The Bank Of Mom And Dad Strategy To Buying A Home And Having A Family

If there's one generation wealthier than ours, it's the “Bank of Mom and Dad” generation. Given that our parents have had, on average, three decades longer to save and invest, it's natural that they have accumulated more wealth. For adult children in need of financial assistance, finding a tactful way to approach their parents for help is a sound strategy.

As a savvy son or daughter, one of your objectives may be to access some of your parents' wealth while they are still alive. While this may sound unkind or dishonorable, the reality is that adult children have been doing this for generations, particularly in high-cost areas of the country. Many choose to keep it discreet.

For instance, approximately 30% to 40% of first-time homebuyers in cities like San Francisco receive downpayment assistance from their parents. Similar patterns exist in other areas with high living costs. Moreover, with the substantial wealth amassed by the “Bank of Mom and Dad,” more parents are open to providing financial aid while they are still living. This isn't a coerced wealth transfer; it's primarily driven by love and, to some extent, necessity.

However, parents often fear spoiling their children and aim to instill independence rather than dependency. Let me share some strategies on how you can respectfully approach the “Bank of Mom and Dad” for financial assistance.

How The Bank Of Mom And Dad Helped One Young Woman Start A Family

At the playground one day, a bunch of us started sharing at what age we had our first child. It's a fun topic here in San Francisco since the cost of living is so high.

I went second and said, “Just a couple months before my 40th birthday.” Although I was an older first-time dad, I was not alone. Other dads chimed in and said between 37-43.

Then one mother excitedly exclaimed she had her first child at age 26. We were all intrigued by her story because her husband looked like a graduate student.

The mother said after she had graduated from Bowdoin College, her parents helped her with a down payment on a two-bedroom condominium in Cow Hollow. She didn't say how much the condominium was. But it was likely between $1.2 – $1.5 million based on the median price for two-bedroom condos in the area.

As freelance writers, it would have been hard for them to come up with a $240,000 – $300,000 down payment on their own in their early 20s. Therefore, the Bank Of Mom And Dad helped out.

Not Embarrassed Getting Assistance From Parents

She didn't sound embarrassed that her parents helped her buy a condominium at all. In fact, she said several of her friends from college had had their parents buy them condominiums or single-family homes after graduation as well.

When I got home, I looked up the cost to attend Bowdoin and it said $73,000+ a year! Well gosh, diggity. If I could afford to send my kid to such a school, then I probably could afford to come up with a six-figure down payment to help my kid live after college as well.

After all, the more you spend on university, the higher the expectations are to become a success. The last thing any parent wants is for their child to struggle after spending ~$300,000 on a higher education. What would these rich parents say at cocktail parties when their friends ask what their kids are up to? Therefore, the financial support continues well into adulthood.

The Bank Of Mom And Dad Is The Reality

Many people have wondered how young people can afford to buy their first home in an expensive city. Now you know. The equation for housing affordability is:

Salary + Another Salary + Bank Of Mom And Dad

There really is no other explanation for how someone can buy a property worth 10X or more than their annual income. I have lived in either New York City or San Francisco since 1999. Everyone I know who bought a property by age 25 had the help from the Bank Of Mom And Dad.

For example, back in 2000, my roommate's parents bought him a one-bedroom Manhattan condo a year after we shared a studio apartment at 45 Wall Street. He was 24-years-old. The condo has since appreciated to ~$800,000 from $250,000.

Meanwhile, I was stuck renting for three more years until I finally found a good deal in San Francisco. If only I had had richer parents. I would be richer today!

Below is a great chart highlighting the household income needed to afford the typical home in one of the top 50 cities. With the required 10% minimum down payment, many adult children need assistance from The Bank of Mom & Dad.

Income required to afford a typical median priced home per top 50 cities

How To Convince The Bank Of Mom And Dad To Buy You Things

To effectively compete in today's society, we must accept reality. And the reality is The Bank Of Mom And Dad is ubiquitous. If you are struggling to get ahead, you too might want to swallow your pride and ask your parents for financial help.

Here are some strategies I've learned from adult children over the years on how they were able to convince their parents to buy them a house, a car, and pay for graduate school.

Percentage of U.S. household wealth by age of generation's median cohort - Bank of Mom And Dad

1) Regularly Stay In Contact With Your Parents

When I lived on the wealthier north side of San Francisco, I had a 28-year-old neighbor whose parents had bought him a brand new $42,000 Toyota 4-Runner. He also lived rent-free in his parent's two-unit building. One of the units was rented out. I said “hi” to him multiple times a week over the 10 years I spent living there. He was often unemployed or traveling around the world.

One day he told me,

Before I plan to ask my parents for anything, I tell them I love them very much at least three times a week for one month. Only then, do I go in and make the ask. After all, what's more powerful than love?”

It's hard to argue with my neighbor's logic. If my adult kids called me at least three times a week and told me they loved me, I'd probably give them anything they wanted!

Back in 2017, when I was considering selling my house, my neighbor actually texted me saying he'd be willing to pay $2.1 million. So you see, having The Bank Of Mom And Dad can really pay off. How many 36-year-olds without a stable job have that kind of money?

Bank of Mom And Dad offering $2.1 million to buy my house

According to a study by the National Bureau of Economic Research, parents who had no contact with at least one of their children for more than a year were about 40% less likely to leave equal inheritances to their offspring than parents who remained in touch with all their kids. Therefore, don't forget to at least call your parents!

2) Plan Far Ahead Before Asking For Anything

One 28-year-old marketing associate once told me,

You never want to just ask your parents for something out of the blue. Instead, create a year-long timeline before asking for anything. During this time, you can demonstrate your enthusiasm for whatever it is you want the Bank of Mom and Dad to buy for you.

For example, I really wanted the latest 4-series BMW coupe. But it cost $54,000 out the door and I only made $55,000 at the time. I knew my dad loved cars so I talked to him about BMWs and Porsches for a full year. Porsche was his favorite car brand and the $130,000 911 S Cabriolet was his favorite model. He may have been going through a late mid-life crisis.

When I asked him a year later if he could buy me a 435i BMW coupe, he said no problem! $54,000 seemed so cheap compared to the Porsche he wanted. We had a fun time going to the car dealership together. We went for a test drive and I let him haggle with the car salesman. It was a nice father-daughter bonding moment.”

The longer your child has demonstrated an interest in something, the more the parent wants to help. In many instances, parents have a difficult time NOT spending money on their children if they show even a hint of interest.

This desire by The Bank of Mom & Dad to help their adult children is a main reason why there are fewer self-made millionaires than you think. With so much wealth creation and love build up over the years, parents fail the marshmallow test by making life too easy for their kids! As a result, adult kids end up demotivated and depressed they can't do more things for themselves. Beware!

