
Nearly half of young millennials get thousands in support from parents - paulpauper
https://www.cnbc.com/2017/02/10/young-millennials-get-thousands-in-secret-support-from-their-parents.html
======
notacoward
This is exactly what one would expect to happen as the wealth gap between
young (disproportionately affected by stagnant wages and student-loan debt)
and old (disproportionately benefiting from low taxes on property/investments)
continues to grow. Some parents pass the proceeds onward, but only to their
own children. Some parents can't or won't pass anything on to anyone. The end
state is a rigid class system in which most people's wealth is determined by
their parentage instead of their own efforts or accomplishments. The solution
is to levy less tax on the young and poor, more on the old and rich.

BTW, I'm on neither side of this. I'm too young to be funding my daughter's
college or early adulthood, but _far_ too old to be on the other end of any
such transfer. If anything, I'd be negatively affected by the suggestion
above.

------
rayiner
The graph commits a couple of errors, one of which is a cardinal sin:
[https://image.cnbcfm.com/api/v1/image/104274858-ParentalFina...](https://image.cnbcfm.com/api/v1/image/104274858-ParentalFinancialSupport_Increased.jpg?v=1529474173).

One is the glaring typo--1985 instead of 1965. Two is starting the scale at
30%. That makes the 35-50% jump look far bigger than it is.

The other two problems are cutting off in 2010 (basically during the aftermath
of the 2008 recession), and starting in 1965. It looks like support decreased
a lot from 1965 to the trough in 1980, then started trending back up. So what
you might really be seeing is the consequences of the 1960-2000 period of
unprecedented growth, with parental support returning to historical levels.

As an Asian person, I find it odd that people at CNBC would find this odd.
Parents supporting young people starting out is an extremely old practice.
These days it's paying for student loans, but back in the day it would mean
giving household goods, land for farming, etc.

~~~
telchar
I don't know where you got 1965: clearly they just labeled 1990 as 1980. And
truncated scales, clearly marked, are not a cardinal sin. They can be used to
mislead but I see nothing wrong with the way they were used here. Cutting it
off in 2010 is the bigger issue, I think.

~~~
rayiner
"truncated scales, clearly marked, are not a cardinal sin"

^^^ I know some people are trying to make that happen, but no, it's egregious
misconduct and there is no excuse for it.

------
noonespecial
Can confirm. Massive help getting through school. Huge "loans" starting my own
business. A life lived without financial fear because, even when not being
actively aided, knowing that rich folk "got my back" is priceless.

Honestly acknowledging this has made me much more humble in my success and
much more liberal in my politics than I would be otherwise.

~~~
jriot
I graduate high school in '03, turned 18 a month later followed by boot camp
two months later. After boot camp, it was 1.5 years of air traffic control
training. This involved 8 - 10 days 5 - 6 days a week in the military, knowing
if I failed I would be washed out of the career-field, potentially kicked out
of the military with no benefits. On a positive note, I wasn't in a combat
role so that did alleviate some stress.

After I completed training and was comfortable as a controller I started using
my benefits to complete school; went through two master's degrees using my
benefits. Separated from the military while living in southern Turkey,
accepting a role in a small town in Idaho as a data scientist. Wife and I
landed in the states and a month later we drove our two children to a town
we've never even visited to start a job I've never done. Five years later, I
work from home as a data scientist.

Acknowledging the hard work and risks it took without a fall-back has made me
much more conservative in my politics than I would be otherwise.

~~~
screye
That was not an easy journey. The resilience to see it all through is
certainly admirable.

I can't see why that made you more conservative though.

Is it a sense of wanting to keep every ounce of legitimately hard earned
wealth, that would be used to make life easier for others in the work force,
when you never got any support ?

Or do you mean it in a sense, where you work your way through the system, feel
that the system isn't that bad and that others can similarly work their way
through it without needing any extra support ?

