You know the Bank of Mum and Dad when you see it: it’s your friend who seems broke, but always has a safety net, or who suddenly (but discreetly) acquires the deposit for a home. It’s those who stayed with their parents while they saved for a flat, or stuck it out in a profession they were passionate about even though the wages are chronically low. It’s those who do not need to consider the financial costs of having children. It’s those whose grandparents are covering nursery or university fees, with the Bank of Grandma and Grandad already driving an economic wedge between different cohorts in generations Alpha (born between 2010 and 2024) and Z (born in the late 1990s and early 2000s).
This is the picture we know, but the Bank of Mum and Dad is not just a luxury confined to the 1% – it is also evident in families like mine. I grew up in a working-class household and was the first person in my family to get a degree, but it was the fact my parents had scrimped in the 1980s to purchase properties in London (and allowed me to crash in one throughout my 20s) that has arguably been the true source of opportunities in my life.
In recent years, we have rightly widened the conversation about privilege in society. And yet how honest are we about one of the most obvious forces shaping anyone under 45: the presence or absence of a parental safety net? The truth is that we live in an inheritocracy. If you’ve grown up in the 21st century, your opportunities are increasingly determined by your access to the Bank of Mum and Dad, rather than by what you earn or learn. The economic roots of this story go back to the 1980s, but it accelerated after the 2008 financial crisis, as private wealth soared and wage growth stalled. In the 2020s, rather than a meritocracy – where hard work pays off – we have evolved into an inheritocracy, based on family wealth.
It’s those who stayed with their parents while they saved for a flat, or stuck it out in a profession they were passionate about even though the wages are chronically low.
This part in particular I find to be a strange thing to complain about… Like, some people have the option of living with their parents, so what…?
This fantasy that everyone moves out of their parents’ house and becomes totally independent the day they turn 18 is just another bullshit American dream that has little basis in reality. If you happen to have the privilege of your empty childhood bedroom in your parents house, and you have a good enough relationship with your family to make it work while you follow a vocation or save up money for later, that’s not something to be ashamed of–it’s making the best of your circumstances and being smart with how you spend money.
Remember kids: there’s no magical stat bonus for adult dignity in giving half of your monthly wages to some asshole landlord if you don’t have to, so don’t let people shame you out of living with family in a multi-generational household like so many people do relatively happily in countries all over the world.
Yes, it’s true that not everyone has that privilege (a good relationship with their parents, an extra bedroom to sleep in, etc.), but as long as you’re contributing (financially or otherwise) to the shared household in some way, there’s no more shame in living with your parents than their is living with non-family roommates, a spouse, or whatever.
I think most people, whether they’ve experienced it or not, would agree that the privilege of living with your parents isn’t exactly a luxury or an ideal way to live, but there really is no shame in it. If you’re a good person who works hard and are only able to save up enough money to work towards your goals because you save money on rent by living with family, doing something like saving up for a house is still a big achievement and nobody should try to take that away from you.
Imagine being butthurt about people who live with their fucking parents and not laser-focused on the fact that a 0.1% of people have 99.9% of the money in society. It’s fucking nuts.
Nice to finally see someone talk about this. Every time I see those popular posts on reddit litigating how good their boomer parents have it, all I can hear is cry-bragging about how wealthy they are.
We have never lived in a meritocracy. That is just some bullshit billionaires will tell you while you work yourself into an early grave.
And here’s some free life advice: If you can stand to be around your parents once you reach early adulthood, continue to live with them. Life is cheaper in groups. Pay some rent and your share, but you’ll find it a lot easier to save money for your own place when some leech landlord isn’t funnelling all your hard earned money off to their own retirement fund.
I’m in this picture, and I do not like it. Well, okay, it’s better than not being in this picture. When I die I’m going to give as much as possible to charity, for what it’s worth.
This is the picture we know, but the Bank of Mum and Dad is not just a luxury confined to the 1% – it is also evident in families like mine. I grew up in a working-class household and was the first person in my family to get a degree, but it was the fact my parents had scrimped in the 1980s to purchase properties in London (and allowed me to crash in one throughout my 20s) that has arguably been the true source of opportunities in my life.
Hate to break it to the author, but that sounds like somebody who started in the (upper?) middle class, and now is in the 5% at least. That’s properties plural, in London. C’mon, everyone with money points to someone they know that’s the next digit up so they can be just average. I find that tacky.
