You're Being Gaslit By Generational Wealth

Summary

This video explores the often overlooked impact of generational wealth on individual lifestyle and success. Through the stories of Mel and Sophia, two women with similar jobs but vastly different financial realities, the video illustrates how generational wealth creates invisible advantages that persist through adulthood. It also dissects the societal misconception that everyone starts on the same playing field, highlighting how wealth affects education, career opportunities, and housing. The discussion emphasizes the need for policy reform and societal awareness to address these hidden disparities.

Highlights

• Mel and Sophia's story illustrates the stark contrast caused by generational wealth. 🚻
• Generational wealth is not just about money but also access to opportunities and networks. 📈
• The video highlights societal misconceptions about class mobility and fairness. 🔍
• Education, career, and housing are deeply intertwined with one’s family wealth. 🏡
• The pressure on individuals to measure up to those with generational wealth can be immense. 📉

Key Takeaways

• Generational wealth creates invisible safety nets that drastically impact life outcomes. 💰
• Many wealthy individuals misjudge their class advantage, thinking it's the norm. 🏠
• Financial and cultural generational wealth extends beyond just money—it affects education, health, and social mobility. 🎓
• Societal structures often gaslight those from lower-income backgrounds, making them feel inadequate. 🌀
• There's a pressing need for economic reform to create a fairer society. ⚖️

Overview

Have you ever felt like you’re living in a parallel universe where some people seem to float through life with invisible wings? This isn’t just a whimsical fantasy—it’s the unseen hovercraft of generational wealth at work. Through the lens of Mel and Sophia, the video by The Financial Diet unravels this often ignited secret that shapes our social and economic fabric.

Diving deep, the video unboxes how generational wealth silently maps out life trajectories from education to career, with some riding smoothly while others struggle uphill battles. It's more than just inherited money—it's inherited opportunities, expectations, and a sense of normalcy that is anything but universally standard.

From the subtle social signals that pass unnoticed to the glaring gaps in policy that perpetuate disparity, the video boldly calls for awareness and change. It lights a beacon on the need for societal reflection and policy reform to forge pathways towards equity and true meritocracy, urging viewers to recognize and challenge the status quo.

