Millennial Avocado Toast Analysis: Permission To Splurge Because You Can!

Millennial Avocado Toast Analysis: Enjoy Living It Up!

Boomers bashing millennials about their avocado toast craze has become a meme. And the reality is, spending massive money on simple food is not a great habit to build wealth.

“When I was trying to buy my first home, I wasn't buying smashed avocado for $19 and four coffees at $4 each,” Tim Gurner, an Australian property mogul told 60 Minutes.

“We're at a point now where the expectations of younger people are very, very high,” Gruner said. “They want to eat out every day, they want to travel to Europe every year. The people that own homes today worked very, very hard for it, saved every dollar, did everything they could to get up the property investment ladder.”

Generational Warfare

Tim's words have ignited a backlash from millennials who are offended someone would attack their eating desires. Eating expensive food is a sacred right! The nerve of this guy. Next thing you know, he's going to dissuade people from buying $300 designer jeans when they already have a credit card balance.

As fate would have it, I just had a $10 bowl of guacamole the other day at Tacoliscious in the Marina district, after spending time doing some ceiling patch work on my rental house. All around me sat a bunch of young and fabulous looking folks who enjoyed the 78 degree San Francisco sunshine. Oh, how I wish I didn't have a house to do work on. I could have gone straight to brunch!

Bottom line: If you're a millennial who wants to spend $25 on the finest breakfast consisting of avocado toast, bacon and crumbled feta cheese, go for it! You don't need to save for a house because you're either living with your parents or your parents will eventually buy you one when they can't stand you any longer. And if they don't buy you anything, they'll at least leave you their house when they die. 

Millennial Avocado Toast Analysis

I know some of you think I'm being a bit flippant. But, living in NYC and SF over the past 18 years, I've seen with my own eyes how so many parents are supporting their adult children. Heck, my roommate one year out of college left me because his parents bought him a $260,000 one bedroom condo in Manhattan that's now worth over $750,000.

Let me share with you some recent encounters and some statistics as to why it's OK for the majority of you to spend aggressively while young and not save for my favorite wealth building asset class.

Neighbor One Millennial Avocado Toast

Brendan is 27 years old and lives in the basement of his parent's house across the street from me. He's a nice guy who loves to go snowboarding every chance he can get. He told me he went up for a total of 45 days this winter because Tahoe had the most snow in decades. Right on brother!

Just last week he, his girlfriend and two friends got back from a three hour SF Giants game that started at 1:05pm. I was doing some final staining on my planter boxes when they pulled up.

They were so happy to enjoy a great weekday victory while his parents were at work. He has a lot of free time because he bartends part-time. With living expenses close to zero, he doesn't need to work a lot.

Neighbor Two Millennial Avocado Toast

Jason, the then 22 year old who was living at home attending community college three years ago when I bought my current house is back to living at home after transferring to and graduating from UC Davis. When I asked his mother what he was doing when she sneakily entered my property to get a closer look at my new landscaping work, she said, “random things,” implying he was still looking for full-time work.

Meanwhile, Jason has invited two of his friends to live with him in his parent's house. His parents no longer live in the house as they have another house up north. They just check-in every couple of weeks or so.

One of Jason's housemates just bought a new Harley Davidson for about $10,000. He works at the grocery store down the hill. Jason himself has a racing bike and a sports car. Housemate #2, who works at Chipotle, drives a Ford Flex. Why ride the bus and get a full-time job when living costs are completely subsidized?

Neighbors Three, Four, Five, Six, Seven: All either live for free or inherited their houses. They're all between 35 – 60 and are really nice folks who don't have full-time jobs. For more details, see: A Massive Generational Wealth Transfer Is Why Everything Will Be OK

House buying competition: 

What percentage of first time homebuyers get help from their parents in the form of a downpayment or total payment?” is a question I've asked about 25 real estate agents so far this year. Their answers range from 30% – 70%. Every agent said that parental help is extremely common. The media likes to demonize foreign buyers for making real estate more expensive for locals. But it's really parents helping their children who make the bigger impact.

For example, the winning bid for the house that I had put an all cash offer for in April was from parents buying the house for their son. He graduated from college this year and is starting at Airbnb. I'm guessing the final sales price is $1.82M, or $321K over asking. Next time you go to an open house, ask the listing agent my same question.

Inheritance expectations:

Empower surveyed over 100,000 millennials who use their free app. They found the median amount a millennial expects to inherit is over $1,000,000 (!).

Although the inheritance may not come until later in life, if you think you have at least $1,000,000 coming to you, you're not worrying about spending $20 bucks on glorious avocado toast. Instead, you'll probably want a $12 mimosa to go along with it! Entitlement mentality can't help grow as a result.

Who can blame a millennial for quitting a job only after a couple years if it's not the perfect fit? No longer do young adults have to “take it and like it” as we older folks did when paying our dues. If there isn't constant recognition from management and a clear accelerated career path, then it's sayonara suckers.

See: No Wonder Why Millennials Don't Give A Damn About Money!

Low housing expenses:

A recent FS survey with over 3,000 respondents showed that 66% of you spend less than 20% of your gross income on housing. That's fantastic. Meanwhile, a good 4% of you spend 0% of your gross income on housing because you either have financial support or rent out a portion of your house.

With 70% of you doing so well, you might as well splurge on a $180 side of beluga caviar to top off your $12 mimosa and $20 avocado toast. Housing cost is clearly not as big of a concern as the mass media makes it out to be.

What percentage of your gross income do you spend on housing?

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See: Housing Expense Guideline For Financial Independence

Live It Up Early Or Late, It's All The Same

After the age of 34, I started living the millennial dream life because I had left Corporate America. After a little bit of writing in the morning, I'd play tennis for a couple hours and then have a boozy brunch with other unemployed friends.

While I didn't order $20 avocado toast, I did increase my spending on $25 chirashi bowls (assorted sashimi over rice). Afterwards, I'd give in to food coma and take an hour nap on my couch. Life was wonderful!

I got to know many 20-something and early 30-something year old folks who didn't work full-time. They seemed to love life and all lived at home with their parents. From the millennials with full-time jobs who I met while consulting at some of the fintech firms, I know of several who had parental assistance with downpayments on new property. Given that was back in 2013-2014, they're now much wealthier.

I got to know many 20-something and early 30-something year old folks who didn't work full-time, seemed to love life, and lived at home with their parents. From the millennials with full-time jobs who I met while consulting at some of the fintech firms, I know of several who had parental assistance with downpayments on new property. Given that was back in 2013-2014, they're now much wealthier because property prices have appreciated 20% – 40%.

Rational Millennials Eating Avocado Toast

Millennials are being completely rational by living their ideal lifestyles before they turn 40 because they CAN. With the internet, anybody can make money online or be a rockstar contractor.

With wealthy parental safety nets, millennials are taking more risks by switching careers at the fastest pace in history. They're also starting companies, taking more time off to travel, and spending more extravagantly.

Some are just plain envious of the millennial avocado toast lifestyle, especially those who busted their butts to get to a level which millennials are already enjoying.

I wish my parents had bought me a condo when I first moved to NYC in 1999. I wish my parents had bought me a house when I moved to San Francisco in 2001. If they did, I'd be so rich I could have turned into one of those Instagram playboys by age 30!

Though I wasn't gifted any property, today I do have four properties which I can gift my children so they can live lives of leisure. Maybe they'll even learn some responsibility as property managers and share some of the rental income with mom and dad. Damn, I wish I were my children!

Final Point Of Millennial Avocado Toast Eaters

Some of you might be wondering what about the importance of pride and independence. By giving adult children everything, we may rob them of achieving self-actualization. While yes, it's extremely gratifying to achieve success on one's own. Don't be so sure that millennials aren't living incredibly satisfying lives.

Here's one millennial's response that sums things up perfectly:

Sam, I didn't have a choice when I was born or to whom I was born to. There are so many bad people in the world. If I don't harm others, I feel I'm already way ahead of the game.

Any millennials out there want to share why they are offended by some random person in Australia who says you shouldn't spend so much on avocados? Given there's such a massive wealth transfer underway, isn't it completely rational to live a life of leisure if you don't have to work as hard to build your own wealth? Are older people simply jealous of the millennial lifestyle?

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165 thoughts on “Millennial Avocado Toast Analysis: Permission To Splurge Because You Can!”

  1. angry american

    Avocados aren’t “expensive food”. Suggesting lower classes shouldn’t expect to afford healthy food is textbook class warfare. I would love to know where all of these kids who supposedly buy 20 dollar breakfasts and travel the world come from; seems like a made up fairy tail to me.

    Oh yeah by the way, with todays insanely inflated economy, avocados cost exactly one dollar. Maybe it’s time to talk about the truth of exploitation in this country, instead of suggesting that our children shouldn’t be able to afford calorie-dense healthy food for one dollar.

    1. If you’re a millennial who wants to spend $25 on the finest breakfast consisting of avocado toast, bacon and crumbled feta cheese, go for it! You don’t need to save for a house because you’re either living with your parents or your parents will eventually buy you one when they can’t stand you any longer.

      Long term, everything is rational. We should feel free to do what we want.

  2. No Debt But Love

    The media is profiting off our economic demise. It’s okay MSNBC, CNN, Fox, do whatever floats your ⛴

  3. If you would like some more ammo for Millennial-bashing, I can send you some some great stuff I saw today. Some article about how not having any isn’t their fault and NOT the result of poor money management, but actually because of wages being suppressed. Or something.

    I think a lot of people who get offended are the older Millenials, born in like ’81, who resent being lumped in with the millennials from say, 1993. Those 12 years make a big difference. It’s really not fair to lump them all in together.

    Myself, as a 23 year old who lives at home…unemployed…couldn’t care less. ;)

    1. Avocado Finance

      Austin, I agree with your comment about stagnant wages. And I disagree with the earlier commenter who blamed people’s lack of work ethic for not being able to get ahead, so to speak. This country is facing a future of increasing automation and most industries, including healthcare, are not immune. Also not everyone is blessed with the same education level, has access to good school districts or has fallback money or a family to rely upon if their entrepreneurial idea fails.

      There are different camps of Millennials as the large gap between the rich and poor continues to increase at a rapid rate and you could say avocado toasts and mimosa brunches are reflective of that. There are those who are eating avocado toast and drinking mimosas because of YOLO, those who can’t afford it and do it anyway to act in denial, and those who can barely afford to eat it at home without government aid.

  4. It would almost be amusing to see a 100% estate tax come to pass. The avocado eating would dry up quick.

    People with 500k to 1 million to leave would eat it on the chin. Those with 10 million plus would make out just fine. It’s unfortunate that people vote against their financial interests but that’s just what it would be.

    When you have liquid millions you can kick down gobs of cash to your family along the way. You can have the nice bankers watching over your hoard write up a tidy insurance policy and take 20% to pass on the rest as a tax free insurance payout instead of paying 50% to taxes.
    When you have 1 or 2 million net worth you are living in/on that. Just something for some of the responders above to chew on.

    As to the article I think you make a good point but your frustration is showing, You can lead a horse to water….
    I’m trying to be more zen myself. If people want to shoot themselves in the foot then so be it, if they have the means to spend their parents money then good for them.

  5. I’m a Millenial born in ’89. Went to school at a public university – albeit no scholarship because I was a screw up in high school – and graduated in economics. Couldn’t find a job in finance (save for a few trader analyst positions up in Chicago), and the only interviews I could get business related were $9-12/hr.

    I’m now a Realtor, finance blogger, and 911 dispatcher. Why? Because Florida has terrible wages to coincide with a high cost of living. In fact, the area I live the median house price is $243,000 and the mean is $234,000. Rent is somewhere between $1200-1800. That’s not feasible to try and buy a home when you’re making $30,000 or less.

    I know I wasn’t the target of Gurner’s speech, but I was perturbed by the insensitivity. That somehow Millenials only have themselves to blame when they can’t afford a home. There are plenty of graphs to show that the economic development of the middle class has not paced with the rest of the economy. Not all who hustle will win the race. That’s kinda the basis of income stratification.

