If you are a parent, your mission is clear: develop into a rich Bank of Mom & Dad to save your children. Without your financial support, they might never launch. If you don’t have wealthy parents yourself, then unfortunately, life might stay on hard mode forever. It’s up to you to break the cycle for your next generation, if they need your help.
Ever since I started working on Wall Street in 1999, I’ve seen wealthy parents buy their children everything—from condos to cars to groceries. I saw this firsthand with my peers at Goldman Sachs.
While I was sharing a studio apartment with a high school friend and later a co-worker, some of my peers were getting $500,000–$750,000 condos from their parents. Instead of wearing ill-fitting suits from Century 21 like I did, they had tailor-made Armani. I was impressed… and a little jealous.
But more than anything, I was motivated. Working in Manhattan opened my eyes to what generational wealth can do. And now, as a parent myself, I see even more clearly how important it is to become wealthy enough—not just for my own peace of mind, but for my children’s future opportunities.
Rich Banks of Mom & Dad Are Thriving
In my post, Income And Net Worth Required To Purchase A $10 Million House, one reader commented:
“The Bank of Mom and Dad phenomenon is so frustrating for those of us who have mostly earned everything… The few I know who ended up in a $10 million house in this situation still work pretty regular jobs… and they’ve traded up over the years. So I guess they get a little credit for making the best of their very nice birthright.”
It can feel annoying when your friends or peers are wealthier simply because of who their parents are. Even more irksome is how shameless many adult children seem about accepting help. There’s rarely any embarrassment. Nobody hides the fact they live in a $3-$10 million home bought by mom and dad, instead they throw parties and flaunt it on social media.
Only Three Ways to Stop Parents From Paying for Their Adult Children
One way to end the rich Bank of Mom and Dad phenomenon is for adult children to start refusing help and insist on making it on their own. But let’s be honest—that’s not going to happen. If free money is available, most people will take it. As a result, the trend will likely continue—and even accelerate—as more wealth is passed down.
Another way is for parents to start saying “no” to financial requests or stop offering help altogether. But when you have more money than you can spend in a lifetime thanks to investing for decades in the greatest bull market, that’s unlikely too. Love, guilt, and the desire to leave a legacy often outweigh ideals about financial independence.
The final—and most unrealistic—way to stop the trend is for sellers to reject money from parents. Imagine requiring every buyer to swear under oath that they earned the money themselves—like checking ID before selling alcohol. Sounds absurd, right?
Because let’s face it: if you own a BMW dealership and a 28-year-old’s parents want to drop $100,000 on a luxury SUV, are you really going to say no? Of course not. Money is money. And trying to screen buyers based on where their funds come from could open the door to legal trouble.
I Sold My Home to the Bank of Mom & Dad—And Liked It
As a home seller, my goal was simple: get the highest price and ensure the smoothest transaction possible. I didn’t care if the money came from the Bank of Mom & Dad, as long as it was legitimate. If the parents offered $50,000 more than another offer without parental help—everything else being equal—I was going with the higher offer.
Taking less would have been irrational. That $50,000 matters to me as a parent working to become a rich Bank of Mom & Dad myself. Every dollar helps secure my own children’s future, if they need our help. I hope my kids will grow up to be independent adults, however, I also appreciate having career insurance just in case they get rejected everywhere.
My buyers were a couple in their early 30s and worked in big tech, likely making $500,000 to $800,000 total a year. But what sealed the deal was their 100% down payment—courtesy of one of their dads, who was willing to pay all-cash. He sent a letter from his bank verifying he had at least X million in funds.
As part of their preemptive offer, the buyers waived all contingencies (financing, inspection, insurance, etc.) and agreed to a 10-day close. In the end, the transaction took 13 days because the escrow company needed extra time to verify the cash source. Still, it was the easiest real estate deal I’ve ever done.
So thank you, rich mom and dad! You crushed it—saving and building wealth to support your son, daughter-in-law, and grandchild. And in the process, you helped me and my family simplify life and get liquid again. Respect.
