What's so bad about the Bank of Mommy and Daddy?
We're back again with what's turning out to be a really entertaining series showcasing curiously angry comments from readers who find my site through online search. Just to give you some background, roughly 75% of this site's ~500,000 pageviews a month comes from new readers through search engines such as Google. Many of these visitors hit the site once, don't subscribe to my e-mail feed or RSS feed and never bother understanding my background or going through the archives. You wouldn't be so silly as to not subscribe would you?
Lot's Of Opinionated Comments About Bank Of Mommy & Daddy
I really enjoy highly opinionated comments. The more extreme the comment the better because I think points can more easily be made when we go to extremes. For example, I like to tell personal finance clients, “Consistently spending money they don't have is like jabbing a long needle into their left eyeball.” They can still see out of their right eyeball, but life is going to be one big bloody mess if they continue their poor money habits.
This latest comment comes from “James Morrison” on my post “The Average Net Worth For The Above Average Person“. The post has 400 comments and is somewhat controversial because I provide a chart for what I think “above average” people have in terms of net worth. The people who are most upset are those who think they are above average, but are not within my net worth range.
Because the construction of my above average net worth chart is very thorough, I feel it might have enraged some people because truths hurt. At the same time, the figures are based off my opinion. There is no law that dictates what one should have.
It's always fascinating as a writer to figure out how to engage the audience. What's more fascinating is the fact that commenter James Morrison says he is “in the top end of my above average” range for his age, yet he still went berserk. Furthermore, he left a derogatory URL address that I won't share. Let's have a read!
James Morrison's first comment:
Here is a statistic for you kids . . .
I would say 80-90% of you are LYING!! The author included.
Now if even half of these are true then it was CLEARLY a case of “mommy and daddy are rich and gave me everything.”
DON’T KEEP LYING TO YOURSELVES!!
I have multiple friends whose families have net worth in the millions and they have good jobs right out of college and aren’t even CLOSE to these numbers.
It seems like you just made this up to make yourself feel better. I would highly doubt if you are making that much you would even bother to write an article like this. . .
This is obvious. . .
You people are in reality, just trying to make yourselves feel better.
It’s true, really reality check yourselves and maybe you’ll see that living in a fantasy world is NOT the same as a basis in reality.
Trust me, and I am in the top end of your “average.”
BUT I HAD ZERO HELP FROM FAMILY ZERO!!!
NO ONE HERE CAN SAY THE SAME!!!
My response about getting help from Bank of Mommy and Daddy:
Thanks for your kind comment.
Can you share where your anger is coming from, even as you say “I am in the top end of your average”? Are you saying that it’s OK for you to be in the range, but not everyone else? If so, why do you think you are more special?
There’s a lot more money out there than people think. People are just practicing the Stealth Wealth Movement.
James Morrison's response to Bank of Mommy And Daddy:
Sarcasm noted, thanks for trying to “act like the bigger person” by deflecting the negativity with a “positive” comment, textbook psychology.
I am just saying most of these posters are lying about their TRUE LIQUID net worth, home equity is not stable as we all have seen from the last decade and the same is true for stocks. But of course this is common knowledge for all of you “20s millionaires.”
ETFs, mutual funds, bonds and other supposedly “stable” investments are at an all time low return, and unless you have at least a cumulative 1 million in one of these type of accounts accounts, after taxes, you make little to no meaningful money. (Still better then nothing.)
I am just saying that if even half of these stories are true there was OBVIOUSLY A HELP FROM THE PARENTAL SIDE OF THEIR LIFE and I would guess that zero to no one came from “nothing.” Yet everyone of these “success” stories, no true logistics are mentioned, just random numbers.
If these stories are indeed accurate then your “net worth of the above average person” should read “the net worth of daddy and mommies money helped me.”
As I stated previously, all of my friends whose parents I would consider “well off,” aka 2+ million in worth still graduate with debt, even if it is just a little bit, and MOST of them immediately continue the lifestyle their parents success afforded them their entire lives, meaning your “goals” are pretty much unreachable unless you started out with a substantial nest egg right out of college and forgo having children until your 30s or later.
I was looking for a real article with some depth and strategy and instead I find a generic “shift your assets from A>B>C (early in life) to C>B>A (late in life).
This just feels like a jack off thread where people can come to sniff their own excrement and try and make others, who might actually be looking for some real guidance, feel bad.
Articles like these are pretty worthless, and I would have not been angered at all if I was not just looking for something you can learn from common sense.
