Author Topic: Millenials success due to rich parents  (Read 23255 times)

MrsMadHobo

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Millenials success due to rich parents
« on: August 01, 2015, 01:50:00 PM »
http://www.theatlantic.com/business/archive/2015/07/millennials-with-rich-parents/398501/#disqus_thread

Yes, our success has nothing to do with choosing sensible majors, working through college to pay tuition, and saving 50%+ of our income...grr, just completely discredits our work.


MrsMadHobo

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Re: Millenials success due to rich parents
« Reply #2 on: August 01, 2015, 02:53:06 PM »
Bah, didn't come up when I searched.

Hank Sinatra

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Re: Millenials success due to rich parents
« Reply #3 on: August 01, 2015, 03:05:46 PM »
http://www.theatlantic.com/business/archive/2015/07/millennials-with-rich-parents/398501/#disqus_thread

Yes, our success has nothing to do with choosing sensible majors, working through college to pay tuition, and saving 50%+ of our income...grr, just completely discredits our work.

It doesn't say that at all. You're being too sensitive. or maaaaaybe  feeling guilty...?  This could be said about X'ers, Boomers, Jonsers, and The Greediest Generation before them. All the way back to the Romans, Greeks, Egyptians and Cave Dwellers.  The one with the richest folks can be predicted  to do better. And don't boar me with personals  like "I know a guy who had poor folks and he worked hard and now he is successful. Not what I'm, talking about.  Rich Folk= Higher potential for success on every planet. Millenials  are no diff.

zephyr911

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Re: Millenials success due to rich parents
« Reply #4 on: August 03, 2015, 10:09:10 AM »
It doesn't say that at all. You're being too sensitive. or maaaaaybe  feeling guilty...?  This could be said about X'ers, Boomers, Jonsers, and The Greediest Generation before them. All the way back to the Romans, Greeks, Egyptians and Cave Dwellers.  The one with the richest folks can be predicted  to do better. And don't boar me with personals  like "I know a guy who had poor folks and he worked hard and now he is successful. Not what I'm, talking about.  Rich Folk= Higher potential for success on every planet. Millenials  are no diff.
Hey now, the other day someone right on this forum insisted that Ben Carson's success invalidates all claims about upbringing as a predictor of life outcomes. It must be true.

EricP

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Re: Millenials success due to rich parents
« Reply #5 on: August 03, 2015, 10:35:21 AM »
Avoiding the privilege discussion, this article has some very Anti-Mustachian stuff in there.  Here are some of my favorites:

Quote
If he or she follows the popular financial advice to save 10 percent of his or her annual pay, itíll take him or her about eight years to have that down payment ready to go.

What "popular financial advice" are they talking about.  Dave Ramsey says 15% to Retirement savings with any other savings being on top of that.  (Although I think he will sometimes advocate saving for a house down payment before retirement savings, "Baby Step 3B" I believe) And the 50/30/20 rule is incredibly common one as well.  10 percent seems like a purposefully low number just to make it seem like saving for a down payment is impossible.

Quote
While many remain skeptical about the real-estate market, homeownership is still the primary way that Americans build wealth.

I think we've debated this many many times over, but people should definitely be building wealth outside of an illiquid house that they need to live in.

So, how about instead of beating the dead horse of the privilege debate, let's stick to pointing out anti-Mustachian ideals found in this article.

zephyr911

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Re: Millenials success due to rich parents
« Reply #6 on: August 03, 2015, 10:38:13 AM »
Quote
While many remain skeptical about the real-estate market, homeownership is still the primary way that Americans build wealth.
I think we've debated this many many times over, but people should definitely be building wealth outside of an illiquid house that they need to live in.
You seem to be comparing a descriptive statement (about present reality and recent history) to a prescriptive one. Am I mistaken?
Obviously, I agree with you on the "should", but if the article is saying that homeownership has been the primary vehicle for wealth accumulation and skeptical Millennials could miss out (and thereby do even worse), that can also be correct (and compatible with your comment).

EricP

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Re: Millenials success due to rich parents
« Reply #7 on: August 03, 2015, 10:47:57 AM »
Quote
While many remain skeptical about the real-estate market, homeownership is still the primary way that Americans build wealth.
I think we've debated this many many times over, but people should definitely be building wealth outside of an illiquid house that they need to live in.
You seem to be comparing a descriptive statement (about present reality and recent history) to a prescriptive one. Am I mistaken?
Obviously, I agree with you on the "should", but if the article is saying that homeownership has been the primary vehicle for wealth accumulation and skeptical Millennials could miss out (and thereby do even worse), that can also be correct (and compatible with your comment).