And as one commenter smartly pointed out, the adult children always have the option of paying back their parents. For honor’s sake, it’s a good idea since the children earn a top 1% income.
How to Compete in a World Fueled by the Bank of Mom & Dad
Imagine not making $500,000+ working in tech. How are you going to afford a $1.8 million median home in the San Francisco Bay Area without help? You’re not.
The reality is, you’re not just competing against dual-income households making half a million dollars or more a year. You’re also up against their parents—wealthy, generous, and ready to help with down payments or all-cash offers.
And if that’s not enough, you’re also competing against international money. In global cities like San Francisco and New York, real estate also faces an international demand curve. My buyer’s dad wired money from Asia to close the deal.
If you didn’t grow up with wealth, you’ll have to play the game differently. Yes, the rules may seem unfair, but that doesn’t mean you can’t compete and win. Here’s how:
1. Accept the Game, Don’t Hate the Players
It’s easy to feel resentful when others get a massive head start. But resentment is wasted energy. Use it as fuel to work smarter, save more aggressively, and build wealth on your own terms. Use my psychological trick and tell yourself, “Everybody is richer than me, why not me too?”
Life isn’t fair and the sooner you accept this reality, the better. I could have spent my time complaining about how much harder life can be as a minority navigating a country filled with implicit biases. Instead, I chose to work as hard as possible to achieve financial independence sooner, so I could live life on my own terms.
2. Invest In Yourself Relentlessly
Education, skills, and social capital are your tools. Beware of competing with the person who continuously self-educates. Subscribe to the free Financial Samurai weekly newsletter. Purchase a copy of my USA TODAY bestseller, Millionaire Milestones. The amount of inexpensive educational resources out there are endless. Please take advantage.
The wealthy may have capital, but you can close the gap with hustle, adaptability, and strategic thinking. Many children from wealthy families squander their advantages because they take their good fortune for granted. View these lapses in judgment as your opportunity to get ahead. Network, negotiate, and never stop learning.
3. Use Other People’s Money Smartly
If you didn’t inherit money, learn to use leverage wisely. Real estate is one of the few asset classes where everyday people can build wealth using other people’s money—namely, the bank’s. It’s my favorite wealth-building vehicle for the average person because of its forced savings component, relative stability, income potential, tax advantages, and long-term capital appreciation.
At the same time, stay consistent with investing whatever you can into the S&P 500 with each paycheck or financial windfall. Over the long run, it’s tough to beat the simplicity and returns of the overall stock market. Just make sure you don’t get shaken out by market volatility. Instead, build the discipline to buy the dips and stay the course.
Investing aggressively over the long run is one of the best ways to build generational wealth.
4. Avoid Lifestyle Creep
Your peers may drive nicer cars or live in nicer homes thanks to their parents, but don’t fall into the trap of trying to keep up. You don't have wealthy parents, so you cannot afford to act like them. Stay in your lane!
Save and invest the difference. Compound interest will be your ally while their spending habits become liabilities. Take satisfaction knowing you are living according to your values and within your means. Nothing can take away the honor of earning what you deserve.
5. Improve Communication With Your Parents
Whether you realize it or not, most parents would do anything to see their children happy. Sadly, many adult children drift away, and over time, the strong bonds built in childhood begin to fade—making it harder to ask for support out of the blue.
Now imagine seeing your parents once a month and checking in weekly by call or text. Even though you’ve moved out, your relationship deepens as an adult. It's a new type of relationship formed through mutual respect. They feel appreciated, proud of who you’ve become, and connected to your life.
In this kind of relationship, asking for financial help doesn’t feel awkward, it feels natural. And your parents will likely be even more willing to help because they remain an active, valued part of your life.
6. Start Building Your Own Bank Of Mom & Dad Today
Whether you have kids now or plan to, think long-term. Build a portfolio of assets that generate passive income. Open custodial accounts and Roth IRAs for them. Teach your kids about money and how to work hard for it. Help them graduate debt-free and buy their first homes.