Like I said, the fact that you still try and maintain an active posting thread in such a retarded article I would guess that your TRUE net worth isn’t even over 200k and your age is much older then you imply.
If I am wrong then go ahead and feel good about yourself, but I seriously doubt your current job writing “feel good about lying to yourself” threads pays the bills, let alone allowing you to build any kind of meaningful wealth.
LET'S BREAK DOWN WHAT'S GOING ON HERE
First of all, I have no intention of writing posts to piss people off. The “Above Average Net Worth Post” was written in a way to provide some idea of what net worth targets to shoot for by age. I carefully break down pre-tax, post-tax, and property equity to arrive at my figures. If you read or re-read the post, I think you'd agree with me that the post doesn't insult your mother. I'm also flattered he thinks I'm much older than I imply. Maybe all this time writing has made me a better communicator, despite all my typos.
Second of all, I just don't understand why he is so angry when he's in the top end of my above average ranges for however old he is. Doesn't his net worth therefore help justify my calculations? He's part of the mass affluent class so what's the problem here? I understand that we all believe we are special, but the law of averages don't work that way. Is he angry because he felt that he was super special for the longest time, yet once he stumbled across my post, he now feels average, even though the estimates are for above average people?
Finally, it sounds like he was severely neglected by his parents with multiple references to the bank of mom and dad helping everyone out. It's as if his parents left him to fend for himself, naked against a pack of wolves in the middle of the woods. If this is the case, I feel bad for James. I had two parents growing up who did the best they could to make me a good citizen. I've had plenty of mistakes and indiscretions in the past, and would have many more without my parent's guidance. And yes, my parents did pay the $2,800 a year in public university tuition between 1995-1999. I'm very grateful to get such support.
James isn't a long time reader of Financial Samurai, but even if a post really pisses me off, I don't think I could be bothered to write a 700 word comment. There needs to be some serious demons in my head or time on my hands to be able to expel so much energy. I'm very glad he believes that my net worth “isn't even over 200K” because that means I've been able to properly position myself to blend in. But, James attributing all of my success to my parents is also disconcerting given how angry he is.
GETTING DEALT A BAD HAND AND DEALING WITH IT
It's OK if everybody's getting rich at the same time. But as soon as you stop getting rich and you see other people continue to get rich, that's when things stop being OK. Wealth creation doesn't go in a straight line upwards over time. We'll have periods of tremendous financial dislocation as we saw with the 2008-2009 crash. Perhaps we'll get laid off and stay unemployed for a year, thereby depleting our savings. Or maybe some of us will take a leap of faith and do something on our own, while earning practically no money for a couple years.
Someone is always going to be richer than you. Deal with it. Trying to put them down or discredit their achievements to make you feel better is not going to help your financial well-being. There are many lucky people out there with supportive parents, trust funds, good looks, fantastic timing and natural talents. We should focus on doing what we can with what we've got. Is growing up a poor orphan the only legit way to succeed?
When I was looking to buy my first property in 2001, I would regularly see 23 year olds walk around open houses with their parents. Not only would their parents pay for the 20% down payment on a $500,000+ property, some would even buy the property for their adult children out right. Complaining why the world isn't fair would do me no good. Instead, I had to figure out how to save more money by working harder and hustling more to find that one ideal property. In 2003, I finally plopped 25% down on a $580,000 condo due to determined, aggressive savings habits and that was that.
I strongly encourage people to get motivated instead of get pissed off. Learn from the people who are ahead of you in whatever field you choose to improve. Think about the law of karma and how all these more fortunate people did something great for others to help them get ahead in their lives. Finally, just learn to be thankful with what you have. As soon as you are mindfully thankful, your jealousies and rage will start melting away.
Bank Of Mommy & Daddy Anecdotes That I Know Of
* 10 year old has a $3 million trust fund.
* Parents paid $60,000 a year to go to a private university for four years so their daughter can work in the arts making $25,000 a year.
* Dad bought his 23 year old son a $65,000 car for graduating from a very mediocre school.
* Parents pay $900 a month for tennis lessons for their sophomore in high school son. He has a $2 million trust fund.
* 34 year old has lived for free in a $1.2-$1.5 million dollar condo his parents continue to own for the past 10 years because his parents gave him the place after he spent 6 years in college.
* Classmate received a front-office Goldman Sachs job in WHQ because his father was a Managing Director and 25 year veteran, despite the son going to a mediocre university.