Yes you're pretty much right, but I still feel like putting it in the article makes it seem as though home-ownership is the right path to wealth.  If the article included another paragraph on 401k savings, then I'd give them a pass, but they put a pretty big focus on the home ownership as a path to success/wealth bit.

zephyr911

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Re: Millenials success due to rich parents
« Reply #8 on: August 03, 2015, 10:55:36 AM »
Yes you're pretty much right, but I still feel like putting it in the article makes it seem as though home-ownership is the right path to wealth.  If the article included another paragraph on 401k savings, then I'd give them a pass, but they put a pretty big focus on the home ownership as a path to success/wealth bit.
Couldn't agree more. Even if homeownership has been a useful tool for savings, it's also been a piggy bank people instinctively raid for dumb shit and thereby screw themselves. They need to diversify.

EricP

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Re: Millenials success due to rich parents
« Reply #9 on: August 03, 2015, 11:05:05 AM »
Yes you're pretty much right, but I still feel like putting it in the article makes it seem as though home-ownership is the right path to wealth.  If the article included another paragraph on 401k savings, then I'd give them a pass, but they put a pretty big focus on the home ownership as a path to success/wealth bit.
Couldn't agree more. Even if homeownership has been a useful tool for savings, it's also been a piggy bank people instinctively raid for dumb shit and thereby screw themselves. They need to diversify.

Having that money in retirement accounts is much harder to get to for those people.  While some may still take the huge penalties, most will realize that that's too heavy a price to pay.

Chris22

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Re: Millenials success due to rich parents
« Reply #10 on: August 03, 2015, 11:10:51 AM »
Yes you're pretty much right, but I still feel like putting it in the article makes it seem as though home-ownership is the right path to wealth.  If the article included another paragraph on 401k savings, then I'd give them a pass, but they put a pretty big focus on the home ownership as a path to success/wealth bit.
Couldn't agree more. Even if homeownership has been a useful tool for savings, it's also been a piggy bank people instinctively raid for dumb shit and thereby screw themselves. They need to diversify.

I like to think/hope that us millenials will learn from the mistakes of those before us and never touch home equity for non-investment purchases (cars, travel, etc).  I have a healthy HELOC I can tap, and I can tell you it's an emergency-only "account" that I don't plan to touch.  Already got burned on one house that's upside down (that's now an investment property, and it wasn't because we drew down equity), I'm not screwing up a RE transaction with a HELOC.

zephyr911

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Re: Millenials success due to rich parents
« Reply #11 on: August 03, 2015, 11:15:00 AM »
I like to think/hope that us millenials will learn from the mistakes of those before us and never touch home equity for non-investment purchases (cars, travel, etc).  I have a healthy HELOC I can tap, and I can tell you it's an emergency-only "account" that I don't plan to touch.  Already got burned on one house that's upside down (that's now an investment property, and it wasn't because we drew down equity), I'm not screwing up a RE transaction with a HELOC.
Just being here puts you miles ahead of most people, regardless of generation.

I fear that too many Millennials are afraid to invest in anything, just because their formative years saw a stock market crash (whose pain is more memorable than the runups before and after, or the overall solid returns over time) and a housing crash (which many wrongly interpret as an indictment of real estate as a whole, and not the combined product of deregulation and overconsumption that it truly was). There seems to be a belief that no investment is safe and we all may as well just spend what we have on a good feeling in the here and now.

EricP

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Re: Millenials success due to rich parents
« Reply #12 on: August 03, 2015, 11:43:06 AM »
I like to think/hope that us millenials will learn from the mistakes of those before us and never touch home equity for non-investment purchases (cars, travel, etc).  I have a healthy HELOC I can tap, and I can tell you it's an emergency-only "account" that I don't plan to touch.  Already got burned on one house that's upside down (that's now an investment property, and it wasn't because we drew down equity), I'm not screwing up a RE transaction with a HELOC.
Just being here puts you miles ahead of most people, regardless of generation.

I fear that too many Millennials are afraid to invest in anything, just because their formative years saw a stock market crash (whose pain is more memorable than the runups before and after, or the overall solid returns over time) and a housing crash (which many wrongly interpret as an indictment of real estate as a whole, and not the combined product of deregulation and overconsumption that it truly was). There seems to be a belief that no investment is safe and we all may as well just spend what we have on a good feeling in the here and now.

Every report, news article and study I ever see points to Student Loan debt as being the primary factor that keeps Millenials from investing.  From the 2008 recession, I think more people will remember the housing crisis rather than the stock market crash.  I think the word has gotten out that those who "held the line" and rode the roller coaster back up did fine and it was only the Nervous Nellies that got hosed, so I don't think there is any extra level of fear in Millenials.  There's always some who don't want to invest in the stock market because they think it's gambling, but I don't think we have any more of those than any other generation.