I hope it does not come off as confrontational. I am genuinely curious.

~~~
jriot
I was raised and lived in fairly conservative areas - Alaska, Louisiana, North
Carolina. Though as everyone does, I explored many areas of politics,
attempting to formulate my own belief system; it is continuous work in
progress never settling.

However, having lived and traveled throughout the world, from the US, Iceland,
Ukraine, Turkey, Cyprus, Nepal and more I've learned that your own culture and
people help you the most. The US is too big to systematically solve any
problems at the federal level. Issues are best solved locally, at the
community level.

I don't keep every ounce of wealth, we donate to our local church which gives
to the homeless in our area. My wife gives her time to the church, helping
families that are currently homeless. She aids in the school, volunteering in
the classroom, functions, ensuring the children are receiving the attention
they deserve. Local issues are what we are trying to progress. Areas we can
see an impact - where our money, time, and effort are being used properly.

I do believe the system is set-up for people to succeed, but it isn't easy.
Work, sacrifice, owning up to your mistakes and learning from them are what
matters. I've never seen one person regardless of race, sex, or age be denied
an opportunity they truly put 100% effort into. Does plan A always work? No,
sometimes you have to accept plan C and make the best of it.

Hopefully, that provided a little insight. It is late here.

------
apostacy
I wish the reality of our economy was talked about more. Without benefiting
from the wealth of our parents, we'd be very poor indeed.

Most people I know are being supported in some way by their parents.

Maybe the United States should have a discussion about why most of us our
getting poorer. If the American dream is to live better than your parents,
then that dream is dead.

~~~
justfor1comment
The current situation can be partly blamed on the quantitative easing
undertaken by the Fed post 2008 housing crisis. By printing trillions of
dollars out of thin air and using them to bail out AIG and other rich
businesses the dollar in our pockets lost a portion of its value. The wiki
section on QE talks about this effect in more detail:
[https://en.wikipedia.org/wiki/Quantitative_easing#Increased_...](https://en.wikipedia.org/wiki/Quantitative_easing#Increased_income_and_wealth_inequality)

~~~
fjp
It also went directly into corporate balance sheets instead of to the average
person. People that own tons of stock won BIG. People that own small-medium
amounts of stock (think retirement accounts) did okay.

People who didn't own stock got nothing.

~~~
heavenlyblue
>> People who didn't own stock got nothing.

So they lost, since the total amount of money in the economy increased.

------
aNoob7000
Why is this an issue? I'm in the GenX generation, and I know a lot of people
that got help from their parents with college, cars, and even first homes.

~~~
Kluny
Only in that those who aren't getting support are left behind, and feel like
failures because they're not able to match the success of their peers, not
knowing that they're working with significantly less resources. Also could
lead to a lack of sympathy on the part of those who are getting extra help,
thinking that those who can't keep up with them are either lazy or less
capable, when in fact they are starting from a place of privilege.

Causes resentment and division, basically.

~~~
edmundsauto
Is it possible to resolve this? Parents are going to want to help their
children over others; people without that help will feel resentful. Seems like
a consequence of human nature, and changing the tax incentives won't
ameliorate what is essentially an emotional problem. (The issue isn't parents
helping their kids, the issue is the reaction to it)

~~~
trowawee
I think there are a lot of policy changes that could make massive strides
towards resolving this. A significantly higher marginal tax rate and a wealth
tax would reduce the amount of wealth available to gift. Lowering the amount
of money that can be gifted legally would reduce the amount of support that
could be offered. Free education and healthcare (and potentially a UBI),
forgiving student loans, and some combination of rent control and improved
zoning laws (and possibly vacancy taxes) would ameliorate most of the problem
areas that people get help with and that cause this resentment.

I disagree that this is essentially an emotional problem. This is essentially
an inequality problem; the inequality (unsurprisingly) breeds resentment, and
trying to fix the resentment without fixing the inequality is just slapping a
bandage over a sucking chest wound.

