Average American Inheritance, By Wealth Level

Average American Inheritance, By Wealth Level

Eric Reed  Fri, July 7, 2023

People inherit less than you might expect. In fact, most people think they’ll inherit far more than they really will.

If you do inherit money, it most likely won’t be subject to federal estate taxes. In 2023, those apply only to estates worth more than $12.92 million. But very few households have that level of wealth and most people inherit nothing at all. Here’s what the inheritance landscape looks like, according to the Federal Reserve’s most recent Survey of Consumer Finances from 2016 to 2019. If you need help with your estate plan or have received an inheritance, consider working with a financial advisor.

Why the Average Inheritance is Misleading

What Is the Average Inheritance?

On average, American households inherit $46,200, according to the Federal Reserve data. But this figure is inflated by top-tier wealth and belies the fact that many households inherit no money at all.

Of those that do receive a bequest, most receive a small fraction of the average. The top 1% and 10% of households by wealth receive so much that their estates pull the average up. This creates the impression that many, if not most, households receive a comfortable nest egg. Very few actually do.

While less than a third of all households inherit any money, between 70% and 80% of households receive no inheritance at all.

Average Inheritance By Wealth Level

What Is the Average Inheritance?

A consitent reality with inheritance is that almost all households who receive an inheritance expect more than they get. This may have to do with the prominence of estate taxes in the national debate, which creates the impression that inheritance and estates are a matter for ordinary Americans. Here’s a look at how much households with varying levels of wealth inherit.

Top 1%     Average inheritance: $719,000     Expected inheritance: $941,100

Measured by wealth, the top 1% of households receive overwhelmingly more than any other group measured. This is what causes such dramatically skewed data when it comes to measuring averages. This group receives more than four times as much as the next wealthiest cohort.

Next 9%   Average inheritance: $174,200   Expected inheritance: $266,600

To continue reading, please go to the original article here:

https://finance.yahoo.com/news/average-american-inheritance-wealth-level-130120356.html

End-of-Life Planning for Your Home

End-of-Life Planning for Your Home

Alexis Bennett

Ever thought about what will happen to your home after you shuffle off this mortal coil? Sounds a bit dark, right? But let’s face it, planning for the end of life isn’t just about wills and funeral arrangements. It involves a lot more, including what’s going to happen to your beloved abode. Whether you’re living in a classic mid-century, a cute little bungalow, or a chic apartment, it’s essential to include your home in your end-of-life planning. And that’s what we’re going to discuss today. Sit tight, because this might just be one of the most thought-provoking, life-changing articles you’ll read in a while.

Why Should I Include My Home In End-of-Life Planning?

The first thing you may be asking is “Why should I care for planning the end of life of my home?” We all have at least a baseline understanding of the effects a loved one’s passing can have on the entire family. Studies have found the death of a family member can seriously impact the remaining members, especially when it comes to dealing with what’s been physically left behind.

Let’s look at a well-known example. Remember Aretha Franklin, known as the Queen of Soul? She wasn’t just a singer and songwriter but also an influential civil rights activist. Her vibrant career spanned many decades, enchanting the world with her soulful music.

But here’s the kicker: when Aretha passed away in 2018, she left behind a valuable estate but no will or trust to guide its distribution. Her family was left in a whirlwind of legal and financial chaos, along with the emotional pain of their loss. What a mess.

By including your home in end-of-life planning, you’re not just checking off another box on your to-do list. It’s more than that. It’s a gesture of love and kindness towards those who will mourn your loss. By taking these steps, you can ease their legal and financial burdens and prevent any added stress during an already tough time. Plus, it ensures that your wishes for your home are respected, offering a sense of peace to everyone involved.

What we really should be asking ourselves is “Why wouldn’t we include our homes in our end-of-life plans?” It seems like a no-brainer when you look at it like that. But what’s involved in considering your home and the things in it after you’re no longer here to care for them?