But I think people learned a lot from the housing crisis.  They know that ARMs are bad, and that houses aren't great investments.  Millenials are continuing to rent and I think that's only partially due to lack of down payments and a lot to do with lifestyle decisions and realizations that houses aren't great investments.

sherr

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Re: Millenials success due to rich parents
« Reply #13 on: August 03, 2015, 11:48:44 AM »
They know that ARMs are bad...

My ARM is great, buying more house than you can afford is bad.

EricP

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Re: Millenials success due to rich parents
« Reply #14 on: August 03, 2015, 11:52:08 AM »
They know that ARMs are bad...

My ARM is great, buying more house than you can afford is bad.

You're right for us they are may be better, but for the general population that can't afford a several hundred dollar increase in their house payment, they are a bad thing, and that's the point I was making.

Chris22

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Re: Millenials success due to rich parents
« Reply #15 on: August 03, 2015, 01:19:25 PM »
They know that ARMs are bad...

My ARM is great, buying more house than you can afford is bad.

Is it?  My recent mortgage was locked in at 3.XX.  Given that that's almost a historic low, how much lower are you getting and what is the value of that versus locking in a rate almost certain to go up over time?

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Re: Millenials success due to rich parents
« Reply #16 on: August 03, 2015, 01:23:07 PM »
I love how they put everyone in the same boat. In my case, it's the opposite, I had to pay for my own school tuition, heck I even helped my parents out financially because they are the one struggling with money and not the other way around like the article says.

dandarc

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Re: Millenials success due to rich parents
« Reply #17 on: August 03, 2015, 01:24:53 PM »
They know that ARMs are bad...

My ARM is great, buying more house than you can afford is bad.

Is it?  My recent mortgage was locked in at 3.XX.  Given that that's almost a historic low, how much lower are you getting and what is the value of that versus locking in a rate almost certain to go up over time?
Depends on your payoff schedule.  For instance, my wife and I have a 3.375% rate locked in for 15 years.  But we're actually paying it off within 3 years.  A 5/1 ARM or even a 3/1 ARM would have likely been a better deal for us.  (Nice to live in an area where our house is such a small part of our financial world).

EricP

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Re: Millenials success due to rich parents
« Reply #18 on: August 03, 2015, 01:43:40 PM »
They know that ARMs are bad...

My ARM is great, buying more house than you can afford is bad.

Is it?  My recent mortgage was locked in at 3.XX.  Given that that's almost a historic low, how much lower are you getting and what is the value of that versus locking in a rate almost certain to go up over time?
Depends on your payoff schedule.  For instance, my wife and I have a 3.375% rate locked in for 15 years.  But we're actually paying it off within 3 years.  A 5/1 ARM or even a 3/1 ARM would have likely been a better deal for us.  (Nice to live in an area where our house is such a small part of our financial world).

But now aren't you just into the old "Should I pay off the mortgage debate?" which I think we're all well aware that from a math standpoint then answer 99% of the time is no.  Sure, an ARM is better if you pay it down in 3 years, but even better would be carrying that 15 year to term.

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Re: Millenials success due to rich parents
« Reply #19 on: August 03, 2015, 02:08:05 PM »
They know that ARMs are bad...

My ARM is great, buying more house than you can afford is bad.

Is it?  My recent mortgage was locked in at 3.XX.  Given that that's almost a historic low, how much lower are you getting and what is the value of that versus locking in a rate almost certain to go up over time?
Depends on your payoff schedule.  For instance, my wife and I have a 3.375% rate locked in for 15 years.  But we're actually paying it off within 3 years.  A 5/1 ARM or even a 3/1 ARM would have likely been a better deal for us.  (Nice to live in an area where our house is such a small part of our financial world).

But now aren't you just into the old "Should I pay off the mortgage debate?" which I think we're all well aware that from a math standpoint then answer 99% of the time is no.  Sure, an ARM is better if you pay it down in 3 years, but even better would be carrying that 15 year to term.

and better yet refi to a 30 year and carry that to term.  now you're a real baller

dandarc

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Re: Millenials success due to rich parents
« Reply #20 on: August 03, 2015, 02:20:11 PM »
They know that ARMs are bad...

My ARM is great, buying more house than you can afford is bad.

Is it?  My recent mortgage was locked in at 3.XX.  Given that that's almost a historic low, how much lower are you getting and what is the value of that versus locking in a rate almost certain to go up over time?
Depends on your payoff schedule.  For instance, my wife and I have a 3.375% rate locked in for 15 years.  But we're actually paying it off within 3 years.  A 5/1 ARM or even a 3/1 ARM would have likely been a better deal for us.  (Nice to live in an area where our house is such a small part of our financial world).

