Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
It boils down to inflated asset prices on everything which was a long time coming, coupled with the current (relatively) high rates. For instance, my parents home cost them 450K in todays dollars to build in 93 (when I was born), but is zestimated at over 1M now. That's what I'm getting at - I can't really go build a home my parents could, but I'll inherit some of that asset inflation they got to ride with.
Quote:
Originally Posted by charolastra00
Meanwhile, my partner and I are millennials with two sets of Boomer parents who looked to their kids to be their retirement plan are are about to be in a world of hurt when they realize that we neither signed on to that nor are able to support them.
Dollar wise, Millennials are getting the most. But for every 1 millennial that gets a big windfall there's 2 or more than have essentially a negative inheritance, helping manage parents without a retirement thought. So raw number wise, it's not all rosy.
Dollar wise, Millennials are getting the most. But for every 1 millennial that gets a big windfall there's 2 or more than have essentially a negative inheritance, helping manage parents without a retirement thought. So raw number wise, it's not all rosy.
But how's that really different than any generation? Boomers had to take care of their WWII parents (and no, they didn't all have pensions. In fact well less than half did and they planned on Social Security being their support).
I'm not advocating for the kids to take care of their parents (except to get your ass over here and help me fix the furnace room door the neighbor's pit bulls broke) but that has been the reality for most generations.
My parents took care of my grandparents (born 1880 to 1900) for years; buying groceries, paying property taxes (which I had to do for my mother and then getting bitched at).
You now also have the multi-generational housing advocates becoming more vocal (I don't think they have any idea what those downsides are).
Maybe millennials who inherit their parents wealth at some point will be the richest but I don't think it matters. Many boomers have wealth being transferred to their kids that are GenX or Mill but it's the amount of time that wealth was accumulated matters.
Once the boomers die off, whoever controls the government and the institutions will be the ones who hold the most wealth.
I'm a single child. My wife is a single child. We each stand to inherit upper seven figures once the taxes play out if the markets hold up for another decade.
I am extremely involved with my mom's finances as my dad was the one who primarily handled that when he was involved. However, she has done a great job over the past 20 years and with the help of an advisor who also helps with trust and estate planning, will not have to worry about anything financially. She does annual gifting to my wife and I as well as her grandkids to try and keep her estate down.
Even Boomers and Xers are still inheriting wealth from their Silent parents.
I'm 37. My dad is 66. His parents died last year within two weeks of each other at age 87. The two estates are still tied up in probate. His parents had about $100,000 cash each - about $200,000 total. After two stays in skilled nursing facilities, final expenses, etc., there's about $30k combined cash left. The house has been on the market for over two months with barely any nibbles.
My guess is that the price of the home will need to be reduced by probably 20% to sell - it's on the TN/VA line - TN has no state income tax, but VA does - and the house is in VA, sadly by just a few hundred yards. It's zoned to VA schools, which are about thirty minutes away, and you actually have to drive back into TN to get out of the dead-end area they're in. The other homes on the street are typical "Appalachian trailer trash." The house has a lot of things working against it.
My guess is that each of the five brothers and sisters will inherit about $30k-$40k once it's all over with. The oldest brother is a multimillionaire. It'll be a good "shot in the arm" for the rest of them, but certainly not a life-changing amount of money.
My mother's father died in 2009, but her mother is still alive. I can't imagine that she has that much in terms of assets. The home is paid for - that's probably worth $250k-$300k. I know her final expenses are paid for, but no idea what the rest of the assets are like.
Message board posters are more affluent than the average person on the street. The vast majority of Millennials are not going to inherit millions. 3/4 of my grandparents were still alive at my 37th birthday last year. We haven't even gotten through the Silents yet.
My parents are 66. I know they have $200k-$250k in home equity. My guess is about $100k-$150k in their retirement plans. My mother has never made more than $17/hr. or so - she retired and took early SS at 62. Dad did OK as a factory mechanic - made probably $50k-$60k until he was laid off in 2008, and ended up spending the next decade making $15-$17/hr. in a call center before finding factory work making about the same thing in 2018 or so. He worked there for about three years and quit on the spot at 63. He's been doing deliveries for a paint company for about $20/hr. part-time for the past couple of years. I'm assuming he's still working because they need the money.
If dad were to drop dead, mom ends up in my lap. Their house isn't paid for. She's not able to take care of the house on her own. While I wouldn't let her be homeless, I wouldn't want her living with my permanently either.
The bottom line is that I am pretty unlikely to inherit a life-changing amount of money.
Up until 2019 or so, housing prices here basically marched along with inflation. It might take months to sell. Yes, there's been a big spike since then. My parents bought their house for $88k in 1997. The house was valued at ~$160k-$170k as recently as late 2020, then the slope of that curve got a lot steeper. It's now $291k. I bought for $96.5k in 2019. A townhome right in front of me sold for ~$190k this month.
I make a lot more than my parents ever did. I have about $100k in retirement plans, my home equity, and about $10k (three to four months of expensive) in savings. I have no debt other than the mortgage and about $7k left on a heat pump loan through the city that is just rolled into my power bill every month.
In saying that, I have a bit of extra, but I'm not doing as well as people might think from the outside looking in.
But how's that really different than any generation? Boomers had to take care of their WWII parents (and no, they didn't all have pensions. In fact well less than half did and they planned on Social Security being their support).