Chapters

• 00:00 - 05:00: Introduction and Overview The chapter introduces the stark differences in perspectives between those who grew up in poverty and those from wealthier backgrounds. It focuses on the misconceptions held by individuals who believe their middle or upper-class lifestyle is the average American experience, particularly highlighting aspects like summer camps, international vacations, and financial support from parents for things like house down payments.
• 05:00 - 09:00: Meet Mel and Sophia The chapter introduces two women, Mel and Sophia, who are 40-year-old married individuals working in the publishing industry. The narrative dives into the concept of generational wealth, describing it as an invisible force that impacts a person's life long after they have left their childhood home. The discussion sets the stage for exploring how this invisible force shapes the reality and challenges faced by Mel and Sophia in their personal and professional lives.
• 09:00 - 15:00: Understanding Generational Wealth In this chapter on understanding generational wealth, the narrative explores the contrasting lives of Mel and Sophia, two women with seemingly similar career paths in publishing. Despite their outward similarities in job title and salary, Mel's financial struggles are highlighted due to lingering student loan debt, medical issues stemming from her youth, and the challenges of saving for retirement. The discussion emphasizes the profound impact of generational wealth, or the lack thereof, on financial stability and life trajectories. Mel's situation illustrates how past disadvantages, such as medical neglect, can perpetuate financial hardship even in a competitive career.
• 15:00 - 20:00: Childhood and Societal Expectations The chapter delves into the societal expectations and financial realities faced by individuals, focusing on two women with similar job roles and salaries, but differing financial obligations and circumstances. One woman juggles credit card debt and childcare responsibilities by taking turns with her husband to care for their child, benefiting from a rent-stabilized apartment to manage living expenses. In contrast, her colleague, unburdened by student loans, enjoys more financial freedom to spend on leisure activities. This comparison highlights the diverse challenges and lifestyle choices influenced by financial pressures and societal expectations.
• 20:00 - 30:00: College and Affirmative Action The chapter discusses the lives of two accomplished women who work in a prestigious, competitive industry. It highlights the balance they maintain between their professional and personal lives. One of them enjoys a sociable and active lifestyle, with weekly outings with friends and shopping whenever she feels like it. She has managed her finances well, paying off credit card bills monthly while enjoying the perks like miles and points. Despite her busy schedule, she and her husband ensure their child is cared for by their available nanny. They live in what she describes as a modest three-bedroom condo, bought soon after their marriage, illustrating a picture of stability and success.
• 30:00 - 40:00: Connections and Careers The chapter titled 'Connections and Careers' examines the lives of individuals with similar salaries and ages, particularly Mel and Sophia, highlighting how their life experiences diverge. It emphasizes the significant impact of generational wealth in these differences while acknowledging the role of luck. The chapter is placed in the context of a video essay exploring this theme. There is also a mention of the financial service Betterment, with a nod to the ongoing tax season and the challenges associated with financial management.
• 40:00 - 50:00: The Housing Market Dilemma The chapter titled 'The Housing Market Dilemma' discusses the importance of simplifying the process of saving and investing for long-term sustainability. It highlights the challenges of managing investments while working full-time and introduces Betterment as a potential solution for simplifying the process. Betterment offers automated investing tools that handle the building and management of a diversified investment portfolio, allowing individuals to set recurring deposits and focus on their lives without the stress of active investment management. The key message is that investing and savings should not feel overwhelming or burdensome.
• 50:00 - 65:00: Child Care Costs and Family Support The chapter "Child Care Costs and Family Support" discusses the concept of generational wealth, describing it as financial assets like stocks, real estate, cash, and heirlooms that are passed down through generations. However, it also highlights that generational wealth includes intangible elements such as knowledge, social connections, and other non-material assets. The chapter contemplates the moral implications of generational wealth, positing that it is not inherently negative, while also recognizing that individuals do not have control over the wealth they inherit.
• 65:00 - 75:00: Conclusion and Call to Action The chapter discusses the impact of generational wealth and societal values. It emphasizes that no one chooses their birth situation, particularly regarding financial advantages like receiving a down payment for a house from parents. The chapter acknowledges the moral challenge of accepting such advantages while highlighting the societal norm and aspiration for children to surpass their parents' achievements, often considered the pinnacle of the American dream. In a community focused on financial literacy, there's a strong desire for one's children to avoid past financial struggles. The chapter concludes with a call for higher taxation on significant generational wealth to ensure fairness and equity.