But now aren't you just into the old "Should I pay off the mortgage debate?" which I think we're all well aware that from a math standpoint then answer 99% of the time is no.  Sure, an ARM is better if you pay it down in 3 years, but even better would be carrying that 15 year to term.

and better yet refi to a 30 year and carry that to term.  now you're a real baller
and then a few years from now, if rates haven't gotten too high, and the closing costs aren't prohibitive, do a cash-out refinance to a new 30 year term.

I guess I'd feel more strongly on the issue if our house was more expensive.  As it is, I can live with paying the mortgage down after maxing out our tax-sheltered accounts each year.  Which as it turns out means it will be paid off next year.

zephyr911

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Re: Millenials success due to rich parents
« Reply #21 on: August 03, 2015, 02:53:03 PM »
Nice to live in an area where our house is such a small part of our financial world.
True that! We have a 5/1 ARM at 3.375%. The payment is only about 5% of wages and we could easily pay it off before the first adjustment. And that's the current plan.

MgoSam

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Re: Millenials success due to rich parents
« Reply #22 on: August 03, 2015, 03:18:12 PM »
Nice to live in an area where our house is such a small part of our financial world.
True that! We have a 5/1 ARM at 3.375%. The payment is only about 5% of wages and we could easily pay it off before the first adjustment. And that's the current plan.

Wow, I was offered a 15 year fixed at 3.25%. Why would my 15 year be lower than a 5/1 ARM?

EricP

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Re: Millenials success due to rich parents
« Reply #23 on: August 03, 2015, 03:49:07 PM »
Nice to live in an area where our house is such a small part of our financial world.
True that! We have a 5/1 ARM at 3.375%. The payment is only about 5% of wages and we could easily pay it off before the first adjustment. And that's the current plan.

Wow, I was offered a 15 year fixed at 3.25%. Why would my 15 year be lower than a 5/1 ARM?

Probably because he got his ARM 6 months to a year ago.

zephyr911

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Re: Millenials success due to rich parents
« Reply #24 on: August 04, 2015, 08:31:31 AM »
Wow, I was offered a 15 year fixed at 3.25%. Why would my 15 year be lower than a 5/1 ARM?
Probably because he got his ARM 6 months to a year ago.
Yeah, this sale was closed last October. I hate to churn mortgages but I'm thinking about one refi, quite possibly a 15-year fixed, to kill PMI right now (between paydowns and improvements we've gone from 90% financed to <80%, but they insist on 2 years of payments before considering removal) and get a better rate too. The higher payment is a non-issue.

sherr

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Re: Millenials success due to rich parents
« Reply #25 on: October 26, 2015, 03:01:08 PM »
They know that ARMs are bad...

My ARM is great, buying more house than you can afford is bad.

Is it?  My recent mortgage was locked in at 3.XX.  Given that that's almost a historic low, how much lower are you getting and what is the value of that versus locking in a rate almost certain to go up over time?

Sorry for not replying for so long...

Yes, it is. My ARM is a 10/1 with a 2.5% interest rate locked in for the first 10 years. 10 years is longer than it will take for me to become FI, and I don't want to RE with a mortgage (or without having the ability to pay it off at-will), so by the time my rate could possibly adjust I will either have already paid off the mortgage or will be in a position to pay it off if I choose if the interest rate goes up too much.

There is literally no downside for me, and assuming I could have had a 3% 30-year fixed (which I doubt) I'm saving ~1k / year because of my choice of ARM.

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Re: Millenials success due to rich parents
« Reply #26 on: October 27, 2015, 09:25:24 AM »
My biggest issue with the article is the claim that homeowners "save more than those who were forced to throw away tens of thousands of dollars on rent due to their inability to buy".  This isn't something you can just throw out as a truism.  You need to look at it on a case by case basis to figure out if buying is a smart decision.

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Re: Millenials success due to rich parents
« Reply #27 on: October 27, 2015, 10:07:57 AM »
My biggest issue with the article is the claim that homeowners "save more than those who were forced to throw away tens of thousands of dollars on rent due to their inability to buy".  This isn't something you can just throw out as a truism.  You need to look at it on a case by case basis to figure out if buying is a smart decision.

I do think that buying a home can be a good decision for many people that are otherwise non-savers because the money they are spending on their mortgage is a form of "forced savings."

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Re: Millenials success due to rich parents
« Reply #28 on: October 27, 2015, 10:12:13 AM »
Yes you're pretty much right, but I still feel like putting it in the article makes it seem as though home-ownership is the right path to wealth.  If the article included another paragraph on 401k savings, then I'd give them a pass, but they put a pretty big focus on the home ownership as a path to success/wealth bit.
Couldn't agree more. Even if homeownership has been a useful tool for savings, it's also been a piggy bank people instinctively raid for dumb shit and thereby screw themselves. They need to diversify.