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Frankly, I enjoy your subtle takedowns of the whiner posts that you occasionally get in the comments. I’m always astounded by the ways people react to what I think are straightforward topics. At the very least, you have engaged readers! Enjoy it!
Hard work pays off.
Some people are lucky enough to be born to rich family. Others strike it rich through hard work. Or you just win the lottery…
Being middle of the road for my age, I’ve had my ups and downs along the way. But I’d much rather use a set back as inspiration to work harder or smarter than a reason to get bitter.
Much more envious of your monthly page views than your net worth, but I know the dedication that takes to achieve. If I want it badly enough I’ll work for it.
After all, you never appreciate something as much unless you’ve struggled to achieve it. Those who have it given to them will never understand.
Like Sam says this is his opinion, no reason to take it so personally.
I think it all depends on what household income level one considers the above average person has. Based on Sam’s chart I would say at least $200,000, seeing that the average household is 2.6 people. For example if husband and wife both worked, and had a salary of 100k each then both should have no problem maxing out 401k at $17500 each, and also saving 10k in after tax.
Based on 2012 census, 200k household income puts you in the top 5% of this country, (we
‘ll use country since it would be too difficult to use the regions of the country were 200k in NYC is top 8% in one area and 2% in another.
In my opinion I would say: (Of course I would also say you would have to average these income limits for a decade or more.)
Above average person(household) has income of 90k to 400k.
This would be about top 25% to top 1%.(2012 census)
Average person(household) 50k to 90k (50% to 25%)
Basically, I would say the Above average person is another way to say Upper middle class and Average person would be considered Lower middle class. So, I would somewhat agree with Sam’s charts but maybe have the lower end lower and the higher end higher to adjust for 90k and 400k.
So why is so mad? I wonder? He does mention he is on the top end of the chart for the above average net worth… he should be happy? I guess he is just mad because he thought he was doing greater than most. So since a lot of readers of FS are above average he thought he was some thing special? Because of that everyone else that’s doing above average they must of got it from the bank of mommy and daddy. I sense bigger issues here…
Well its like a lot of things… there are groups of friends that I hang out with that compared to them I am well above and beyond them in terms of net worth for my age. Then I have some sets of friends, that just blow the above average out of the waters.
Like you said, there will always be some one richer than you. You can either bitch and moan about it… or pick they’re brain about how they got there and from them.
Wow. That was quite a crazy read. Definitely some deeper issues going on there. It made for an interesting article though. I do think some people fall into the “the way I did it is the only respectable way to do it” trap. If your parents are willing to help you out as much as some of the examples you gave, you’re not a bad person for taking the help. You may be judged, but you will be judged while still having a nice car or an expensive education. People are silly.
I think your analysis of James Morrison was probably correct. While he has a high net worth, which is great, he is upset because it might be considered average by some people. I am always happy for “nice” people who are reaching their goals and my be making more money than we are. I have a close friend who likes to own private aircraft. That is way too expensive for me, but I am more than happy to take a ride with him. I am much more upset when I see friends and family struggling. I do what I can by passively sharing my investment knowledge on my blog, but you sometimes just can’t help everyone.
I admit I was the lucky ones who has ‘rich enough’ parents to pay for my school fees, I’m not from this country and the tuition for the international students is 3-4 times the in-state tuition. So when I graduated from college, I started out with 0 not minus. It did took me sometime to start accumulating wealth especially on the 401k amount (which is why I’m a little lagging on my retirement savings, I should start catching up on that since I’m contributing 30k last year and 53k this year on SEP IRA)
When I replied to your post (above avg net worth) earlier this year I was at 3.5m, and now I’m almost hitting the 4m mark due to aggressive savings (80-85% savings rate).
One thing I learned alot from my ‘rich enough’ parents is not the money they gave me (tuition) and they going to give me (it will probably double my net worth after they passed on), but the life lessons they gave me from young. They taught me work hard (not settling on 1 good paying job), save aggressively, invest wisely (stocks and real estate), money makes money. So now, we are blessed with 2 good paying jobs plus a side business that generate 3-4 times our income.
As for JM mentality, some posters commented that he’s probably young and talented. He said he’s higher income earner, so he probably has ego issue that ‘I’m better than the rest of you’.