You're Being Gaslit By Generational Wealth Transcription

• 00:00 - 00:30 one thing no one tells you about growing up poor is even if you one day earn good money you will spend your adulthood feeling completely gaslit by people who obviously grew up wealthy but genuinely think that they were middle class because for people who grew up like going to summer sleepaway camp or like having international family vacations every year or expecting their parents to help them with a down payment on a house like they really do think that's how people grow up like they think that that's the average American experience and you'll be at a job earning the exact same amount as that person and yet your lifestyles will be completely different and on some level they'll think that's a
• 00:30 - 01:00 you problem because the nature of generational wealth and how it filters into a person's life even long after they've left the house is that it creates a kind of invisible force field and if you've lived in that your whole life it's almost impossible to imagine a world without it hello everyone and welcome to our March video essay here on the Financial Diet and for this month's essay I want you to meet two women their names are Mel and Sophia they're both 40-year-old married women who work in the publishing industry because if you've ever seen a romcom you know that
• 01:00 - 01:30 women only work in publishing journalism or at an art gallery and on the surface Mel and Sophia's lives look almost identical they work for competing publishing houses making similar salaries with similar job titles and yet one struggles way more than the other let's start with Mel she's still paying off student loans at age 40 she's scrimping on each purchase to save a few hundred a month into her 401k she's dealing with the aftermath of medical neglect in her youth like her teeth problems and her joint problems she's
• 01:30 - 02:00 paying off a little bit of credit card debt she and her husband take turns caring for her kindergartner after school in the afternoons because she has to avoid the cost of after school care and she lucked into finding a rentstabilized apartment after many many years of unpredictable rent increases a lifesaver since buying property in the city is nowhere within her family's reach and then sitting just one desk over you have Sophia who as we said has essentially the same salary works the same job but who has no student loans to speak of she loves going out with her
• 02:00 - 02:30 friends at least once a week plus shopping when the mood strikes she's healthy and active for her age with no medical concerns she has no credit card debt actively racking up miles and points with her cards that she pays off in full each month she and her husband have a nanny who's available to pick up and babysit their child every day after school and she lives in what she considers to be a modest three-bedroom condo on the bottom two floors of a brownstone which she moved into with her husband shortly after they got married now if these women who are both very accomplished and work in this prestigious competitive industry have
• 02:30 - 03:00 such similar salaries and are the same age how do their lives look so different luck always plays a role in these stories and we won't discount that but for Mel and Sophia and millions and millions of Americans like them the real answer is generational wealth but before we get into this month's video essay here is just a quick word from our sponsor Betterment now that we're fully into tax season I know that the last thing a lot of us want to hear is another financial to-do that feels like a ton of work but the key to
• 03:00 - 03:30 saving and investing in a way that you can sustain long-term is to make it as easy and painless as possible because the last thing we need is another job managing our money when we're already working 40 plus hours a week so for anyone looking for a simple way to get started Betterment may be your answer their automated investing tools put your money to work so you can focus on literally anything else once you set up recurring deposits they will handle the rest like building and managing your diversified portfolio while you just focus on living your life investing in savings shouldn't feel like a side
• 03:30 - 04:00 hustle because with Betterment your money will be the one hustling for you head to betterment.com/tfd or click the link in the description to sign up in minutes now generational wealth typically refers to financial assets passed down from one generation to the next in the form of stocks real estate cash heirlooms and other holdings but it can also pass down in much more intangible ways in our bodies in our minds in our social groups and basically everything in between and it's important to say that generational wealth is not necessarily a morally bad thing for example no one controls the
• 04:00 - 04:30 family they're born into no one chooses to have parents who can give them a down payment for a house and for most people it would be hard to stand on their values and not accept that and for the people passing down that wealth for most families that's still the pinnacle of the American dream to have your children do better than you did every day in this community where people come to learn about money and get better with it a primary reason for wanting to be better with money is so that their children will not have to struggle the way they did although when it comes to the higher levels of generational wealth they should definitely be taxed more but
• 04:30 - 05:00 we'll get into that later but all of that to say even if generational wealth is not inherently a bad thing it is still a very unfair thing and the way that it filters into our lives many years after we've left our parents' home makes it so that we're kind of low-key being gaslit all the time because we're told that we're all playing with the same equipment and on the same field but babe we're not even playing the same sport so to get a better understanding of how Mel and Sophia ended up so differently despite literally working next to each other at the same office with the same salary we have to take a step back to see how they got there
