Can we talk about parents buying their adult children luxury homes

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We do not come from money, like at all. My mom is gambling away any inheritance that I may have received, and my in-laws are absolutely broke. My husband and I are totally self-made and we bought our $900k home in the DMV a year ago at 30 with no help at all. I’m proud of us and I actually feel a bit sad for people who don’t get to see the fruits of their own labor everyday to the extent that we do. I love our life (and home) because we made it happen.

Well done, PP

Just because my parents gave us some help with our first house (which was 20 years ago now) and a few other things doesn't mean we haven't worked hard at our jobs and earned our own money of which we are proud...and I did try to give my parents back the money. They 100% didn't want it - they are wealthy and it gives them pleasure to help out while they are still alive versus when they die. Win Win for all of us.

Yet, here you are bowing to the guilt of those who judge you by explaining that you wanted to pay them back. STOP. Your parents, I assume, worked hard to provide their children with a better life, there is no shame in that goal.

I’m the person who posted this.. just to be clear, I don’t judge you. Being proud of myself for making it all on my own doesn’t detract from your own experiences. I was just trying to flip the perspective for OP. Instead of being jealous, I’m extremely proud of my own journey. You happened to be born into different circumstances than I was.. I don’t resent you for that!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Oh please.

My parents did this, and it helped us build equity in a good investment. After a while we sold our first home and bought our second without any additional help.

It’s not different than any other advantages the well off have.

And I am sure you paid your parents back for all that they did for you.

If parents are trying to pull kids into the UMC, they don’t want to be paid back after they transfer wealth

DP. If the parents are gifting their kids luxury homes, the family is UC, not UMC.

not necessarily. I define upper class as enough wealth to be able to live off of that wealth. An attorney making 400k a year still needs to work to enjoy their life style. A kid with a trust fund generating the same amount does not need to work. The attorney will be able to help their kids buy a home, but those kids will also likely have to work to earn a living

[Anonymous]

I think it's common for parents to not wish to appear far wealthier than their adult children. Not once they are retired. I know I don't want to live in the nice close-in suburb with the good schools ... in a large house while my kids afford much less further out. And their life is difficult. They should be living where I am. I should be the one drastically downsizing my moving further out.

But when it comes to giving up comforts, at the end of the day, some of the older folks just don't want to give up the big and comfortable. Far easier to elevate the lifestyle of their kids. To make things feel better.

[Anonymous]

Anonymous wrote:

Anonymous wrote:It's one thing to give a helping hand it's another thing to just give into your adult children. The idea that this will preserve or grow generational wealth is unlikely over many generations. Most of the heirs get lazy and then over the generations the go broke or stagnate/lose wealth relative to inflation because they don't need to do anything.

Exactly. Generational wealth (in smaller sums) will eventually be lost because adult children either don't know how to maintain or continue earning. 2-3 generations down, kids get lazy and then you have out these handout houses. Great way to deplete the pot.

This is what I would worry about with my family — if you don’t see first hand how hard you have to work to fund an upper middle class lifestyle without family assistance, you might not really get it, and then the money might run out, so while your parents could have managed to have an UMC (nice house, nice cars, good vacations, etc) earning $65K a year in a “fun” job, you might not be able to do that... especially if a UMC family has three kids they help with houses etc. then each of those kids has three kids.

Of course, if there’s enough wealth, and/or it gets transferred early enough so the third generation can enjoy it in their 20s/early 30s, it wouldn’t be an issue. But I can see this happening with some of my distant relatives, the kids of the wealth earners (who are a little older than me, with young adult children) are benefitting from the wealth, but there isn’t enough of it to pass on to the adult children in their 20s (the grandchildren) without the adult children giving up their benefits. Some of those grandkids likely won’t be able to replicate the lifestyle they had growing up.

My kid is still young, so I don’t know how it’ll play out, my current thought is to do what my parents did, which is enough help to start a career without debt, but absent extenuating circumstances, that career will be the determining factor in lifestyle. Of course, with home prices skyrocketing the way they are, that may change.

[Anonymous]

This whole thread would be irrelevant if people could just mind their own business, focus on their own life rather than others, and seek happiness outside of material things.