~~~
hkai
Would you say that a person would be more motivated or less motivated to learn
new things every day and work insanely hard if they receive UBI, get income
redistributed to them from richer neighbors, receive free goods and services,
and also know that most of their wealth, if they earn it, would be taxed away?

~~~
trowawee
Well, first, I reject the idea that the only potential motivation for learning
new things, building interesting things, and working hard is personal greed,
especially given that virtually the entire tech industry is built on the hard
work of open source contributors, who built and continue to build incredible
things without any expectation of financial recompense.

But more importantly, I don't really care if a few people are slightly less
motivated if it means that we can unlock the massive amount of latent human
potential currently wasted in poverty, hunger, and desperation. The number of
people like that would be massively outweighed by the people who aren't
scrabbling just to survive, and whose intelligence and work ethic could
instead be turned to learning and building the future.

------
benmmurphy
I lived at home while I was attending university. I didn't directly receive
monetary support from my parents but not paying rent / not paying for food
works out to a lot. I'm sure a large number of young people have always
received some kind of support from their parents.

------
jshaqaw
Let’s put to one side for a moment the legitimate problem of the millenial
generation’s money problem... the central thesis here is that generations
should be financially atomized and autonomous. No I don’t come from
generational wealth but I’ve always viewed “my” money as the money of my
parents and my children should they need it. There is an implicit social
construction here of an autonomous nuclear family cut off from an extended
family which I find curious and far from universal.

------
Humdeee
Every time I see mention of this, I am reminded of the short story about the
struggling butterfly:

[http://instructor.mstc.edu/instructor/swallerm/Struggle%20-%...](http://instructor.mstc.edu/instructor/swallerm/Struggle%20-%20Butterfly.htm)

Are parents doing a long term disservice to their children by doing this? I
don't know. What I do know is that after highschool, a self-sustained budget
became a real thing, real fast. I reckoned that a lot of my friends and peers
received this so called drip feed of e-transfers from their parents. My
parents were middle-class; not poor by any means, but they believed in "tough
love" and strengthening through struggle. It was indeed a rougher ride, but
I'm thankful for the outcome. Perhaps there is something intrinsic about
paying your own way. But I believe I might be starting to see the subtle
differences emerge from the two groups now that I'm in my early thirties among
my circle of friends

------
esotericn
The idea that this is 'secret' is patently absurd. You would have to basically
not interact with the world to think that.

Parents _not_ helping children out is an anomaly. It's definitionally bad
parenting; it doesn't change because the subject may be physical goods or
money rather than e.g. 20 years of food and water, or childhood education, or
just making sure they don't walk out into the road, etc.

So too is the idea that people should be ashamed of it. Literally every non-
damaged parent out there gives their children money or housing or something
similar; the degree may differ (a poor parent may have to stop at 16 or 18),
but the fundamental idea is the same.

I don't have wealthy parents. I've done fine. Would I have done better if, all
else being equal, they had a few million? Perhaps.

To me this all seems like sour grapes. Be happy with where you are in life.
There's always more.

------
b_tterc_p
> about 40 percent of 22-, 23- and 24-year-olds get significant assistance
> from their parents, much of which goes towards housing and _start-up
> capital_

Must be some good parents?

~~~
Mtinie
In the context of this article "start-up capital" could also be defined as
"all of the costs associated with moving out on one's own: furniture,
dishware, utensils, etc." and would include a cash reserve for unexpected
needs. This is beyond the monthly cost of rent covered by the term "housing."

------
sudosteph
My mom always told me about how she had to pay her own way as a young adult,
due to her father financially disowning her for taking a scholarship to
college (he didn't believe women should attend). That definitely colored my
expectations towards asking for support, so I opted to work 20 hours a week or
more during my college years to support myself. Even so, I did receive $500
assistance my freshman year towards buying furniture, as well as a used car
for 4k (though I sold it after college for 80% of purchase price and gave
proceeds back to my mom). I consider myself more independent than my peers
because I never requested or took an allowance or payments after freshman year
(and my tuition was paid via grants and student loans), but I still know that
even my option to work part-time to pay for rent and food was dependent on
having that car available, so I still recognize I wasn't as independent as I'd
like to believe.

I do think most college-age or immediate post-college millenials could be more
financially independent if they felt the need for it. I was definitely in the
minority of students at my college who worked significant hours while also
maintaining a full workload. So many people bought into the idea that school
should be a full-time thing, or that their parents wanted to support them so
they didn't have to experience crappy jobs - and they really didn't think
financial independence was a valuable pursuit on it's own.

