Should I tell my parents that I am a millionaire when I am 22?

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Dear Petunia,

I became the first millionaire in my family. I want to know if I should tell them or how I will bring it up.

I’m 22 years old. I’m not sure how my parents will feel if I tell my parents my wealth but don’t use it on them, because most of it is related to investment. Any suggestions on what I should do and whether I should wait?

-M.

Dear M,

You are an adult. You do not need to show your brokerage statement to your parents. When you join two comma clubs, the rules will not change.

But I also know that you might want to share this news with your parents. Becoming a millionaire at the age of 22 is a huge feat. Naturally, you want to make your parents proud and tell them that you have made a fortune.

Obviously, we all want to know what you did to accumulate so much wealth when you were young. It doesn’t sound like you bought a winning lottery ticket. But no matter how much discipline you need to become a millionaire, people may treat you like a winner. The golden rule for lottery winners is always to keep as secret as possible.

In other words, I will not assume that your parents will automatically want you to bathe them in cash. Of course, some parents may treat their child as an ATM machine that can walk and talk. But I suspect that many people just want to make sure that their children continue to use their money to continue making wise decisions.

However, when others realize that you are busy, even if you are surrounded by well-meaning people, there will be pitfalls. On the one hand, people have a lot of opinions on how you should spend your money. Even well-meaning family members do not always give good advice. But perhaps the greater danger is that when others know that you are rich, you will feel pressure to act like Rich.

Becoming a millionaire and keeping a millionaire are two very different goals. If you can avoid acting like a millionaire now, your chances of achieving the latter will be much higher.

It is wise to meet with a financial adviser who only charges a fee to review your investment. Just charging means they get paid for the services they provide you, not commissions. They must act as your trustee, which means they must act in your best interest.A great resource for finding a fee-based consultant near you is National Association of Personal Financial Advisors website.

You can discuss your goals and ensure that your investment is appropriate. Your consultant can help you solve the not-so-fascinating parts of becoming a millionaire, such as ensuring that you have adequate insurance so that your wealth is not at risk.

I assume that a large part of your first $1 million comes from investment. If this is correct, please note that the stock market returns we have seen since March 2020 are not the same as experienced investors have seen in their lifetime. It may take longer to earn the next $1 million.If you are one of the many young people who have made amazing wealth in high-risk investments, such as emoji stocks or Dogecoin, Understand that today’s $1 million may be worth much lower tomorrow.

Once you have developed a solid financial plan, you will naturally start Upgrade your lifestyle a little bit. If your parents see that you have bought a beautiful house or spent an expensive vacation, they will be able to conclude that you are doing well. If you handle your money responsibly, it will be a gradual improvement, not an overnight change. If your parents ask questions, you can share as much as you want.

After all, the conversation you need to have with your parents is not about your financial situation. This is about them. Try to discuss with them their preparations for retirement. If you feel that they are not ready at all, you will not cash out all your investments to save them. However, at some point, you may want to start setting aside some money so that you can help them if necessary.

At 22, the best thing you can do with a million dollars is to buy yourself freedom, not things. Life will be much richer when you can make decisions based on what you want instead of how far you can extend your salary.

Reaching $1 million is a huge victory, but it is also somewhat arbitrary. Try not to make your entire identity depend on becoming a millionaire. Focus on your overall goals, not your net worth on any given day.

Robin Hartill is Penny Hoarder’s certified financial planner and senior writer.Send your tough money questions to [email protected].


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