Do you also not realize how privileged you are to be able to criticize other well off people for not being well off in the “right way”?

90% of you need to look into therapy.

[Anonymous]

But what's the difference between putting 250k in a 529 or helping kids with a downpayment? FWIW, DH and I paid for our own wedding and my parents gave us downpayment help (20k). My wedding cost a lot more than that.

[Anonymous]

Anonymous wrote:I trust you are reading the news about the increasing gap between the haves and the have nots? This is what it looks like to build generational wealth.

This needs more attention. Thank you.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I trust you are reading the news about the increasing gap between the haves and the have nots? This is what it looks like to build generational wealth.

+1. Soon enough the ruling class will demand titles.

More likely people like OP will try and tax (or find other ways to expropriate) the savings of Americans with higher net worth to assuage their own grievances.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I trust you are reading the news about the increasing gap between the haves and the have nots? This is what it looks like to build generational wealth.

This needs more attention. Thank you.

The answer is, and always has been, the Single Tax.

All the other band-aids subvert personal incentives and are prone to power concentration and corruption. Pouring more and more money into educational systems with decreasing performance, landlord handouts in the form of rent subsidies, perpetuating the system in the form of homeowner subsidies.

All of our problems are due to the fact that with a fixed amount of land, those who own it get to charge more and more for it, while those who need to buy it have to compete with more and more buyers, trying to earn money for labor against more and more people selling labor. The Single Tax solves this, can be enacted at the local, democratically-controlled level.

The republicans don't want this, because they hate all taxes. The democrats don't want this because they love all of the band-aid programs.

[Anonymous]

My parents offered to co sign a mortgage for me in 2015. But when I looked into it, I was told my parents would have to be on the title. I don’t know if things have loosened up but that doesn’t sound like a great situation to me.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I trust you are reading the news about the increasing gap between the haves and the have nots? This is what it looks like to build generational wealth.

+1. Soon enough the ruling class will demand titles.

This is a good idea. I could be an Earl.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Tax the shit out of it. This is what privilege is.

I disagree with this. A lot of these parents worked, scrimped, and saved to get there. They didn't not spend money on crazy things - they saved and bought homes, they ate out once a month, they didn't do lavish things with their kids. Now they have money and lots of it. Their sacrifices and hard work gave them that money. Now, you see those who have astounding higher education debt, taking jobs (or not) that have easy hours, taking lavish vacations, and spending money eating out all the time pissed at others having wealth that obtained it through sacrifice. They want to tax their capital gains and inheritances. It is petty.

You don’t know any of this. But we all know that earned income is taxed higher than inherited income and housing .And loopholes, low tax investments, shelters, etc, are for rich people whose money works for them while they watch it grow. Why do we penalize working for money? I paid $70,000 in taxes last year but can only afford a starter home in this high COL area. Meanwhile, people with inherited wealth are making all cash offers over list price then financing after the sale to take advantage of low rates. “The rich get richer, the poor get poorer”

[Anonymous]

My father owns a home construction company and is currently building us a new home which we would not be able to afford on our own. My grandmother (his mother) passed away last year and left him more money that he needs. So he is spending it how he wishes, buying a boat (that costs more than the house he is building me) and helping each of this adult children get new and bigger homes. He works hard and can spend his money as he wishes. I appreciate it as it allows me to save more for my own children's college funds and preschool bills without stressing about monthly budgets. It's really nobody's business how he chooses to spend his money or how I afford my home.

We are not well off by DCUM standards but I make six figures and frankly don't care what other people think.

[Anonymous]

Anonymous wrote:This whole thread would be irrelevant if people could just mind their own business, focus on their own life rather than others, and seek happiness outside of material things.

Do you also not realize how privileged you are to be able to criticize other well off people for not being well off in the “right way”?

90% of you need to look into therapy.

Weirdly defensive response addressed to no one, bro.

[Anonymous]

Anonymous wrote:I trust you are reading the news about the increasing gap between the haves and the have nots? This is what it looks like to build generational wealth.

And the parents probably want the kids to stick around in a particular area, so they are incentivizing the adult kids.

Parents did this in a small town I lived in 20 years ago, it's just that the houses didn't cost as much there. It's not new behavior, there is just a larger wealth gap now.