Break free from the cycle of only thinking about your own financial well-being. Start thinking in terms of generational wealth. The goal is to be in a position to help your family if and when they need it.
Ironically, if you can make your kids millionaires by their 20s, you may not need to help them much at all. When they are set for life, observe how your anxiety fades away.
Banks of Mom & Dad Are Only Going to Grow Bigger
You may not be able to stop the Bank of Mom & Dad from growing, but you can become a great bank for your own children. And once you do, you'll realize that helping your kids doesn't mean spoiling them. It means giving them a fair shot on an increasingly uneven playing field.
Accept that:
- Parents will never stop loving and wanting to help their children.
- Adult children will rationally swallow their pride and accept financial help from their parents.
- Asset owners will always sell to the highest, most reliable bidder.
The Bank of Mom & Dad isn’t going away, it’s only getting richer and more ubiquitous. Instead of resisting it, it’s time to accept its rise and adapt. Whether you’re a parent or a child, understanding this powerful financial shift could shape your family's future for generations to come.
Readers, how have you seen the Bank of Mom and Dad affect you and your children? Do you think there's any way parents will stop financially helping their adult children, or that adult children will stop accepting money from their parents? Can we blame our parents for not saving and investing consistently during the greatest bull market of our lifetimes? What are you doing to ensure your children get a fair chance to compete?
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Hilarious! And awesome! Hope your funds are only used for emergencies. :)
personally my situation is not directly rich bank of mom & dad but what helped was that my little brother and I were front row seats to our parents come up lol we both saw the struggle and enjoyed the benefits of that beautiful struggle later on in life so it kept us humble and our material desires fairly low… in Chinese culture the parents not only want to get you on to a horse they will also want to walk with you for a bit until they can fully let go (although I don’t think they’ll ever let go being Chinese parents they will worry about their kids until their grave lol)
I think in today’s economy there’s absolutely no shame in going to bank of parents; hell, I would love to be in a position to buy a whole house for my kids with cash but the key I think is to make them realize it’s hard work and really appreciate their position compared to their peers
I experienced the Bank of Mom and Dad manifest as college was ending, although it took me a few years to realize what was going on.
I had a lot of friends who were not afraid to launch businesses, like lifestyle brands or t-shirt companies. I was envious of their no-fear attitudes and passion to create something. On the other hand, I went to law school because I thought that was the best way to get a “good job.”
The realization I stumbled into was that these kids were backed by the Bank of Mom and Dad. They were empowered to take risks and be creative. If the businesses failed, they would be OK. It was like they had a super-power because they could take risks many of us couldn’t afford to take.
It’s been about 20 years since I graduated college. These same kids who failed with their early start-ups moved onto new ides and new businesses. I’m sure the lessons they learned early on were invaluable. They probably would not have learned those lessons without the Bank of Mom and Dad as a backstop.
The point is: another way the Bank of Mom and Dad helps is by being the safety net that gives kids the confidence to be creative and take chances. That’s the kind of bank I want to be for my kids.
Thanks!
Matt
Very well said. Like Bill Gates III willing to drop out of college and focus Microsoft bc of his wealthy parents. If he fails, it’s OK big as he can just chill out at their summer vacation home and come up with a new idea.
Being able to take more risks is a huge competitive advantage to building more wealth.
Ahh.. the bank of Mom and Dad… my parents offered me $100k as part of the down payment when I was moving up to a bigger home a while ago (2 young kids at the time and needed more room)
They were not rich by any means.However, they wanted to help their kids out. I was actually pretty well off, having worked in tech for quite a while and had a bit of stock RSUs/options, so I declined the offer, told her to spend it enjoying life.
My mom told me that she wants to see me and her grand children happy while she is alive. Her money is going to come to me anyways when she passes, she would rather it do some good now and she can also reap the joys at the time. In return for this, she will visit me more often and for me bring the grandkids over often (it’s not that I have not been – btw)
I accepted the offer, it sounds very transactional? But I think she was trying to get me to accept the offer (and snuck in a “cost” so I do not feel guilty not “paying” her back)
She passed away several years ago, I hope she throughly enjoyed hanging out with her grandkids.