When I was young, I too envy of those who parents give them everything, like bought them a new Mercedes, bimmer, NSX, supras in college. After I graduated, I move to DFW and happens to know a few people that live in University Park/Highland Park area. My envy never turns to hate though, so I always ask the question ‘How can I afford it?’ and not ‘I would never afford it.’ This very question is my drive to earn more and continue to build wealth.
There are probably people are lying in this forum, since it’s so easy to hide behind your pc, like they guy who said he got 35MM working for Samsung and everybody working for samsung has more than that. But I admire those young people who start early and save aggressively, they have the discipline that I never had at that age. Even if people are lying, use it as the inspiration and motivation. I like to read the billionaires life story on how they get there and their life lesson as well. You will always learn something valuable and applies to your daily life.
Starting at 0 is definitely a good advantage to have. I had the same advantage, but I did mindfully decide to go to a public school for $2,800/year in tuition vs. choosing a private school for $25,000+/year tuition. I’ve since paid them back.
https://www.financialsamurai.com/should-i-go-to-public-school-or-private-school/
Maintaining a 80% savings rate with your income and NW is excellent! Well done.
He went high and to the right, but I think I understand his sentiment and the point he was attempting to make.
You spent years of blood, sweat, and tears in an attempt to earn something. You hold your goals dearly. You deeply admire top performers. You have great work ethic and respect for money. You have absolute reverence for the process of attaining your goals.
Richie Rich has everything you have been working for and more. He has never struggled and barely tried. He doesn’t understand or appreciate what he has. The way he lives his life is irrelevant because he has nearly infinite funds and opportunity available to him. Yet, there he is, taking a job position that could be filled by someone more competent and eager. His organization would probably benefit from replacing him, but they don’t want to ruin their relationship with his father the client/partner/donor/politician.
Richie Rich comes to this page, reviews his assets and sees that he has the right numbers. He comments to pat himself on the back, assuming these numbers automatically give him the title of “the above average person” that you wrote about.
I agree.
And I think the biggest test for anybody is to actually just press the EJECT button from a job and see whether he or she can survive based on absolutely creativity, execution, and sheer will.
Sam – I have been reading your blog for few days. I want to congratulate you first of all on great articles – no wonder you have 500 K monthly visitors. Your article on “Average net worth for above average person” was one of the best articles I have read in a while.
I can see the point Brian and others were making earlier about genetic lottery (born to educated families) and advantages that accrue from it. And then what Sunil and Nishant said about just being born in United states should be considered a lottery if you are from certain other underdeveloped countries.
How do you differentiate hard work from luck as far as a driver for success is concerned? Being lucky is very relative term and when does luck even out to make it a even playing field is the key question? e.g One can argue that even a person born in India in very poor families is much luckier than somebody born in North Korea or parts of Africa from where there is no escape.
Real financial success stems from not just pure luck though – understanding money and how money works is an important aspect of being financially independent. This is reason why many professional athletes, musicians, rock-stars end up bankrupt even though they earn in millions. Here is a theory: if all the wealth in the world is spread equally among the people, in few years say 15-25 years huge chunks of money will most likely gravitate back to people who actually understand underlying principles of money (tax structures, cashflow basics, compounding etc etc). With luck you can make money but it takes a lot of hard work to keep it with you so it can compound over years and become the “juggernaut” that provides you the financial cushion for material trappings or for giving it to your offspring’s or your favorite charity.
Sam – this could be a great topic for your next article maybe “Role of Luck v/s Hardwork in achieving financial freedom” :)
Sam – Keep up the good work! Fantastic blog.
Thanks for your comment!
I have a similar post regarding what you’re talking about.
Check it out: https://www.financialsamurai.com/why-not-just-try-harder-to-get-ahead-the-effort-vs-talent-debate/
Well I think alot of people don’t realize the value of money. Today, money is too abstract to understand. Sure a billion is alot of money…but exactly how much is it?
If a millionaire could buy a single house, the billionaire could buy up the entire city section of houses.
The Doors front man sounds a lot like one of my tenants. Terribly angry, and sure everyone else is cheating, especially his landlord, who has bent over backwards to be beyond fair. What’s the scripture? The anger of man does not accomplish the righteousness of God?
Man, I hope your tenants, although angry, are good and steady payers!
Sam, I’m a new reader as of a month ago and wanted to post a reply to this great post. First of all, I want to congratulate you on a great blog – it’s very addicting. I’ve gone through and read most of your posts dating back to 2009.