So far in the last 11 years buying my house was the worst financial decision I've ever made.

mm1970

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Re: Millenials success due to rich parents
« Reply #29 on: October 27, 2015, 10:15:12 AM »
http://www.theatlantic.com/business/archive/2015/07/millennials-with-rich-parents/398501/#disqus_thread

Yes, our success has nothing to do with choosing sensible majors, working through college to pay tuition, and saving 50%+ of our income...grr, just completely discredits our work.

There's nothing wrong with acknowledging privilege.  Whether you work hard or not.

I grew up poor in a rural area, 8th of 9 kids, college was not a thing in my family.  But I worked through school, joined the Navy, and got a good job, chose a sensible major.

But I'm privileged anyway, to be smart, white, with parents who were not addicted to anything (at least not when I was a kid), and who valued hard work and taught us that lesson.

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Re: Millenials success due to rich parents
« Reply #30 on: October 27, 2015, 10:32:48 AM »
Yes you're pretty much right, but I still feel like putting it in the article makes it seem as though home-ownership is the right path to wealth.  If the article included another paragraph on 401k savings, then I'd give them a pass, but they put a pretty big focus on the home ownership as a path to success/wealth bit.
Couldn't agree more. Even if homeownership has been a useful tool for savings, it's also been a piggy bank people instinctively raid for dumb shit and thereby screw themselves. They need to diversify.

So far in the last 11 years buying my house was the worst financial decision I've ever made.

So far in the last 6 years buying my house was the best financial decision I've ever made.

(The point is, circumstances matter and not everybody's are the same as yours.)

Also, I think there might be a "correlation is not causation" issue going on here: home ownership is correlated with wealth because (mostly) only people inclined towards saving can accumulate the necessary down payment in the first place. But those people don't become wealthy because they bought a house; they were able to buy a house because they had the right habits to become wealthy already.

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Re: Millenials success due to rich parents
« Reply #31 on: October 27, 2015, 11:06:09 AM »
Yes you're pretty much right, but I still feel like putting it in the article makes it seem as though home-ownership is the right path to wealth.  If the article included another paragraph on 401k savings, then I'd give them a pass, but they put a pretty big focus on the home ownership as a path to success/wealth bit.
Couldn't agree more. Even if homeownership has been a useful tool for savings, it's also been a piggy bank people instinctively raid for dumb shit and thereby screw themselves. They need to diversify.

So far in the last 11 years buying my house was the worst financial decision I've ever made.

So far in the last 6 years buying my house was the best financial decision I've ever made.

(The point is, circumstances matter and not everybody's are the same as yours.)

Also, I think there might be a "correlation is not causation" issue going on here: home ownership is correlated with wealth because (mostly) only people inclined towards saving can accumulate the necessary down payment in the first place. But those people don't become wealthy because they bought a house; they were able to buy a house because they had the right habits to become wealthy already.

I would agree with this. Buying a house, going to college, and picking a high paying career have been overall, the key things to my success (of course God has been helping along the way as well). It really is amazing that people don't make these basic sacrifices for a better life.


Bearded Man

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Re: Millenials success due to rich parents
« Reply #32 on: October 27, 2015, 11:09:19 AM »
Oh, I do agree though that the majority of millennials who make it these days are doing so with help from their parents. I have a friend in his mid thirties who has been coddled his entire life by his parents. They are now paying for his MBA that he has been pursuing for about 8 years now so that he can make more than $15 an hour doing book keeping work. He keeps flunking his classes at a for profit school though, and considering how much financial hand holding he needs, I can't imagine him ever becoming a CPA, unless his parents take the tests for him or something.

Eric222

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Re: Millenials success due to rich parents
« Reply #33 on: October 28, 2015, 05:47:20 AM »
Obligatory:  I am not a millennial, and this is just my n=1.

I was really proud of the fact that my success in life wasn't due to my parents, but my own hard work (scholarships for school, not taking money after I turned 19, etc, etc).  Yeah, except for the unconditional love, support, and  advice they gave me, as well as the knowledge that if shit hit the fan they would have my back.

Lo and behold, the shit hit the fan (divorce) and my parents stepped up big time.  Loans at 4% secured with my parents collateral versus who knows what percentage loans to pay for lawyers, separating households, etc.  Without their help, I don't know that I'd have been able to get joint custody of my kids, or even get my life back together.  They could have just given me money, but then I wouldn't have learned anything - and I probably wouldn't be here.