I was able to migrate over to work and study because my family paid for the trip and even though the deal was that I were to work and be by myself I could always call to ask for emergency money. I did that twice, one for paying for my college inscription and other for rent. Without that I wouldn’t had the comfortable life I have today.
My parents blew up any inheritance I would’ve ended up with due to bad decisions and shit luck.
Now my mom depends on me during her final years as we cruise the stars in a two-bedroom apartment.
A lot of my friends live together and share rent. Some with their parents, and a minority got hitched and live with a spouse. It seems like a lot of people depend on small family groups these days.
Multigenerational homes, or living with a bunch of people, was the norm until less than a hundred years ago. It was only a brief period of time of immense economic and technological growth that we saw people living independently in large numbers. We’re just watching a regression back to the mean. And I don’t know how we avoid it with a growing population, and not everyone wanting or willing to live in a city.
Thing is, if I want to run around naked the whole day I want to be able to do that. If I come home absolutely shitfaced at 8am I don’t want my parents to comment on that. If I want to have loud sex I want to be able to do that. It used to be normal but it absolutely sucks to have no privacy and I don’t want to go back to that as a grown up.
Those tiny, single-person tubes in Japan where one just pays rent for a tube to sleep in and a storage unit would do me fine.
I’d sleep in a hollow log if it meant not sleeping there with another person.
I believe this is the main source of unfairness in my country. I have a good pay, but most of it goes for housing. So I live the same life as someone who works for a minimum wage if they inherited their home or can live with their parents.
Even though I had to work and invest way more to get to my salary.
But what is even worse is that in eyes of our government I am considered rich and I get no social benefits and I also pay way more taxes than those who are “poor”.
“Abolish inheritance”
But what about my inheritance
*sigh*
Inheritance isn’t the root problem. The problem is that the only people with any money are people who were able to save it decades ago. And that problem is because labor has been devalued, wages stagnated, and cost of living soared.
And all of that is because for the past 40 years or so, there has been more benefit to taking profits out of business than spending money within the business.
When you reach the top-tier income tax bracket, and the IRS starts taking 91% of your income beyond that level, $10,000 of business income is only worth $900 to you.
When your best employee wants a $10,000 raise, that money comes straight out of your “excess” earnings, and that entire raise effectively costs you only $900.
But we don’t have a 90% top-tier income tax bracket anymore. We had a punitively high top tier rate for most of the 20th century, but we gave it up in the 80’s.
We need to restore the business incentives that come with a punitively high top-tier income tax rate. We need businesses to increase their labor expenses to avoid that tier. Business needs to benefit the whole economy, not just the ownership class.
For similar reasons, we need taxes on registered securities, payable in shares of those securities. The shares collected as taxes will be liquidated in small lots over time, comprising no more than 1% of total traded volume, to limit their effect on the market. Exempt the first $10 million held by a natural person; tax everything above.
I mean, it’s not that clear-cut. There’s still people who have a nice job and save a lot of money, it’s just somewhat less than there used to be, and at the same time the gap with non-nice jobs is larger. Furthermore, $900 is still $900, I question if some random shareholder really cares about a stranger’s raise that much.
More redistribution would help the inequality problem, for obvious reasons, though. I also don’t buy that nobody will do anything without a small chance of becoming a billionaire, or that billionaires are really hundreds of thousands of times smarter than the average person and we need them to be happy.
Furthermore, $900 is still $900, I question if some random shareholder really cares about a stranger’s raise that much.
I’ll rephrase. The shareholder in question has the option of spending $10,000 on their business, or giving Uncle Sam $9,100 and pocketing $900.
The shareholder in question gets a lot more bang for their buck by figuring out how to spend it than paying the tax and trying to keep it.
Well, they have to pay the tax just the same on the 10,000 - or whatever it grows into - in the future. I don’t see how it changes their tendency to invest rather than spend.
Looking at the empirical data, propensity to save was maybe double what it is now back then. It’s an imperfect metric because it includes instruments other than stocks and all social classes, but that seems like less of a difference to me than you’d expect if this was driving it.
Like, again, the general concept isn’t bad here, but I have to take issue with this specific argument.
That only accounts for a small portion of parental contribution and is easily avoidable by an early inheritance.
Nobody bats an eye when you say, “early inheritance,” but everyone gets sooo upset when I murder my parents
This tracks from my experience.