Legally Prepare Your Home

To continue reading, please go to the original article here:

https://todayshomeowner.com/home-finances/guides/end-of-life-planning-for-your-home/

Lending Money To Family: 10 Pieces of Advice for Setting Boundaries

Lending Money To Family: 10 Pieces of Advice for Setting Boundaries

June 27, 2023 by Saad Muzaffar

Hey there, moneybags! It’s time to get your financial act together and be mindful of your own situation. If your family hits you up for a loan, how do you set effective boundaries with them? After someone asked for advice, I grabbed the ten best tips from the discussion to help with the situation.

1. Know Thyself Financially

Consider letting the person know clearly if you cannot lend money. However, remember that you are not obligated to lend money, and it is okay to prioritize your own financial well-being.

You can always be transparent by admitting destitution. Someone rightly mentioned that people are less likely to ask a favor of you if you yourself are in a pickle.

 2. Take Care of Your Heart

Many people discussed how lending money caused extreme distress or even depression. One user recalled being severely depressed when their relatives did not return the favor. Remember to view your time and energy as finite resources.

3. When in Doubt, Fib it Out!

Remember that a little white lie can go a long way if you’re in a real pinch. As someone suggested, tell them you’d help if you could, but unfortunately, you’re currently living like a pauper.

So, technically, you are just being honest about not having a surplus after you’ve allocated your finances to your primary areas of expenditure.

4. Set a One-Time Gift Amount

Consider setting a one-time gift amount with the understanding that they can never ask for money again. Now, remember that you have to be strict with this boundary.

As one person mentioned, if you have lent them money despite their continued violation of your boundary, separate your feelings from the matter and put it to a stop.

5. Don’t Mingle Love and Loans

To continue reading, please go to the original article here:

https://investedwallet.com/lending-money-to-family-members-advice-boundaries-set/

One of the Toughest Things to Master for Your Financial Health

One of the Toughest Things to Master for Your Financial Health

by Todd Kunsman  Financial Health

When it comes to your life, you want to stay physically and mentally healthy. And this also applies to your personal finances, which is commonly called your financial health.

While your physical and mental health is far superior to your financial health, it’s still crucial to work on this too. And as I know and you may too, finances can cause some serious stress. That financial stress can then put a toll on your body, mind, and relationships.  Yet, when it comes to your personal finances and financial well-being there is one area that is critical to master: self-control. The challenge is, it might be the toughest thing to be consistent with throughout your lifetime.

What is Financial Health?

Before we get into how self-control affects your financial health, I think it’s important we are all on the same page on the definition.

Financial health is the term used to describe your own personal finances and how healthy it is. This includes things like how well your saving, what you put away for retirement, how little debt you have, etc.

There is a bit more to it than that, but for the sake of this post, we’ll keep it that simple.

Why Self-Control Matters to Your Financial Health

As I mentioned in the introduction, I think self-control is one of the toughest things to master for your financial health.

Your ability to control certain desires or urges with your money, can really determine your overall financial stability and results in the long-run.

It’s also incredibly challenging, especially if you are just starting to take control of your personal finances.

I see a need for discipline and self-control in four key financial areas:

To continue reading, please go to the original article here:

https://investedwallet.com/your-financial-health/

8 Ways to Prepare and Protect Your Money

8 Ways to Prepare and Protect Your Money

Experts Explain Hyperinflation and 8 Ways to Prepare and Protect Your Money

September 27, 2022 Financial Pilgrimage

Imagine a world where money is worth practically nothing, and the costs of goods increase rapidly, doubling and tripling day after day. This situation might sound like a fictitious movie plot, but it has happened many times before in our world. It’s called hyperinflation, and it can wreak economic devastation on people.

Right now, the increasing prices of goods and services across the board have already stretched people’s budgets. That’s just called inflation. But during hyperinflation, things would get dramatically worse. While the odds of this happening in the U.S. are small, there is no better time to get your financial house in order.

Financial planners and experts share their best tips and personal finance advice to prepare for any economic scenario, including hyperinflation.

But First, What is Hyperinflation?

Inflation can signal that an economy is growing and demand for goods and services is rising. However, hyperinflation is not just about high growth in the cost of goods.