That attitude persisted after college for some of them. I have a friend living
in a very expensive city, who got a masters in a STEM field, but won't apply
for jobs that actually are attainable b/c this person believes they deserve
better than a mediocre job living in a un-cool city in the midwest, and their
parents don't mind footing the rent bill until that dream job pops up
somewhere cooler. I was taught that sometimes you just need to take the crappy
job as a step towards getting a good one (and it worked out for me), but the
people who never had financial pressure to do that don't really see it the
same way.

~~~
dsfyu404ed
The funny thing is nowadays if you want your kid to come out of school with
less debt disowning them is probably a pretty solid strategy. Either way the
kid's gonna have debt but if the school/government thinks you're supporting
the kid they'll take your money first whereas if they think the kid's on their
own they'll give them financial aid first which preserves your ability to
write a check 4yr later and wipe out a lot of that debt. Kicking your kid out
of the house at 18 well enough to satisfy financial aid requirements is a hard
thing to do though.

------
EliRivers
The most important factor to succeed in the US (and indeed, many other
places); rich parents.

Sure, it's always been the case, but the trend is heading in the wrong
direction ("wrong", that is, if you don't like rich parents being the key to
success).

------
dragonwriter
> Why do parents continue helping children into their early twenties or
> beyond? It seems to be, largely, because they can.

The evidence offered for this is simply that better off parents are more
likely to do so now, but to answer why the changes occur you actually have to
track what has changed in who has given over time (and also track against
potential external factors, like broader economic conditions.)

Obviously, those who give are a subset of those who can, but that doesn't mean
that that is what is driving the increase.

------
Chardok
I just want people to be less 'secretive' about receiving parental support; in
my peer group it seems almost shameful to have help, yet I can guarantee all
of us have received some sort of financial help from family. It seems
disingenuous to not acknowledge this fact especially when talking about
government financial assistance.

~~~
jstarfish
Just like incest and bankruptcy, dynastic wealth transfer is shameful when we
plebes do it, yet it's perfectly acceptable for American presidential
candidates and the royal families of Europe.

~~~
jedmeyers
Wait, incest is perfectly acceptable for American presidential candidates?
Since when? I thought it was only fine for members of Congress.

------
scarface74
How much of that “secret support” is keeping kids on your health insurance
until they turn 26?

In our case, why not?

Most insurance plans have three tiers:

You

You+1

You+n

It doesn’t cost us anymore to keep our grown son on our insurance since we
also have a younger school age child than it would cost if he wasn’t on our
plan.

If he had to get his own insurance, it would be an extra $4000 a year probably
with a plan that wasn’t as good.

Yes he works and doesn’t live with us.

------
tathougies
The fact is that the government taxes estates and not gifts. It's better to
give money to your adult children, even if they don't need it, to avoid
probate and estate taxes. This is just the basic mentality of "I don't want
someone else to take my money."

~~~
delecti
That's just untrue.

You can give 15k per person per year (may have gone up in the past year)
without reporting it. Anything more than that you have to report it, and it
counts against the untaxed portion of your estate. Aside from that 15k per
person per year value, there's no tax difference between giving it away now,
or willing it away when you die.

Estate and gift tax are intertwined. There's even a page on the IRS web called
"Filing Estate and Gift Tax Returns".

[https://www.irs.gov/businesses/small-businesses-self-
employe...](https://www.irs.gov/businesses/small-businesses-self-
employed/filing-estate-and-gift-tax-returns)

It might be easier to work things out while you're alive to make the gifts,
but it doesn't get you out of the taxes.

~~~
tathougies
Yeah, so the thing is that you give the money away while you're alive. You can
give 15k per year per spouse. So a married couple with two married children
can give away 30k to each child _and_ 30k to each son/daughter-in-law. That
reduces the total estate that is taxed by 60k each year. If you have 20 years
left of life, that's 1.2 million dollars given tax free. Way better than a
probate.

You're correct that if they gave all 1.2 million in one year, it's subject to
tax, but no one does that.

~~~
delecti
The threshold for estate tax is over $20m right now for that same married
couple. Your example takes 20 years of foresight and only gets you an extra 5%
before hitting estate tax.

~~~
tathougies
20 years of foresight is not much if you start at 55. 5 percent is still free
money. I'm not sure what the argument here is. The rich are more organized
than you give credit for

~~~
delecti
My point is that your initial comment stated this was a good strategy to avoid
probate and estate taxes. I agree it's a good strategy to avoid probate, but I
disagree that it's a very useful strategy to avoid estate taxes. You also
incorrectly (or at least greatly oversimplified) said gifts weren't taxed.

------
jayalpha
Sounds like a Headline from the Zerohedge Website

------
Expez
TL;DR quote from the article:

> Why do parents continue helping children into their early twenties or
> beyond? It seems to be, largely, because they can.