My kids have not hit college age yet, but my wife and I are most likely going to help them out as well. I think every parent feels this sense to help out if they can. My challenge now is to teach them the value of money, investments, savings, spend within their means, save for a rainy day.
What a beautiful and heartfelt story—thank you for sharing it. It’s clear your mom gave you more than just financial help; she gave you a way to deepen your relationship with her and for your kids to build cherished memories with their grandmother. That kind of support, given with love and intention, is priceless.
It’s also admirable that you were financially secure enough to initially decline her offer—shows your independence and awareness. But by accepting it on her terms, you honored her wishes and gave her the joy of seeing her generosity in action. That’s powerful.
Now, as you prepare to potentially help your own kids, it’s touching to see the full-circle moment. And yes, the real challenge isn’t just financial support—it’s equipping them with the mindset to handle money wisely, so they don’t rely on the “Bank of Mom and Dad” forever. It’s a delicate balance between giving them a leg up and teaching them to stand on their own two feet.
Your story is a great reminder that wealth isn’t just about dollars—it’s about the relationships, values, and moments we share along the way.
The example of parents putting 100% down on kids house may not be ‘end of the story’ as they say parents may be fronting the money to make an attractive offer to seller with cash/quick close in a competitive market/desirable neighborhood. After the initial quick purchase, the kids may then secure a permanent mortgage on their own, paying back the bank of mom and dad. That’s how you play the game when kids have to compete with cash rich investors/buyers. Definitely an advantage that many young people don’t have starting out
Ahh, great point! And totally possible! Thanks for that. And what a great solution for helping kids own, but then making sure they have skin in the game.
I wonder if that happened with my home sale. But that’s too hard to ask.
Sounds like a win/win! What would the downsides be? Hmm.
A friend did exactly that 15 years ago in Denver. Cash offer via bank of mom and dad to quick close on a townhome. Shortly after he took out a loan.
My in-laws purchased our first home in Denver in 2012 in cash and we had a private mortgage with them until we sold the home in 2021. Although were more than underwritten to cover the cost with a conventional mortgage, their support prevented the need for mortgage insurance and shaved the interest to 3% from the 3.3% we were quoted. We invested the downpayment money and eventually put it toward a rental property purchase in 2016. We “pretended” we owed the conventional mortgage amount plus mortgage insurance and paid the mortgage down faster. We sold the house in 2021 to a long-term tenant off-market (saved the real estate agent fees and hassles/costs of listing) and conventionally financed our next home purchase. Our in-laws’ help with tremendously valuable in setting the stage for the rental property purchase and we remain extremely grateful. Although they offered to privately finance our next home, we felt they’d done enough.
Sounds like a good compromise and a win-win solution.
As a man, I’m curious to know how you felt about the in-laws offering financial help? As a man, I feel it is my duty to provide for my family, and I don’t wanna have any type of obligations toward my in-laws.
Interesting post! I’m one of those people who come from a family where Bank of Mom & Dad existed, but it was balanced. They taught me the value of money, saving, and investing, and I’m grateful for that.
Safe to say that I’ve never turned them down, but I’ve never asked them for $$$, either. They just knew when it was time to support me – they provided a modest ($1k) starting balance to fund my first bank account in HS (after I got my first job), they purchased my first car (used), which I kept it for 10 years, and they were generous enough to pay for my college tuition (in addition to a partial scholarship).
Now that I’m in my 30’s, a co-owner of a company, and within eight years reach of my own financial independence, I can look forward to someday becoming another Modest Bank of Mom & Dad.
Like you mentioned above, their bank accounts kept on growing! Apparently so much so that their financial advisor is now encouraging them to find creative ways to spend it down.
And as you’ve mentioned in the comments, you don’t need millions to provide support for your children/family! Many of my family members and closest friends have/are the most giving parents, even if they don’t have much, themselves.