I'm not advocating for the kids to take care of their parents (except to get your ass over here and help me fix the furnace room door the neighbor's pit bulls broke) but that has been the reality for most generations.
My parents took care of my grandparents (born 1880 to 1900) for years; buying groceries, paying property taxes (which I had to do for my mother and then getting bitched at).
You now also have the multi-generational housing advocates becoming more vocal (I don't think they have any idea what those downsides are).
It's not very different - there's been this yo yo forever where parents sacrifice for kids when they are little then kids take care of parents when they are old.
There's 2 things that have changed from history though. 1. There's a lot of people with big accounts now, moreso than was a thing in the past and 2. People have BIG gaps between when they stop generating income and when they die. In the past, people didn't have these big wealth buckets but they also pretty much generated income until they were physically in decline. It's weird, for some millennials today, they will be retired out of the work force for more years than they spent in the workforce!
I guess that I will likely benefit from one of my boomer parents and my in laws as well. However, my maternal grandfather inherited over $500k when he was in his late 60's and proceeded to burn through all of the money until his death in his mid-late 70's.
He died penniless and in debt, so much so that the state took his ashes and the family refused to even buy them back from the state for burial. He was a terrible person who used and abused anyone he was close to.
All that to say there are plenty of examples where money has come and go and no single generation can be "to blame". I just hope that the money I inherit won't be squandered (it won't) and that my kids don't squander any wealth I leave them.
It's not very different - there's been this yo yo forever where parents sacrifice for kids when they are little then kids take care of parents when they are old.
There's 2 things that have changed from history though. 1. There's a lot of people with big accounts now, moreso than was a thing in the past and 2. People have BIG gaps between when they stop generating income and when they die. In the past, people didn't have these big wealth buckets but they also pretty much generated income until they were physically in decline. It's weird, for some millennials today, they will be retired out of the work force for more years than they spent in the workforce!
I have a friend who retired from teaching after thirty or so years. His goal was to collect his pension for longer than he worked. He's got about a year to go.
The thing I think no one anticipated as recent as a couple decades was the life spans of people extending like they have. Even so, Baby Boomers will still, on average, collect less in Social Security than they paid in as will succeeding generations.
As long as it's not held in US dollars a person should be able to keep up with the rate of monetary debasement. We are likely to see inflation unlike anything anyone would ever expect, because they are not going to allow deflation... they just won't.... so for the middle class to get ahead, they just need to jump in, buy an asset, and hope the inflation is aggressive enough that their wage rises to the point where their asset becomes affordable, in my opinion.
Playing is safe will likely not work... I don't see a prolonged style of Japan style price stability coming, but I really need to verse myself more on modern monetary theory to be sure. The way to capitalize on the current system is to leverage oneself and hope for the best. Paying off your house, playing it safe, saving money for a rainy day has always kind of been bad advice, unless you save that money in a hard asset. It seems like particularly bad advice now, where debt creation is going parabolic, and all the pandemic debt creation is still not enough to keep the system stable, with a potential world war looming and the pandemic stimulus working it's way out of the system. I managed to hold onto a single bitcoin and I'll just keep it in a wallet and see what happens with it, and will increase my exposure in silver at current prices, while staying invested in stock index funds. Have to learn from past mistakes and look forward.
It's fine if Gen Z inherits their parent's wealth.. that's the proper way forward is to teach one's children to build up a nestegg they can leave to their own children. That's how generational wealth is built.
As long as it's not held in US dollars a person should be able to keep up with the rate of monetary debasement. We are likely to see inflation unlike anything anyone would ever expect, because they are not going to allow deflation... they just won't.... so for the middle class to get ahead, they just need to jump in, buy an asset, and hope the inflation is aggressive enough that their wage rises to the point where their asset becomes affordable, in my opinion.
Playing is safe will likely not work... I don't see a prolonged style of Japan style price stability coming, but I really need to verse myself more on modern monetary theory to be sure. The way to capitalize on the current system is to leverage oneself and hope for the best. Paying off your house, playing it safe, saving money for a rainy day has always kind of been bad advice, unless you save that money in a hard asset. It seems like particularly bad advice now, where debt creation is going parabolic, and all the pandemic debt creation is still not enough to keep the system stable, with a potential world war looming and the pandemic stimulus working it's way out of the system. I managed to hold onto a single bitcoin and I'll just keep it in a wallet and see what happens with it, and will increase my exposure in silver at current prices, while staying invested in stock index funds. Have to learn from past mistakes and look forward.
It's fine if Gen Z inherits their parent's wealth.. that's the proper way forward is to teach one's children to build up a nestegg they can leave to their own children. That's how generational wealth is built.
Yeah, it's definitely a complex and uncertain time, with government spending and central bank policies influencing market dynamics.
Your perspective on asset allocation and hedging against potential inflation is interesting. It's true that holding assets not denominated in US dollars could potentially mitigate the effects of monetary debasement.
It's also understandable to be cautious about playing it safe in the face of economic uncertainty. Leveraging oneself and investing in hard assets like real estate, precious metals, or cryptocurrencies may indeed offer opportunities for growth in this environment.
Teaching future generations about financial literacy and the importance of building generational wealth is crucial. Passing down knowledge and assets to empower the next generation is a smart approach to securing a stable financial future.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