• 05:00 - 05:30 let's start again with Mel she grew up in a working-class family in upstate New York she attended all public schools most of which were pretty underfunded but she still finished high school with a 3.8 GPA taking the only two AP classes available to her she spent two years attending community college before transferring to a well- reggarded 4-year state school to finish her degree she met and married her similarly working-class husband at community college and she and her husband are now finally able to contribute to their 401ks consistently which was a huge financial goal of theirs but between lingering student loan debt credit card
• 05:30 - 06:00 debt and paying for child care they don't have a ton left over to save each month when times have gotten tough they've occasionally had to dip into their credit cards past what they could pay off leading to a cycle of small consumer debt as the highest earner in her family she's also responsible for sending money to her parents every month to help subsidize their living expenses whereas her co-worker Sophia grew up in a wealthy family in Westchester an upper class New York City suburb she attended prep school and finished high school also with a 3.8 8 GPA taking almost all AP classes for her junior and senior
• 06:00 - 06:30 year her high school extracurriculars were the fencing team the student council VP yearbook committee school newspaper and summers attending an 8-week long summer camp in New Hampshire her GPA was inflated thanks to AP class grading scales so through a combination of academics extracurriculars and family connections she was able to attend Brown University where she landed a spot on the fencing team where she met and married a similarly affluent man at the Ivy League school now since her parents gifted her and her husband a sizable down payment for their condo as a wedding gift her mortgage payments have
• 06:30 - 07:00 always been manageable and her and her husband have investments well beyond their maxed out 401ks when she got into a little credit card debt as a 20-some her parents paid it off while she reimbursed them so she didn't get hit with interest and her parents have plenty of resources so she'll never be responsible for their care or retirement now it's clear that Sophia's background has made it infinitely easier for her to achieve the same position in life as Mel despite them having by all measures pretty equal qualifications and things like academics skills and work ethic and at the end of the day it's all about the
• 07:00 - 07:30 pipelines that generational wealth creates from who our parents know to where we go to school to who we marry to how we get our jobs to how we buy a home to hear personal accounts of the realities of growing up without the boon of generational wealth we spoke with two women who were able to change their circumstances after growing up in low to middle inome families without generational wealth paola 31 and Sarah 29 growing up my family's financial situation was definitely what I would call paycheck to paycheck um looking at
• 07:30 - 08:00 myself now I'm not at that point i definitely feel that I at least accomplish financial freedom if something were to happen to my job if something if I needed to drop something for family um or support family in any way I feel confident that I'm able to do that without sacrificing what life I've currently built but yeah growing up I do remember times of like you know we we
• 08:00 - 08:30 had everything we needed there were we never had enough to splurge on things right like we had enough money for our meals like our three meals a day we didn't like splurge on like snack stuff like that when it came time for birthdays Christmas I do remember my dad occasionally getting a second job just to kind of give us what we what they thought you know we deserved but they just weren't able to provide with what jobs they had at the time my financial
• 08:30 - 09:00 situation growing up was very much um middle of the road middle-class family if you can imagine a you know a one-story house in the suburbs um mom dad three kids they both of my parents worked growing up my dad is or was an airplane mechanic and my mom is an accountant um and so really growing up we had nothing that we ever kind of went without which was really a privilege so
• 09:00 - 09:30 all of the kids were very much involved in different after school activities um we never kind of went and had a summer that we were terribly bored or something um we were very much supported growing up and from the outside looking in that felt very stable very you know comfortable but from the inside even though I was very young and it was hard to really see or understand all of the
• 09:30 - 10:00 financial background and concepts you just felt the stress um or maybe the tension around money between you know the parents and planning and making sure that their kids were supported for uh we didn't talk about finance a lot so it was kind of a black box of information where you don't know what is going on or all the words that are being used but you just felt okay you know parents are stressed uh whether that is
• 10:00 - 10:30 conversations about going to college there was never an expectation of oh yes we have this you know secret bank account that is going to just make sure you are comfortable through college it was always a conversation of I don't know where we're going to find this i'm not sure how we're going to do this so though we never had to make huge sacrifices in terms of yes I was able to go to college um yes I was able to do all of the activities that I wanted to
• 10:30 - 11:00 do um and all the experiential learning things that I was excited about it was always a conversation of we need to figure out how to do this because it's not going to be easy financially but let's look beyond just the pure numbers of generational wealth and really unpack how it gaslights all of us in real time starting with chapter 1 the privilege of being a kid as we discussed in a previous video essay about the lingering effects of poverty there are many ways that growing up without much continues to be visible and punishable well into
• 11:00 - 11:30 adulthood while it is definitely possible to change class and I again am an example of that the truth is that having grown up poor does tend to radiate throughout many aspects of our lives and we live in a society that continually tries to remind us of where we came from because ultimately having poor people is of huge economic benefit everything from our psychological and physical health to our aesthetic appearance and presentation to our social and cultural norms and habits are deeply impacted by the class in which we grew up and although America often likes