3) Make An Investment Pitch

One woman who had her entire $130,000 MBA tuition paid for told me,

I created a Powerpoint presentation explaining why them paying for my MBA was going to be a great investment. In the presentation, I highlighted pre- and post-MBA salaries and the top 10 employers who hired from my school. I also mentioned famous alumni closer to their generation to make them proud.

They loved my presentation! Although I felt more pressure to land a great job after graduating, everything turned out well. I got a job in finance that paid me a $180,000 base salary plus a bonus.

Further, I'm now engaged to one of my business school classmates. Together, we make a little over $400,000 a year and will soon save up enough money on our own to buy a house. My parents couldn't be more proud. They feel like their investment paid off big time”

4) Become A Real Estate Expert

If you want The Bank Of Mom And Dad to buy you a home, you should do your best to get smart on real estate. The more you know what you're talking about, the more confident your parents will be to spend money on you.

A 36-year old woman who currently lives in a paid off $2 million, three-bedroom, two-bathroom single-family home in my neighborhood told me,

Back when I was 28, I made an argument why San Francisco real estate was a good investment. I told my parents about the upcoming tech IPOs from Uber, Lyft, Pinterest, Airbnb and more. I showed them what happened to San Francisco Bay Area real estate prices after Google and Facebook went public. In addition, I highlighted how inexpensive San Francisco was and still is compared to other international cities.

Further, I agreed to pay the mortgage, maintenance, and property taxes so they could rest free knowing their asset was being taken care of. Finally, I rented out a bedroom to a girlfriend of mine for $1,900 a month. From a financial standpoint, we're all winning.

If I hadn't shown my parents how much I knew about the local real estate market, there's no way they would have helped out five years ago. My younger brother, who is a knucklehead, won't be getting any down payment help any time soon. He can't even pay his credit card bills on time.”

Real estate wealth by generation - The Bank Of Mom And Dad helps with buying their adult children homes

5) Demonstrate You Are Worthy

One Bank Of Mom And Dad parent who financially supports her 31-year-old son said,

I needed my kid to show me his 5 and 10-year career and financial plans before I opened my checkbook. Growing up, he always had trouble committing to something for longer than a year. He lacked grit. I feared that if I gave him too much money, he would just quit his job and go travel the world with his girlfriend and not come back.

Before buying his condo, I made him sign a contract to follow his financial plan for at least five years before doing whatever he wanted. He agreed, and after three years, he hasn't quit his job yet. I'm hoping that as he matures, he will appreciate the value of commitment.

At the end of the day, getting The Bank Of Mom And Dad to help shouldn't be too difficult if you are a worthy son or daughter. Every parent just wants to have a happy child who finds independence and meaning in their lives.

The Wrong Way To Ask The Bank Of Mom And Dad For Money

Now that we've learned the right way to ask The Bank Of Mom And Dad for money, let's discuss the wrong way.

As an adult child, the worst way to get your parents to buy you anything is to tell them, “All my friend's parents are buying them homes and cars after college, why can't you?” This argument reeks of entitlement! No effort or love is spent in this ask.

Your parents will likely start questioning whether they raised you right after all these years. They may even alter their wills or revocable living trusts

Yes, we all know that hard work is not the only way to get ahead thanks to the massive generational wealth transfer. However, it's important adult children never let their parents know they are expecting anything.

Perhaps treat The Bank Of Mom And Dad like Social Security. It'll be nice if your parents help out one day, but don't count on it.

What Parents Want From Their Children

In any type of negotiation, it's important to put yourself in the other person's shoes. If you don't, you will have a harder time getting what you want. The Bank of Mom & Dad isn't just going to throw their money around for nothing.

Here's what I think every parent wants for and from their children.

  1. To be happy and not struggle more than they need to.
  2. Not take them and their money for granted.
  3. To do what they can on their own after all these years of support.
  4. To not rob them of fulfilling their own potential by accepting money.
  5. Hope they'll stick around when the parents are sick and need help.
  6. Hope they'll have children of their own who be loved and cared for.
  7. Contribute a positive impact to society.
  8. Bring honor to the family like Mulan.

If you, the adult child, are incapable of taking on side jobs, working more than 40 hours a weeksaving aggressively, investing diligently, and being patient with your desires, then you may mobilize The Bank Of Mom And Dad to help.

Without a strong work ethic, some luck, and the financial help from your parents, I'm afraid life might become too difficult. You might also get extremely bitter at your peers. The rich are already setting up their kids for life by buying their way into the best schools and giving them the best jobs.

Swallow Your Pride And Ask For Help

My parents weren't rich, they were middle class. We lived in a regular townhouse and drove an 8-year old Toyota Camry when I was in high school. I attended a public university for $2,800 a year in tuition because that's what I thought we could comfortably afford.

However, if I had been savvier, I would have spent more time learning all the nuances of personal finance as a young man. I would have read more personal finance books at Barnes & Noble or at the public library after school.

If I had read this post back when I was in college, I would have worked more during the summers and winters to save more money. Then I would have tried to convince my parents to help me come up with a downpayment to buy a two-bedroom Manhattan property in 2001. Today, it would likely be worth over $2 million and be fully paid off.

Perhaps most importantly, not having enough wealth delays family formation. And perhaps there is no greater reward than having your own children.

If The Bank Of Mom And Dad had helped me like it helped the 26-year-old mother at the playground, I most certainly would have tried having kids five years sooner. Alas, I can only move forward and try and help the younger generation understand the secret ways of society.

The Ultra-Competitive World Today

Income growth not keeping up with college, housing, and health care costs

Wages are not keeping up with housing, college education, and healthcare costs. As a result, the average person is falling behind. Despite stocks and real estate at all-time highs thanks to a strong economy, many are actually feeling a Silent Recession instead.

Thanks to inflation, it now takes at least $3 million dollars to be considered a real millionaire today. Some even argue that having $10 million is the more appropriate level of wealth to be considered rich.

The rich will keep on getting richer. There is no stopping this trend. Therefore, I suggest doing what many first-generation immigrants do and pool together financial resources to help the next generation thrive. The Bank of Mom and Dad is strongest with immigrants trying to make it in a new land.

Get Neutral Real Estate By Owning Your Primary Residence

Once you get neutral inflation by owning an affordable place to live, life is much easier to manage. If you need help from your parents, ask for help in a respectful way. Parents love their children and will do anything to make them happy. At the same time, parents want to feel proud of their children for making it on their own.

Personally, it's become easier for me to invest in stocks, real estate, and alternative investments now that I have children. Children force us to extend our investing time horizon by 20+ years. 20 years from now, we are probably going to wish we had bought more assets today. Children also encourage us to be more thoughtful about why we earn, save, and invest.

This Bank Of Mom and Dad will likely stay open as long as our kids demonstrate effort and kindness. However, our hope is that our children will be resourceful enough to figures things out on their own once they become adults.

Don't Give Your Kids Everything

We don't want to deprive them of achieving something on their own after a period of struggle.

