Building wealth has gotten harder for most people in recent years. But the habits that can make you rich haven’t changed.
It boils down to this: putting aside money, regularly and consistently, that can be invested for your future. You have to leave that money alone to grow, which means you also need an emergency fund. And you must be careful with debt, because the wrong kinds can erode your wealth rather than build it.
It’s a simple formula but one that’s become increasingly hard to implement as incomes stagnate and prices rise. A shocking number of American households — nearly half, by the Federal Reserve’s last count — don’t have enough savings to cover an unexpected $400 expense. Our inability to save has contributed to a 21 percent decline in household median net worth between 1998, the year median incomes peaked in America, and 2013, the last year for which Fed stats are available.
Hardest-hit are households in the lower middle class, which in 2013 meant incomes from $23,300 to $40,499. Their net worth fell by half.
In my latest for the Associated Press, how to use the habits of wealthy people to build for your future.
My parents have both passed away from Alzheimer’s and dementia within the past three years. My father had amassed a considerable amount of wealth working for Merrill Lynch, putting large amounts into ML stock – which we know went down the tubes overnight in 2008, and the market was very bad for quite a long time afterward. So, naturally, there isn’t nearly the same amount of cash to be split, or down anything else with.
After my father started showing signs of illness, we began looking for wills. Daddy had a habit we thought was harmless at the time, of sitting at his desk shredding paperwork. When no wills were ever found, we assumed they had been shredded. I am 59 years old, and have been collecting SSI from complications of cancer, and my father subsidized my living expenses thereafter. With no will to be found, the family – me, my mother, and older brother (who obtained POA), agreed that I would receive IRAs, cash left in checking accounts, etc., due to my lack of income. My parents were very concerned that I have enough money to live on. This was talked about with my brother (who has a military pension, as well as a very good income since), and all agreed this was fair.
Around the end of the year, I brought up going thru the furniture, ect., in storage. At was at this time he told me he had disposed of everything – he had POA and could do anything he wanted; he did not need to consult me.
ATwo weeks ago, he told me that among other papers in storage he found the wills – that were signed about 20 years ago. He has yet to send me copies. He’ll get around to it, but he’s busy. For some reason, he won’t tell me name of the funerl home either, so that I can get certified Death Certificates. With that, I can obtain the IRA’s now since they don’t go thru Probate.
The deaths occurred in Virginia, so that is the law that applies here. My brother now says gleefully, that we will abide by the will, and divide all monies equally. I have found a clause in VA law where if there has been a drastic change in circumstances (2008 – several million dollars were lost due to the market and ML takeover), then the previous will would be invalid. The “family agreement” made to take care of me in my later years (I never married), was known to a few family members, but I suppose it boils down to he said/she said, and nothing was in writing.
I don’t trust my brother; I believe I should have an atty get an accounting of the cash he was in charge of; have the will’s validity looked into, and if I would come out any better one way or another. ( He says he’ll take his 1/2 and put it way for his almost grown children. My father started accounts for them when they were born.)
It was my parents’ wishes that my brother take care of my mother and me after he was gone. He wrote checks to keep her in her assisted living home, while at the same time literally emptying her room of any summer clothing – leaving her with a handful of sweatshirts. I visited every two months, and in June spent most of a day buying her summer-weight clothing to live in. He visited her on Sundays for 1/2 hr – there is a check in book at the living facility, so I could see how much time he spent with her.
My brother is eight yrs older than I am. Needless to say, we spent our lives not getting along – but I never expected for him to treat/cheat me like this. This is not how we were brought up
In all this rambling mess of an explanation, can you give me any advice on how to proceed. I live in South Carolina, so would have to travel to Virginia to meet with a local attorney.
You’re right that these are legal issues that require the help of an attorney. Probate cases would need to have been opened for both your parents and the executor (presumably your brother) would need to account for the estate to the court. That’s also where any challenges to the will would be heard. If the IRAs listed you as a beneficiary, those should pass to you outside probate.