  6. Sam, I am a huge fan of this site. Hell, I’ve even guest posted on this site. But Sam, no. The Millennial bashing. Just…no.

    The generational bashing needs to stop, and this is coming from a guy who recently published an article asking which generation produces the most entitled customers. Not just here, but all throughout the Internet. Depicting Millennials as avocado-eating man-children mooching off their parents instead of working is like depicting Asians as squinty eyed math prodigies who are human driving hazards. Stereotypes aren’t cool, even if you throw out numbers to “back it up”.

    Honestly, Sam, this sort of article is beneath you. It’s the sort of thing I’d expect from MY blog, where there’s more off-the-cuff rants than a Donald Trump rally.

    Sure, many Millennials live at home with their parents because they are lazy, irresponsible, and unwilling to work (just like my 50-something year old neighbor across the street who still lives with HIS parents for that very reason). But many of also are suffering in a country with rising home prices, stagnant wages, worthless degrees, and skyrocketing debt. My dad went to college for $50/year. No scholarship; that was just what it cost! I have customers who bought their modest “regular” homes around the time I was born for <$50,000 and now have them valued at over a million. Times are different, and I wonder how many Millennials would still be living at home with their parents if the economy of their parents still existed.

    And in our service economy–where we all serve each other, move money around, and push papers through/around government bureaucracies rather than creating anything–I only see this becoming worse and worse. That's what happens when the manufacturing jobs and automotive jobs move overseas while the compliance/regulatory fields are growing.

    And yeah, I know that just means the Millennials should hustle more, just like you did. And I don't even disagree with you, Sam. That's what I'm doing, trying to find ANOTHER second job on top of trying to find a new full time job. But don't forget that the vast majority of people aren't you. I think you have whatever the reverse of the Dunnong-Kreuger Effect would be called; sometimes you seem to think that just because YOU created a successful online media company while working as an investment banker doesn't mean it's something everyone can do, like it's about as labor intensive as ordering a burger or something. And this means nothing about the "lazy Millennials" against the "hardworking older generations"; THEY wouldn't have had the skill or work ethic to do what you do either.

    Yes, I know I just spent the last paragraph essentially saying "Not everyone is as awesome as you, Sam".

    Anyhoo, rant over. Keep up the great work over here, Sam. Just leave the Millennial bashing articles out of your itinerary. I'm sure they bring page views, but so does everything else you write. And unlike everything else you write, articles attacking Millennials or any other generation of people bring nothing of value to your readers, the greater national discussion, or Financial Samurai itself.

    Like I said, this is beneath you.

    ARB–Angry Retail Banker

    1. ARB – Where was the attack? Did you miss the conclusion where I write that Milllennials who spend a lot on the finer things are acting completely rational?

      Did you miss this beginning paragraph?

      Bottom line: If you’re a millennial who wants to spend $25 on the finest breakfast consisting of avocados, bacon and crumbled feta cheese, go for it! You don’t need to save for a house because you’re either living with your parents or your parents will eventually buy you one when they can’t stand you any longer. And if they don’t buy you anything, they’ll at least leave you their house when they die.

      Not sure how you went from these conclusions to racism against Asians. What?

      1. I wasn’t accusing you of racism. I was comparing stereotyping against stereotyping. And I don’t think that “Millennials are being rational” was the intended conclusion of this article, or else you hid it very well. This was another “Millennials are mooching off of mommy and daddy” article, and it’s gotten really old really fast.

        1. Of course you aren’t. I’m accusing you of being racist.

          I even bolded “completely rational” at the end of the article. Will look into more intense bolding to emphasis the point even more. I think you using the words “Asians as squinty eyed math prodigies who are human driving hazards” is way more offensive than saying Millennials are free to spend what they will because of a massive generational wealth transfer.

          If you don’t, then you’re going to have a difficult time building good relationships that will help you get ahead.

          Related: Some Insights Into Why Asians Have The Highest Median Income

          1. Sam, I’m aware of the bolded words. But I still don’t think that was the point you were trying to make. As you mentioned in the article, you came off as quite flippant. You tend to do so when talking about Millennials. I tend not to read those articles, but you lured me in with the promise of that delicious-sounding Ava ado toast I’ve never had.

            And of course for someone to unironically say that about any ethnicity would be way more offensive. But joyfully and gleefully waving off an entire generation of people as worthless basement dwelling moochers isn’t particularly great either. And THAT’S what I get from this article and all your other Millennial articles. They’ve got a pretty hard to ignore anti-Millennial tone to them.

            Sorry, I’m not trying to attack you here, and you know I’m a big fan of your blog. But your best sides–which show in literally every single other piece of content you write–do not show in these articles.

            Maybe it’s unintentional. Maybe your conclusion was meant to be taken at face value and I’m reading too much into it, in which case I apologize. But in that case, Sam, I urge you to go back and read a lot of these articles again in which you talk about the failures of the Millennial generation (supposedly sitting around, mooching off the parents, unwilling to get a job, and waiting for those huge inheritances to buy a lifetime supply of avocado toast all apparently being a part of the “Millennial lifestyle”). They come off as spiteful and cruel sometimes, and unlike your other work, they don’t add anything of value. It’s why I keep saying that that’s beneath you. Leave the Millennial bashing to those who DON’T provide valuable financial advice to a mlion people monthly.

            I don’t think this wod annoy me so much of I didn’t like your blog. Normally I just eye roll the anti-Millennial content on the web.

            Of course, maybe I’m just grumpy that I’m not getting my massive inheritance. Seriously, not a single person I’ve ever met is expecting any sort of inheritance. What the HFIL!?

            ARB–Angry Retail Banker

            1. I really am impressed/surprised with how much you have let this article get to you. What are some of the things in your life that are really bothering you that have caused you to feel so offended? I find it very helpful to talk things out and you’re free to use my site to vent as much as you want. Just keep the racist language to a minimum please.

            2. Sam, while I completely disagree with ARB’s comments, I would strongly encourage you NOT to see his comparison of Asians as racist. He did purposely come up with a super offensive comparison, but he clearly said “Stereotypes aren’t cool, even if you throw out numbers to “back it up”.

              >>But many of also are suffering in a country with rising home prices, stagnant wages, worthless degrees, and skyrocketing debt.

              I would just like to say, this is Millennial speak at it’s finest. ARB, you are still making excuses as to why people can’t get ahead. It’s simply not true. It’s not a “right” to be super successful in this world. If a person in the US makes the most basic of common sense choices like living with roomates and not having children until you can afford it, you can live comfortably in a lot of states just making minimum wage.

              NO ONE born in the US should bit** and moan about anything. Born super poor in OTHER countries, yes, you can complain. Here in the US, the people living under bridges STILL have it better than poor people in other countries. Poor people in other countries can’t walk streets and find food in trash cans. STOP COMPLAINING people!

            3. ARB, that was Racist as F*8k, because “You” created those sentences.
              Jeff, What are you not seeing hear? If ARB hadn’t created those words, then it’s a copy & paste issue. So maybe it’s not racist.

              Also Jeff, “Here in the US, the people living under bridges STILL have it better than poor people in other countries. Poor people in other countries can’t walk streets and find food in trash cans.” Really?

              Have you ever been to the worst parts of the American ghettos that resemble third world, war torn countries?? I’ve seen parts of Mexico, Mid East, South America, etc that look better and are safer than some of our own American turf.

          2. The sad part is that ARB doesn’t even think he is racist using those words. And you wonder why so many minorities don’t feel welcome in predominately white areas of the country.

            Invest in the Midland, but live in a coastal city where there’s more diversity and acceptance of all people.

            1. Jon and Jen, pointing out a stereotype is NOT racist. Period. That’s all ARB did.

              And pointing out ghettos that are like 3rd world countries, assuming I agree that it’s “just as bad” (and I don’t – more in just a sec), that’s still only like 1% of the US. In ARB’s “negative US” (and maybe yours too), It’s like 33%. I’ll give it to you another way — he mentioned people with worthless degrees. People in the ghettos (as you described) don’t get worthless degrees. So I’ll give you maybe 1% have it bad here in the US, but the rest need to wake up and simply be thankful they were born in the US.

              As for being “just as bad”, nope, sorry, it’s not. Why not? Because the people in other countries would give anything to have the CHANCE TO START here in the US, than to have to start where they are at. You understand people risk there lives floating on anything they can find just to get a chance to try to make it here in the US!?

              It’s all relative, and the worst of the worst here in the US still have it better than the rest of the world.

  7. Without having any data to support this, I think there is a large segment of unseen Millennials that live with parents for the sole purpose of “getting ahead” and not to have a particular lifestyle.

    My closest dozen or so friends and I are in our early 30s and most of us either have frugally lived with parents to save up for our own down payments and have subsequently bought a house, or are in the process of doing so right now. Four years ago, after grad school, I moved back in with my parents (we live in the Bay Area) and I spent my first year and a half doing nothing but paying off my $50,000 in student loans (7% grad school loans) and preparing for my fiancee to immigrate back to the US. As a married couple, we live with my parents, pay $50 in rent to cover some inconvenient costs we are responsible for, pay for our own expenses otherwise, make a combined $130K (not great for the Bay Area), and have been saving almost everything that we make (88%) and investing (currently hold close to $70K in CDs to mature in 2018 and 2019) so we can potentially have a down payment within the next two years, or even move out of the Bay Area with, hopefully, $200K. We have three pairs of married friends that have done exactly this or are doing exactly this as well. In fact, I think I only know one or two fellow Millennials that have this so-called Millennial lifestyle. Perhaps this is because we are not socializing through this same lifestyle. I don’t know.

    While this is, indeed, a form of taking advantage of our parents, living at home and frugally saving seems like a more rational behavior than to live lavishly, expect an inheritance, and simply live off parents. I think this frugal saving and living at home lifestyle is pretty normal around the world, outside the US, and has been for generations, especially in countries where going into debt was not easy or was viewed as dangerous. My wife is Russian and she has this mentality, while my mother is Italian and her entire family has this relationship with debt as well. But again, this might be a result of an upbringing in more rural areas. Regardless, I respect the caution.

    Also, living in my parents’ home is no walk in the park. It sucks. My friends agree and we all have stories of our quiet and respectful suffering (I say quiet and respectful, because we are also grateful for the opportunity to save so much money). Nevertheless, it’s not great; parents are loud and nosy, and it can put a strain on the normal ebbs and flows of married life. I feel like this aspect is not usually explored when talking about Millennials living at home.

    Finally, I’d like to make an observation about lifestyle and living at home:

    Conversely, my sister does epitomize the so-called Millennial lifestyle, as she spends large portions of her money on expensive makeup, clothes, eating out, and traveling, while she has credit card debt and large student loans. She lives on her own for much of the same reasons I just wrote about. Yet, I feel comfortable saying that she is far more dependent on my parents than my wife and I are. She is at the house every day, eating dinner my parents prepared (and sometimes mine), using the internet and picking up her packages, having my mother help her with her work (they’re both teachers), and asking for money to travel.

    The lifestyle and attitude is certainly not tied to living with parents or not. In fact, I think it makes more sense for independent Millennials to bite the bullet and live with parents and save up as much as possible asap so they can become financially independent. It’s my default advice for people coming out of college.

    This is a long way of saying that I agree Millennials shouldn’t buy avocado spread meals, but they should still live with their parents (almost impossible not to in the Bay Area anyway)

  8. I’m a millennial, and I’m finding two main things here I’m disagreeing with.

    1. The assessment of cheap living. Simple fact is a lower % of millennials own houses than prior generations while they were of the same age range. Maybe housing just seems to be a lower % of our income than for prior generations because more of us are opting for a 800 dollar a month apartment instead of a 2000 dollar a month mortgage. I know personally I’ll fall in the housing taking up 5-6% of my income this year, but its because I bought a small condo 11 years ago so I have a relatively cheap place to live now with a six figure income. I could go buy a house and bring my housing expenses up to the 20-30% range…but why?

