Does wealth beget Wealth?

[Anonymous]

Everywhere I see the well-to-do people around me are people who come from privileged backgrounds. The lawyer who's father was a doctor; the chemical engineer who's family is blue blooded; the foreign policy adviser who's father was a VP at Morgan Stanley; the aerospace engineer with an oil industry executive for a dad etc.

Where does this leave regular, middle class people? Can we hope to rise? Why or why not?

[Anonymous]

I think first gen wealth is the hardest to achieve -- i.e. going from blue collar to having a child become a doctor; lawyer etc. In large part it is bc while a high school educated parent may want the best for his/her kid, he can't help navigate the college process, SATs, choosing a lucrative field -- the same way that 2 ivy league parents can; with the internet it's gotten easier, but often a lot of it falls on the kid's own shoulders. Plus there's the finances of it, even if the kid can navigate the process, likely he/she will have loans while the kid of 2 lawyers may end up going to med school with little/no debt and thus starting out that much further ahead financially.

But I think change is generational, once one generation gets the degrees, the job titles etc. and marries someone with the same credentials, it is that much easier for them to get their kid to a higher spot and so on.

[Anonymous]

You see too much and are too concerned about other lives.

My biggest ponder of the day ? What's for lunch.

[Anonymous]

What you're seeing is far more prevalent in very expensive areas. Where I live, in a lower-cost area, it's far more typical to find your engineers, doctors, and lawyers who grew up in working-class households.

But where you are, you find people in lucrative career fields who were also able to get their parents to give them huge down payments for their houses.

[Anonymous]

My parents were both raised very poor. My father went on to generate a ton of wealth through corporate real estate. Because of their annual gifting and trust funds that they have set up for my siblings and I as well as for each of our children, it has been easy for us to amass a lot of wealth (even outside of our trust funds, which my husband and I have not touched). I had no student loans. My children are already taken care of without us having to save for their college etc. This sort of generosity has made our lives much easier, even though I was a high earner and married a high earner (I have SAH for the past 9 years). So yes, wealth certainly begets wealth in my experience.

[Anonymous]

Anonymous wrote:What you're seeing is far more prevalent in very expensive areas. Where I live, in a lower-cost area, it's far more typical to find your engineers, doctors, and lawyers who grew up in working-class households.

But where you are, you find people in lucrative career fields who were also able to get their parents to give them huge down payments for their houses.

yes, and to take that a step further, the engineers, doctors, and most lawyers here are not the wealthy.

[Anonymous]

Wealth absolutely begets wealth. And many people in this area get it for free, but there's nothing you can do about that. If you're not lucky enough to be one of them, you need to do it on your own, starting immediately:

http://www.mrmoneymustache.com/2012/01/30/your-money-can-work-harder-than-you-can/

[Anonymous]

Anonymous wrote:You see too much and are too concerned about other lives.

My biggest ponder of the day ? What's for lunch.

Would you like a medal or a monument?

[Anonymous]

Whose, OP, whose.

[Anonymous]

Ever heard of compound interest? Think about it.

[Anonymous]

Anonymous wrote:Everywhere I see the well-to-do people around me are people who come from privileged backgrounds. The lawyer who's father was a doctor; the chemical engineer who's family is blue blooded; the foreign policy adviser who's father was a VP at Morgan Stanley; the aerospace engineer with an oil industry executive for a dad etc.

Where does this leave regular, middle class people? Can we hope to rise? Why or why not?

Yes, generational wealth can be a good stepping stone, but much more important is the up bringing. If the parents do not raise their kids to be successful, then the kids will be failures. I know of a billionaire whose son is a playboy, never really worked, ever. I know of a successful real estate developer whose daughter is an admin assistant at age 35 making barely any money, but is getting a lot of support form the parents.

On the other hand, most of the successful doctors, lawyers, and business people I know are first generation success. They came from diverse and humble backgrounds and became successful after a dedicated life of hard work and discipline. Most of them are raising their kids to follow in their steps.

The class mobility in the US is very good, as you can see it flows both ways.

[Anonymous]

Duh.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Everywhere I see the well-to-do people around me are people who come from privileged backgrounds. The lawyer who's father was a doctor; the chemical engineer who's family is blue blooded; the foreign policy adviser who's father was a VP at Morgan Stanley; the aerospace engineer with an oil industry executive for a dad etc.

Where does this leave regular, middle class people? Can we hope to rise? Why or why not?

Yes, generational wealth can be a good stepping stone, but much more important is the up bringing. If the parents do not raise their kids to be successful, then the kids will be failures. I know of a billionaire whose son is a playboy, never really worked, ever. I know of a successful real estate developer whose daughter is an admin assistant at age 35 making barely any money, but is getting a lot of support form the parents.

On the other hand, most of the successful doctors, lawyers, and business people I know are first generation success. They came from diverse and humble backgrounds and became successful after a dedicated life of hard work and discipline. Most of them are raising their kids to follow in their steps.

The class mobility in the US is very good, as you can see it flows both ways.

Sounds pretty damn successful to me

[Anonymous]

Anonymous wrote:

Anonymous wrote:Everywhere I see the well-to-do people around me are people who come from privileged backgrounds. The lawyer who's father was a doctor; the chemical engineer who's family is blue blooded; the foreign policy adviser who's father was a VP at Morgan Stanley; the aerospace engineer with an oil industry executive for a dad etc.

Where does this leave regular, middle class people? Can we hope to rise? Why or why not?

Yes, generational wealth can be a good stepping stone, but much more important is the up bringing. If the parents do not raise their kids to be successful, then the kids will be failures. I know of a billionaire whose son is a playboy, never really worked, ever. I know of a successful real estate developer whose daughter is an admin assistant at age 35 making barely any money, but is getting a lot of support form the parents.

On the other hand, most of the successful doctors, lawyers, and business people I know are first generation success. They came from diverse and humble backgrounds and became successful after a dedicated life of hard work and discipline. Most of them are raising their kids to follow in their steps.

The class mobility in the US is very good, as you can see it flows both ways.

You are basing that on some anecdotes of your parents friends.

In truth America has the worst class mobility of any developed nation.

http://www.theatlantic.com/business/archive/2015/07/america-social-mobility-parents-income/399311/

And guess what, that admin will probably marry some hedge fund type wealth will begat wealth.

[Anonymous]

I don't know a ton of people who grew up truly wealthy, but I do know a lot of people who grew up very solidly middle/upper middle class. Their parents went to college and pursued white collar careers and expected them to go to college and pursue white collar careers. Some of them are now way more successful than their parents.

I think there are plenty of successful people whose parents were just of average wealth. I think it can be a lot harder if you grew up poor. Only a couple of the people I know who grew up poor are very successful today; more of them repeated a lot of the same patterns of their parents. They didn't go to college or dropped out early. They had kids too young. They ended up in lower paying jobs and never built up savings for home ownership. To get ahead, they probably would have had to have broken the cycle and gone to college or not had kids at 18/20.