The Great Wealth Transfer: How Parent Money Shapes NYC
Society
AI summaryDisplay highlights
- Parent money shapes NYC culture
- Rent prices are shooting up, salaries are not, and boomers are preparing to die
- The $124tn in assets that, over the next two decades, older generations will hand down to charities and, most of all, to their heirs
- For a lot of New Yorkers who are Gen X on down, markers of adulthood like buying a home, starting a business, or having a kid have gone from aspiration to fantasy
360 summary
- The millennial's parents paid for her eight-year Ph.D. program in New York City, including her rent, food, and tuition, which allowed her to focus on her studies without worrying about finances.
- She felt embarrassed by her family's financial support and tried to hide it from her roommate by giving her the money for rent, which she received from her parents.
- The millennial's parents' financial support had a significant impact on her life, allowing her to pursue higher education and achieve her career goals without worrying about student debt or living expenses.
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- Younger generations are struggling to make ends meet, with many unable to afford basic markers of adulthood such as buying a home or starting a business.
- For some, the financial support of their parents has allowed them to pursue worthwhile goals, such as education or homeownership, but this can also lead to feelings of guilt and anxiety.
- The stark contrast between the financial situations of the older and younger generations highlights the need for policies that address wealth inequality and provide greater opportunities for all.
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- Her parents bought her a studio in Forest Hills when she was 24 and single
- Her dad bought her out of her share and she used the money for the down payment on a two-bedroom in Murray Hill
- Without her parents' help, she and her husband would have had to rent and live in a worse apartment or move out of the city
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- Intergenerational wealth transfer has become a lifeline for many middle-class families in Manhattan, who are struggling to make ends meet despite earning six-figure salaries.
- For many, the money they receive from their parents and grandparents is not enough to buy a home or start a business, but it does help them cover the high cost of living in the city, including daycare and vacations.
- However, the line between being a trust-fund baby and middle class is blurred, and many are left wondering where they fit in the city's complex social hierarchy.
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- The interviewee grew up in a preselected community of wealthy families and attended private schools.
- Her parents helped her pay for an apartment and gave her money for travel and other discretionary expenses, which allowed her to maintain a certain lifestyle and social circle.
- Living with friends who were not financially supported by their parents created a rift in their relationships, as they could not afford to travel or spend money as freely as she could.
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- The interviewee's parents had high expectations for her partner, asking questions about his education, job, and family background, which made her feel hopeless and criticized.
- Her parents' expectations made her feel like she needed to meet certain standards in her personal life, which put pressure on her to succeed and be financially independent.
- When she moved in with her partner during the pandemic, her parents' reaction was that she no longer needed their support, which made her feel like she had to rely solely on her own income.
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- The pressure of not having access to the same lifestyle as their partner's family and friends can cause strain in the relationship.
- Feeling excluded from family events and trips can lead to feelings of envy and inadequacy.
- Differing mentalities on lifestyle and education can create a divide in the relationship.
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- Younger generations are struggling to keep up with the high cost of living, particularly in expensive cities like Manhattan, where the average rent is over $5,000 a month.
- As a result, many young people are unable to achieve traditional markers of adulthood, such as buying a home, starting a business, or having a child.
- However, some younger people are still receiving financial support from their parents, who are part of the Great Wealth Transfer, and who want to ensure that their children are taken care of.
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- A Gen Xer living in Upper West Side with two kids and married, living with grandparents in their big apartment overlooking Central Park
- Despite having a social worker job, the cost of living in New York City is high, with $80,000 in private nursery-school tuition, $1,000 per month for groceries and takeout, and $350 a week for therapy
- Relies on family members to cover the cost of living, but the cost of privilege is managing their health care and finances wisely, ethically, with some kind of competence
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- Personal wealth is not about the amount of money you have, but rather about the access you have to it and the ability to activate it.
- For some, having access to wealth means being able to donate thousands of dollars to political causes, even if it means not saving for retirement or buying a home.
- Parents may be concerned about their children's ability to sustain themselves, but for some, activism and community organizing are more important than maximizing income.
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- A Black American mother of three believes that there should be a more robust social safety net, and her parents' money could play a role in making that happen.
- Her parents have given out thousands of dollars in loans to a cousin or a nephew, and they are coming around to the fact that their money could play a role in making a more robust social safety net.
- She believes that her parents' generation's wealth transfer could be used to create a more robust social safety net, which could help younger generations who are struggling financially.
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- The cost of living in New York City is high, with the average rent for an apartment in Manhattan being over $5,000 a month, making it difficult for younger generations to afford basic necessities.
- Younger generations often rely on their parents for financial support, but this comes with a sense of guilt and responsibility, as well as a loss of independence.
- While parents may help with certain expenses, such as taxes or hair treatments, the financial support comes with emotional and psychological costs, and younger generations often wish they could afford their lifestyle without assistance.
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- A 37-year-old Upper East Side resident relies on her parents for financial support, particularly when she was diagnosed with infertility and needed more money than her insurance coverage provided. Her parents contributed $15,000 and bought her a car to ensure she could always visit them in the Midwest.
- A 34-year-old Brooklyn resident had his undergraduate education paid for by his traditional Indian parents, but he took on loans for medical school to avoid feeling like they had control over his life.
- These examples illustrate how some New Yorkers are turning to their parents for financial support, particularly for unexpected expenses or to avoid debt, despite being part of a generation that is struggling to achieve traditional markers of adulthood like buying a home or starting a business.
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- Immigrant parents have a mentality of building wealth for their children to have opportunities they didn't have
- Parents' opinionated nature about their children's lives can make it difficult for them to make independent financial decisions
- Children may feel obligated to ask for financial help from their parents, even if they don't necessarily need it
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- Over 50% of the $124tn Great Wealth Transfer is in the hands of the top 2% of the population, many of whom reside in New York City.
- Real estate is one of the most common ways for parents to give money, and many young people in New York City are only able to purchase property with the help of their parents.
- As a result, New York City is increasingly becoming a city of heirs, with out-of-towners buying property for their college-age children and thirty-somethings touring apartments where their parents will handle the purchase price.
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- In the late '90s, tenants found it harder and harder to satisfy landlords' income requirements, and if they didn't make enough on their own, they either had to find a cheaper place or get a guarantor, and more often than not, the guarantor would be a parent.
- Wealthy parents became more visible in the mid-aughts, especially in the New York rental market where rents outstripped entry-level salaries.
- Now those parents who were guarantors are the same baby-boomers helping make purchases.
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- Many millennials feel ashamed to admit that they receive financial help from their parents, as they see it as a personal failure.
- Some couples even try to hide the fact that their parents are helping them with a down payment or other expenses, as they want to be seen as independent and self-sufficient.
- Living in a city that requires a secret stash of funds to maintain a certain standard of living, those who receive parent money are often reluctant to disclose it, even to their financial advisors.
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