“The biggest misconception about hyperinflation is that we’re in it now,” said Mike O’Leary, co-host of early retirement and frugal living podcast Friends on FIRE. “Economists typically define hyperinflation as a month-on-month increase of 50% or more. We’re currently experiencing an uncomfortable but fairly normal inflationary cycle.”

Why Does Hyperinflation Occur?

Hyperinflation is complex. There are many reasons why hyperinflation could occur. Every country’s economy is different and has its own unique path that could lead them down into this nightmare scenario.

However, common underlying causes of hyperinflation include:

A rapid increase in the supply of money without a currency backing such as gold

A rapid rise in the demand for goods and services

In the past, some governments have rapidly increased the money supply by printing money. Hyperinflation occurs when excess money is rapidly added to an economy, such as Brazil’s 1995 hyperinflation. From 1985 to 1994 prices rose by a mind-boggling 184,901,570,954.39%.

Common Hyperinflation Misconceptions

To continue reading, please go to the original article here:

https://financialpilgrimage.com/hyperinflation/

Wealth & Income Are Not The Same

Wealth & Income Are Not The Same

Hillary Hoffower

 A woman who studied 600 millionaires says there's a misconception about wealth that just won't die

Wealth does not equal income, but people often mistakenly think they're the same thing.

Wealth is the net worth of a household, whereas income is what's reported on an income tax return.

Being rich isn't about how much money you make or spend — it's about how much money you keep. ...

There are a lot of myths about wealth, but one seems to strongly persist: The idea that income equals wealth.

"It continues to be the assumption of those who increase consumption as their income increases that they are the same," wrote Sarah Stanley Fallaw, director of research for the Affluent Market Institute, in her book, "The Next Millionaire Next Door: Enduring Strategies for Building Wealth, in which she surveyed more than 600 millionaires in America.

She added: "And believing this myth gives the false perception that those who appear to be rich (neighbors driving luxury cars or friends in $200-plus jeans) are wealthy when in fact it only means they spent more than real millionaires on these purchases."

Point blank, income and wealth are not the same thing.

Wealth refers to the net worth of a household, i.e. all of its assets minus of all its liabilities, Stanley Fallaw explained. Household income is merely realized income to be reported on one's personal income tax return.

Even the Tax Foundation gets it wrong, referring to "millionaires" in terms of their income tax returns versus their net worth, Stanley Fallaw said. In reality, a millionaire's income is only 8.2% of their wealth, she found through her research.

This myth is problematic, Stanley Fallaw added, because it "distorts" the numbers people focus on when trying to achieve financial independence.

Wealth isn't about how much money you make or spend — it's about how much money you keep

To continue reading, please go to the original article here:

https://www.businessinsider.com/difference-between-wealth-net-worth-income-2019-1

Keep These Financial Records in Your 'Go Bag'

Keep These Financial Records in Your 'Go Bag'

Lisa Rowan

But even if you don’t live in a hurricane-prone area like I do, there’s no excuse for not having an emergency kit ready for the worst-case scenario, whether it be a wildfire or a flood or an earthquake.

Beyond evacuation essentials like clothing, toothpaste and a flashlight, you’ll also want to have a substantial amount of financial information on hand.  This information can help you make payments, access assistance, and otherwise go about daily life during or after an emergency. Since cell phone or internet service may not be available, it’s important not to rely on just having your username and password memorized to access various financial services.

Plus, you’ll need a lot of that financial information to help you rebuild: For instance, you may need to show proof of income if you apply for Federal Emergency Management Agency (FEMA) disaster relief assistance. And the last thing you want to be doing as you’re trying to rush your family out of your house is trying to dig up your last pay stub.

The following are the financial documents you should pack copies of in your evacuation bag.