It's amazing the things you take for granted because you don't know any better.  Just the knowledge that the backup is there makes certain avenues easier to take.  I say thank-you to my parents a lot.   I love them and hope to be able to be as supportive (in every respect) for my kids as they were for me.  Lots of motivations for killing the debt and striving for FI.

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Re: Millenials success due to rich parents
« Reply #34 on: October 28, 2015, 07:28:07 AM »
I can't imagine him ever becoming a CPA, unless his parents take the tests for him or something.

Yikes, becoming CPA requires an insanely amount of studying.

mrmiyagi

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Re: Millenials success due to rich parents
« Reply #35 on: October 28, 2015, 07:45:43 AM »
Oh, I do agree though that the majority of millennials who make it these days are doing so with help from their parents. I have a friend in his mid thirties who has been coddled his entire life by his parents. They are now paying for his MBA that he has been pursuing for about 8 years now so that he can make more than $15 an hour doing book keeping work. He keeps flunking his classes at a for profit school though, and considering how much financial hand holding he needs, I can't imagine him ever becoming a CPA, unless his parents take the tests for him or something.

The "majority" need help from their parents? And then you list one personal anecdote? Come on.

I'm a 30 year old "young professional" and I don't know of a single successful friend currently getting financial help from their parents. If you go back to college some had 4 years at the in-state school paid for, some had scholarships and/or jobs. The only people I know who get help from their parents now are the unsuccessful ones who had to move back home.

AlanStache

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Re: Millenials success due to rich parents
« Reply #36 on: October 28, 2015, 07:47:50 AM »
..

It's amazing the things you take for granted because you don't know any better.  Just the knowledge that the backup is there makes certain avenues easier to take.  I say thank-you to my parents a lot.   I love them and hope to be able to be as supportive (in every respect) for my kids as they were for me.  Lots of motivations for killing the debt and striving for FI.

Yep.  From personal experience I know not having a strong safety net changes the dynamic, not sure how many people understand what it is like to know you cant call mom/dad up for a loan (even for some bs 1k$ car repair) or move back in with them if things ever really hit the fan.  For all the problems my ex and I had she did understand that if she failed she could always move home and get a job with her parents business and have a fine life, and she got that I had none of that and was on my own.  This safety net I think made her more relaxed and willing to go try something different that she ended up being very successful at.
« Last Edit: October 28, 2015, 07:50:34 AM by AlanStache »

JR

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Re: Millenials success due to rich parents
« Reply #37 on: October 28, 2015, 11:06:05 AM »

Oh, I do agree though that the majority of millennials who make it these days are doing so with help from their parents. I have a friend in his mid thirties who has been coddled his entire life by his parents. They are now paying for his MBA that he has been pursuing for about 8 years now so that he can make more than $15 an hour doing book keeping work. He keeps flunking his classes at a for profit school though, and considering how much financial hand holding he needs, I can't imagine him ever becoming a CPA, unless his parents take the tests for him or something.


I think it depends what you mean by "make it" and what you mean by "help". Parents allowing their child to live at home rent free while attending college or starting a career can be tremendously helpful but does obviously not require wealthy parents. Your friend doesn't seem to be very financially successful and has received copious amounts of help from his parents.
« Last Edit: October 28, 2015, 11:20:14 AM by JR »

zephyr911

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Re: Millenials success due to rich parents
« Reply #38 on: October 28, 2015, 11:25:45 AM »
So far in the last 11 years buying my house was the worst financial decision I've ever made.
Because...?

I can list one of my home buys as a terrible decision, though not necessarily the worst, but it was due to unforeseeable circumstances (bankrupt builder, foreclosures, dive in value) and I'll overcome it eventually. Getting married and divorced screwed me far worse... lol

Eric222

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Re: Millenials success due to rich parents
« Reply #39 on: October 28, 2015, 11:42:08 AM »
Getting married and divorced screwed me far worse... lol

+1.  But hey, at least I got two adorable kids out of it...

mm1970

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Re: Millenials success due to rich parents
« Reply #40 on: October 28, 2015, 11:58:49 AM »
Yes you're pretty much right, but I still feel like putting it in the article makes it seem as though home-ownership is the right path to wealth.  If the article included another paragraph on 401k savings, then I'd give them a pass, but they put a pretty big focus on the home ownership as a path to success/wealth bit.
Couldn't agree more. Even if homeownership has been a useful tool for savings, it's also been a piggy bank people instinctively raid for dumb shit and thereby screw themselves. They need to diversify.

So far in the last 11 years buying my house was the worst financial decision I've ever made.

So far in the last 6 years buying my house was the best financial decision I've ever made.

(The point is, circumstances matter and not everybody's are the same as yours.)