The world is never going to be fair. Let's bolster our finances so that our children, when they become adults, won't wonder why we didn't do more for them.

Finally, if you can't convince The Bank of Mom and Dad to buy you a house, then you can always invest in real estate more surgically through real estate ETFs, real estate funds, or real estate crowdfunding.

For example, you can invest as little as $10 in a Fundrise diversified real estate portfolio as you build up more capital for a down payment. Fundrise is one of the largest and oldest real estate investing platforms today.

The single-family real estate market is booming due to lower vacancies and rising prices. It is a long-term trend that will likely last for years. As a result, I've personally invested $954,000 in real estate crowdfunding. Fundrise is a long-time sponsor of Financial Samurai and Financial Samurai is an investor in Fundrise.


Three White Tenants, One Asian Landlord: A Story About Opportunity

How To Convince People Are You Middle Class When You're Actually Rich

The Importance Of Feeling Consistently Uncomfortable For Personal Growth

Questions And Suggestions

Readers, have you received help from The Bank Of Mom And Dad to buy you a house, a car, or pay your bills after you became an adult? How did your parent's financial assistance help or hurt your life? Was it easy to overcome any shame or guilt receiving so much financial help as an adult? At what point should we stop helping our adult children financially?

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80 thoughts on “The Bank Of Mom And Dad Strategy To Buying A Home And Having A Family”

  1. John the Donkey

    Considering that the costs of living, especially housing, have become completely decoupled from wages it is not surprising that more people have to rely on the Bank of Mom and Dad; when working a job no longer covers what it used to the money has to come from somewhere.

    For some it is government assistance because even though they work full time, their wages still leave them in poverty. For others it’s the Bank of Mom and Dad because even though they work full time, their wages only render them ineligible for government assistance.

    For others who have the jobs that pay enough for good housing and opportunities for their kids, good for them, just remember that these jobs are a lot more scarce than they used to be.

    In a way, it should not be surprising. During most of history, wealth was generally inherited, not earned. George Washington, JFK, Winston Churchill, and Franklin and Theodore Roosevelt all received generous inheritances and that was considered normal during their times, so why not today?

  2. Wow what a timely post. My son is on workmen’s comp and has been permanently injured and is now trying to get disability from SSDI with a probable two year wait.

    To prevent the bank from foreclosing on his house, we (his parents) are looking at paying off the 230k mortgage and we will become the new lenders. The terms will be an interest free loan with no payment exceeding 20% of his monthly income and he won’t have to start paying anything until he begins receiving benefits. His monthly mortgage payments to us will still be half of what he currently pays. The balance will be paid off if either one of three things occur 1) they sell the house 2) 30 years after the start of receiving benefits (in which case I will be 98 years old) or 3) upon our death in which case it will be a reduction of his part of the inheritance

    We will put a mortgage lien on the house for a couple of reasons. It will prevent other creditors from going after the house and it will prevent them from using the equity in the house as an ATM machine.

    I had thought of just paying the house off and forget about it but I liked this idea better.

    Bank of mom and dad to the rescue.

    PS: we are in constant contact with our children and have very good relationships. Inheritance is the one leverage you have from them throwing you into an old folks home hehe

  3. Looking at my family history, Bank of Mom and Dad did help people having a better life in their 20s and 30s. However, the difference does not matter when you get into 40s. Parents money lowers kids’ ambitions and willingness to take risk in life.

    My grandparents got parents to buy their house in cash and annual pensions to help with nannies and other childcare costs. My grandparents were highly-educated professionals. They came from old money families. They worked hard enough to cover daily expenses, but they were not ambitious or risk-takers.

    Then they lost most of their wealth in the 60’s during the Chinese Cultural Revolution. They have never recovered from it emotionally. They told all their grandkids and great-grandkids repeatedly how much they had lost.

    My parents only enjoyed wealthy lifestyle before they were 12 years old. Then they were extremely poor for 20 years. They were also denied lots of opportunities to get education or career advancement for about 10 years due to their family background. They had their first full-time decent salary job in their early 30’s. Despite starting late in career and finances, my parents and all of their siblings have accumulated enough wealth to be financial independent before age 60. While their parents lamented on the loss, my parents’ generation worked towards a brighter future. They were either business owners or well-known experts in their fields. All of them did much better than their parents career-wise. They also have kept frugal lifestyle.

    My parents’ generation has suffered lots of hardship when they were young. So they wanted their kids to enjoy life early. My cousins, my husband and I fit the spoiled Chinese wealthy kid single child stereotype. My parents would give me money before I feel I needed it. My parents paid all my college tuitions. I worked part-time only because I felt ashamed to live 100% on parental support. My mom bought me a condo in Shanghai all cash when I was 20. I did not know about this. I went there for a short vacation. My mom took me to the notary, then explained I need to sign the papers. My brain froze at that moment. Took me a few months to digest this. They also contributed to my house down-payment. I bought a house only when I saved enough cash on my own and got a mortgage approval. However, my parents and in-laws still gave us cash so we only took half the mortgage we planned to. They all dislike any kind of loans. I have a 6-figure professional job. I work hard enough to climb the corporate ladder. However, I spend way more than my parents. I have cousins who are close to 60 years old now who still get money from their parents. They are all good people with stable jobs. But none of us wants to start a business or inherit parents’ small business. None of us has became expert in our field get get known nationally. So my generation spends more saves less and under-achieves career-wise than the previous generation. We are still better than our grandparents generation with spendings because our parents accustomed us to frugal lifestyle when we were kids. None of us is hiring nanny or cleaning lady. My parents generation has suffered a

    I only started saving more aggressively this year. With COVID, I realized that most of my spendings were not necessary. I also realized that I might not inherit most of my parents wealth or easily cash my condo currently in China by reading more on the politics in that country.

    So at 37, I finally told me to live as if I get nothing from my patents. Try to invest all money my parents and in-laws give us as a cushion for the future.

    I send my kids to cheap private school in Quebec (7$K a year). I plan to offer less cash to my kids than what I got from my parents. They only had one-child. I have two. So even if I am willing to spend the same amount on my kids, each will only get half.

  4. The truth is 90% of all you ‘self-made’ egotistical people would have been nowhere without mom and dad saving your financial ass and helping you along the way. It is a story as old as the bible. Most of you couldn’t even run a lemonade stand.

    As someone who had to pay for every-single-bill ever in my life having had my first job since the age of 12, I let all of you fuel my inner rage to crush you in life. And in every single way possible. I am on a mission to destroy you with success.

    And just for the record, most of you are not that smart as you like to believe. Only I got no help and nobody else!

    1. I also received zero help from my parents from the day I turned 18. It’s more common than you think among those with 7 digit NW. You should read the millionaire next door. The vast majority of kids growing up in well to do households do not do well. I don’t care if someone else had it easier than me…why would I? I’ve worked my butt off two decades and today make 10x more than my parents do at their peak.