    2. The inheritance concept. The median amount a millennial expects to inherit is 1,000,000, but the median net worth of their parents isn’t nearly this high. I know a TON more millennials who think they’ll never be able to retire and have to work into their 70s than those that think they’ll inherit 1m+ at a young enough age to allow them to never have to hold a steady job. In fact, of all my fellow millennials I’ve known from school and work over the years I knew literally none who thought that.

    I also don’t understand the general griping about generational wealth some posters seem to have here. Fact is 80%+ of millionaires are self made…there are far more self made millionaires than trust fund babies out there…and really what is the alternative, should the government just swoop in and take everything you own of value when you die because inheritance is bad? What claim should they have over property you already paid taxes on? I’ve never met anyone who wanted to will their entire estate to the government, or anything for that matter, yet of met plenty of bitter, jealous people who would like to force others to do just that.

    1. Phil @ PhilanthroCapitalist

      I totally agree with you about the inheritance. According to the the Global Wealth Report 2016 ), there are over 13.5 million American millionaires. I suppose it’s possible that there are 100k+ millenials who expect to receive that much inheritance money, but I certainly don’t know any of them.

      My problem with generational wealth is that inheritance recipients STILL see themselves as “self-made” — a fairly dubious concept to begin with, all things considered. It’s funny: people who truly built up their own wealth through hard work and smart investments recognize their opportunities MORE than the people who had it handed to them (you’ll see Sam talk about the foundation his parents built for him in terms of learning and growth; Bill Gates and Warren Buffett both signed a pledge to give away over 95% of their wealth, and they signed a petition to beef up the estate tax, etc).

      You probably got that 80%+ statistic from Dr. Thomas Stanley, I’m guessing, so you won’t be surprised by this stat: on page 154 of the Millionaire Next Door, Drs. Stanley and Danko write,

      – “Like many other gift receivers, James views himself as ‘self-made.’ In fact, about TWO OF EVERY THREE adult children who receive significant cash gifts periodically from their parents view themselves as members of the ‘I did it on my own’ club. We are amazed when these people tell us in interviews, ‘We earned every dollar we have.'”

      Emphasis mine.

      It reminds me of that one woman Sam wrote about who, while recalling her life story, leaned back in her chair, kicked her legs up, and concluded it by saying something like, “And I did it all on my own,” while in the back porch of her father’s estate. I can’t remember which post it was, though.

      At least if it goes to the government or, better yet, a charity of the donor’s choice, there’s a chance the money will go to someone who will appreciate it.

      (I’m by no means saying 100% should go to the government, but a portion of it should.)

      1. Why should any of it go to the government? Just because you have the perception that its unfair someone inherits more than you? Look if I die with 20 million in the bank…I ALREADY PAID TAXES ON IT WHEN I EARNED IT. What is unfair is the government saying well…that guy had a lot of money…let’s take some just because we can! If I was living I could spend it all on booze and hookers and that is perfectly fine…but if I want to help my offspring get set up in life…oh heck no, that isn’t fair…let’s tax the crap out of it?

        I used to work for a family owned company that had a book value probably somewhere north of 30 million dollars. The owners son worked there and obviously would be taking the reigns when his dad wanted to retire. I worked side by side with him for a year and could assure you he was a worker, not some nitwit sitting around waiting for dad to die so he could inherit millions. If the dad walked outside and got struck by lightning and died tomorrow…what do you think should happen? The government should deem that 30 million is too much to inherit and his son should get spanked with a massive tax bill?

        What would happen then? The kid would sell the company, pay the tax bill, and walk away. Who really wins other than the government? Or maybe the kid would take a loan to pay the tax bill…and then who really wins other than the government and the banks? What happens in 30 years when its time to pass it on to the next one in line…time to go back to the bank to take another loan to pay taxes? Yeah…that isn’t a ridiculously terrible idea. Funny how often I hear people complain about the banks and then conjure up genius ideas that would be like giving free money to the banks because someone stands to inherit some assets that were already taxed in the past and they deem it as unfair.

        Yeah maybe some people that inherit money and know they are coming into money squander it and you think man…that jerk really didn’t deserve that money…but taxing the crap out of that money just hurts people like the above situation I talked about, and it hurts the person who actually earned the money who loses the right to do as he pleases with his legacy when the government steps in and robs his estate when he dies.

        I know a guy who inherited 250k + a paid off house when he was 22. By 26 all the cash was gone(he had some expensive drug/party habits) and he lost the house due to not paying taxes. An inheritance of that size probably isn’t on anyone’s radar for what would be required to make you a spoiled rich kid trust fund baby…but the point is everyone with a large inheritance(again see above example where the owner’s son was one of my favorite coworkers during the 10 years I spent at the company) is an undeserving jerk, and even people who get modest inheritances can be complete jerks who absolutely foolishly waste it. I look at that kid like man…if I basically inherited a half million at 22 I’d have invested it all, continued to work hard, and easily retired by 35 at the latest and he just blew it all up his nose. I just think “idiot,” the thought that “if the government just took that money we’d all be better off” never crosses my mind…I don’t know why it does for so many people just because the dollar amount is larger in some cases.

        1. Phil @ PhilanthroCapitalist

          Sure, those are all solid points.

          I want to reiterate, though, that I never said the government should take 100% of a person’s estate. That would be ridiculous. I would rather the millionaire/billionaire donate most of their wealth to a charity (or charities) of their choice. I firmly believe that you can’t go wrong if you make it your goal to decrease human suffering, however you believe that should be achieved. If you think the best possible route is to give to your kids, then give to your kids.

          I completely agree with you on a few points. The estate tax CAN harm family-owned businesses and farms. The size of the inheritance doesn’t necessarily proportionally affect the recipient (though I would argue that $250k is, statistically, well above the median; I wouldn’t call it “modest”).

          There are real problems created by both viewpoints that aren’t easy to solve. Some of these things should be observed on a case-by-case basis, and I’m not about to make the argument that a piece of legislation that generalizes EVERY inheritance would be ideal.

          I just think that the government reserves the right to tax *a portion* of a person’s wealth, which I’ll be happy to pay when I die. It’s a small buffer against “old money.”

          But I love America for the opportunities it’s given me; not everyone shares that view.

          When it comes down to it, even though it seems to rile people up along the class lines, the amount of taxable income of households in the $10mil and over category that’s held in estates and trusts is only 1.6% of that group’s entire realized annual income of $300bil, which, when you factor in the $2-4tril in government revenue/year based almost solely on income tax alone, this whole argument becomes pretty silly. It’s certainly nothing to get angry over.

          I treat it as more of a thought experiment, really.

          1. I think Buffett is a great example of this too.
            Give to charity! Just make sure that 3 of the 5 charities you give to are foundations run by your….wait for it…children!
            What an idea. Send billions of dollars into their control with tax favorable treatment so they can sit on a board and collect huge amounts of money for the rest of their lives AND go on the news to pump your “generosity”!
            It’s actually amazing how stupid he thinks the average person is and even more amazing how right he is.

  9. I was born in 84 in China and grew up in Canada. I worked in the financial industries in Toronto, Montreal and Shanghai.

    Most of my friends in Canada own at least 1 property by now. Many of them received money from their parents, they are all hard working and manage their money carefully. They all dream about achieving financial independence. We spend lots of time discussing how unsustainable the Canadian health and pension plans are, and how we should prepare our future without relying on social safety net.

    When I moved to Shanghai, what a shock to see almost everyone around me wearing fancy clothes, eat-out all 3 meals in restaurant + freshly squeezed juice + Latte, taking at least 1 annual vacation abroad. Many of them don’t have rich parents, they are hard-working too, but they all spend money like the kids in your article. Once I get to know them better, I don’t blame them. The real-estate in Shanghai is so unaffordable that most young people gave up the idea of buying any property on their own. Either you becomes homeowner with parental money or you would never become one. 1 trip to Europe = less than 5 square feet condo. Sometimes they joke about how many years of frugal living they need to buy a bathroom in Shanghai. They are very offended by media critics labellling them the spoiled only-child generation.

    I don’t want to see what’s happening in Shanghai to spread to North America. So I hope more people are working on how to create opportunities for everyone, and not wasting time at bashing millennials or the future generations.

    1. Wonderful insight. Thank you for sharing. And makes total rational sense that if housing prices are so unaffordable, you just give up and spend on what you can afford.

      It is absolutely crazy how expensive Shanghai property is compared to per capita GDP. I haven’t done the math, but if it was like for like here in San Francisco, then the median home price in San Francisco might be more like $10,000,000, or more than 10 times median household income.

      I keep thinking about this question:

  10. Saving4ExtraRice

    I was born in 84 so I guess I’m am older millennial, but my husband is 10 years my senior-makes him GenX I guess? His parents gave us money (3.5 % fha loan plus closing costs plus extra yo buy things to fill it) or down payment in a house in 2011 (best time to buy). 5 years later we sold and was able to make enough for 20% dp on our new house and pay off all our CC. Thank you Mommy! This definitely helped us move forward and look more closely on our finances :)

  11. Phil @ PhilanthroCapitalist

    I’m a Millenial. I’m pissed off that the avocado guy is getting this much coverage. Ramit Sethi wrote about him, too.

    Shouldn’t we know by now to not give attention-seeking morons exactly what they’re looking for? This guy, having received a $34k loan from his grandpa to start his first business, is not part of the penny-pinching, hard-working Boomer property owner he claims to represent — that’s why he gives shitty advice that’s only applicable to the Millenial who thinks he’s going to get ~$1mil in inheritance.

    (Which begs a question: Who are these Millenials using Personal Capital? How the hell has Personal Capital managed to corner the future-rich Millenial market so well? Those stats sound fishy, like Personal Capital users are just trolling the surveys, but whatever. Maybe the marketers have been taking really good notes from The Millionaire Next Door. I want in on that demographic).

    I’m not going to get much of anything from my parents, who I doubt are going to get much of anything from their parents, either. I’ve read the article on the “Massive Generational Wealth Transfer,” but I know my family. After 30 years with a major tech company — and multiple patents — my father got laid off two years before his pension plan really kicked in. He doesn’t need to leave me anything.

    Even if I do inherit some money, I’ll probably give at least 50-75% of it away because, as the Oracle of Omaha himself says, dynastic wealth shouldn’t exist in a meritocratic society. You either do your best to earn it, or you don’t. My parents and grandparents gave me my demeanor, intelligence, drive, and even helped a little with my college. I don’t need their fucking HOUSE, too. That would be boring.

    But it’s quickly becoming the only way a person can compete with all the other kids who are inheriting multiple properties (which their parents aren’t even going to have to pay taxes on). When it comes to the “Estate Tax,” it’s less about the money and more about the fact that the ultra-rich are turning their kids into lazy asses.

    To use a metaphor involving Monopoly: It’s one thing to start the game holding the property card for The Reading Railroad, and another thing entirely to be set up with hotels on Park Place and Broadway. You’re apt to think that it’s an entirely different game. Why not just clear the board?

    Then again, I love all the articles shitting on Millenials. If we’re as bad as these articles make us out to be then, given time, I’m going to bury all of my peers. Regardless of “inheritance” money.

    Avocado toast doesn’t even sound good.

      1. Phil @ PhilanthroCapitalist

        I’m not a big fan of avocados in general, honestly. Consistency’s weird.

    1. Thanks for your comment. What do you think is the reason for why a random guy in Australia talking about avocado toast has triggered your anger?

      Maybe I’ve just become inured to everything after all these years, but I find this whole uproar quite entertaining!

      1. Phil @ PhilanthroCapitalist

        It has less to do with the actual post and more to do with how much everyone’s talking about it.

        It was purposely written to be shitty advice and to get people riled up.

        I’m not mad about the trolls; I’m mad that people I respect are feeding them.

        1. I think I understand some of your anger at society after reading some of your posts. The only thing I would recommend is to stay in college for as long as possible if you can afford it. It is a cruel, cruel world out there with little or no safety net if you don’t have well-to-do parents.

          But I think your perspective will change after working for a couple of years and see how easy some of your peers have it.

          1. Phil @ PhilanthroCapitalist

            Thanks for reading!