Also, I think there might be a "correlation is not causation" issue going on here: home ownership is correlated with wealth because (mostly) only people inclined towards saving can accumulate the necessary down payment in the first place. But those people don't become wealthy because they bought a house; they were able to buy a house because they had the right habits to become wealthy already.
Definitely truth in this.  But again, circumstances vary, there are a large # of people for whom homeownership was NOT a road to wealth.

mm1970

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Re: Millenials success due to rich parents
« Reply #41 on: October 28, 2015, 12:04:28 PM »
So far in the last 11 years buying my house was the worst financial decision I've ever made.
Because...?

I can list one of my home buys as a terrible decision, though not necessarily the worst, but it was due to unforeseeable circumstances (bankrupt builder, foreclosures, dive in value) and I'll overcome it eventually. Getting married and divorced screwed me far worse... lol

Just straight-up math from the housing bubble.  Bought in 2004 (could have been worse, next door neighbors bought in 2006 and paid $100k more than we did).  House is not quite worth what it was when we bought it, but it's getting close.  (The "floor" of the market was $300k less than we paid for it.)

Don't get me wrong.  I like my house, my neighborhood, and it's a place to live.  It was never an "investment" for me.
Which is a good thing.  I could have rented the house for the last 11 years for much less.  Mortgage, property tax, upkeep (roof, floors, heating, windows, paint, backyard), etc...even factoring in the tax savings due to interest paid, my  quick calculations tell me renting would have been $600k cheaper over the last 11 years.

AlanStache

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Re: Millenials success due to rich parents
« Reply #42 on: October 28, 2015, 12:41:53 PM »
So far in the last 11 years buying my house was the worst financial decision I've ever made.
Because...?

I can list one of my home buys as a terrible decision, though not necessarily the worst, but it was due to unforeseeable circumstances (bankrupt builder, foreclosures, dive in value) and I'll overcome it eventually. Getting married and divorced screwed me far worse... lol

Just straight-up math from the housing bubble.  Bought in 2004 (could have been worse, next door neighbors bought in 2006 and paid $100k more than we did).  House is not quite worth what it was when we bought it, but it's getting close.  (The "floor" of the market was $300k less than we paid for it.)

Don't get me wrong.  I like my house, my neighborhood, and it's a place to live.  It was never an "investment" for me.
Which is a good thing.  I could have rented the house for the last 11 years for much less.  Mortgage, property tax, upkeep (roof, floors, heating, windows, paint, backyard), etc...even factoring in the tax savings due to interest paid, my  quick calculations tell me renting would have been $600k cheaper over the last 11 years.

"600k cheaper"!!!! Did you buy football field in down town Tokyo?  Closets should not have there own zip codes; if you need a moving walkway to get from your kitchen to your other kitchen you are doing it wrong :-) 

Mntngoat

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Re: Millenials success due to rich parents
« Reply #43 on: October 28, 2015, 01:25:08 PM »
http://www.theatlantic.com/business/archive/2015/07/millennials-with-rich-parents/398501/#disqus_thread

Yes, our success has nothing to do with choosing sensible majors, working through college to pay tuition, and saving 50%+ of our income...grr, just completely discredits our work.


 I wouldn't be thowing stones  when so many of your generation have multiple degrees and are flipping burgers for $11/HR  while  living in moms basement....

ML

mm1970

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Re: Millenials success due to rich parents
« Reply #44 on: October 28, 2015, 01:36:46 PM »
So far in the last 11 years buying my house was the worst financial decision I've ever made.
Because...?

I can list one of my home buys as a terrible decision, though not necessarily the worst, but it was due to unforeseeable circumstances (bankrupt builder, foreclosures, dive in value) and I'll overcome it eventually. Getting married and divorced screwed me far worse... lol

Just straight-up math from the housing bubble.  Bought in 2004 (could have been worse, next door neighbors bought in 2006 and paid $100k more than we did).  House is not quite worth what it was when we bought it, but it's getting close.  (The "floor" of the market was $300k less than we paid for it.)

Don't get me wrong.  I like my house, my neighborhood, and it's a place to live.  It was never an "investment" for me.
Which is a good thing.  I could have rented the house for the last 11 years for much less.  Mortgage, property tax, upkeep (roof, floors, heating, windows, paint, backyard), etc...even factoring in the tax savings due to interest paid, my  quick calculations tell me renting would have been $600k cheaper over the last 11 years.

"600k cheaper"!!!! Did you buy football field in down town Tokyo?  Closets should not have there own zip codes; if you need a moving walkway to get from your kitchen to your other kitchen you are doing it wrong :-)

Ha, I know right?  The sad (?) realism of the thing - it's a 2BR, 1 BA, 1100 sf house with no garage, built in 1947 (with a driveway to a house in the back, owned by someone else), on a 5227 sq foot lot (much of which is not "usable" because of said driveway).  Almost the bottom of the single family home market in this town, though some older homes are only 850-1000sf.  But it's Coastal Southern California.  As I explained to my FIL when we bought the house: "Just think of it as a $188k house on a $600k piece of land".

