested in investment real estate and I'd love to share what I read, and she blurts out, "don't worry, we have 5 rental houses [here in the city]."

I am going to go as far as to think that she means 4 hours plus the one they own, 6 houses would be mindbending.

a house where I live generally goes for about $500k right now. The house they live in is definitely $800k plus, but I presume the houses they're renting out aren't that nice.

I asked her what they thought they'd rent their place out for and she said that their house can be split into two apartments and rent for $4000 total per month. I had no idea they had a second kitchen in their house, but they do. Let's say they have 5 houses and rent all the apartments out for $3000 per month average, that's still $15k per month or a gross of $180k per year. Even at $2500 per house that's $150k.

Now, they're always asking me questions about life and achievement and education and the like. We had this long conversation about saving for their kids' college fund, which they hadn't started. They never let on, even remotely, that they were clocking $100k+ in rents.

I will quote my mother on this: "I spent all this emotional energy helping along these nice people and all this time they had 5 houses to your one house and never said a word." The unspoken word was basically, why were they looking for support rather than offering more support. Honestly, the next time the mother tells me that she wants someone to watch her kids while they go out, I'm dang tempted to just give her the name of our babysitter, because my mother ain't volunteering.

How does that reflect a millionaire mindset? How does my reaction reflect scarcity? Would you go out and request help from everyone knowing you could be independent and do it yourself or is the only reason they were able to afford 5 houses is because they've always scrimped and gotten by with free help from others? Because I'll tell you right now that I would not spend much time asking for free childcare for my kids and always just spend $15 per hour on the teacher we know who sits and reads to the kids and does art projects because we know she's the highest quality, even when that makes a $50 dinner cost $95 for 3 hours.

Because the flipside is this, my son is in a camp now that has morning and afternoon swimming lessons, sports, art, weekly field trips and volunteers from all over and it's totally transforming him. But, with both kids in activities that's $2k per month and everyone in the camp talks about the same thing- saving up cash, but it's worth it when you see your kids show Grandma Wednesday's swimming medal. And some of these people in camp are country club lawyer types, it's no scarcity camp, it's the real deal. but if i took that away from my kids, could I afford a downpayment on a second house?

Some people are givers and others are takers regardless of whether they are rich or poor.

As for their kids college fund, this reminds me of my cousins. My uncle got bitter about having paid so much for his eldest daughter to go to college that he decided not to pay for his younger two daughters to do to college. One of them wanted to be a doctor so my mom ended up paying for her to go to college and the cousin is now a doctor. My uncle has never even thanked my mom for that and for my college graduation all I got from them was some stupid book they bought at Sam's club. Now keep in mind, he is not poor. Just stingy.

My mother may have summed it up best when she said, "Your problem is, Silver Surfer, that you don't ask us for help. They clearly asked their parents for money. We can pay for your to get your backyard landscaped."

So I responded, "Would you co-sign a loan for us so we could by a rental property instead?"

My mother responded, without skipping a beat, "Someone told me once that [my mother's family] is specifically unsuited to commercial industry."

Which is her way of telling me "No."

Some people are givers and others are takers regardless of whether they are rich or poor.

As for their kids college fund, this reminds me of my cousins. My uncle got bitter about having paid so much for his eldest daughter to go to college that he decided not to pay for his younger two daughters to do to college. One of them wanted to be a doctor so my mom ended up paying for her to go to college and the cousin is now a doctor. My uncle has never even thanked my mom for that and for my college graduation all I got from them was some stupid book they bought at Sam's club. Now keep in mind, he is not poor. Just stingy.

Yeah, my father yelled at me about the $15k he paid for my college education not too many years ago.

My wife is the total opposite of stingy. She grew up with no money at all and helps out people to a fault- to the point where it annoys me. she's the person who will tip deliverymen who carry things all the way upstairs. I used to give those guys sodas and that was a step up from my father.

The issue to me is that tipping someone bringing in a couch $20 never seems to come back to me in any kind of karma. My wife isn't making more money and the furniture still gets damaged in delivery. The money just goes away. I come home and say, why is there a rip over here in the stitching on the couch and the company's all like, "you're wife signed that it was ok" and she's like, "I tipped those guys!"

[makes some kind of muppet noise.]

I send my kid to camp and my kid is ecstatic and I feel homey and comfortable. I buy a rental and my kid might be stir crazy and spazzing out, but I can order in pizza from the rent money!

(please note that actually I'm the one who travels all the time for work, while he's the guy who's home during the afternoons.)

Just keep talking and thinking, SS. 'Sounds to me like you are discovering your own values in a new area of competence. The difficult part of this is that coming up with your own values - judging things to see how you value them - leads you to judging others. You will, and that's okay. You will lose some friends and gain some friends as you settle your mind.

It's called Growth!

I would say that most important to find out what your values are.
As to the situation, you said that those rich folks are not sending their kids to camps and stuff. That could tell you something right away. Every person has their own values, and they live by their values. The question is, can you understand those people? If yes, good. If not, that probably means that they don't worth to get into relationship with.

Yes, real bummer there when you think you've been helping someone out but end up feeling like you're being taken for a ride. Have you considered that these people might actually be cash poor with debts to pay, (like backlogged taxes or ex spouses up the wazoo), or perhaps they use it all for drugs? At least then the poverty you see would be real. Just a possible other angle.

but if i took that away from my kids, could I afford a downpayment on a second house?