  5. My parents have never paid a bill of mine in their life. I moved out at 18 and have been on my own since, financially independent and debt free.
    I’m the oldest of 5 kids, we are immigrants from the USSR. As my parents got older they had more resources and contributed to my siblings expenses more. The ones they helped the least are the most “successful ”
    My husband and I (age 36 & 40) have 3 kids and I struggle with how and what we should be helping them with once they reach adulthood. We have a bit of time to think about it as the oldest is 7 and youngest is 8 months. (They have 529s and custodial investment accounts)

  6. Hi Sam, thanks for this article and the thought provoking discussions in the comments. It’s hard for me to imagine going through the mindful machinations via inorganic steps of telling my parents “I love you” for a certain number of times before asking for money or deliberately discuss with enthusiasm about a pricy car just to emotionally manipulate my dad to buy me one that’s half as expensive.

    However, I do appreciate that you gave advice on how to demonstrate one is capable and competent when asking for financial help. After all, if I was giving my money away, I need to know that my children respected the act enough to not squander it all away.

    I think we can agree that we want our children to be happy…but what is that exactly? Being in my late 30’s and financially thinking about how we want to support our 2 young children in the coming decades, I don’t know what happiness may be for my future children because I will not be them. So I don’t have the answer but there is beauty in the struggle and if we overdo it with the financial support, will we paradoxically deprive them somehow by potentially giving them too much?

    In my limited world-view…hard-work, patience, and consistency are values easy to espouse, hard to practice, and I believe above all else builds financial stability. As parents, we will always be there for our children, whether it be financially or emotionally. However, I find it quite a bit harder to instill the above qualities in a human being as they are not innate qualities that someone who is struggling financially would possess.

    1. Yes, the mindful machinations are not natural. It’s just feedback and one woman’s way of trying to solicit financial help from her parents. Hopefully, everything is organic. But that’s not reality.

      One commenter wrote, “Making our children suffer is a poverty mindset,” is something I have to think more about. Because at this point, I’m ready to give everything to my children.

      The one thing we should give them so much when they are young is our time. I will give my kids as much as they want.

      1. Agreed, the most valuable commodity is time. Also agreed that we as parents shouldn’t want our children to suffer for the sake of suffering.

        I suppose I’m worried about letting them skip a step by providing too much. You’re a tennis guy and so am I…no powerful forehand without proper footwork and balance. Resiliency through the lessons of life allows a person to be set up with the basic fundamentals to thrive.

  7. Paper Tiger

    Great article and timely for me as our daughter just graduated from college 2 weeks ago. Obviously, this is an individual decision and a lot depends on the maturity and mindset of the child. Our daughter is an only child, as I got married later in life, and she was born just as I was turning 41. She’s been a great kid, very responsible, hard-working, and goal-oriented. She understands the value of a dollar and appreciates the advantages she has been given. We paid for college so she is debt-free and there is still plenty in her 529 to cover grad school if she goes that route.

    We intend to help get her started on the right foot. She majored in Nursing and landed a job at one of the finest University Medical Centers in the country. She starts in August. We just bought her a car as a graduation present and her grandmother put $5K in her checking account to help her with cash flow until her job starts to pay out regularly. As a nurse, she will be paid hourly and we aren’t sure what her initial hours and cash flow will look like.

    We paid the first year of renter’s insurance on her apartment and car insurance and I intend to fund her IRA to the max each year. I’m assuming she will only be able to afford to fund her retirement account up to the company match so I wanted to supplement that by contributing to her IRA. If she likes her job and location and wants to buy a condo rather than continuing to rent, I am sure we will help with that as well. If she stays at least 3 years with her employer, they will pay 90% of her grad school expenses so what is left in the 529 can continue to accumulate for potential future grandkids.

    My feeling is our daughter will not have the same advantages that we had as baby boomers. I doubt the markets will be as strong in her life as they were in ours and I’m concerned the government is going to work against her when it comes to investing and taxes. I also want to pass on as much as we can to help her out while we are still alive because I’m sure the government will continue to try and take what they can from us that we intended to pass on after we are gone.

    My wife and I have worked hard, saved well, and invested as smartly as we could. Our retirement plan appears to be in good financial shape so we have the ability to help our daughter without compromising any of our plans. This really was our plan all along as we worked hard to be in a position to make this happen for her so we are grateful to be able to see it through and make our daughter’s life a little easier without the fear of her taking advantage of it. She has not asked for any of this help but we know she appreciates it and will use it the right way.

    1. Thanks for sharing. It sounds like she’s a great daughter and you guys have a solid plan going forward.

      I didn’t think about there being money left over from a 529 plan to pay for graduate school given the rapid rising cost of undergraduate tuition. That’s great that there is for you guys.

      I can feel the love in your family! And it definitely doesn’t sound like that by helping her, she will become entitled or spoiled like some of us parents fear.

      1. Paper Tiger

        Thanks, Sam. We feel very blessed as a family and try not to take it for granted. Again, great article, and thanks for continuing to be thoughtful and responsive with your comments.

  8. This is something I’m currently struggling with. So far my daughter has done just about everything right. She’s gonna be a senior in college and wants to go to graduate school. So far mom and dad have paid for everything. In a perfect world she’ll get a job that will pay for her masters. If that doesn’t happen we’ll probably pay for it. I would also love to help her with a down payment on a house.I understand the suffering argument, but dammit that’s what I did. Even though I have that pride that I did it all on my own I worked my ass off so I could make it easier for my kid. I think it’s case by case basis. If your kid is good help them. If your kids a asshole well then you probably are too.

    Thanks, Bill

  9. If parents help kids with big expenses, its only fair for adult “kids” to then help their elderly parents out in later life.

    My parents paid for college and wedding, and gave me a few gifts of $10k over the years. They made it possible for me to pursue risks with my career that have paid off. i knew I would never starve, they always had my back. But in return I will pay for them to have a fun retirement- I pay for vacations, travel, gifts and anything that feels like a “splurge” that they wouldn’t spend on themselves. When they need help in later retirement and they’re tight with money, they’ll have it from me, no question.

  10. Outdoor Guy

    Studies I have seen, including in the Book the Millionaire next door show that the more you give/loan/supplement your children’s lifestyle the less likely they are to succeed. I have never asked my parents for more than a 10 day loan so that I could pay 20% towards a home purchase while my current home was waiting to close… I paid them back 10 days later. Borrowing or loaning money to family is way to risky, it complicates the relationship. Giving – that is simpler and may result in man/woman child rather than a full adult. But at least it doesn’t put the relationship at risk. I have never loaned family members money, I have GIVEN it when they are in dire need.