As far as your post on average networth of the above average individual, I feel that it’s very realistic depending on how you define “above average”. For me, I went to a top 5 school and graduated with no loans due to a combination of scholarships and money I made through my online business while in school. I made six figures coming out of school the first 2 years, then doubled my income by starting a consulting company. No help financially or otherwise from any family members. I’m 29 now and have doubled your high end of what a 30 yr above avg networth should be (pre-tax+post-tax+equity), and I know that a lot of my schoolmates are doing even better than me (28-32yrs old, 1mm+ networth, no family seed money nor help, mostly working in financial services).
I think Morrison is upset because he thought that he’s accomplished something unique which was diminished by your calling it just “above average”. The reality is hitting your avg “above avg” networth of 240k by 30 is very tough for everyone except maybe the top 10% of college grads (or even less) as it takes immense discipline in both savings, hard work to earn more money and move up the ladder quickly, and luck (the avg 2013 college grad is earning 45k/yr according to shrm.org).
Welcome to my site. Going back to 2009 is a lot of reading! My writing has changed over time right? I got everything out in the first three years and now I’m looking for new angles in the last two years.
Graduating from a top 5 school with no debt is impressive. What is your business consulting about?
I focused my consulting on digital strategy and eventually transitioned into more management consulting as my experiences changed. I will have to say that while I’ve done well, I’ve not been invested in the market at all in the past 4 years so no asset appreciation of any sort for me. I actually even lost 100k shorting the market in 2011 when the technicals broke down in Aug but the markets had a miraculous hockey stick save. Had I been all in like everyone else, I’d probably be a lot closer to FI now! Unfortunately, now is a very tough time for me to jump in as markets are again at all time highs, economic indicators have continued to decline (GS and JPM forecasting negative GPD Q1 14), real estate growth is slowing, mortgage apps have tanked, consumers are tapped out, and asset bubbles are forming all over. Interest rates are already at near 0, and the fed, while they’ve cut back MBS and TSY purchases, are still doing 45B and reinvesting all of their interest on their 4T of holdings. Simply put, I’m not seeing where the growth will come from to warrant current valuations let alone any additional multiple expansion as earnings growth more or less have stalled.
Quite often, the anger is misdirected! It generally has nothing to do with you or the article. I went to school with very wealthy (many of them were old money) who were highly motivated to outdo or surpass their parents. Some even did! It is a lot easier for children of wealthy or successful parents to do well. Nature and nurture is a huge part of it.
This is my 2 cents. In JM’s case, my guess is that mostly from environment and culture. If you look into certain affluent city/town/ZIP code in this country, most people will be in the range (or even high end of the range). If parents have 2M in the bank but decide to let their kids to borrow money for college, I think that’s their choice and a good one actually. JM might not form one of those city/town/zip where young folks who have major in certain jobs (e.g. IT) and also from a “saving” culture. For example, Taiwan, as a country, has 29% saving rate. So even an average saver (whose parents are from Taiwan OR she/he was born in Taiwan them came here in 20s), she/he could easily make to the high end of the range later in life because the influence from the culture. Of course, the % to total population is not high but we are still talking about one million or two (i.e. Asian background with good education, good job and high saving rate). Just making an example here.
The other point is that JM feels people are lying about their net worth…which is entirely possible, of course. BUT at the same time, those who care to come here and read your articles usually are those who care and do better (money wise) than average Joe. So personally, I believe most reader’s comments.
In the end, we believe what we know and see. So, Sam, it is possible that what you see and know is very different from what JM has been seeing and knowing.
Here’s the thing. Even if someone said they had $10 million dollars at age 30, I would be happy for them. And I would want to learn their story on how they didn’t. I would not be envious of them b/c that feeling is no good.
Learn from others or be happy with what you have.
I don’t mind if someone gets a car or house from their parents. I take a lot of pride in buying my own things, and wouldn’t feel any sense of accomplishment from having my parents buy those things for me. The drive to buy my own things has led me to be a super saver, and I could easily purchase these items right now in my mid-twenties.
However, I find it downright annoying when someone brags about buying their own home and talk all the time about how they are building equity, when their PARENTS paid the downpayment. Either buy your own home or let your parents buy it but don’t go on about how responsible you are and how much of an investor you are when you don’t even contribute a dime.
100% agree with you there Liz!
Who spends their time writing a comment like that? Haha. That is really my only question.
I do get envy eyes sometimes. I live in a very affluent part of DFW. I remember moving here after living with my parents. I thought everyone was rich, millionaires.