            It’s funny you would assume I don’t work currently. Right now I’m on vacation from my job at a factory in my hometown, where I work from 3:30PM to 2AM Monday-Saturday while I run the Stand Up and Speak Up campaign for Overcoming Odds, a non-profit that’s looking to reshape the adoption industry, on the side.

            Shameless plug (there really are some great stories in there):

            Trust me: I *KNOW* some of my peers have it easy.

            But I’m fully on-board with the idea of working 60-80hr weeks so that I can get ahead. I’ll get there one day.

            Thanks again. I actually started my blog bc of this site. Hopefully someday soon you can point to it as an example of someone who followed your advice, step-by-step, to build a passive income stream.

  12. I suspect this attitude has something to do with the latest leftist “white privilege” meme subtlety pumped into young skulls full of mush during the K-12 public school years. M’s feel they’re the last chapter in the white domination of the world, so that when they inherit mom and dad’s estate, they’ll lavishly spend it, enjoy life, not reproduce, bringing on the wonders of a multicultural society that will finally flourish with equality and income fairness for all.

  13. Two days ago, my co-worker was ranting that rich people want to deny poor people the luxury of eating avocado toast. I had no idea what she was talking about. Later that day, I saw that many people in the FI community were talking about this story. I tried to explain to my co-worker that it is just about reducing expenses to free up some money to be able to save more. She was not hearing me or giving up her avocado toast.

  14. I’m a millennial by definition, but maybe not in mindset.

    My parents have given me help in two major areas.
    1) Paying for my college degree
    2) Instead of gifting me money for my house, I have actually taken out my mortgage with them at a lower rate (2%). This has allowed us both to benefit in this low rate environment.

    Even though I will probably inherit so much money I will never have to worry again (5 mil +), I am still maxing out my 401k, spending no more than $100/mo out to eat, I still have never been to Europe. Maybe I should live it up some more. My future wife and I are near your happiness income level (2017 probably combined $200K), and I think we can hit $250K in the next 5 years. We are more focused on getting a million dollar house (NYC – NJ Suburbs). And I would not ask my parents for a dime towards the down payment… although a 2% mortgage will be nice!

  15. ha ha ha! I’m not a boomer, but I plan to eat it all! If I need to buy a three $250,000 bottles of Chateau LeWilder 1834 and put them in my IV? I’m doing it!

  16. My 47 year old wife has been making avocado toast for 10 years. Sorry millenials, but this is one trend you are quite late to. I made mine this morning – with Beckman’s sour dough bread, one half of a Haas organic avocado, a sliced hard boiled egg, and a lightly applied coat of pink Himalayan Salt and some pepper. Lovely!

    Oh, and bumming off your parents who are more than willing to enable you…that’s been around for decades too. Honestly I don’t care because I have no control over how people I don’t even know…behave.

    As for me, I get my inspiration from “The Millionaire Next Door,” which provides clear counsel: no enabling. Instead, encourage self reliance.

    Speaking from experience, living in a shit hole for the first 11 years after college builds strength, humility, and hopefully a bit of liquid net worth.

  17. Yup And Coming

    I’m a millennial and I do wonder if there’s not enough consideration given to absence of loyalty by employers when discussing millennial employment habits. Frankly having been laid off twice in my first 2 years of employment, and growing up around crumbling cornerstone companies laying off tens of thousands made short term job stays an expectation. I know it sounds defensive but for many people it’s the truth. Either way I’ll keep grinding and taking care of myself, because no one else should!

    1. You make a great point. Companies are more ruthless now than ever. If there’s a better opportunity, I would go for it. Are used to scratch my head at all the job popping every 2 to 3 years. But after spending a couple years consulting for some start ups, I see why. There’s a lot of failure, competition, and disloyalty you make a great point. Companies are more ruthless now than ever. If there’s a better opportunity, I would go for it. Are used to scratch my head at all the job popping every 2 to 3 years. But after spending a couple years consulting for some start ups, I see why. There’s a lot of failure, competition, and disloyalty by companies themselves who don’t promote from within and screw employees out of proper compensation packages.

      Long gone are the days of multi decade and loyalty. It’s time to be greedy for yourself? The only problem is, sometimes you make mistakes.

      1. Yup And Coming

        I imagine the pendulum will swing back a little in the future, even now I see my company reaching out to employees for advice on how to retain employees and keep them in the same job longer (traditionally 18-30 month jobs).

        Thanks for the reply!

  18. So there are some millennials that are a bit pampered… They have all the right to live life in their own way. Especially if they can fund that kind of lifestyle. I know plenty of people (with a millennial age) that are hard working and don’t splurge money on avocado toast.

    In another comment here (from Apathy Ends) it’s simply explained, that even within the millennial group you have lots of different people. That some people are offended by his advice is their every right. Who is that random person in Australia anyway who dictates how they should live their live. I know I’m not though.

  19. As someone from a fairly average cost of living area on the East Coast, I know relatively few cases of millennials being handed expensive cars/homes. I definitely think this is limited to a fairly small percentage of the overall population, and is more common in the major cities. Even there, however, for every 20-something who is given a half million dollar home, there are probably several who are struggling to make ends meet.

  20. “If you’re willing to spend $19 on avocado toast when you’re not already rich, then you’re probably willing to spend aggressively on other things and not save. After 10-20 years, you’re screwed if you have no safety net.” This is EXACTLY the point I made in my post on the subject. I think the people bothered by this article are the exact people he was targeting. Similar to the Latter Factor, it isn’t about one avocado toast, one latte or even 365 lattes…it is overindulging when you don’t have money to overindulge. In that mindset, rarely do you limit yourself to one indulgence. This is about spending freely when you can’t afford to.

    If you have the money then have at it! No one is judging for spending. The judgement comes when you spend on $19 toast then complain later that you are broke. On the other hand, if your parents are footing the bill and the arrangement works for them then it’s nobodies business how you spend. Go get yourself an avocado toast and grab me one while you’re at it!

    1. Sam addressed that a good portion of millennials are assuming/expecting a large inheritance of some sort. I kind of see that as a reason why they’re less worry about money. I use to work at a restaurant bar in San Fran and a lot of the young patrons tipped really, really well for their age.

      My average tip was 18% and they order a lotttt of fancy food. If someone wanted avocados toast but they were truly broke, I don’t think they would tip me 18%. I overheard one girl (22 years old max) complaining to a bunch of her friends that she had to take another family trip to Barbados or some tropic paradise so I think it’s some wealth transfer thing.

      1. For sure! I realize many are expecting inheritances or have parents footing the bill and it’s awesome that they are so generous with tips! Many people don’t learn that until a later age.

        Anywho, the quote I pulled was from a comment Sam made to Laura above and I think it still holds true. Not ALL who frequent fancy restaurants can’t afford them. Still, the ones who complain about not being able to afford certain luxuries yet spend freely on others are the ones that this is directed at. Otherwise, wh
        en you have all the financial resources in the world at your disposal you are less likely to complain that you can’t afford something – I guess you’re more likely to complain you have to go to Barbados again instead! Poor thing.

  21. Ohh lord, another one of these stories where the comments are filled with everyone making 6 figures or inheriting wealth, then belittling those that live with their parents.

    I make about 55K/year as a scientist, luckily with great benefits, govt pension, and lots of vacation. I do not own a home. I live with a roommate who owns his home. I am 38. I do not understand why this is even a conversation anymore. There will always be people who earn more, or are given more. But that doesn’t mean they have better lives. And in the end, a few years after someone is dead and gone, no one will remember you had a bentley, that you lived in some luxury neighborhood, if you lived with your parents till 30, or if they helped you buy a home. We all end up in the same place, so why obsess over who has more now?

  22. Although my husband and I are definitely Gen X, I can’t say I’ve seen a lot of this is Ohio. I was born into a very working class family, however, and anyone I know still living off their parents has mental health issues or went through a bad divorce. I have a few friends who were children of first-generation immigrants whose parents footed the bills for college and helped with housing,but many of those parents are living with their children and grandchildren in multigenerational households.

    We hope to leave some kind of legacy for our kids, but have no plans to buy expensive homes or cars for them. Maybe I have read too many 19th century novels,but I don’t want my kids or grandkids to end up becoming wastrels with nothing to do but gamble, shop,and chase tailand deplete the legacy we worked hard to create.

    1. I agree with you Jen. I am more than willing make the playing field as even as I can (better neighborhood/stable family environment) BUT I’m not tilting the entire field (cars, designer clothes etc.) so they’re guaranteed to make the goal.

      Ignore Aiden, he’s being a total downer.

  23. Hey Sam! I like that anecdote “The more things change, the more they stay the same.” At the extremes, the spoiled California avo-eating millennial is equally as troubling as the self-righteous Trump-loving blue collar worker. In Zen, they say the Middle is the way. The key is to find a balance. Working your WHOLE life stressing out and complaining about mortgage payments and the inability to keep up with the joneses seems silly to me. Rich parents over-spoiling their kids is foolish too. Beware of those things in life society says you’re “supposed” to do. Focus on the cheap thrills of life: Being outdoors, playing sports, going hiking, chillin’ at the beach, reading, writing, playing an instrument, hanging with loved ones. Peace.

  24. TBH, I have EXTRA respect for kids with rich parents who don’t want anything from them and want to make it on their own. They are probably rare though. And also TBH, if my parents were rich, I’d most likely piggy back off of them too for a longer time. Satisfaction comes from good relationships with people you care about and if you have that, you’re good!

  25. There are 44.7 million Americans between the ages of 25-34, a population group named “Milliennials”. Generalizing everyone in this age bracket by observations of your San Francisco neighbors might not be the best way of looking at things. There are entitled, privileged, annoying portions in every generation. You can’t extrapolate the behaviors of those people to the entire age group they were born in.

    “The children now love luxury. They have bad manners, contempt for authority; they show disrespect for elders and love chatter in place of exercise.”

    ― Socrates

  26. Charleston.C

    I went back and forth on whether I should comment on this post, at the end I couldn’t resist on speaking my mind.

    Conceptually I get the point about saving money and not spend it lavishly on unnecessary things like avocado toasts or designer jeans. I get the point about (some) millennials having a skewed expectation on life because of financial assistance from parents. The general population are spending beyond their means, but is all that really a new thing? America/Western culture is synonymous with materialism. Gilded Age, Roaring 20s, decade of excess in the 80s, how are these any different from what we are seeing now?

    As for saving money and reduce wasteful spending, I think all of us (or at least the reader base here) can agree it is important. Shouldn’t the emphasize be the saving money portion of the equation instead of how people spend the money they choose not to save? If someone decide to dine out every day, but decide to stay in a small apartment with roomates to save money, how is it any worst than someone who spends more on housing, but save money by cooking at home?

    I grew up in a poor family where having a coke at a restaurant is considered as excess, so I get it. But if someone is saving 50% of their income, does it really matter how they decide to waste the rest of their money? They can flush it down the toilet for all I care, they may still be doing better financially than someone who appears to be frugal.

  27. The study references “average”, not median. For the median expectation of 100K millennials to be $1M would mean half their parents have to be millionaires. Average makes sense because I imagine the study is skewed by very wealthy families.

  28. Wall Street Physician

    Essentially, these trust fund babies were FI from the day they were born. They were on FIRE before ever having worked a day in their life. If we promote people to FIRE at age 50, 40, or even 30, there’s really no reason to vilify those who were given the gift of FIRE from their parents.


  29. Several of these kids are just the end of a third generation cycle of wealth building. They themselves have developed little in the way of skills, work ethic and financial knowledge. When mom and dad pass away I can see a million dollars going real quick.

  30. I am a “millenial” with a house but I can understand where they are coming from.
    I think a lot of overseas people are missing why the younger generation in Australia have been angry towards this.