Thanks for sharing your thoughts! I would say those are quite normal and relatively modest contributions by your parents indeed, and I would think most parents do something similar.
You don’t mention them buying you a home or a car as an adult, so kudos to you for being financially independent from them. Being 8 years within reach of FI is great. Keep it up!
My wife and I have no issues assisting our kids (29 & 27). Both are grinding away at life and working hard to better themselves and those around them. As parents, we feel the responsibility to help build a strong foundation financially for our kids so they can continue the our families legacy going forward. The goal is continued improvement for generations to come. My kids understand that when there is a financial request it will come with a “speech”, which they would rather avoid….lol. We have done better then our parents with a little help and I want the same for my children. No shame in that.
Tell me about this “speech!” What does it entail?
I guess the tricky part is when to ask for help as an adult child, as some children are quite prideful in never asking. On the flip side, when should parents offer financial help, especially to proud children who never ask.
The irony is I was the only child in my family to reject most forms of help and yet objectively am now the most “successful.”
In my experience, having that level of safety net breeds complacency and in some cases outright laziness. Which would need a fairly expensive bank of Mom and Dad to compensate for.
True. But there is also the alternative of being super hungry and getting a financial boost as an adult child. I used to default think that most children who get financial help from their parents would turn into ungrateful, spoiled, and perhaps lazy people.
I don’t think this way anymore after seeing so many adult children get help and still grind away to build their own careers and companies.
I think there is a fine line between parents helping their kids and causing future problems or making existing problems worse. I really think it depends on the situation. If the kid in general isn’t responsible a handout isn’t going to help them be more responsible. It is likely going to make them more dependant on mom and dad. Another issue is that sometimes these gifts come with strings attached which can lead to relationship problems between parents and children or even spouses if the children are married. It is not all bad though, there are situations where money can help. I remember when I was in college and accidently backed into someone else’s car. I didn’t have the $3,000 for the repairs so my grandmother gave me the money. I paid her back as soon as I could but it was a huge help having that money.
Yes, agree. Parents should know their kids maturity and dispositions by the time they turn 18 or graduate from college at 22-23. So it will be a judgement call as to whether to help the kids financially in the future if they need help or not.
So the goal is to raise grateful, mature, and hard-working kids, while having the financial resources as insurance, just in case they still cannot get ahead in life.
And here we are wondering why the avg person no longer wants children, blaming everything except the simple fact that 90% of parents don’t have millions, never will, and can’t fathom being financially responsible for their kids long after death.
Sure, it’s easy to say ‘well they just had to be smarter with their money’, but if everyone was a millionaire, inflation would have insured that money eventually got diluted.
I would personally feel like a failure as a parent if my kids couldn’t make it on their own as adults. I have 2 family members in their 40s who lost their job but aren’t really looking or stressing, still taking ski and south East Asia vacations with their kids thanks to the bank of mom and dad. Good for them I suppose? It’s no different than nobility getting land and perks only thanks to their last name with no chance for the rest of the population to ever own anything. History shows this doesn’t usually end well for these people.
You don’t need millions to be a rich bank of mom and dad. But you will need some resources to potentially help your adult kids compete with other adult kids who have wealthy parents. You could also be a rich mom and dad by spending more time with them and teaching them practical and social skills for life.
Do you have children? If so, how are you helping them prepare for and ever more competitive world?
I’m not sure whether people really know the extent of the bank of mom and dad. So I think it’s important to highlight this reality.
I do have one 21 yo kid finishing college, and 3 step kids aged 24, 27 and 31. I’m turning 50 this year, our household net worth is about $1.5M, mostly thanks to leaving the US 4 years ago while keeping US income through our LLC, which drastically reduced our expenses while keeping income high.
Nevertheless, I limited my college contributions to my kid to $50k, which meant state school, scholarships and summer jobs for her to graduate debt free. I told her to sell her $2,000 car during college because I didn’t want to pay for her insurance and parking while living on campus. With each of our kids we intervene when things are dire and not their fault, like losing employment, but we have not set an expectation of unlimited help forever. That’s how how I was raised, and it helped me overcome adversity when I immigrated in the US in the late 90s.