Identification

Driver’s license and/or passport

Social security card

Birth certificate

 Contact numbers for family, friends or neighbors

School registration forms

Family

Alimony payment agreement

Child support payment agreement and payment receipts

Elder care payment records

Will or trust

Power of attorney

Home

The deed to your house or your rental lease

Home or renter’s insurance policy

Other home loans, like a home equity line of credit

Photos of your property, including photos of valuable items that have separate insurance coverage

Flood insurance policy

Property tax statement

Car

Title or loan records

Registration

Insurance policy  Banking, Investing And Credit Cards

Account numbers, routing numbers, verification codes and institution contact information

Account information for stocks, bonds or mutual funds

Retirement account records

Other Financial Records

Most recent tax return

Employment record (an offer letter or pay stubs) and contact information for workplace

Government benefits documentation (Social Security, TANF, veterans benefits)

Utility account information

Student loan agreements

Cash

Along with your documents, you’ll want to have cash available for expenses if payment systems are unavailable or the power is out. How much should you have handy?

To continue reading, please go to the original article here:

https://lifehacker.com/keep-these-financial-records-in-your-go-bag-1835947477

9 Little Ways to Be Better with Your Money

9 Little Ways to Be Better with Your Money

By Chris Reining

Some random guy from the internet emailed me wanting to meet up. This happens more than you think, and usually I’d say no because saying no to everything was the only way to protect my time so I could focus on my goals in life.  But now that I have my time back I’m starting to say yes. So we meet up and he’s not weird or anything like that, and we talk about a lot of stuff but one thing really stuck out: How broke we used to be.

When you’re in your 30s you start forgetting about your early 20s. How hard it is being an adult and trying to make it on your own. He’s telling me about selling his saxophone for money, and that makes me remember when I had to borrow money for my first apartment.

But here’s the thing. Starting out broke with no money or advantage or anything like that is how you should start out. Because if you’re just given everything you’ll never appreciate what you have. I mean, we all know that spoiled rich kid that doesn’t appreciate anything.

Anyways, I’m going to tell you what I’ve learned about money so you can start using it. Right now. So here are 9 little ways to be better with your money.

1. Increasing Your Value Increases Income

When you’re continually becoming better at your profession what you’re doing is becoming more valuable, and when you’re more valuable people will pay you more for what you do. And you’ll have more options, too. I spent most of my 20s partying and horsing around until I realized if I wanted to earn more I had to become more valuable. So read books, get mentors, and surround yourself with the right people.

2. Start Marrying Together Skillsets

Learn skills like public speaking, psychology, writing, design, conversation, persuasion, technology, a second language. Because when you’ve plateaued in your profession you’re going to need these skills to earn more. This is like the architect who’s a great public speaker and writer. Or the personal trainer with a mastery of psychology, persuasion, and conversation. (Btw, I learned this from Scott Adams.)

3. You Get To Choose Your Lifestyle

To continue reading, please go to the original article here:

https://chrisreining.com/9-ways/

Beware the Advice of the Rich

Beware the Advice of the Rich

Chris Reining

Does it seem like everyone but you is becoming fabulously rich and famous?

It makes for a good story. Someone goes from living out of their car to driving a Ferrari. The problem is when they go on to say their success is a result of their morning routine or this one book they read or some random tactic.

You’ve probably heard business icons or celebrities giving this advice. It typically goes something like: “Look, all you need to do is this one thing, and then you’ll be rich and famous too.”

It’s nice of them to share what worked for them. It’s often useful advice. You can apply the little tip to your life, and see what happens.

But isn’t it like saying if you do a few things Justin Timberlake did to become Justin Timberlake you can be the next Justin Timberlake? (Or LeBron James, Oprah Winfrey, Bill Gates, whoever.)

The point is, if it were possible to rerun history with everything seemingly identical it would generate a different winner each time. Justin Timberlake would become popular in this world, but in another version he’d be a nobody, and someone you’d never heard of would be in his place.

Why? Luck.

Luck is why there’s tons of talented and hardworking people in this world who will never reach the level of success they want, because the level of success they want is maybe half “the things you do” and half luck.

So how do you know which is which. In other words, can you separate work ethic from luck?

To continue reading, please go to the original article here:

https://chrisreining.com/beware-advice/

The Effects of Trauma on Personal Finance

The Effects of Trauma on Personal Finance

Tawnya Redding  02/11/2023  Money Lessons

A plethora of things effect our personal finances and the development of our financial habits.  From family, to culture, to media, to unprecedented global pandemics, our money lives are constantly being molded and shaped by things both within and beyond our control.