    There are constantly “rich” people coming out and saying “stop buying avocado on toast, then you can afford a house”. Or a politician not long ago said something like “if you want a house, get a better job”.
    While both could be considered acceptable arguments, it misses the mark of housing affordability in specifically Sydney and Melbourne. For example in the last 5 years, house prices have increased by 70% in Sydney. Not eating avocado on toast isn’t going to make up that difference.
    The median house price in Sydney is AUD$1,123,991 ( US$838,722 ) while the median income is AUD$88,692 ( US$66,181).
    At these rates, young people in Sydney can keep saving as much as they want, but they will struggle to keep up with the increasing prices.

    A quick calculation
    $88,692 = $67,928 after tax.
    Borrowing power ( based on a bank automated estimate ) = $716,000.00. $3,560.12 monthly repayments
    Income $1,306 pw. Repayments $821 pw. Remaining $485 per week.
    The other big issue is the max borrowing amount is $407,991 under the median house price.

    On a $716,000.00 loan you need
    a $35,800 deposit with mortgage insurance
    or $143,200 without without mortgage insurance

    On a $1,123,991 loan you need a $224,798 deposit or in other words, 14,986 avocado on toast meals at $15 each.

    Australia allows negative gearing on investment properties. This engourages people who can put up enough for a deposit ( usually using equity in existing properties ) to loan money on a new property. The property makes a “loss” after rent and loan repayments causing the owner to get a tax break on the losses.
    So you have the older generation using their existing equity to take out interest only loans, creating property porfolios pushing up the price of houses at a faster rate than people can save for a deposit. Then add in overseas investers and it ends up feeling like an impossible situation to escape.

    And yes I see the humor in the OP article, more a comment on the whole avocado situation.
    Lastly, avacado on toast is terrible anyway.

    1. John, you’re right about the economics. So perhaps avocado toast is assemble to change one’s mind set into being more of a saver and hustler instead of a spender.

      For example, I was grown-up to always on my order water when going out to eat. My parents always told me the drinks were too expensive for what it cost. So I had to find a solution because water it’s not very satisfying when you’re not deathly thirsty.

      That solution was figuring out restaurants would give me a free lemon slice to put in my water. No the water tasted amazing, and it was still free!

      Only ordering water mindset helped me get into the habit of saving money and extracting maximum value for the rest of my life.

  31. Sam is apparently blissfully aware that there are Two Americas, not every American will inherit – or be gifted – a home, and those whose parents do not own a home may never be able to own one themselves.

    Our fiat-money economy is one gigantic confidence game, and will crumble once people lose confidence in it.

    So I live on a shoestring, because today’s high living will not last.

    Guess this is my ONE comment for today.

  32. As someone right in the middle of the millennial generation (age 27) I just don’t see this in my peers except for a few I met in college. It could be location specific since I’m in the mid-west. Working in IT and seeing where different types of individuals gravitate towards, those who go to San Francisco to work at start-up firms generally care more trends and trends, like advocado toast, are expensive.

    If I was someone who would inherent a large some of money when my parents passed away it wouldn’t change my approach. I would still live way below my means (like drinking boxed wine), would invest my money intelligently, read financial blogs every day, and do everything I can to acquire cash flowing rental property and increase passive income. The difference would be, instead of throwing a large portion of my income into retirement accounts I would be taking all that extra money and throwing it at real estate and other passive income vehicles since the inheritance would cover retirement needs. I want to retire early, not wait for someone I care about to die to do so.

    I think more than anything, by talking or writing about millennials the producer of the content knows they will get more buzz/clicks because millennials are the largest generation and they are on-line more than anyone else. That’s why we see millennial discussions and articles all the time now. Want to get someone to read something, write in the article they are lazy and entitled, that will get them reading!

  33. As a millennial, I’m glad we are able to fight back on the internets, immortalize it, and maybe 30 years from now we can have a good laugh.

    There is always some inter-generation disapproval going on. I don’t imagine Grandpa Harry was too happy with Auntie Ann when she ran off to Canada to be a pot smoking hippie…that was interesting.

    There are a lot of millennials who are chasing freedom in their own way. No one is required to be in a rush to bunker down in anticipation for a 30 year mortgage. There are also a sizable portion of millennials (me for one) who question the possibility of children. I can barely handle my dog…

    Avocado toast isn’t very good. If that millionaire had the short rib tacos at Tacolicious, maybe he would be questioning his life priorities.

  34. A single mom in her 20s without a college degree who struggles to stay afloat financially is probably not thinking about buying avocado toast. Articles that state that she’s poor because of all those frivolous breakfast purchases are daft, dumb, and simplistic. Yes, people might make some bad decisions that hurt their finances, but to generalize about young people based on what maybe 2% of them do is BS.

    Also, what you experience in real estate is not national. While San Francisco is gorgeous and expensive, I think a high rise in NYC is more likely to gain an international luxury buyer, especially since new construction in NYC is nearly property tax free. So while Joe Schmo-USA may be buying that $400,000 town home in the outskirts of public transit, BRIC-ers are a big factor in high-end construction sales, which ensures new construction is not built for the average Joe and more average Joe’s have to fight over existing townhomes.

    1. Tax free? My ears have perked up! Can you expound on the tax free rolls of buying a condominium in New York City? One of my biggest regrets was not buying Manhattan in 2000.

      So depressing to see something go from $800,000 to $3 million.

      1. Condos anywhere in NYC come at a premium over coops (to my eye looked like between 150-200k+ for the same thing) and are fewer and far between than coops. Brooklyn is the only borough with 15 year tax abatements (that I can see), IF you can find them.

        BK is the hip place to go to, but the prices these days are nearly Manhattanesque if you’re looking in Brooklyn Heights, Park Slope, Downtown, DUMBO, etc. Sure you can live in Canarsie or Flatbush, but unless you have to….why? :)

  35. I agree with Tim Gurner’s position. And I’m an Australian millennial property owner.

    First home buyers need to make sacrifices to buy a home, lower their expectations, and stop complaining about the high price of property.

    The reason people got upset at this guy for saying what he said is because the Australian market is “hard” for people to buy their first homes currently.

    Millennials and the media here like to go on about how expensive property is here and how the older generation had it easier. They also believe they can buy a median priced house as their first home on their own income.

    The point was that young people/first home buyers have unrealistic expectations. They expect to be able to save for a couple of years and buy an inner city property. They don’t want to make sacrifices. They also don’t want to put in the extra work (which I know working hard/earning extra money is one of your beliefs).

    I also believe that the idea of “living it up” because you’re getting an inheritance is lazy, selfish, and misguided. Millennial’s parents will still be around for many years, so they need to sort their lives out before that.

    But I got your humour in this article :)

    (I bought my first investment property three years ago, after saving for a few years on my own salary (no parents or partner). I made sacrifices, did some client work outside of my full-time job, and did a lot of the renovation work to save money. It was in an affordable area.)

    1. Hi Ben,

      I’m also a millennial Australian property owner and I agree with you about what you say about expectations and sacrifices but I don’t think that those who point out the flaws we have in our property system don’t necessarily have a point.

      Being able to tax deduct interest on investment properties (without being able to do this on your own home) is a construct that just doesn’t make sense. It unnecessarily encourages investors without offering the same benefit to home owners. I say this as someone who owns my own home and an investment property (just because I think the system is screwy doesn’t mean I won’t take advantage of it).

      Prices are also nuts…the Aussie market IS genuinely hard at the moment. I’ve been lucky enough to build equity through the crazy price increases but I sure wouldn’t want to be buying my first property at the moment in Sydney or Melbourne. Actually given the choice of any investment class at the moment and Australian property (especially SYD and MEL) rank pretty low on my list. Anyway hopefully we’re in for a “soft landing” rather than a crash.

      1. May I ask what are the key factors driving Australian property prices higher? I thought the commodity downturn would depress the economy?

        What are some of the major employers that pay big bucks that is boosting income and job growth and your major cities?

        1. Hi Sam!

          Australia tends to operate on a two speed economy. The resources cycle tends to affect the economy and jobs in Western Australia (Perth) and Queensland (Brisbane). At the moment the property market in those two places (especially WA) are pretty soft.

          Sydney and Melbourne are more service type economies with financials, telcos, healthcare etc being among the larger employers. These are the property markets which have been growing strongly over the last decade or so.

          It’s probably worth keeping in mind that the last time Australia had a recession was in 1991 / 1992…it’s been a pretty strong economy for a long time and I wonder whether people (especially individual investors) are properly considering and pricing risk at the moment.

          Wage growth in Australia hasn’t been anything special in recent years…this is what has some of the regulators worried…the property boom has been driven by increased debt and credit availability.

          One of the quirks of Australia is that much of the population lives in the large city centres. The total population is only 24 million but 8 – 9 million people live in just two cities – Sydney or Melbourne. Within these two cities many of the high paying jobs tend to be centralised within the CBD and so proximity to the CBD becomes one of the best indicators of property prices.

          1. Thanks for your feedback. From an American’s perspective, it just doesn’t seem like the job growth and income growth and income numbers are as high as with warrant the current prices in Sydney and Melbourne.

            But what do I know. Auckland, New Zealand is even more expensive. I just don’t get it.

            I really believe United States property is so cheap compared to the rest of the developed world. What is your view on US property?

        2. Hi Sam!

          I cant speak for other cities, but Sydney is driven by BOMAD and Chinese money.

          Last I checked, the median property price is over 8 times median income.

          Auatralia is one of only a handful of countries in the world where you have negative gearing. Its normal for people to have several investment properties and offset the interest expense of several mortgages against their day job incomes to avoid tax.
          Yes – interest rates were higher in the 80s, but so was inflation and wage growth, meaning the mortgage debt was reduced in real terms.
          Back in the 80s my parents bought a house at 3 times my dads gross income. Salary increases were every few years, pension schemes, and two stock market bulls, without any student debt to think about.

  36. Young and Finance

    Theres a local restaurant that charges $7 for avocado toast. Now considering 1 avocado costs $1 and an off brand loaf of bread costs $1, it just doesn’t make sense unless your the restaurant that’s selling it.

  37. Save Splurge Deny Debt - Cameron

    Great Examples to go along with the post,

    I had never really seen a lot of this going on in Arkansas until after we scrounged up enough to have a nice down payment on a foreclosure. The nice house across the street was gutted and remodeled for my 23 year old neighbors by their parents while the couple enjoyed an Italian month long honeymoon.

    Not to say they aren’t hardworking but they sure do enjoy the vacations and nice dinners that they can Instagram. Good for them I suppose.

    It is all about balance and priorities. Some of us can only afford fancy avocado toast once a freaking month! And that probably isn’t even organic avocado and the bread probably has some gluten….UGH!

    I will continue to save and invest now, build up some stealth wealth, and enjoy lox bagels when my employer is paying on work trips. I never want to count my inheritance chickens before they hatch! Great article on this topic!

  38. The Tepid Tamale

    I have been eating avocados on my salads for years, so is this toast thing why they have gone up in price so much lately! But, I tell you what, I am going to make one of those things in your picture, those look awesome! Anything with an egg is awesome! (Especially a Tamale!). Sorry, I digress. I have 5 kids and I struggle with how to pass frugal living principals on to them, while everyone else (including the peers that we have been reading about) tries to steer them in the opposite direction.

  39. Not a millennial here at all. Though as I’ve stated in the past I do wonder how much of its just that people under the age of 30 are usually looked at as lazy by the older generation. After all wasn’t the nickname of Gen Xers like myself “Slackers”.

    In all seriousness there are a lot of people that will inherit money, but there are also a lot who won’t. Also not all millennial behave this way. I lived with my parents in my early 20s while working full time and digging my way out of college debt. Why? My parents had no money to pay for college (or for me to inherit). I am sure plenty of millennial are in the same boat. Conversely my wife comes for a family as least as well off as my family is now (which is quite well). She’s actually a millennial too and we will likely inherit money at some point because of that (though I suspect by the time that happens we’ll be talking about passing it on a generation). But you know what, despite being a millennial, she is the one sibling in her family that refuses a hand out. Every person is different.

  40. It does seem that “millennials” get stereotyped a lot. I have found that big city urban millennials differ quite a bit from those in the suburbs, at least in my neck of the woods. Also I have seen the lavish behavior you describe from both the parentally supported set you describe but also from the self-supported ones trying to fit into their peer group.
    I don’t have any issues with the former as long as they have a solid contingency plan. I have seen several extremely large future inheritances disappear due to expensive and drawn out health issues.

