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The older the company I mix with, the more I realize how common it is for parents to give their kids a huge leg up financially. I am one of the only people in m

The older the company I mix with, the more I realize how common it is for parents to give their kids a huge leg up financially. I am one of the only people in my friend group to not have been given the equivalent of a large home down payment by the time they were thirty.

deleted 5y ago
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xwolfi 5y ago
Huh you have nice friends. My parents a rich and the only thing they gave me directly was a rent payment on a flat I was leaving when I moved abroad . They paid the $1000 rent for 6 months in case it didnt pan out and needee to crash back. That was amazingly nice but a house downpayment, I d feel like cheating at life.
- war1025 5y ago
  My understanding is that it's pretty common on the US coasts (i.e. the major metros where housing is super unaffordable). I imagine it's a self feeding cycle. Young adults can't purchase homes, so their parents cosign and give a big down payment. Then sellers are able to ask more because wealthy parents are backing the sale, which just makes housing even more unaffordable.
- IkmoIkmo 5y ago
  Even so, the safety net can be useful. I have a friend who knows his parents have >1m available, and he knows that given their spending patterns, the returns on investments and actuarial tables, it's likely a $2m windfall will come his way within the next 20 years. That allows a wildly different lifestyle. He can spend 100% of what he earns, and still - retire early - buy a large home - send his kids to uni - enjoy quality of life of the top 15% Not having to buy a home, invest in stocks, reserve money for retirement, savings etc, is a big deal. Meanwhile other friends who have no such parents are more stuck in the rat race and will likely work till an old age retirement, not have a big home, will struggle with kids' education blablabla. The other thing is that if he fucks up, his parents will help him out. This is one of the reasons I think that he started his own business and continued through years of no-income, whereas others had no such luxury to fail for a few years. e.g. there's plenty of people who, if they had not climbed the corporate ladder the past few years, would permanently be locked out of the housing market. He has no such problem, as if shit really hits the fan there's always a safety net. Your parents might be reserved, but unless they're quite unique, they'll definitely step in if you really fall. Lastly, don't think it applies to you but I find as kids get older and the 'house' discussion comes up, suddenly rich parents step-in in ways they wouldn't have before (e.g. to fund a fun lifestyle). I've seen this housing-purchase support so often and it can't be overstated how much of a leg up this can be. And even if no support is given, inheritance of rich parents typically covers the mortgage and then some mid-life. Don't mean to make it too personal and dump a lot of 'you're actually privileged' on you, I don't know you so I really can't say, every family is different. But on a more general note, having rich parents is definitely useful even if there's not been much financial help so far.

deleted 5y ago

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xwolfi 5y ago

Huh you have nice friends. My parents a rich and the only thing they gave me directly was a rent payment on a flat I was leaving when I moved abroad . They paid the $1000 rent for 6 months in case it didnt pan out and needee to crash back. That was amazingly nice but a house downpayment, I d feel like cheating at life.

war1025 5y ago
My understanding is that it's pretty common on the US coasts (i.e. the major metros where housing is super unaffordable). I imagine it's a self feeding cycle. Young adults can't purchase homes, so their parents cosign and give a big down payment. Then sellers are able to ask more because wealthy parents are backing the sale, which just makes housing even more unaffordable.
IkmoIkmo 5y ago
Even so, the safety net can be useful. I have a friend who knows his parents have >1m available, and he knows that given their spending patterns, the returns on investments and actuarial tables, it's likely a $2m windfall will come his way within the next 20 years. That allows a wildly different lifestyle. He can spend 100% of what he earns, and still - retire early - buy a large home - send his kids to uni - enjoy quality of life of the top 15% Not having to buy a home, invest in stocks, reserve money for retirement, savings etc, is a big deal. Meanwhile other friends who have no such parents are more stuck in the rat race and will likely work till an old age retirement, not have a big home, will struggle with kids' education blablabla. The other thing is that if he fucks up, his parents will help him out. This is one of the reasons I think that he started his own business and continued through years of no-income, whereas others had no such luxury to fail for a few years. e.g. there's plenty of people who, if they had not climbed the corporate ladder the past few years, would permanently be locked out of the housing market. He has no such problem, as if shit really hits the fan there's always a safety net. Your parents might be reserved, but unless they're quite unique, they'll definitely step in if you really fall. Lastly, don't think it applies to you but I find as kids get older and the 'house' discussion comes up, suddenly rich parents step-in in ways they wouldn't have before (e.g. to fund a fun lifestyle). I've seen this housing-purchase support so often and it can't be overstated how much of a leg up this can be. And even if no support is given, inheritance of rich parents typically covers the mortgage and then some mid-life. Don't mean to make it too personal and dump a lot of 'you're actually privileged' on you, I don't know you so I really can't say, every family is different. But on a more general note, having rich parents is definitely useful even if there's not been much financial help so far.