“spending more time with them and teaching them practical and social skills for life” is not being a bank of mom and dad, it’s called parenting. It won’t pay for a car or a condo.
As a parent, it is my job to form fully independent adults who can have a chance of survival through self-reliance. If my kid reaches 30 yo and still depends on me, I will have failed.
If we accept this new paradigm you are describing, we are doomed as a society. Most people can’t subsidize their kids lives forever and therefore won’t have kids.
That’s the beauty of parenting—we all do the best we can, and we know our children better than anyone else. Every situation is unique, and there’s no one-size-fits-all approach.
I’ll take the other side of the “society is doomed” argument. Since the beginning of time, parents have always wanted to help their children. Some do more than others, and that’s OK.
What does your 21-year-old plan to do for work or hope to pursue? Kudos to you both for finding a state that works for your situation. When I was reading the Bloomberg article about income limits to get financial aid, I felt sad for the two characters who couldn’t go to their dream school due to the cost. I’d like to have enough money to give my kids that optionality.
As for “spending more time with them and teaching them practical and social skills for life” isn’t part of being the Bank of Mom and Dad—I’d argue it’s just called parenting…”
Teaching kids how to work, earn, save, and invest absolutely can help them afford a car or a condo in the future. There’s something deeply gratifying about working hard and being able to buy something with money you earned yourself.
I’ve got my kids working summer and winter jobs like landscaping, and they’re contributing to their Roth IRAs. We’re two years in, and it’s been incredibly rewarding.
To me, the best part of being a financially secure parent is having the option to help our kids if they need it. If they get into a great school or land a solid job—amazing, more savings for us. But if they struggle, we’re there with a safety net. That’s the kind of freedom and peace of mind money can buy.
I also wanted to add that the one kid who struggled to get his footing and ended up needing the most financial help from us is my wife’s youngest, who’s now in prison for drug related charges.
My wife’s oldest is graduating from med school. $500K debt, but she did it 100% on her own and has gained a ton of confidence in the process. Anecdotes, sure, but still…
What more do you think you and your wife could have done to help the youngest who is now in prison?
As a stay at home dad, I’e often wondered with spending more time with kids will make a different long-term. Were you a stay at home dad as well?
You wrote in your first comment, “I would personally feel like a failure as a parent if my kids couldn’t make it on their own as adults.” How do you feel with your youngest?
I did not raise the youngest, my wife and I got married when he was turning 18, but she obviously feels like a failure. She was a single mom, tried everything she could helping him with school, activities, programs for troubled kids, ADHD medication he refused to take. When he turned 18 and refused to work we first tried helping financially to keep a roof over his head, but the money went to drugs. We stopped funding his habit and he was homeless for a while, made money dealing.
It’s now that he’s been in prison for 2 years he’s finally getting clean, taking meds and getting ready to work within boundaries of the law.. Nothing else worked. Not sure what she could have done.
Gotcha. Sounds like you guys did everything you could to raise him well. This may be the case of genetics taking over versus nurture.
Because from your previous comments, you believe you are parenting on the best way possible, so that’s all that matters.
If those without money don’t have children and those with money have children, eventually that 90% will be inverted.
Maybe right. The natural order of things.
Huh? Are you all claiming that if only rich people have kids eventually 90% of the population will be rich? Is that from Kindergarten Economics?
No I’m not. Everything will rationally work out. What did you mean by your 90% comment?
Keep the fire up! I really enjoy this discussion. Thanks
There is nothing to claim. It’s actually history
https://www.pbs.org/newshour/nation/key-englands-economic-growth-rich-outlived-poor
Fascinating! Thanks for sharing
I sense your anger and frustration, which is understandable. We decided to build a lot more wealth and invest heavily in our children’s custodial investment accounts to get $10 million net worth.