  41. All this viral talk on self serving millenials and avocado toast makes me want to go eat one right now. But first,

    let me take a selfie.

  42. As a late model millennial (34 years old) I feel a bit ripped off. I worked hard to put myself through college, pulled myself up from flipping burgers to being a secretary at a law firm, to now making well into 6 figures as a mid level executive.

    I made a lot of mistakes along the way – getting into debt when I was in my 20’s and only now am feeling like I’m getting ahead and catching up to where I should be (according to Sam’s guidelines).

    My Dad, whom I do not speak to anymore, owns a bevvy of cars, trucks, ATV’s, and other toys – foreclosed on 3 “investment” houses during the financial crisis. He used to tell me that I needed to pay my own way through college/ life while he collected my deceased mother’s social security checks and used her life insurance to buy a Corvette.

    He also keeps a vault of physical gold and silver in the basement for when the world ends. When he dies, I’m sure I’ll inherit some form of debt of his.

    1. Hi Matt,

      I’m sorry to hear your story. You’ve turned into a fine man, though. You can learn a lot by both good and bad examples. With the bad, an example of what not to be. Keep up the good work!

      (and you can’t inherit his debt — unless it’s offset by his assets, so don’t worry about that)

    2. Bay Area Stealther

      Not to be critical of your comment (but being critical, sorry), I do think there’s an expectation in what you wrote that your widower dad should have spent his money and your mom/his wife’s social security checks on you instead of himself? Look, my baby boomer parents are also GIANT spenders. But unlike my siblings I don’t see it as my inheritance. I just want it to last for their entire lives. And as far as the next generation goes, we are not planning to finance our teenage kids’ higher education. If they want it they are going to have to work hard enough to make it happen and make strategic choices.

      1. My comment started a bit tongue in cheek, like Sam’s post. I was responding to the troupe, “Millennials are given everything by their parents.” My experience was anything but that.

        At one time, yes, I did feel a bit strange, struggling to survive, knowing my dad was living large on my mom’s income/ insurance. There were also other family issues beyond financial obviously, but unimportant to addressing the millennial beneficiary issue.

        Frankly, at this point, I told my dad to write me out of the will, sell his house, do whatever he needs to do to stay afloat – just to never come to me and ask for money in his waning years, because I am absolutely sure once he stops working, the money will dry up – I forgot to mention he does not “believe” in the stock market.

        / and thanks Jeff.

  43. Friendly Russian

    I am not agains of avocados nor millennials, but paying $1 for a half of avocado it’s something that my brain doesn’t understand.

  44. I’m 46 years old and after reading this article I tried avocado toast for the first time in my life. It was delicious!! The millennials are on to something.

  45. LivingReturns

    Aha! This helps explain why my millennial daughters are trying to kill me. The youngest, 22, was just asking about our life insurance and estate planning. No doubt she is already tired of working for a tech company here in Seattle and is dreaming of an avocado and mimosa brunch at my funeral.

    Of course, grandma bought her an almost new car last week that goes nicely with the STEM degree we just paid for, so maybe driving around town with her friends will temporarily distract ber from planning my murder. She knows she needs to act fast because I told her I was gonna blow all the money. I told her she was gonna have to earn her own wealth or marry rich, both of which involve more WORK and HUMILIATION than trophies..

    I try to inspire her by reminding her how toxic corporate America is, how I grit my teeth and force motivation and a fake smile on myself on the way to work each day, and how pathetically ridiculous it is that I’m frenetically bored all day making 4X+ the U.S. median household income. Oh, and I just helped her get an entry level version of a job like mine…at the same company. If irony were a sauce, she could drizzle it on avocado toast.

    BTW, when, not if, the stock and housing (and maybe bond this time) markets crash, there will be fewer people of any age eating subsidized brunches, at least for a while….esp. the ones with parents @ retirement age who invested like markets don’t crash.

    I’m inspired to be more Millenial. It’s been too long since I’ve partied like it’s 1999.

      1. LivingReturns

        Ha! Perfect….i just sent the link to her w/ a note that you suggested she read it. We can discuss while I buy her a drink tomorrow night. And ya, she’s a smart kid…we’ve helped her a lot, but in fairness, she does a pretty good job of helping us when we need it, respecting our requests, paying us back as agreed if she borrows money etc. In fact, she tries to be pretty frugal and now pokes us in the eye if she thinks we’re wasting money, which is great because that means she’s thinking about frugality…even if she’s just worried we’re wasting her inheritance. ;-)

  46. If you actually check back through history the old are always decrying the flippancy of the young and how they don’t appreciate things they have, nothing new to me.

    On a personal level I don’t see a lot of millennials being all that different than when I graduated college. Most of us were motivated, either culturally or practically, to enter the workforce. Some stayed with folks until they had been working for some years, others moved out right away, some got married sooner than others, and those who’s families were really wealthy were “spoiled” with all types of material stuff they didn’t “deserve” in our minds, but that we grudgingly had to admit would be nice to be them assuming they were doing something we thought useful and sad to be them if they were complete bums in their parents basements. I see the trends being pretty much the same with my kids and their friends and the people they’ve met and I’ve heard them discuss. Sure there are mild differences in housing decisions and relationships (e.g. marrying later or waiting to have kids, etc.) but I don’t see any of my kid’s friends slacking, and the slackers I know of and heard about are still a minority of the group. To me it’s like when I buy a new car, it suddenly seems everywhere I look I see the same make and model, but they were actually always there, I just now notice them more often because I’m focused on it because I have a personal connection. If you are looking for examples of Millennails that are at home, you’ll start seeing them all around. If you look for those who are working, they’re out there to.

    1. Good observation on once you buy a car, you see everybody else with the same car b/c you’re focused on it.

      In my case, I am 100% surrounded by neighbors who don’t pay rent or were gifted their homes by their parents.

      And I was also surrounded by 3 out of 4 neighbors in my older neighborhood whose parents bought them the house ($1.5M at 26 back in 2004, and another who has lived at his parents duplex for 15 years now).

      And when I was in NYC from 1999-2001, about 50% or maybe of my fellow financial analysts had parental help, including my roommate of one year whose parents bought him a one bedroom for $260K.

      Parental assistance for adult children is way more prevalent than people realize. And that’s fine b/c that’s the long term trend. If you fight it with stubbornness, believing you should pay rent or pay for a house based on a competitor with only one income statement, you will ALWAYS LOSE.

      1. I think it’s quite a jump to say that ‘parental assistance is way more prevalent than people realize,’ but only have two examples from highly skewed cities (SF and NYC).

        Where you have lived since your career has started (and ended I guess, ;) ) and the type of people who read this blog, are heavily skewed, so I would say using examples that you’ve been exposed to would not apply to a majority of those in the millennial group.

        1. I could write out 100+ more examples, but then this article would get boring. It would also take too long.

          25+ agents each have spoken to over 1,000 people this year about first time homebuyers. And then there’s this site, which garners many personal e-mails and comments.

          Believe or don’t believe about ubiquitous parental assistance. It’s all good! What’s your story?

  47. Fairly Frugal Fella

    I’m only offended because no one told me avocoado toast was a thing.

    But as someone mentioned earlier, the people I’ve seen offended are millennials that are interested in personal finance or have their spending in check.

    No one else outside of that, in my personal circle or Facebook circle, has been offended, to my knowledge.

    I don’t think he’s off base because he’s right. Most people in my generation can’t afford basic things because they spend too carelessly. It was just oddly specific.
    I’ve had a hard time even amongst my friends impressing on them the importance of not wrecklessly spending.

    Anyways, I really want to try this toast now.

  48. Stealth Saver

    I’m very envious of the millennial “lifestyle”, because I am relatively young myself but instead went for the early marriage and kids route instead of the very late marriage and kids (or neither) route. Therefore no fancy avocado toast/snowboarding/new Harley for me… until I retire :)

    However this does remind me of a great TV commercial I saw when I was young. It showed a guy in his 20’s drinking/smoking all the time, eating take out constantly, just really living it up. Then it fast forwards to 20 years later and it shows him in a hospital bed presumably for a heart attack, with his wife and kids crying by his bedside. The idea being his ill health happened way earlier than it should have because of his previous “out of control” lifestyle, therefore you should always be thinking about the future and make your choices accordingly.

    I believe the same thing is happening now financially with millennials. You can live that lifestyle before you’re 40, but you have to pay for it sometime, because mommy and daddy’s money may not be there forever! Especially if there is some massive financial meltdown in the future.

  49. I think the big takeaway from that Personal Capital survey is that millennials are overestimating the amount of money they will be inheriting. Like you wrote about here: the average American has a net worth in the 300k-350k range. Two average parents leaving their entire net worth to their single child = 700k which is less than 1mil. Even less if it’s split among multiple children. Maybe the results of the PCap survey skewed higher because the profile of a typical user of that platform skews wealthier. But I think it’s more likely that among the survey respondents, expectations are not aligned with reality.

    1. Maybe! A good point you bring. But the $700K will likely turn into $1M+ in 20-30 years thanks to inflation. The PC data does skew towards more responsible people who don’t want to hate their lives because they hate their work.

  50. The Luxe Strategist

    I like the Financial Samurai because he lives in the real world. Additional data points: no one I know in NYC who owns their own place did it without parental help. Not one. All these people are hard-working and not spoiled at all (at least the ones I know). It’s the way of life here. Parents get an investment and hassle-free tenants. Kids get fair rent and hassle-free landlords. It’s a win-win situation for everybody…except those who don’t have parental help. For us, we rent places from small-time landlords to keep rent low, and then invest our savings.

    1. Thank you for corroborating what I’ve been observing in NYC as well.

      I think it’s a win-win as well. Feels good to help your child and make an invest as well. No brainer! And if your kids don’t pay the rent, you cut them out of the will!

  51. Your First Million

    This post had me almost in tears I was laughing so hard! As a 28 year old millennial myself, I know many people who are living in this same “YOLO” / refuse to take any responsibility mindset.

    One guy especially comes to mind! I know a guy named Danny who is my younger brother’s best friend. Danny is 26 or 27 years old (not certain). Danny lives at home with his parents. A few years ago, Danny had moved out into an apartment of his own but after a year of having to actually pay rent he left his apartment and moved back in with mom and dad to live rent free.

    Danny works as a handyman for hire and does odd jobs in the neighborhood (ex: landscaping, fixing fences, installing floors etc). Now I must give him credit, as far as I know he does work hard when the jobs are available… of course they aren’t always available. I do not know how much money he makes, but it must be enough for him to afford the following:

    -2013 Corvette ZR1 (he bought it on Ebay for around $60,000)
    -Lifted 2016 Dodge Ram Diesel truck (not sure how much he paid, maybe $40k?)
    -Rolex Submariner watch (about $6,500 new)
    -a 25′ fishing boat
    -a brand new fifth wheel (no idea the make or model, but it is new and I know it was expensive!)
    -eats out on EVERY SINGLE MEAL! he refuses to eat anything at home.

    This guy is seriously the “YOLO” millennial to the extreme!

    1. Glad it made you laugh!

      Dang, Danny balling so hard! Are you SURE he doesn’t make under the table money on the side? Those are some expensive, expensive habits!

      Handymen are very valuable here in SF. Don’t take him for granted! They’ll make your life easier, especially if you are a homeowner.

  52. My fear for this type of entitlement thinking is that it does not bode well for this country. If the # of income producers declines and we have increasing # of takers (be it from Mom and Dad or from gov’t or ??); we will become a very weak people who will vote accordingly.

    Long term, who wants to live in a country where the majority of people think it is acceptable to suck on the gov’t teat?

      1. Western Europe is only around because of the strength of past USA involvement. If not for USA, western European countries would be speaking German/Russian and QOL would not be very high.

        These were also mono cultures and thus it was relatively easy to achieve consensus about what kind of country they wantes.