A lot of that cost was having the down payment tied up, plus prop tax, plus upkeep, plus just the cost of the mortgage (which was $3800 a month when we bought it - NOT INCLUDING PROP TAX OF $8000 a year), rent would have been $2k back then).

All for a little slice of heaven.

At least now with refi and paying down the mortgage "faster", our mortgage+prop tax+insurance is equal to rent ($2900).  That's something.

sky_northern

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Re: Millenials success due to rich parents
« Reply #45 on: October 28, 2015, 01:44:31 PM »
Oh, I do agree though that the majority of millennials who make it these days are doing so with help from their parents. I have a friend in his mid thirties....

I'm in my mid-30s and I thought I was Gen-X not millennial. Damn, I don't want to be a millennial.

AlanStache

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Re: Millenials success due to rich parents
« Reply #46 on: October 28, 2015, 01:50:40 PM »
Quote
...

"600k cheaper"!!!! Did you buy football field in down town Tokyo?  Closets should not have there own zip codes; if you need a moving walkway to get from your kitchen to your other kitchen you are doing it wrong :-)

Ha, I know right?  The sad (?) realism of the thing - it's a 2BR, 1 BA, 1100 sf house with no garage, built in 1947 (with a driveway to a house in the back, owned by someone else), on a 5227 sq foot lot (much of which is not "usable" because of said driveway).  Almost the bottom of the single family home market in this town, though some older homes are only 850-1000sf.  But it's Coastal Southern California.  As I explained to my FIL when we bought the house: "Just think of it as a $188k house on a $600k piece of land".

A lot of that cost was having the down payment tied up, plus prop tax, plus upkeep, plus just the cost of the mortgage (which was $3800 a month when we bought it - NOT INCLUDING PROP TAX OF $8000 a year), rent would have been $2k back then).

All for a little slice of heaven.

At least now with refi and paying down the mortgage "faster", our mortgage+prop tax+insurance is equal to rent ($2900).  That's something.

So 600k is opportunity cost too.  Am going to the SF bay soon, am sure I will be dreaming a bit about living there, but then I will remember my house cost what a 20% down payment is in any California city.  I love the west coast but man....

seathink

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Re: Millenials success due to rich parents
« Reply #47 on: October 28, 2015, 02:02:32 PM »
I remember bringing up finances with my Gen X friends at a book group. They were astounded (as was I) at the number of friends my age and younger (Millennial) whose parents were paying their twenty-something kids's cell phone bills, car insurance, health care through work, and sometimes new car loans.

But I can't really talk, because my parents took out a student loan for my sister and I, in addition to the loans I got myself. Also, very privileged in many other ways. I've had the shit hit the fan and get a lot of help from family.

Also, in regards to this and other SL articles, I've noticed my friends with the most loans also went abroad for study. 96k sounds crazy, but you got to go to Cambridge?!? Nice! Or get your graduate degree in 19th Century Literature at the University of Sheffield? That's cool! But very expensive.

Dollar Slice

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Re: Millenials success due to rich parents
« Reply #48 on: October 28, 2015, 05:05:44 PM »
Also, in regards to this and other SL articles, I've noticed my friends with the most loans also went abroad for study. 96k sounds crazy, but you got to go to Cambridge?!? Nice! Or get your graduate degree in 19th Century Literature at the University of Sheffield? That's cool! But very expensive.

I studied abroad in London for a year (UCL) and it was actually about 35% cheaper than my university at home, including living in a dorm and a meal plan. Even when you add in the money I spent traveling around Europe for five weeks, and the flights back and forth to Boston, it was still thousands of dollars less expensive.

That is if you are paying full price with no scholarships/grants/etc., so the math might work out differently for different people, but still... equivalent universities abroad are just not as expensive as they are in the US.

seathink

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Re: Millenials success due to rich parents
« Reply #49 on: October 28, 2015, 05:18:43 PM »


I studied abroad in London for a year (UCL) and it was actually about 35% cheaper than my university at home, including living in a dorm and a meal plan. Even when you add in the money I spent traveling around Europe for five weeks, and the flights back and forth to Boston, it was still thousands of dollars less expensive.

That is if you are paying full price with no scholarships/grants/etc., so the math might work out differently for different people, but still... equivalent universities abroad are just not as expensive as they are in the US.

Nice! I had an old co-worker who went there, and yeah, her costs were about like mine. So, true, it's not everyone.