We are allocating $1.5 million dollars each for them to go to the best private universities opportunity to get the best jobs if they want to. If they don’t want to. They will leave us with $7 million to spend for retirement, if our investments don’t grow. We are 51-53.
It’s great that you are OK with public college and letting your child pay for a lot of it. We are too, but not as much.
We enjoy having the ability to help our kids financially buy a house once they’ve found a stable job and know what they want to do.
We don’t want to have to leave the country to provide a good life for them. We also want to be closer by.
May we all be in a position to help the next generation (rather than be a burden to them). I know multiple people who get help from mom and dad, some annoy me and some do not.
There are some that acknowledge their privilege and are grateful that their parents have helped them with big expenses, like school, homes, cars and medical expenses. Others have been able to take more risk in their careers, and I admire that and their hustle, even though they could coast. And they respect others people drive.
Those on the other end of that seem to think that because there are others (on social media) that look to have more, that they don’t have privilege, which includes a free place to live and other types of help. They incessantly complain about said parent even though they live thousands of miles away. They are unhappy with their circumstances and rather do something to change it, blame others. Or they silently judge those that work extra hours on side projects and forgo going out. You feel sorry for them until it gets old.
Well said. There’s definitely a spectrum when it comes to receiving help from parents—and how that help is perceived and used makes all the difference.
I have a lot of respect for those who acknowledge their privilege, use it wisely, and still choose to hustle. It’s refreshing when people are grateful and driven, even when they don’t have to be. That kind of attitude not only earns respect, it often leads to even greater success because they’re operating from a place of stability rather than scarcity.
On the flip side, entitlement without self-awareness can be exhausting. Especially when someone is clearly receiving help but refuses to acknowledge it, or worse, complains about their situation without making any effort to change it. That kind of mindset tends to breed resentment—not just in relationships, but internally too.
At the end of the day, I think we all hope to be in a position where we can lift the next generation up—not enable dependency, but offer support that empowers.
I witnessed this trend back in high school. A classmate carelessly crashed her car so bad that it was totaled. Luckily she wasn’t injured. But the part that struck me the most was overhearing her say that her dad bought her a brand new Benzo the week after. I was shocked. Not only was she not getting punished for being reckless, she was getting rewarded with a brand new luxury car. Whaaaaat?! I wasn’t even jealous of her because I was so shocked at how spoiled she was. I actually felt embarrassed for her.
I have been saving as best I can to support my kids if they need it but I will be mindful about how and when I decide to help them financially. I definitely don’t plan to reward bad behavior nor give them funds that I don’t feel they’ve earned. It’s important to me that they develop independence, kindness, and a strong work ethic.
Perhaps the parents were thinking this luxury car protected my child from injury and will therefore buy another one to prevent future injury?
Totally get where you’re coming from—that story’s a perfect example of how well-meaning support can turn into enabling. It’s one thing to help your kids, but when help comes without accountability, it can send the wrong message entirely. Rewarding reckless behavior with an upgrade not only skips over an important life lesson, it also risks creating entitlement and a lack of resilience.
Your approach strikes the right balance. Saving to support your kids if they need it, while still prioritizing values like independence, kindness, and work ethic, is exactly the kind of intentional parenting that helps raise grounded adults. Financial help should be a tool for growth—not a cushion from consequences. And sometimes the best kind of support is letting them work through challenges on their own, knowing you’re there if it truly matters.
BTW, sounds like you went to a nice high school!
In some ways, I am not sure what to make of this article. Realizing that some scenarios require more support than others (like SanFran), here is what we do (at least so far).
The new generation gets the inflation adjusted start that we got. Anything else is a bonus and should not be expected. I always tell our kids when they graduated high school that Mom and Dad are technically done but we are willing to continually help. However, they must materially contribute. No free rides.
For example, we made them take on debt for college so they would have skin the game. We helped with the first car but the rest is on them. Ditto work clothes, etc. How has it worked? One of them is selfsufficient. Doesn’t ask for a dime. The other has made a mess of things and is now struggling. They both understand that choices matter and life is like investing.