        I believe the High QOL you reference will wind down. Socialism always eventually runs out of other people’s money to have fun with. Eastern European immigration is reducing the mono culture and thus they will become more ungovernable.

        It was a good 50-60 year ride but it is almost done now.

        Thanks for the reply as it got me thinking. Also while this post may seem a downer, I agree the future is bright for the individual with the right attitude.

  53. My parents have not supported me financially at all as an adult. It’s actually been the other way around. No massive inheritance for me, sigh! Oh well. I’m sure if I got in a bind they’d let me live with them for free, but I think I’d lose my mind within a few weeks. I need and love my independence.

    1. Lol, I’m in this position. And you’re right about the losing your mind bit. Sometimes I wonder how far gone my mind is :D

  54. I think this is a fantastic post!

    I do feel a lot of the negative feelings from older generations comes from a point of jealousy. I, as a millennial, recognize how hard the older generations worked and how many of them spent their entire careers working jobs they didn’t like simply because that’s what was commonplace. I feel very fortunate to not have that kind of pressure put on me.

    While my parents didn’t buy me a house or contribute to my purchasing a house, they do help me out financially a lot. They paid for me to go to college and grad school, they bought me my first car and paid the insurance for it, and they pay my cell phone bill still even though I can easily afford it on my own. They help me, and my siblings, because I am their child and they want to see me do better and have an easy life than they did.

    I think the only thing wrong with the millennial generation here is the sense of entitlement and maybe that’s where Tim is coming from.

    1. Dang, what type of car did they buy you? I’m jealous!

      I felt bad asking my parents pay for my MBA because I was 26 at the time and had worked for four years. So, I did what many do and just borrowed money to get my graduate degree. But I also figured out how to get my firm to pay for a good part of it whoo hoo!

      1. It was a 2006 Jeep Liberty (certified pre-owned)! Lasted me 10 years and I was beyond grateful!

        My MBA program was only one year long and VERY cheap compared to others. I also graduated undergrad in 3 years and commuted, so I think my parents had more money put away than I actually cost them.

        Having your company cover the cost is the best option of all though! No guilt there!

  55. Here are my stats: 26; House Bought/Gifted By Parents; Employed Full Time; College Grad

    I have been blessed. I don’t spend the amount I am saving on rent by purchasing luxury items. Instead, I put the savings directly into my 401K. It will help me retire a few years earlier. I also will be the caregiver for my parents in their old age. Basically I am getting paid upfront to provide caregiving services. It works out well for both parties.

    I don’t understand why any parent would let their kids live at home and not work past the age of 18. It seems like such a waste of potential earnings. I would rather work to my full potential now, and retire early. I cannot imagine working until I die or wasting my life away. These “kids” should at least devote a decent amount of their time to charitable work if they insist on not having a full time job. A person should find a way to give back to the world. Otherwise, they are just a self-centered drain on resources.

  56. Great post, Sam! I can’t help but recall a saying you quoted in one of your previous (but recent) posts:

    “From rice paddy to rice paddy in 3 generations”
    “From shirtsleeves to shirtsleeves in 3 generations”

    I witness a lot of my friends doing the “avocado toast”, $60 brunch, etc etc on any ‘ol Sunday. I’m seeing it here in Seattle too….its becoming more like the Bay Area you describe by the month. Many of my friends have their parent’s as co-signors on their homes or live in homes that are owned by their parents and pay very, very subsidized rent. As a result, they splurge frequently. Ironically, some of them also carry large credit card debt which they reduce (or pay off) from time to time by cashing out their 401K’s…..I think I can say that the high flying millennial lifestyle is a bunch of smoke and mirrors for the most part and is a lot about ‘keeping up with the jones” -instagram lifestyle.

    1. I wonder though……. how do we balance helping our kids and spoiling them?

      I would smack that avocado toast out of my son’s mouth if he hadn’t saved up enough to buy his own place yet. Oooooohhhhhhh…. gonna be a Dragon Dad maybe!

      Or, I’ll just take him on a trip to an impoverished country for a couple weeks, live in 2 star hotels with only a backpack each, and make him realize what an idiot he is for being so wasteful.

      1. SeattleGirl

        Great idea about a trip to an impoverished country. I will keep that tool in my toolbox for future use!
        LOL Dragon Dad!
        Thanks again for the interesting and upbeat posts!

  57. I think complaining about helping your kids seems to be counter to most Asian cultures. The difference is expectations. In Asian cultures, it’s not uncommon for parents to help their kids out by providing downpayment and even buying a house for them. I think the philosophy
    is more of a “keep it in the family” kind of philosophy. I would do that for my children no problem! But, this doesn’t excuse them from performing to the best of their abilities in school and being good social community citizens. I don’t know if sitting behind a desk or spending all your time working is the right answer for anyone… How responsible is it to work yourself into an early grave? I’d rather they use the help that I can provide to be entrepreneurial and find something they enjoy doing and can sustain a balanced life style. Just my two cents.

    1. I agree, which is one of the reasons why real estate is so prevalent in Asian net worth households.

      I do like the thought of “keeping it in the family,” which is why I’m considering renting out my house to a family’s business.

      The problem occurs if you’re 25 years old, own a home your parents bought you, and start bragging to others. That’s where doom occurs.

  58. I think you’re missing the point of the backlash — many people were mocking the advice because

    1) they weren’t spending a lot on frivolous stuff like overpriced avocado toast, and
    2) even if you have avocado toast, say, once per week, “spending too much on avocado toast” is not the reason they can’t afford a house, as cutting that expense out is a drop in the bucket compared to the down payment you’d need in much of the country.

    That’s why things like those mocking “avocado toast” calculators sprung up.

    1. You may be missing the obfuscated humor I try to incorporate in these type of articles. But that’s understandable because I used real examples with real data to show why everything will be OK for those who have everything already….

      1. nah, I’m a longtime reader so I’m used to your sense of humor – just think you were reaching a little with the pretext for the article. ;) Love the examples, though!

        1. Savings and FIRE is a mindset Laura.

          If you’re willing to spend $19 on avocado toast when you’re not already rich, then you’re probably willing to spend aggressively on other things and not save. After 10-20 years, you’re screwed if you have no safety net.

          But good thing people who are set, are set.

          What’s your situation? Seems like this article has touched a nerve.

  59. Isn’t this just the new “latte factor?” Avocado, latte, aren’t they all the same? It’s just another piece of luxury that you can get.

    Yes stop “splurging” on these luxuries can save you money in the long run but you’ll get more bang of your buck by saving on bigger items like car, housing, phones, etc. If you’re one of those people that upgrade your cellphone or change a car every year or two, you’re literally pissing away money. It wouldn’t matter if you’re not eating avocado or drinking latte daily.

    We splurge on chocolate and coffee semi regularly and do not feel guilty about it at all ( shameless self-plug).

    You’re better off spending a few dollars here and there, enjoy your life NOW than having to deprive yourself for many years and ending up hating your life. It’s all about having a balance that works for you.

  60. Our parents bought us a good paying job when they paid for our college degree. But it takes the college so long to give us that job that we have to move back in with our parents. If our parents didn’t want us there then they would be getting mad at the colleges who sold us the jobs and didn’t deliver, but i don’t see that happening.

    Why rob your parents of the joy that occurs from giving to their children? There’s no shame in this, unless it is from a less fortunate onlooker.

  61. Here’s the thing that few consider. Much of the wealth that has grown over the generations is because of inheritance. Wealth is transferred from one generation to the next. With the way things are going, you’re going to see less of that happening. If parents of millennials are spending their wealth on buying their kids avocado spread sandwiches and snowboarding trips, that’s all fine and dandy, but what it’ll mean is less wealth that gets transferred to their kids when they die. That in turn will mean less wealth to the generation after that. Even though it’d be a long time away, probably past the lifetimes of anyone reading this, a good deal of the wealth transfer will be evaporated.

    So, you can say that spending this money no is ‘no big deal’, and you’re right, it probably isn’t. But if someday historians start looking back trying to figure out when the transfer of wealth began to slow and even reverse, those avocado sandwiches might turn out to be just a tad more important than people realize.

    1. Someone is profiting and creating their own wealth though by selling that avocado toast. More of a wealth transfer than wealth destruction

  62. I read an article a while back about how the drop in fertility rates has contributed to inequality by not breaking up larger estates into more pieces. If I were an only child and my parents died today I would inherit around $1M. But unfortunately I have to share it with my money grubbing siblings ;). The more a couple makes the fewer kids they seem to have. I don’t know if it’s a problem but I have taken note of it ever since.

    I think we see a lot more millennials like this than previous generations because of the shrinking fertility rates combined with the relative financial success of baby boomers when compared to their parents and grandparents so we wind up with more failure to launch. There was plenty of living with mommy and daddy for people of a certain class. We just have more people in that class. But I expect these kids to go through their inheritance just the way third generations have for how many years and hungry people from poorer circumstances to come up behind them and start the cycle again to spoil their own kids.

    On another note, I’d be interested to know what the statistics look like in more modest parts of the country. I know some of the people I know who live in really nice houses got help from parents/inheritance, but most I know have done it on their own. But my peer group isn’t representative either as we’re all full time professionals already.

    1. Very salient observation about declining birthrates and a larger piece of the pie going to a smaller amount of children. You’re absolutely correct. I can’t believe I have to split anything with my sister. Just kidding sister! You know I’ll support you until my dying days.

    2. >>The more a couple makes the fewer kids they seem to have.

      I would like to offer the point that maybe BECAUSE people have fewer children they make more money.

      I know it’s true for me. I look around and people with tons of kids, and really, ALL you can do is raise them. It’s clearly a problem for the poor (in general).

  63. This entire article should replace “millennials” with “Young adults with rich parents that buy them houses”. The generalizations here apply more to socioeconomic status than they do to a generation.
    My parents bought their house for $50k, neither of them had a college education, but had a household income of $40k when they were 25. My wife and I are both STEM majors and have a combined income of $135k (with $200k student loan debt) and the house my parents bought is now worth $450k. So their house was 125% of their yearly high school educated income at 25 yrs old. For us that house would be 320% our yearly college educated income at 30 yrs old. Plus we have the debt load to contend with. Seems to me like the increase in housing and education costs combined with the stagnation of wages has had a greater effect than avocado toast. I don’t eat avocado toast, but if I ate it every day it would cost me what? Like $1.50 a day? That should cover the cost of the avocado and bread. Obviously I would make it at home, I can’t afford to go out as much as my parents did at my age.
    “Some are just plain envious of the millennial lifestyle, especially those who busted their butts to get to a level which millennials are already enjoying. I wish my parents had bought me a condo when I first moved to NYC in 1999. I wish my parents had bought me a house when I moved to San Francisco in 2001. If they did, I’d be so rich I could have turned into one of those Instagram playboys by age 30!”
    That’s not the millennial lifestyle me or anyone I know is experiencing. Perhaps living in a wealthy city in a wealthy neighborhood is influencing your perception of what a “millennial” is? Maybe rich kids have always been like that regardless of their generation label?
    See this article for an alternate perspective:

    1. Steve Adams

      Yep! “This entire article should replace “millennials” with “Young adults with rich parents that buy them houses”. The generalizations here apply more to socioeconomic status than they do to a generation”

      1. Agree as well. My husband and I are older millennials (82 and 86) living in Dallas. Our parents helped with college, but we still worked and saved money, and we put ourselves through grad school, bought our own homes, and have been saving money for years trying to stash away a few million to retire on. My husband wouldn’t be caught dead ordering avacodo toast. Our parents could have given us more, but didn’t and we are thankful and proud of what we’ve accomplished on our own. Our friends are all on similar situations, so I really don’t know where these entitled millenials are whose parents fund their lives.

          1. They are in Dallas as well, just got to the uptown area when the weather is good and you’d see the same thing between 10am-3pm. Heck, Dallas is known to be the home of the “$30k Millionaire”. This isn’t a new phenomenon, I was in a posh/cool are of London in 2010 and saw the same thing. Can’t recall it but they actually have a nick name for the rich kids that way and of course there are some broke one littered in the bunch as well.