I am appreciative of my parents for making some sacrifices so I could progress in my education. I, am, also proud of myself for recognizing I did not want to be stuck in a circle of poverty, and I’m working on this.
Sam, the reason I really enjoy reading your site is that you are one of the only people that I have come across that has the balls to actually document real numbers out there on various topics. They are your “opinion” and people who freely choose to visit your site get fired up about it. Admittedly I get fired up about stuff as well, but I completely respect where you are coming from. Different opinions is what makes the world interesting. For the record, I moved out of the house at 18, was a self made (liquid cash in the bank not house or business equity) millionaire by the age of 32…I remember that day like it was yesterday…11 years ago. It can be done, and the number of people out there who are just like me would shock people like Mr. Morrison. Life is good, keep the good stuff coming Sam!
Life would certainly be a little dull if we all thought and did the same things wouldn’t it?
Well, if you ask someone if they agree half the population is below average they’ll typically agree with that point (whether it’s statistically valid or not). Then ask if they think they are above average. I’ve never run into a person who doesn’t say they are average or above, they may say a “little above” or “about average” but absolutely noone says they are below average. So I guess part of the issue is if you just gloss over the writing and basic assumptions about the person you’re considering above average who is actually way above average IMHO I can see how someone could feel insulted in being considered less than “above average” even when their gains may otherwise be considered impressive.
I’ll use myself as an example. I meet none of your assumptions with respect to 401K, aftertax, and real estate savings even on the low end for either my age or my years of working and I am woefully short with respect to overall net worth.
Of course I got started later (didn’t get a full time job in my career field until age 24, and even then at only half the average salary for the field), had no good experience with handling money (stock market was for rich folk and you were doing well if you could pay your bills every month), made some really bad decisions early on that took many years to dig out from, etc. and yet by many metrics I’ve kicked butt compaired to some of my friends and many of the folks I knew from the old neighborhood.
So if I compare myself to the old neighborhood, every sibling and in-law in my family, and high school pals, I’m doing darn good and at the top of the heap. But compared to your charts, I suck. Then compared to a few of my friends who hit multi-millionaire status financially we are really poor folk.
So am I envious of my few rich friends, or the duel income power couple my last three supervisors were part of, or even you and your success FS. Well, DUH! I’m human and I can be envious in my dark moments (and you can’t stop me from wallowing in evil envy, so there :P. It can be hard to hear from a boss complaining about college costs for their only kid when you know that not only do both he and his wife make much more than you, but he told you about that half million inheritance he got last year meanwhile you’re facing paying for your third kid’s college bills. Basically, after a good pity party, I get up, dust off, appreciate that I have no business in their financial lives and can only worry about my own, and let it go or see if there is something I can learn from them.
Man, complaining about paying for college and then telling everyone he inherited $500,000?!?! Ummm… I would say it’s ok for you to sweep his leg, Johnny.
All I have to do is look around the corner to see the mega mansions that I will never afford to buy. BUT, I do find inspiration in them, and as a result, try really hard to continue writing here and elsewhere, and never giving up.
I posted a comment on that post before realizing maybe I should have posted on this one. I hadn’t read the article until today. I qualify as an above average person but I knew before I read the post I wouldn’t be even close to average savings or net worth of even average American. My main fault was the worst decision of my life – buying a house in 2007. Now I’m $43k underwater on it. I also didn’t start saving for retirement until age 25 ( a year ago) so I’m behind there too. Maybe some day I’ll catch up but for now my mortgage eats up most of my income!
Anyway, I liked both posts and that guy was just ridiculous. Ah well, can’t please everyone and you can’t change up your blog to attempt to avoid people like that. Keep doin’ what you’re doin’!
Hi Bex, thanks for sharing! I’m impressed you were able to buy a home at the age of 19, if my calculations are correct. How’d you do it? I had like $3,000 to my name from working at McDonald’s and saving up Christmas money gifts, that’s it!
Yes, I was 19. I got an FHA loan and they were offering 100% financing. I didn’t have any money. I even bundled closing costs into the mortgage. I qualified because my dad co-signed (but I have paid 100% of the bills, I just needed his good name on it) I recently wrote a few blog posts about it if you care for more details
Gotcha! I’ve been wondering about the FHA loan system and feel that it may be doing more harm than good?
I’ve got a 30/30 home buying rule I like to followin, which is 20% down and a 10% semi liquid buffer to boot. The other 30% is having the mortgage be no more than 30% of your income.