Who said trickle-down economics doesn't work? :trollface:

~~~
prophesi
Anecdotally, my millennial peers receive financial help from their parents
because they'd otherwise not be able to save anything up due to crippling
school loans and low-paying entry-level jobs.

I, personally, had to live with my parents for the first few years out of
college. They were too poor to help out financially. To offset that, I don't
take vacations, don't have a car, and generally just don't go out into town.

~~~
scarface74
Whose fault is that? Why pay exorbitant tuition just to get a job that pays
low wages? Which low paying job cares about which school you intended?

I went to an unknown state school,stayed at home and within three years I was
making as much as people who paid more per year than I paid an entire four
years.

~~~
prophesi
That's a narrative that one was unlikely to hear about a decade ago in
highschool. My parents & teachers essentially preached that you went to
college to succeed in life. You _could_ not go, but you wouldn't have nearly
as many opportunities to succeed.

That said, if I went back in time, I'd still attend the same school. It was a
(expensive) life-changing experience.

(moral of the story: predicting the future is really, really difficult)

~~~
scarface74
The moral of my story is don't go to an _expensive_ college.

~~~
prophesi
Again, predicting the future is difficult. The fear with going to a no-name
college was that you're throwing money down the drain to have the same
opportunities as those who don't attend college at all.

~~~
scarface74
Okay. I’m not being completely honest - I’m leaving out some details that
changed the equation for me.

I did graduate from a no name school with a horrible CS program in the mid 90s
and it didn’t affect my career.

That could have been a horrible mistake. Especially seeing that I was accepted
to Georgia Tech (still a state school) but I went to my school for free and
they gave me room and board even though I stayed at home.

However, the few others that graduated with me from the CS department weren’t
so lucky. I had the advantage of having a computer growing up and a lot of
them didn’t have one growing up or in college. By the time I got to college, I
had already been programming in assembly for 6 years on an Apple //e and in
college I had an (expensive) Mac running Soft PC (x86 emulator). I also
released a shareware program in college that caught the attention of another
college to give me my first freelance contract.

That led to me being able to impress another company in Atlanta they offered
me an internship with free lodging. Which led to my first job and the rest is
history.

There was no GitHub back then or an easy way for most people to publish
software. I happened to know how to hack around a dialup gopher server
(showing my age) to get to Nyx ([http://nyx.net/](http://nyx.net/)) that
offered a Unix shell to publish to the ftp Info Mac archives.

Today, I have a relative who was thinking about getting a CS degree from the
same college I went to. I discouraged him and his mom from him going there. He
actually needed the exposure, the education increased opportunities for
internships, etc.

I still said that he should do his first two years st home and then transfer
to a college in Atlanta.

But, if he was going to enter a low paying, non competitive field like
teaching, social work, etc. I would have suggested he stay in the no name
state school.

~~~
prophesi
That's an awesome turn of events! I think there's a good lesson in there, that
I wish my peers learned early on; higher education is nice to force you to
figure things out, and improve your work ethic.

But what you do in your own time, at least in the Computer Science field, is
likely what gets you a job you'll enjoy. If you aren't fooling around with
servers and such, it's also a good indicator that this might not be the career
you'd actually like to pursue.

------
terryschiavo22
The FAFSA already takes such money into account when calculating aid. 'Secret
support' makes this sound like it's a conspiracy on the level of the USC
scandal.

~~~
notacoward
They account for it even if it doesn't exist. I got screwed on financial aid
(before the FAF and the other one were merged into FAFSA - it was a long time
ago), because the amount was predicated on a much higher parental contribution
than actually materialized (due to health costs). Not only that, but a far
higher percentage of that total was work-study instead of grants.

I mention that not to gripe but to warn people, and to highlight the fact that
differences in parental support really matter. I already see several people
trying to minimize this by saying it's not new, they got plenty of support
Back In The Day and so did their friends. Well, good for you. Not everybody
did. It was a symptom of inequity then, and it's a symptom of inequity now.
Enjoy your privilege, and hope that your children appreciate theirs.

~~~
jstarfish
If you can make do without health insurance from or tax breaks for your
parents, the solution to this is to not apply for financial aid as a
dependent. They will always consider your parents' ability to contribute, even
if they hate the idea of higher education and refuse to spend a dime on it.

The amount of student aid I became eligible for once I applied as independent
was insane.

~~~
mwilliaams
You can’t apply as independent until you reach a certain age, 23 I think, or a
court has declared you independent or whatever. That excludes most students,
who are trying to get a four year degree after high school.