      2. This article is not reflective of the entire generation!

        I’m 26, born right in the middle of the Millennial generation. I’d never live it up on my parents’ dime like the people you mention. Doing so would make me deeply ashamed.
        I moved back in with my parents after college graduation for some time, and viewed it as a kind of beneficent and benign purgatory.

        I’d avoid someone my age who was living like these San Franciscans and others you mention.

          1. More than three years in total, and for a number of reasons: being underemployed, being unemployed, moving back in-state, health reasons, to save three-fifths or more of my (small) income.

    2. I just view a millennial as folks born after 1980.

      Your parents had a higher mortgage interest rate to pay AND you guys have strong earnings power as a dual income household.

      Don’t sell yourselves short!

      My neighbors aren’t rich btw. Their parents are making big bucks or anything. Just normal middle class jobs helping their adult kids. It’s just that their house has appreciated so much more than their income.

      Related: Definition Of A Middle Class Income

      1. Very true about the higher mortgage interest rate, they also made the mistake of taking out a second mortgage, so in the end that house cost far more than the purchase price.
        While I do believe on average things are more financially difficult for my generation than my parents, I’m not using that as an excuse. I believe my wife and I are in better financial shape that our parents were at our age and I know we have a far better trajectory. Smart moves like driving a $1,500 car are getting us there (take that 1/10th rule! Closer to 1/100th!). Maybe I reward myself by having some avocado toast for breakfast. At a home made cost of ~$1.50/day it would be a huge splurge compared to my current ~$0.20/day oatmeal breakfast! Hold on, That’s a 7.5X cost increase! Maybe this guy really is on to something…
        As far as your neighbors not being rich but instead benefiting from home worth appreciation, I think that may be a major factor in how they treat that wealth and pass it on to their kids. Easy come easy go. I think we are probably more discerning with wealth that comes from our hard earned income or deliberate investments than the “found” wealth of home appreciation. Or from inheritance for that matter.
        Thanks for the reply!

  64. Is this a Bay Area thing? It’s crazy to coddle the kids that much. Yes, I’d help with college cost and the house down payment if I could, but that’d be it. They have to learn to stand on their own two feet because we won’t be around forever. Helping the kids too much is detrimental to their growth. This was in the Millionaire Next Door years ago.
    On the other hand, I’m sure there are a ton of hard working millennials. I suspect you got to know the entitled ones because you have free time during the day.

    1. I’m wondering if this may be a Bay Area or super wealthy California thing too. I live in Houston and am a physician living in a fairly well off neighborhood but not Bay Area wealthy or even close. We don’t have children, but most of our neighbor’s kids seem to work pretty hard at jobs. Many do live with their parents until mid twenties or even later but they all seem to be working a lot of hours and trying to save money. I’d love to be a Bay Area Millenial!

      1. It is definitely predominant in California, both northern and southern. Many young adults haven’t seen their parents struggle to achieve wealth and seem to take it for granted. For many years I struggled to figure out how the hell my friends were always buying new cars, expensive purses, etc. and then magically was able to afford the down payment on a $750k house. Once I started asking questions I realized that even the ones who were making $80-$120k salaries were receiving money from their parents. I’ve seen several friends receive benefits from their parents like $400k for down payment on a $750k house, brand new Lexus IS350 with insurance paid for, vacations to Italy, etc. It’s very frustrating to those of us who have to work hard to make our ways, but it is what it is. It’s best to recognize it for what it is and realize you do not need to try and keep up with those more fortunate than yourself.

    2. It’s more of an expensive city kind of thing. Because if you live in an inexpensive city, you don’t need as much help.

    3. NOPE..I am out here in VA..Live on a 6 house cul-de-sac. Next to me 24 year old in basement, next to them a couple with 2 kids in the basement (so 4 total both kids under 3)..across the street, adult couple in the basement (they both own very nice suv’s )….NOW next to them is a very nice couple doing the right thing taking care of their mom.

    4. It’s more an “expensive city” or “expensive coastal city” thing where extravagant living is more commonplace, and help from your parents as an adult child is a necessity.

      But there’s a breaking point where there will be migration out of places like the Bay Area, towards cheaper places like Portland, Austin, etc.

      1. As a Portlander looking to upgrade neighborhoods now that we have a little one, Portland is most definitely not “cheap” these days. Our modest 1907 N. Portland home would sell for $400-$450M (purchased for $260 in 2006) and has horrible schools (hence the need to move).

        Looking to move to a better school district and for something in $600-700 range and there has been NOTHING on the market since we started looking last fall. Keep in mind taxes are high here too at 5-10k/yr and with a large school bond just passed that will add to that. Salaries here are not bay-area level.

        You might find something in the burbs for cheaper but if you’re working in the city you’re looking at a 1 hour commute each way and getting worse each year.

        Oh yeah, and it rains here all the time as well. Stay away! Would seriously consider leaving at this point if I didn’t have strong family ties to the area. Phoenix is warm, sunny and cheap. Boise and Salt Lake too if you’re looking to stay West.

  65. Oh man, that avocado toast in the picture looks amazing! I think I’m going to go ahead and make some right now!

    I’d actually say that your observation about the current real estate market & millenials is spot on with one of warren buffets claims: “Americans born today are the luckiest crop in history”.

    The real question is how long this trend will continue, and whether or not it is sustainable.

    1. The next generation will be more and more “lucky”. One day most of us won’t need to have a job.

        1. No I don’t but that appears to be the trend. Each generation has less of a financial burden than the one before. Hence, we are talking avocado toast now. In the future teachers will educate the youth what it meant to have a “job” as we see it now.

          1. Steve Adams

            Progress is driven by our society and institutions. There is no guarantee that this progress continues. In fact, history is full of examples of civilizational reversals.

            Maybe it won’t happen again, but maybe the wealth and work ethic effects in turn drive society and institutions to change in a way that stops the progress.

  66. AVacado toast does sound good. However since it is easy to prepare at home I would never order it. Much like bagel and lox at a brunch place. Give
    Me some French toast or other item that actually requires prep.

    I don’t begrudge people who are born into wealth. As your millennial said, as long as they are not harming anyone then who cares.

    My freshman year roommate was loaded. He was not a nice guy and constantly told me that he deserved first choice at everything because he paid full tuition, unlike me who was on a scholarship. People like him suck. So if you are not like him then who cares.

    As for the FIRE movement, the privileged don’t even have to worry about it. Kudos to them and their parents for setting up a nice life for their kids.

    1. Physician on FIRE

      I like the way you think. I make avocado toast at home for 50 cents a serving. If I’m going out for breakfast, I’m getting the platter that would make a mess of dishes and require significant prep at home.


    2. Terry Pratt

      Who says they’re not harming anyone? When wealthy millennials move into my neighborhood, rents necessarily skyrocket and I become financially worse off.

  67. As a millennial (29) living in the Midwest, it is quite different than San Francisco. I was able to buy my home in 2013 for $145K. 5% down with a combination of savings and $5K since repaid loan from mom. I expect an inheritance < $100K way down the road. To tell you the true I think my parents spend more like millennial's than I do. I suppose they have every right to but I worry about their retirement which is getting closer every year. The difference is that I have large financial goals still such as a second home, kids, boat, etc… My parents have this things accomplished already so they buy $12 mimosas and go on vacations often.

    1. And this is why I’m actively trying to gain real estate exposure in the Midwest. There is an arbitrage happening at this moment where investors will be rewarded over the next 10-20 years IMO.

      You don’t have to live in SF or NYC or LA to make the bucks or find the opportunities thanks to tech. Prices in the coastal cities will force geo-arbitrage.

      No Bank of Mom and Dad necessary when you can buy a home for $145,000!

      Related: Focus On Trends: Why I’m Investing In The Heartland Of America

      1. Sam. I’m a real estate investor in the Midwest (Indiana). Your article on Midwest real estate is spot on. I now own 4 rental homes, 3 free and clear. My last was a 3/1 with 1200 sq feet and large 2 car garage for $97k plus $3k in improvements. My marketing budget was $15 (For Rent sign from Lowes). Within 1 week of closing, had a signed 2 year lease with deposit in hand. Two more couples were in the bullpen if the first couple backed out. I’ve had zero vacancy on any property. I started my RE investing in 2014. It’s an amazing business. My 13 year watched my entire last deal from start to finish and asked “why doesn’t everyone own rental properties?”

      2. I am in a very similar position to Nathan in the Midwest. I grew up here but never really necessarily wanted to stay. One of many factors that brought me back to my hometown is the cost of living. I spend 15% of my gross income on housing making it possible for me to save 50%+ of my gross income to meet aggressive financial goals while also enjoying some expensive hobbies and moderate fine dining while I am young.

  68. Apathy Ends

    I have one theory on the backlash, the people who are offended aren’t the people he is targeting or need his advice. They either have control of their spending and thus are entitled to splurge on whatever they want -or- aren’t concerned with money because they have (or will have) enough of it.

    The ones that are offended and don’t meet one of those 2 categories need a reality check.

    1. I am not offended by this article at all. In fact, I think the author made a great point about people feeling entitled to whatever they want and then complain about how they don’t have more. If someone wants to drive a brand-new BMW and eat their way into debt while not caring enough to get a job, they shouldn’t complain about how they don’t own a house like every body else.

  69. Duncan's Dividend

    I’m 36 and born literally at the end of 1980 so I’m in, but not in, the millennial generation. I do however spend a ton of time at work with them so I think I have a pretty good perspective given how many entry level positions that I have hired for in the past into a fortune 100 company. I’m in the camp where I will inherit a lot of money, enough where I will ever have to work if I don’t want to ever again. I do however think that there is a very big divide between us older millennials and the younger everybody gets a participation award for coming in dead last younger part of our generation. I honestly think that the changes in society with everybody wins and there is not life struggle bubble that we have given kids these days is harming them in preparation for what true life is like. Now letting your kids walk to the park alone is frowned on by society because something might happen, every generation prior was able to do it and it was normal. Just my two cents, but we coddle kids too much and it shows with their drive, business acumen, and ambition in life.

    1. That is a very good point. The real issue is whether or not this approach to life is sustainable over the long term.

      I myself am a millenial (1989), but I do not think it is a good idea to just pamper your children and basically shifting any sense of responsibility away from them.

      By giving them everything and enabling them, without any sort of conditions, they will not be equipped or prepared to handle these responsibilities. I would not be surprised if the family’s inheritance or wealth is destroyed after one generation.

      1. Something quickly comes to mind about a fool and his money…

        I’m a late Gen Xer, but teach lots of millennial undergraduates — and I see Sam’s observations here back east all the time. But I also see a lot of millennials hustling, getting deeply involved in communities outside of their careers, and thinking about creative ways to merge tech and social change.

        Yes — this urge to hustle is probably diminished in proportion to the expected inheritance/level of parental support to meet daily expenses. But I’m pretty optimistic about the next generation’s ability not only to be independent, but also to be creators of new wealth and (better yet) new ideas.

        1. MillenialExpat

          The main qualm I have with this analysis is the expected $1,000,000 inheritance, and with the timing of it.

          The sample of the population you’re getting by surveying millennial Personal Capital users (and the anecdotal examples of your neighbors) is in my opinion vastly out of touch with the millennial generation in general. In my opinion this snapshot represents a Top 5 and maybe even Top 1% of millennials.

          With all the problems baby boomers are having with retirement (cite the draw down on SS in the news lately), the median household income of families in the US etc. a seven figure inheritance windfall is pipedream for the median American millennial.

          While I happen to be a 24 year old Personal Capital user who can likely expect a $1,000,000 inheritance, I likely won’t be receiving this until I am around retirement age and it has almost no bearing on my current financial planning.

          My parents have already given me everything and more(access to a comfortable childhood, access to quality education and a 529 plan that paid all my living and tuition expenses in undergrad), and I wouldn’t dream of effectively drawing a salary from them unless I absolutely had to. After all they’ve done for me it seems incredibly arrogant to impose upon them and potential compromise their ability to retire early all so I can enjoy deferring financial responsibility.

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