What you do today impacts tomorrow. It is gratifying to see that lesson being imparted to the grandkids. Will it continue? Unknown but we hope so.
Hi Chuck – How old are your kids?
For the longest time, I thought the only honorable way to go was for an adult child to leave the house, sleep on a sofa if they have to, and try to make everything on their own. I shared a studio for two years in Manhattan and worked after 7 pm to get free cafeteria food at 85 Broad St.
I even waited 10 years to start Financial Samurai in 2009 because I felt I needed 10 years of expertise and experience in finance to begin publicly writing about finance. Meanwhile, plenty of people with no financial education and experience were starting sites and growing them big, while I stubbornly waited. There was even a guy who wrote a bestselling book on how to be rich as a 26 year old who wasn’t rich!
My point is: we can stubbornly go through life the hard way or the more practical way, if we have family resources. For 26 years now, I’ve seen adult children jump farther ahead in their careers and net worth goals due to parental help. I’ve accepted it, and have adapted accordingly.
If our kids can make it on their own without our assistance, fantastic. But if they turn out to be good people and need help launching, well then, as parents, we should probably help.
See: Don’t Let Pride And Honor Keep Your Life On Hard Mode Forever
The problem here is the assumption that there’s no correlation between setting an expectation of financial support and your kids behaviors into adulthood. That might be ok with some fraction of children who have an independent mindset from birth. But many young adults reading your post would be inclined to work less hard towards independence since there is a comfy guaranteed safety net. I see it all the time, even in the behaviors of 40-somethings with a guaranteed trust fund.
Case in point: I mentioned my wife’s oldest in my comment above, graduating med school with a half mil in debt. Half way through med school she experienced health issues, grades fell a bit and was told by her advisor she might not be cut out for the job. She was burnt out. But the $250K she had already borrowed were so crippling without a degree she couldn’t see quitting as an option. She made it. If we had been able to pay those $250K for her it is very possible she’d have quit and gone a different route.
As a parent, saving as mich as you can and helping out your kids in bad situations is a good thing, but embracing that expectation as you described in your article is a very risky approach, with a real chance of creating Succession-like entitled brats. If your kid isn’t into school, which would make you a prouder sad, your kid buying his first home in a LCOL area with a plumber salary, or them floating through life failing at influencer-type quick money schemes in their SF condo paid for by the bank od mom and dad? Because I can guarantee you the former will never happen once your kid reads this post.
“Case in point: I mentioned my wife’s oldest in my comment above, graduating med school with a half mil in debt. Half way through med school she experienced health issues, grades fell a bit and was told by her advisor she might not be cut out for the job. She was burnt out. But the $250K she had already borrowed were so crippling without a degree she couldn’t see quitting as an option. She made it. If we had been able to pay those $250K for her it is very possible she’d have quit and gone a different route.”
Glad she made it! I think it’s great to have the $250,000 as a parent to pay, but make a judgement call whether to pay or not. Of course a parent shouldn’t give their kids everything. Does this article seem like it’s inferring such?
Let me clarify. I’m not telling adult children to expect handouts from their parents. The article is written for PARENTS to build wealth to have career insurance for their children, who will likely struggle in the future due to globalization, AI, and overall intense and growing competition.
I appreciate you trying to look at things from the adult child’s perspective though.
You may enjoy this post that I linked to: How To Get Your Parents To Pay For Everything As An Adult Child
Great article, Sam! A question on investing: when buying stocks, including buying the dip, do you look at charts to help with your confidence level at buying at the right price? Thanks!
Sure, I look at the charts for indications of support and potential downside risk. But I mainly look at valuations and earnings – both historical and future – to make judgement calls on when to buy and how much.
The reality is, I’m always trying to buy the dip. It just depends on how much to buy with each dip.
Here’s a case study where I bought the dip in March 2020: How To Predict A Stock Market Bottom Like Nostradamus
You’re never going to get your investment exactly right. So you’ve got to follow a methodology over time.
Another article: A Better Dollar-Cost Averaging Strategy