  11. I am a believer in Warren Buffet’s quote to the effect that he wants to give his children enough money so they can do anything, but not so much that they can do nothing. That amount will vary by family/child, but I think that is a good target. For every “rich kid” that someone wants to point to who lacks work ethic or character, there are plenty of similar examples of poor and middle class kids with those same failings.

    We have 2 children – 25 and 22. Both out of school and working ($70-$80K range) to build skills and help them better understand their interests and opportunities. In the next few years, they both anticipate transitioning to their own business or companies. My wife and I do not have businesses that will transition to the next generation, which puts some limitations on transferrring our wealth to our children. My wife and I currently gift each child the annual max (totaling $30K each per child) and likely will do so indefinitely. We will also use intra-family loans to use the interest rate / return on investment spread to transfer wealth, as well as other legal mechansims. We expect our children to build on our success – not necessarily financially, but certainly in terms of finding something that they enjoy doing and that is productive. If our children ever seem like they are planning to do very little with their lives or falling into drug or alcohol abuse, then we would change our approach. That doesn’t seem likely, but it happens.

    Many of the folks in D.C. and elsewhere have made it clear that they hope to take much of the wealth that my wife and I continue to work hard for. I would rather my wife and I decide who gets our money, rather than politicians and others whoe feel entitlted to take it.

  12. While this post rings true, the last couple of years for my family in particular has made me much less willing to use them as a resource.

    Parents in particular both work in major covid risk industries (director of a nursing home and frontline at a meatpacking facility), and the physical toll (and generous amounts of overtime) it has taken on them has them both looking at retirement 5-10 years earlier than expected.

    As a result, I’m almost looking at a perfectly backwards situation: How much money would I need to give them to quit, today, and never look back?

    1. Only you can answer that, but sounds like a GREAT idea! Have a conversation with them. So many variables to consider.

      And please ask them to negotiation a severance if they leave as it sounds like they are in their 50s and have been at their respective jobs for a while.

      1. Christine Minasian

        The question I have is when someone’s been given (and not loaned) a large amount of money from the Bank of Dad & Mom, are they embarrassed to tell others how they got their easy start or are they screaming it from the rooftops to their friends?!?

  13. After an initial unpleasant financial dealing with my dad, I resolved to never ask him for money again. Ten years later I asked him to loan me a couple thousand dollars to hold in my savings account while qualifying for a mortgage. When I went to repay the money, he said keep it since my wife and I had just had a child. I think the intermediate ten years had shown him I was now a responsible adult vs. the out of control person I had been. After that, there was no way I could refuse my brother when he asked me to do the same for him. My son is unready to act responsible with and funds given to him, so it isn’t going to happen anytime soon. As indicated in the article, showing you are responsible goes a long way towards the bank of M&D providing financial support.

  14. As a Millennial, the graphs are dire and not surprising and illustrate why many of us are disillusioned. Add on to that climate change and the prospect of another pandemic to rival covid19 before we die.

    Once Boomers die, I’m curious if we will see a sharp increase in wealth and particularly RE wealth through estates and inheritance for Millennials. Or, will various private firms and the government gobble those gains.

  15. The Bank of Mom and Dad for us is in form of a trust where the trust invests and owns a partial stake in the home purchase. And let me say, it hasn’t been evenly divided amongst us kids. I’m fine receiving absolutely nothing, but when one sibling is heavilly, heavilly favored by the Bank with huge down payment, it doesn’t sit well!!! Reason from what I was told was that he asked for it and that my dad would spend some time there (potential pre-retirement job for him, but it fell thru) which hasn’t happened much at all. My wife is more upset at it than I am, but I also don’t think this was fair or planned out well. It’s allowed my brother to retire before 40.

  16. Our three kids went to college for free on merit based scholarships even though we were millionaire parents. We did not pay anything toward their grad school or med school. We have not given them any help on housing or living costs. We did give each of them a token $10,000 one time and may do that again in the future, but the idea of loaning them money sounds like one of the worst ideas. Turning a family relationship into a business transaction, it is way too big a risk. If someone is badly injured or has health problems we would have no problem stepping in but they need to make it on their own, or you truly risk turning them into weak pathetic adult babies. You’ve mentioned several of those in your area in the past. My millionaire parents were the same way, no financial help until they passed away and left a big inheritance. I’m glad they didn’t give us significant money early in my career. I achieved a lot of success and part of that was because I graduated from college completely broke and had to succeed to feed and house my family.

    1. I wholeheartedly agree. Taking away their drive to grow, succeed, plan, and provide for themselves usually leaves them in an infantalized state.

      1. I think we can all agree that is bad. I just don’t know if that is the default result if we help our children. I don’t think I would’ve worked less hard if I was giving some money for my down payment. I truly believe I would’ve worked harder to show appreciation to my parents and to pay them back once I had enough money. That was my mentality in high school when I decided to go to William and Mary to save money. As soon as I got enough money to pay them back I did. And luckily William and Mary it wasn’t expensive.

        Therefore, it’s a case by case situation. I would happily give any amount of money to my parents if they needed it. Without them, there is no me.

  17. I think this is part of the ladder of wealth, once you have enough it’s best to start sharing it. Take care of your retirement, then probably your children’s college, weddings, help with down payment, first car etc. . . At some point it’s an annual check for each child’s family? Why not start giving it away if your kids are responsible and your wealth is growing at a faster rate?

    Not sure if it is typical but Looking back at my family tree, the men died before their wives so it was the Grammas who were giving away the money. Which I’m pretty sure increased the levels of education and home ownership.

  18. Great post as always and great discussion. We raised our kids with the middle-ground in mind on this topic. In short, we tried to allow them to work toward a goal and enjoy the satisfaction of accomplishment, while always looking for ways for the Bank of Mom & Dad to help them out along the way. For their high school car savings, we agreed to double the amount that they earned on their own. For college, we saved for their education, but also agreed to partially “reimburse” them for the scholarships that they earned on their own. Our goal was to teach them the qualities and attributes that are needed to succeed in life while also allowing them to enjoy freedom from the debt that is crippling our younger generations today. The ROI associated with giving our kids their inheritance during their younger years is much higher than hanging onto all of our wealth until we die.

    1. John the Donkey

      This is probably the best approach. Ironically by matching them on what they earn, you are effectively giving thier wages the purchasing power they would have had 50 years ago, back when the powers that be incentivized work instead of watching investments grow

  19. My parents have done well enough to save for their retirement, but not so well that they were able to pay college costs or help out with down payments for their kids. Not having extra cash doesn’t mean they weren’t able to help out in a significant way though.

    They made it very very clear that the best financial decision was to stay local and live at home throughout college. Then when I got married and was saving up for a house, they generously offered their basement apartment for free for 18 months to enable us to weather the tail end of the great recession and save up for a down payment. So while they didn’t gift us cash, and I don’t expect they ever will, I still credit my parents for significant financial assistance in my 20s in the form of room and board. So less the bank of mom and dad, and more the hotel of mom and dad.

