I had an awesome Saturday this weekend at Huw’s FIRE Escape meetup in Devizes. While being a great opportunity to finally meet some of the many faces behind blogs I regularly follow and hear some of their stories first hand, it also provided a rare opportunity to discuss personal finances and early retirement in an open way I’ve found impossible to do elsewhere. If the British are infamous for being reluctant to discuss money, even basic personal finance areas.. it’s downright impossible alot of the time to even touch on the subject of early retirement without being branded a lunatic, or worse.

Interestingly, from speaking with many of my fellow FIRE attendees, it certainly seemed that a majority of them shared the same view that they often found it difficult to discuss this area of their lives with others. Some (including myself) even going out of our way to hide our long term financial and lifestyle plans from friends, family and colleagues. We started discussing our own circumstances and reasoning behind it which made me realise that the concerns I’ve personally had about discussing financial plans with others are often the same concerns others themselves have.

Ultimately I think we were able to group most of the concerns into a few key areas and who they commonly applied to. I wonder how many others also have these concerns and actively avoid discussing their finances with specific people?

Work Colleagues

By far the most common concern amongst the group was work colleagues (included bosses) finding out about the early retirement plans. I can recall only one person saying they openly spoke about their early retirement plans with their boss, while the rest of us either avoided mentioning anything to do with it or even going as far as to present the image that we’d love to continue working and progressing within our companies right up until state retirement age. The reasoning is obvious: Despite the times of someone working at the same company for 40 years being long behind us, many organisations still like to think they are able to retain staff for their entire careers. Every interview I’ve been to have always asked “Where do you see yourself in 5 years?” to which they expect a reply along the lines of “Progressing within this company”. This is despite 1 in 4 graduates quitting within their first year and the common advice that to maximise salary increases you need to swap jobs (or threaten to leave) every few years. Anyone not seen to be wanting to stick within the company for the long haul is likely to see themselves passed over for promotion or slowly pushed out the door.

Another reason someone mentioned avoiding discussing finances with work colleagues, and one that I’d not even considered before, was the potential for other team members to react negatively to your financial situation. They mentioned that although they published their expenses every month and discussed income in brief; they specifically avoided going into detail on income in the way that I do so that any work colleagues reading the updates would not be able to calculate their salary/bonus/commission. The reasoning for this was so that work colleagues would not attempt to benchmark their work compensation package and potentially lead to resentment or trouble for the management as multiple team members suddenly start knocking on the door asking for massive pay rises.

My advice: Don’t discuss personal finance with anyone from work, ever. I had a work colleague who showed interest in personal finances and early retirement so I steered him towards some other blogs without mentioning my own.

Family

Another common grouping and one that I’m very familiar with was discussions with close family. In the past I’ve had to bite my tongue as I watched family members making poor financial decisions, and it seems a number of other attendees had been in similar situations. Unlike discussions with work colleagues or friends, talking about finance with close family members has a real emotional attachment and one which can be difficult or impossible to separate yourself from.

When I’ve heard about the financial problems of family members in the past, my immediate response has always been to consider what help I could offer them and naively; how much money could I lend/give them to help out. The Millionaire Next Door went into great detail of what they called Financial Life Support given amongst family members and the many issues it presented. Primarily; by offering handouts to those in financial difficulty you artificially maintain their poor habits and decisions without providing any influence to change. What was seen as a charitable and good involvement often lead to financial dependence and even worse financial habits.

While I’m not saying you shouldn’t help out family members in need of assistance, instead consider whether it may be better if they resolved the issues for themselves and suffered a temporary setback which eventually strengthens them in the long run.

My Advice: Offer guidance when asked for it, but don’t continually offer hand-outs.

Friends

We’ve all got friends who are bad with money; who see their monthly income as a monthly spending goal and who would rather plan next Friday’s night out instead of paying off the mortgage. While many people are interested in finances and go to great lengths to organise their own spending.. the same amount if not more have no interest in it whatsoever. Trying to discuss finances and early retirement with people like this is at best going to be ignored.. while at worst viewing you as a walking cash machine.

Almost everyone I spoke to at the meet-up mentioned a friend they had who was bad with money and always complaining about it, yet took no steps to change their spending habits. Many people I’ve spoke to with this mindset will talk about their finances purely as a reason to rant about how unfair their situation is and how lucky I am to be in my own. While they moan about being unable to afford this month’s rent whilst playing on a brand new games console (true story), you can only smile and nod in return. The truth is that often these types of friends don’t actually want to be helped.. they don’t want to hear about your well-organised finances or how they could sort their own out. If they did; they’d no doubt have turned to Google long before and asked the questions themselves. Saying that; some friends will no doubt love to discuss actual finances with you, to ask for tips and share their own. It’s one of the best ways to get real life knowledge first hand from people who have been there and done it themselves. When we were looking to purchase our first house I purposely went to all of my friends who had done it before seeking advice and all of them were more than happy to go into details around the finances involved.

The difficulty then is ultimately identifying which friends genuinely want to discuss finances and which are just looking for someone to have a rant at.

Also of great concern was certain friends identify your good financial position with envy. It’s an ironic situation that people generally accumulate funds by not spending, and yet by having these funds are then expected to spend more of it. If your friends know you’ve amassed a decent chunk of investments paying a healthy dividend each month, it may only be a matter of time before you’re expected to pickup the meal tab for everyone as you can afford it more than they can.

My advice: I try to let friends start the discussions around finances. If one of them mentions they’re looking to save for a house deposit or confused about workplace pensions I’ll mention that I’ve just gone through all that and would be happy to answer any questions they may have.

Have you had a bad experience discussing early retirement or finances with someone? Do you actively avoid discussing it with certain groups for any of the same reasons I do, or do you perhaps have other reasons?