I've always considered that one of the main points in having money and resources is so that you could get your kids off to a really good start. If you share that value, does the trade off make sense then?


PS: I wouldn't worry about all the questions they fire your way. That's just some people's way of showing interest. For others, it's a style of relating to others. Others see it as the best way to learn anything...

I wouldn't feel bad, I've had similar situations. Even back at Uni, I had one friend in our group who was always crying poor, never chipped in for food or petrol, never brought a beer to a party. It turned out he and his family was loaded, and he was spending his money on luxury things for himself. I had a big problem with this, till I realised I was simply jealous of his "stuff", and that I was simply a generous person. I could always decide to start being more selfish if I wanted to!

In the years since, it turns out he hung around me because I had lots of friends, had a good time, and wasn't stingy like "his crowd". We had a good heart to heart not so long ago, and he was oh so lonely despite being in a world of people, leading what would outwardly appear a magic life. Lots of "stuff".

I'm sure he owns a skyscraper by now, and I own a fraction of an average house, but man, on my deathbed, I'm gonna enjoy my life all over again.

As I go to meet my maker, give a rats arse if the backyard was landscaped or not!

Rejoice you are a generous spirit, it's why the universe is generous back, and I'm not talking money. Work out a plan to get some of your own stuff, and stop comparing yourself to "the Jones's". THAT is scarcity. It's also very normmal. Also you're expecting a karmic return, and that isn't generosity, that's trading. Something to ponder my silver friend?

You want to die knowing you have 5 investment properties, or that your kids got to have experiences like camp? No brainer for me!

You want to die knowing you have 5 investment properties, or that your kids got to have experiences like camp? No brainer for me!

I agree!

Keep in mind that having a potential to make money is not anywhere closely to making money. Correct me if I am wrong, but those neighbors never said that they made good money, it was just revealed that they could, and at the same time we just assumed that from all that property they could make some good income.

Those hippy guys can simply be bad with any finance or greedy bastards. Anyway around I do not like them! :hopeless:

Wow, that's totally crazy. What good is being loaded without being able to create amazing experiences like the kids having fun at camp? On the other hand, did someone die within the past year and they inherited all those properties?

Every can get rich depend on attention, mind, courage.

Owning rental property doesn't mean they have cash. My guess is they don't have a lot of extra money. Unless they own those homes FREE AND CLEAR, they have a mortgage to pay on those 5 houses. Don't let the fact that they own property fool you. They may very well be in trouble financially.

From what you say....My guess is that they bought those properties with very little down when everyone was handing out loans. Which made it easy for people to buy multiple properties. Really.... It all comes down to the types of loans they got on the properties.
At any rate, I would be surprised if they are "banking" a lot of money off those rentals. They may just be getting by... if that.
Plus, depending on when they bought, they might be under water on those things with no chance at turning them around. You just never know.

From what you say... it doesn't sound like your hippy neighbors are doing well. Someone who is doing well in the rental real estate market will have extra income. Especially off 5 homes.

A lot of un-savvy real estate wannabe's tried their hands in the industry when it was hot and got severely burned. If your neighbors didn't know EXACTLY what they were doing. Then they are in trouble now.

If your paying 2,000 per month on your children's activities with no money left over for investment. Why don't you just cut some partial programs, or shop around for cheaper programs so you can save some cash. 24,000 p/year is a hell of a nut for a kids activities. IMO that is exceedingly expensive for anything less then a college education.

As an aside, my original post is several years old. The family moved and own a $1 million plus brownstone in Brooklyn. I cut them off.

We believe now that they also own a ski cabin in Colorado.

Potentially they always took their money and put it into real estate, then made deficits other people's problems.

I had a very interesting conversation with a mutual friend last month. He knew these people, but talked about another family who he had the same problem with. Family never throws birthday parties for their kids but Mom was a nationally famous author whose book was made into a hit movie. He figures they just have a ton of money in the bank and that their complaints about money aren't based in the same reality that everyone else's is.

Kind of like... at my age I should have a $1 million IRA but I don't, I'm about half that, but then you talk to someone who has a $100k IRA and you're like- do you really consider that saving? He figured that their version of reality was just radically different than ours.

To Real Estate Guy:
$2k per month on children's daycare and activities is nothing. I don't know when you've last checked numbers, but the prep ELEMENTARY school I'd like to get my kids into is $38,000 per year or would be over $70k for both kids. Summer camp starts at $300 per week and the best ones are at $500.

For instance, our boy scout troop last year estimated most parents spend about $1000 on scouting for the year. I spend about $1000 on my kids' PTA alone because we pay the salaries for the math tutors and robotics instructors which no school system is going to fund. Start adding that up.

I live in a rich neighborhood.

hi,
no doubt its true. and i love this.

This situation if happened to me would have left a sour taste in my mouth, but at the same time I always look for ways to turn unpleasant feelings or surprises into something worthwhile. I don't condone their over the top frugal attitude. I have children and there's no way i would have denied them those things you pointed out, knowing full well i had the means to let them participate in those activities. It's one thing to be a secret millionaire next door, but it's not OK to take time or material things from others knowing you can attain those things for yourself, or better yet knowing you could be reciprocating the favors. I call that using someone no matter how innocent.