    I don’t know if I’ll have enough cash to act as the bank of mom and dad (Nor do I really plan to if I have the means), but I do think there are a lot of ways to provide financial assistance in a way that sets them up to thrive in their 30s rather than pay for a series of expensive decisions they made in their 20s. Whether that means handing down old cars or inviting them to dinner 1-2x/week or offering to babysit 1-2x/week to help cut down on child care costs, there are a lot of ways to provide financial assistance without being your kid’s bank.

  20. Frugal Bazooka

    My parents were not rich, but they were well off. I thought about asking them for money as a young man struggling to build wealth, but I never did because I already knew what the answer would be. No. They never had a problem saying no to any request they thought idiotic. They brought all 5 of us up to understand that we had to make our own way just as they did. They lived thru the early and mid 20th century and it was no picnic. I think they figured that my world was a lot easier than the one they tamed, so why would they step in and upset the balance of nature?
    Today, I thank them profusely for letting me struggle to find my way thru the world financially and otherwise. I learned so much more because of that struggle. I met and befriended so many people because of that struggle and today I look back and appreciate my success for what it is – my struggle to succeed. While I have had mentors and friends who have been helpful, it was my hard work and belief in myself that was the key ingredient. My parents gifted me that esteem and for that I am eternally grateful.

    1. You gave me an idea. I’m just going to straight up ask my kids whether they would rather struggle and feel the tremendous glory of succeeding on their own. Or whether they want a helping hand, which will help them succeed, but take away the satisfaction of succeeding mostly on their own.

      We’ll discuss multiple different scenarios and outcomes. It’s worth asking and explaining. Why the heck not.

  21. I’m super uncomfortable with the idea of gifting money or cars to adult children. My parents paid for all of undergrad, tuition for law school, and bought me a car when I was 16 that I drove for a long time, and most importantly, they spent a lot of time with me growing up and made sure I developed their work ethic. Those things make sense to me. But now as an adult, I always try to pay when we go out dinner, and send them nice gifts, even though they have a higher net worth and income than me. I guess I am too “proud” to ask them for things, and I’m good with that! I understand why uber wealthy folks might do more for their adult children, especially if their adult children are pursuing meaningful work despite the extra advantages.

    1. Can you elaborate why you are uncomfortable given you got your law school tuition paid for and got a car for them?

      If you turned out OK, what gives you fear that your children might not turn out OK with your financial assistance?

      1. Sure. Because they paid for those things to help me get an education, all before I was 24, and they could easily afford it. Then, the expectation was that once I had an education, I was on my own. It was undoubtedly a huge advantage to be 24 years old making big law salary with no student loans. But I also became a fully independent “adult” the day I graduated, and the help stopped there. Of course, every situation is different, and if my parents had a hundred million dollars, they might have done things differently, and I might have pursued a career in the arts instead of law.

        It’s all relative! I plan to support my kids education as much as possible, too, and will likely buy them a modest but safe car when they turn 16 as we need one where we leave, but I don’t plan to gift them money for a down payment on a house or give them an adult allowance. t I might feel differently about that if I was uber wealthy or struggling.

    2. John the Donkey

      Honestly I think the biggest killer of the work ethic is the fact that costs of healthcare, education and housing have become completely decoupled from wages. Meanwhile investments are yielding bigger dividends than ever.

      When working full time is no longer as profitable as sitting in a pile of money and watching it grow, and, more importantly, is no longer a guarantee of a secure financial future like it once was, you can be sure that faith in the work ethic will slide.

  22. I think our goal as parents is to prepare our children to excel in life and to give them a better start at it than we had. If we have the resources and don’t help them a bit, then are we doing our best to give them that head start?

    That being said, we also have to prepare them by teaching them work ethic and not expecting to rely on our generosity. It’s a balancing act.

    At this point, my wife and I likely have more net worth than both of our parents combined. There is nothing they could give to us to help us financially, but her parents insist on paying for our meals if we go out to eat together even though we don’t need it. The Bank of Mom and Dad takes many forms.

  23. Canadian Reader

    We plan to help our kids as much as possible. I used to think they would need to earn it and go to the school of hard knocks, but now I realize forcing them to struggle unnecessarily is a poverty mindset. Especially going forward, it will be hard for meritocracy to make its case among all of the competition.

  24. We’re on the “mom and dad” side of this conversation today. We’re already planning (today) for our middle schoolers and how we can eventually “set them up for success, likely in one of the hotter job market cities, when the time comes, by easing their housing (and daycare) burden”. We have two U.S. West Coast properties and one East Coast property. My sense is that we’ll be shuffling them when kids get out of college and start deciding on geography. I myself got nothing growing up. Trying to duplicate for my own kids that is just nonsense IMHO. The world is a much more competitive place today than 30+ years ago.

    I’m looking forward to your (future) posts on how to do all of this well enabling smartly…

    1. KT in the Deep South

      The greatest gift you can give your children is a good work ethic. Nothing bolsters self esteem like working hard and saving for what you want or need. Very few people have the Bank of Mom and Dad money you are describing, and I always thought it was more important to fund your own retirement first. I love your emails and generally like your advice, Sam, but I think you are way off base this time. Sucking up to your parents and only being nice when you want money(that they may or not have available) is not considerate, healthy or moral!

      1. I’m just sharing the strategies others who have received financial help from their parents have shared with me. I don’t expect anything from my parents as I’m way beyond needing their financial help anymore.

        I wrote this post to explain why some people seem to be getting so far ahead at such a young age.

        “ Very few people have the Bank of Mom and Dad money you are describing”

        With all the data and all the logic showing our parents are the wealthiest generation ever, why do you believe this? I think it’s important to realize that just because your parents may not be able to provide for you as an adult, many parents are able. We have to broaden our perspective.

  25. I haven’t taken a dime from my parents since I graduated college. I actually ended up giving them money (which I regret, I could have grown that money to multiples of that and could have even given them an even bigger gift).

    Some days, I wonder how life would be like if I did receive financial help from my parents. How much further along I would be in my financial independence journey…

    1. Not receiving any help after college or simply make any Financial wins you have even sweeter.

      At the end of the day, we want to use money to balance out the lifestyles of people we care about. It would be greedy for one person who is very wealthy not to share the wealth with parents or siblings.

      1. Yeah but if they gave me a dollar, for example, I can turn that into $10. They are pretty awful with money (not insulting, factually correct) and when I tell them that, their ego and pride gets in the way and denies it.

        If I give them a dollar, they only get a dollar’s worth of joy. If they give me a dollar, I can give them $10 worth of joy down the road.

        I don’t mind sharing wealth but there’s a time for that. I can generate much more returns than my family ever can.

  26. The Bank of Mom and Dad does not charge interest.
    No paperwork/credit check needed.
    Loans never get defaulted or goto special assets and can be forgiven.
    Beware! They own you until you get on your feet. Nice!