I’m afraid with the FHA loan system allows first timers to put down 0-3% it might be getting folks way in over their heads.
I agree that the FHA loan process could be setting people up for failure. I did not have a lot of $ saved up after graduating from college and decided to do FHA to lock in the interest rate (3.25%) last year. The biggest downfall is mortgage insurance that you pay until you 80% or less of your home value.
And as the commenter named Sunil so aptly describes above, most people commenting on this blog ( including , I assume,James Morrison) have been granted one of the greatest blessings of all. Citizenship rights in the greatest country on earth , which rewards you amply for hard work and ability. Being born a US citizen is the greatest lottery of all.
I think about this almost every day, having grown up in third world countries like Zambia and Malaysia in the 70s and 80s. I’m thankful to have the opportunity to create write freely, earn some shekels, and feel free. Go #USA!
Slumdog millionaire right here Mr. Morrison. 41 years old with a net worth of 1.5 m. I grew up in India in one of the worst slums in the world. I understand there is poverty in America and all that but I suggest you take a trip to any one of the third world nations to understand the meaning of poverty. It will forever change your opinion on how good we have it here. I worked really hard in school and graduated from college with full scholarship…. worked for few years, saved money to apply to US universities for graduate studies and bought a 280 sq ft apt with running water for my parents in India. Moved to US as a grad student with a research assistantship that paid $400. My school was in south with monthly rent of $300/month for a 3 bed apt. I took another roommate in my room to save on the expenses. So my monthly rent was $50. We used to share groceries (mostly rice and beans and top ramen) which added to another $100. Sent $100 to India to pay for the mortgage on the apt and used to save the rest. Yes! I managed to save some money at a monthly salary of $400! After graduation I worked for couple of years and hit the dot com lottery. Became a millionaire and lost it all due to reckless spending (mostly buying other crap dotcom companies). Lost my job and was unemployed for sometime. Then started my own business with most of the expenses on credit card. Sold my business, got my citizenship in 2008 (after waiting for 16 years!) My spouse and I only started to contribute to 401k in 2009 because of we didnt want to lock up our money till we were citizens. Our combined balance is 250k which is on the lower side. But I invested in real estate in 2010 to 2012 time frame which made paid off big time.
Despite all its flaws I firmly beileve America offers the greatest upward mobility if you are determined to work hard (and smart). And all the people cribbing about not having handouts from parents, guess what! You already have the biggest lottery any person in this world can have can have: US citizenship! That is all you really need to be successful! God bless America!
India is the one country that really shook me up, despite having grown up in developing countries like Zambia and Malaysia for the first 14 years of my life.
I went to Indian in 2001 and then right before the terrorist attacks in 2008, and man, the trips affected my outlook and my eating habits.
Here’s the post with an example of the poverty that I saw: A Weight Loss Tip To Die For
Since that 2001 trip, I haven’t let myself gain more than 5 pounds because I’m always mindful of the poverty out there. We are truly lucky here in the US.
I will admit that I am not a self-made individual. It did not come in the form of monetary inheritance but from the love and care shown by those who gave a damn. The last time I saw my father alive I was thirteen, sitting on a train getting ready to head back home after a rare visit to the “other half’ of my split family. We shook hands and parted. A few minutes later he was back on the train with me and showing me the proper way to shake hands with firmness and confidence.
That’s all! It was enough.
He was not alive for my high school graduation. I received a suitcase from my immediate family and off I went.
I still have the suitcase which has served me well but not nearly as well as that one minute that my father spent that enabled me to stand tall with confidence for the rest of my life.
Wonderful story John. I’m sorry you could not spend more time with your father. That is terrific you still have that suitcase to cherish his memory.
Ironically enough, I went from this article (and reading the comments) to a friend’s endorsement of an article on social media:
https://groupthink.jezebel.com/to-the-princeton-privileged-kid-1570383740
Interesting article on a politically right blog. If I went to Princeton, I would just keep quiet. There’s no need to try to defend yourself for being a Princeton student. It should be a given that you are smart and worked hard to get into the school.
But, going to a good school is not exactly an incredible accomplishment. What is more important is what he DOES with his degree.
I enjoy reading PF blogs like FS (FS being my favorite, BYW) and also make money. But, at the same time, I think that financial wealth is so much overvalued in today’s US society. The angry commenter is an example of how much importance one can put on money. There are so many other more important things in life for one to be so upset about its own or other people money.
Cheers