While the majority of things that help shape our financial lives are relatively easy to see (but not necessarily to change or resist), there is a silent epidemic running throughout the world. One that affects as many as 70% of people in the U.S.

This silent epidemic is trauma.

Trauma is a pervasive aspect of our society that affects every aspect of the lives of those who have experienced it. Although the link between trauma and personal finance may not be clear, rest assured that it is there.

This article will discuss some of the main effects of trauma on personal finance.

First, we’ll define trauma and its prevalence. Next, we’ll discuss how trauma effects brain development and one of the most eye-opening studies ever done regarding trauma and its effects.

Finally, we’ll conclude by making the connection between trauma and personal finance crystal clear and offer ways to combat its effects.

What Is Trauma?

According to the American Psychological Association, trauma is “an emotional response to a terrible event.” It occurs when the extreme stress of the event(s) overwhelms the person’s ability to cope.

People impacted by trauma often have feelings of fear and helplessness, and their inability to cope or escape the trauma often leads to the development of maladaptive means of coping.

Experiencing trauma can be the result of a one-time event such as an accident, assault, or natural disaster, but it can also be the result of persistent negative experiences such as abuse or neglect.

While not all who experience traumatic events are severely affected by trauma long-term, it is safe to say that the majority are.

As previously mentioned, 70% of U.S. adults (or 223.4 million people) have experienced a traumatic event at least once. Furthermore, 90% of clients in public behavioral health have experienced trauma.

Post-traumatic stress disorder (PTSD) is a common manifestation of trauma and is characterized by flashbacks, nightmares, and acute anxiety.

While most commonly associated with soldiers returning from war, PTSD is far more prevalent in our everyday society.

And one of the most startling populations of victims is children.

Almost all children who witness parental homicide or sexual assault develop PTSD. Furthermore, 90% of those who’ve experienced sexual abuse, 77% of those who’ve experienced a school shooting, and 35% of those exposed to community violence will also develop PTSD.

Aside from the high likelihood of developing PTSD, experiencing trauma is linked to a host of other negative outcomes, especially when experienced in childhood.

Adverse Childhood Experiences (Aces)

There have been a host of studies linking childhood trauma to negative outcomes later in life, but the largest of these was conducted by Kaiser Permanente in the mid-90.

Called the Adverse Childhood Experiences (ACE) Study, researchers surveyed over 17,000 individuals about their childhood experiences and correlated them with later life outcomes.

To continue reading, please go to the original article here:

https://savoteur.com/web-stories/12-scariest-active-volcanoes-in-the-united-states-story/

What Everyone forgets About Money

What Everyone forgets About Money

By Chris Reining

Washing dishes was how I earned my first paycheck. When you’re 15 years old and don’t get money from your parents to buy things then you have to work. So there I was scrubbing dishes in the filthy kitchen of a small family-owned Italian restaurant, and it’s where I learned a little life lesson.

Work is nothing more than trading time for money. A medium of exchange.

You provide one hour of time to an employer and they provide an hour’s wage. I quickly discovered teenager’s time isn’t worth all that much, a measly $4.25 per hour.

Not long after starting that job I wanted this Blind Melon album. You might remember their catchy song “No Rain.” One Saturday afternoon, wandering the aisles in Kmart’s electronics department, I saw it for sale. “Cool, I’m getting it.” The price was $16.98. For whatever reason I did the mental math to figure out the album didn’t really cost me $17.

No, it cost four hours on your feet washing never-ending streams of bus tubs overflowing with half-finished plates of meatballs. “Is this CD worth four hours of my time?”

In this case it was, but more importantly you realize the money tucked in your wallet isn’t money at all, it’s time disguised as money.

In fact, it was Benjamin Franklin who said, “Time is money.” But in our hectic day-to-day lives it’s easy to forget this.

That when you spend your money what you’re really doing is spending your time. Which means if you waste your money you waste your time.

To continue reading, please go to the original article here:

https://chrisreining.com/time/