    1. Well, if you had a great childhood up until age 18, I don’t think he would mind being owned by your parents as an adult. If the relationship is great, I don’t think you’ll ever feel really owned. You’ll feel appreciated and may be a little bit guilty.

  27. Before I became a parent I wouldn’t have really gotten this post the way I do now. My parents helped me with half my college tuition and that was it. I had to do the rest on my own. If they had the means I think they would have probably given me more. But they didn’t and I made do just fine.

    Some of my friends got a lot of help from their parents. Car, down payment on house, grad school tuition. One has been taking care of her single mom since college (her mom moved in with her) so she’s definitely put in her time.

    As a parent I expect I will want to help my kids as adults once I see them grow into independence. And of course this is I f they are also appreciative, good people, and stay involved in our lives.

  28. I’m torn here. On one hand my parents were always trying to be the bank of mom and dad.

    They managed to pay for all three of their kids college costs. They gifted us with three brand new cars (think Honda Civic) and helped pay for my wedding. My parents used their network to help get me and my siblings jobs. Plus both my other siblings lived with my parents for a time post-graduation as well.

    I certainly benefited from their generosity and their success.

    Yet, I wouldn’t want them to do any more than that. At some point I had to break out on my own. Pay my own way, and fight my own battles.

    I’d like to do the same for my children, but I want them to grow and prosper and I don’t want to overly coddle them financially. There’s a real fine line I think, but my parents handled it perfectly.

    1. The fine line I see is letting the make their choices, and seeing how the consequences are reaped for your kids. That too me is the big thing. Say you are going to do something, stick to it, don’t coddle, etc. The people who I saw had the best outcomes were those that had to manage their own finances in some way.

      An example would be you set an allowance, the kids can negotiate it (if you want to teach that skill) sign a contract, and stick to it. An example I had, we got an allowance for $2 a week, had to mow the lawn to get it and parents paid no money for activities (like movies with friends, etc.) There was no “Im broke, can you give me $2 for the dollar theater dad to go with my friends”. You have an allowance, save it. You want more – renegotiate next year. Yep shrewd – damn did that teach me how to negotiate, sign contracts, etc. when I was 8 years old.

      1. I love the renegotiate next year. So far, we have “Star Charts” for our kids and they earn money based chores and behavior. Then I bank the money for them and track how much they have earned. When they want to buy something, they can withdraw from the bank. My kids are 3 and 5 and so far its working well for the most part. It also has slightly helped them to better behave. Slightly!

    2. “ Yet, I wouldn’t want them to do any more than that.”

      What more could they have done? After paying for college, buying you a car, and getting you a job through their network, do you mean buying you a home?

      Using one’s network to get their children a job seems tougher now due to heightened sensitivity around nepotism, college bribery, etc.

      1. Yeah, I meant downpayment on a house or giving money if asked. Maybe my parents had a certain strategy, but I’m not so sure. Honestly, the best thing they did for me, was make me to go get a job when I turned 16 and could drive. I had my own spending money and I learned what the real world was like real quick.

        You are probably right on nepotism. Maybe by the time our kids are heading to college they’ll have to have resumes on the blockchain and a more rigorous process. Not that I also didn’t earn jobs based on my own merit, I certainly did, but I also used my parents connections to my advantage as well.

        1. How do you know that you did earn it over the other candidates that didn’t have your family connections?

          I’ve always believed it’s not what you know it’s who you know that allows someone to succeed. After all there are no “self made” people everyone got somewhere by the help of someone else. Anyone that thinks differently is in denial unless they made their own tools to grow their own food, etc. They also would never be able to sell to another either cause again that’s using someone else…

        2. BTW, can you share what type of job you got through your parent’s network and how you got it? Was it a good job you stuck with?

          Getting a good job after college was my #1 biggest worry. After 4 years of college and the money spent, I didn’t want to feel like a loser without being able to land more than a minimum wage job.

          Lucky, I got a good job. But it was a hairy, hairy situation that required 7 rounds and 55 interviews over 6+ months!

  29. Wow, just an awful manipulative article. Extremely, disappointing that you really think that way. Perhaps struggling a bit may even make one more compassionate. 1. No, adult child have not been doing this forever.
    2. Wealth transferred based on love? So if Snowflake 1 gets $100k from his parents and Snowflake 2 only shakes down his parents for $10k. Snowflake 2’s parents just don’t feel the love.
    3. Why not close the bank of Mom and Dad after the shrewd child extracted $300k for college?
    4. Your first chart is deceptive it starts boomers out at age 35 and the next two generations at age 0
    5. Not much hope for your children if all they have to is call you 3 times a month and say “I love you”
    6. Plan ahead before begging/manipulating now there is a winner’s strategy.
    I will stop there as your article just dribbles on from there.
    You are much better than this article conveys.

    No need to put on website for your benefit only.

    1. Sorry to disappoint you Bill. Hope people are smart enough not to be manipulated by feedback. Sometimes, we must face reality and take action if we are unsatisfied with the way things are.

      The next time I see these folks, I can relay your disappointment to them.

      I would suggest reading the other comments in the article to gain more perspective.

      How old are your children and how are you tackling this topic with them?

  30. Christine Minasian

    Why am I vomiting in my mouth right now…
    I cannot believe how much help people get!
    My husband had divorced parents, paid for his own college, started his own business, worked his *SS off obviously since he HAD to. We were given nothing. I wouldn’t have it any other way….NO one can say behind our back we had help. But I can see as my kids get into their 20’s…we do want to help them financially because we can! Your friends’ dad is right “you can’t take it with you”! But do not forget….if given too much- kids DO NOT have a good work ethic!!!

      1. I respectfully disagree. My husband I (ages 50 and 51) still receive annual gifts ($15,000 each) from my parents. And my parents pay for our children’s private school tuition (elementary school and high school), which is $45,000 per child per year. And my parents have fully funded 529s for each of the grandchildren. And they helped us with our down payment 20 years ago.

        Yet my husband and I both work hard at our full-time jobs (two lawyers), and our HHI is over $500,000 per year. I don’t consider us to be slackers at all.

        In our family, my generation is the first one where there is financial security. (My parents and my in-laws all grew up modestly.) We plan to pass down a legacy to our kids — college, wedding, a down payment on a house, and perhaps annual giving. I don’t worry about the kids turning out to be slackers because we practice stealth wealth, and have a nice lifestyle (but not extravagant).

        Also, I’ve noticed in our neighborhood (UMC area) that a lot of people seem to have family money to buy their houses. Their jobs may be decent, but nothing great. And yet they live in nice (not extravagant) homes in a nice neighborhood. I guess there’s no law that says that houses must be paid for with W-2 wages.

        1. John the Donkey

          Considering that housing costs have become decoupled from wages, it’s only to be expected that more and more people are going to have to look to money beyond thier own earnings to buy a house.

          If people really want to instill a work ethic, maybe start by making a full time job more profitable than sitting around watching investments grow. Or at the very least, make it capable of supporting a decent standard of living like it was in the past.

    1. It will be interesting to see if you can resist not helping your kids in their 20s and beyond, especially if you have more than enough to live on.

      There has been so much wealth created over the past several decades, that I can’t imagine parents more parents deciding to stop helping their adult children any time soon.

      Just because one had to suffer growing up or struggle doesn’t mean their children do right? The whole point is to provide a better life for your children than what you had. Or maybe not.

      As I have thought about relocating to Virginia so my children can experience more hardship and racism like I did growing up, instead of moving to Hawaii.

      See: The Importance Of Feeling Consistently Uncomfortable For Personal Growth

    2. I will say that if you give too much – then that is a problem – as someone who has received a lot over the years, it has not changed me. My parents have said (every year) don’t expect anything next year. It is a gift and do with it as you will. I learned to get on my own two feet as an adult, and had a few things given to me, but not so much as I didn’t have to earn it. I never have gone to my parents to ask for a handout, I have asked for a loan – and had to pay interest like a bank. I have done the same to them when they borrowed from me .. so it is not anything that is not expected as a family.

      It honestly depends on your family, how you phrase things, and how it works with personalities. My parents had a college fund setup for us. They told us day 1, this is all you are getting from us. I chose to go to a out of state school and blew through 30% of my money in one semester. I switched schools and went to a cheaper school and when I graduated had money left over for a 20% down payment on a house. It is all about what you do and how you use what opportunities are given to you.

      I am not denying one iota that I am lucky, but I am also saying that I am some spoiled rich kid with zero work ethic with my hand out waiting for handouts. I work hard, have earned what I have received with over 20 years in business and 2 masters degrees (one paid for by work, one paid for by teaching as a graduate TA). That is what my parents taught me, hard work, and patience, will be rewarded. Generosity is just another gift, one that I wish to teach to another generation.

  31. People always ask “where did you get your money skills from” and it was my parents. My parents have always had good nuggets of truth, as they have saved over their lifetimes. When they tipped that scale of having enough for retirement, they started giving to their children. One thing my dad says (hell said it yesterday on the phone to me), “You can always use more money when you are in your 30-40s vs when you are in your 60’s, and I cannot take it with me.”

    My parents have been generous over the years and have given about $300k in the last 30 years since I graduated High School and got into college. They keys are as follows. 1) Don’t take their generosity for granted. 2) Thanks them. 3) Do something with their money (I invested most of mine). 4) Pass it on. 5) Realize why they are doing it (Rather you get it now, than later & Why pay death tax if you don’t have to).

    As for #4, I am doing the same with my Son. He is 26, and I have given him some money and things over the years. I have given him a car ($7k sedan), a deal on the house he is buying from me (below market value), some money to help fix things on the house, etc. I have given he and his wife money for paying off debts (she came with college debt), and they know not to expect it every year, but when times are good, why not share. I do the same with my nieces and nephews. I have UGMA/UTMA accounts and have given them money over the years. I will be their favorite uncle when they graduate high school and have $10k sitting in an account for them.

    1. Lucky kids! $300,000 is an impressive amount to receive as an adult, especially back then yah? What did your parents do for a living?

      How much money total would you be comfortable giving your son after the age of 26? This is a dilemma I know I will struggle with in 22 years when he was that age. Thx

      1. Mom was a school teacher and Dad was an auto executive. We lived mostly on mother’s salary, so we were not living high on the hog, and saved most of my dad’s salary for decades. I work in IT Security and am a Director making just over six figures. Not a ton – but enough to live on less than I earn, invest the rest, and move on. Not everything my parents gave was cash. In fact most of it has been in the form of literal gifts. When I was 18, my dad gave me a car (well $12K toward a car – gifting amount at that point) as an auto exec, he got a discount. I drove that car for 9 years through college and into my first few years of work.

        Honestly, I don’t know how much I will give my son over his/my lifetime. He has the mindset that this is gifts, he is using it for the “right” things (Pay off debt, emergency fund, have a little fun with part of it). He is not spending it on “hookers and blow” and since he is doing that (even though I am not telling him it), he might get some more. I know people who get gifts and it becomes expected, and budgeted, etc. Part of it, is how much “extra” I have, how much makes sense, and meeting my financial goals. I know I am getting an inheritance from my parents when they pass, but I am not living life waiting for that inheritance. I can pass on what I have more than enough of to help him, and supplement what I need with future income streams.

        My thing that I am looking at is I would be a (multi)millionaire if I hadn’t help from my parents, just not as quickly. I am looking at the same thing with my son, why not help out enough so he can get good nest eggs. I gave him a car while he was in college, I gave him $20k over 4 years to create a Roth from age 20-24. I don’t know what else I will do, since it is more spur of the moment. At 25 I sold him my paid off house, for a discount, while I moved to my dream home. My big thing is he can use it more now, with kids on the way, to get his house in order.

        This is where “multi-generational” wealth comes from. I know people read about it but if you have families that can pass along enough to help, that little extra can help in a lot of ways. I have a siblings who are not as “well off” due to various factors. One lives in a high priced state, and has very little savings. Another has a lot of kids expenses and for years didn’t make a ton of income (they are now both working again, as kids are school aged, and doing better in that category). I was lucky – single parent – had custody – and in control of my own destiny. I am just ahead of the game as I had my child early, and got my act together quickly.

        1. My parents were able to pay for my college. My college roommate’s parents were not and he took out loans. 18 years on, he is still chasing his undergraduate debt. OTOH, I have been able to save and benefit from nearly two decades of compound interest.

          If your parents saved for your education, THANK them. It is a gift many kids do not fully understand at the time. Do not squander it.

          1. My parents did, I have thanked them, and paid for my son’s education as well as he graduated with a degree with no debt. He thanks me every so often as well as his wife has college debt, and they are dealing with that.

          1. Little D works as a Project Manager in the printing industry. *Think* he is the one that takes the clients wishes, gets quotes from printers, manages shipments, etc. for books/magazines/etc. His wife works as an accountant (both with college degrees).

            As for how do I determine if I did a job as my parent, simple:
            1) Are they prepared to be positive contributing members of society (Jobs, pay taxes, etc.) (Then I did my job as a parent, gave them enough exposure to skills/training to work).
            2) Are they able to live on their own without any (my, family, government) assistance? (Then I did my job as a parent to give them the right skills/training to live on their own).
            3) Are they happy? I mean they are not struggling under the weights of the world, and that they are able to have coping mechanisms when life goes sideways.

            Beyond all that, it is just morals and other stuff which two rational adults can have different opinions on.

            1. Great three points! I agree. Happiness is a tough one though as it is often elusive, even to the most privileged people.

              If one is happy, everything else seems to take care of its own.

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