• 11:30 - 12:00 to imagine itself a classless society we go pretty far out of our way to make sure that if you grew up a certain way it is very hard to make people forget but before we can get into the long-term effects of being lowincome let's start by understanding why there are so many poor people in America to begin with and why they stay poor for so long because FYI as of today there are about 42 million people living below the poverty line in America and whether we're talking about having messed up teeth from never getting braces the stigma attached to obesity which is heavily
• 12:00 - 12:30 conflated with socioeconomic status particularly in youth regional accents a lack of cultural knowledge from things like travel or elite educations or simply the absence of social connections and manners favored by the wealthy being poor is something that follows you around as you age in fact there are even studies that show that we can literally tell people's socioeconomic status just from looking at their face and this is not to say that these things are distinct from the actual financial element of generational wealth even if you never got braces or didn't look rich or didn't have good manners having
• 12:30 - 13:00 parents who can give you hundreds of thousands of dollars as an adult to get into a housing market is still a huge advantage but it means that much of the wealth gap is more insidious than just money and this is why it often feels like we're being gaslit about wealth and its effects because not only are many of its most classic markers intentionally hidden like it's rare that adults will just volunteer the fact that their parents bought them a house or paid for all of their college or subsidized their child care but many of these clear class markers that we pick up in childhood
• 13:00 - 13:30 people don't even ascribe to class in fact the subtle visual language of wealth especially generational wealth is so pervasive that it largely explains the recent explosion in cultural fascination with old money style or quiet luxury especially from people who largely can't be affording either as we said in a video on the topic and this style has simply exploded in popularity on social media over the past few years and especially in the past 12 months to the extent that basically every influencer and fashion magazine has created their own guide to the style or
• 13:30 - 14:00 has demonstrated their own spin on it and even on social media it tends to vary between people who actually might embody that lifestyle themselves giving glimpses into their life to people who are trying to recreate the aesthetic through primarily things like fast fashion clothes which is obviously in many ways the worst of both worlds but the fact that it's so popular now does seem to feel somewhat in line with the extent to which younger generations are increasingly removed from any semblance of financial stability or security let alone exorbitant wealth the average person is never even going to come in
• 14:00 - 14:30 contact with the kind of people who can afford to wear subtle discreet designer wardrobes that they can treat like garbage while they pull into their slip at their yacht club with the schooner that's been in their family for decades unless of course like my former self they happen to be working for them but it makes total sense that as we get further and further away from these ideals we become more and more fascinated with them but when you really break it down many of the privileges of generational wealth that manifest in childhood and then the transition into
• 14:30 - 15:00 adulthood are simply the luxury of being a child and then having an unburdened transition into your adult years where you can afford to take your time change your mind make mistakes so you could say that one of the biggest advantages of wealth as a kid is literally just getting to be a kid quote "Young adults from poor families establish financial independence early eg contributing to family bills during adolescence considering themselves fully responsible for their finances as young adults whereas young adults from more affluent homes are more likely to receive financial transfers from their parents
• 15:00 - 15:30 who often help them pay for college and other expenses these findings highlight the ways in which socio-economic inequality and childhood can differentiate youth's experiences of adolescence and young adulthood increased investment in higher education accompanied by delayed marriage and childbearing combined to create an extended period in which young adults experiment with different relationships and slowly settle into adult roles securing good jobs is also difficult for young workers particularly those who do not invest in higher education this emerging adulthood research literature suggests that the majority of youth
• 15:30 - 16:00 benefit from large parental investments during this elongated transition to adulthood yet there is a significant variation by social class with a discernable subgroup of adults and young adults who may lack the resources or have parents who lack the resources to support an elongated transition to adulthood and as I stated in my Tik Tok many of these hallmarks of what it means to live a relatively carefree childhood or have a long transition into adulthood things like traveling extracurricular activities not having to work going to
• 16:00 - 16:30 college and even to graduate school are treated not as the class signifiers they are but as just normal aspects of growing up which as any kid who grew up poor can tell you is very much not normal for not just not everyone but literally the vast majority of Americans i know that a lot of people think about I want to go to a really well-known college um Ivy League whatever it is to really set myself up for great opportunities i actually did the opposite whenever I was going to my undergraduate I actually decided to just
• 16:30 - 17:00 go to the small university that was 20 minutes from my house i saved on room and board i stayed at home um I was still able to support in bills with the student worker um jobs that I had but it that university provided me the most amount of scholarships i literally based my decisions around who can support me the most in the journey so that I wasn't digging a hole for myself from the very
• 17:00 - 17:30 beginning um so that's what I kept in mind and I'm like what can what can help me earn more money but then also who can help me like get there without you know kind of like um yeah digging a hole for myself i I wanted to make sure that I wasn't coming out with more debt than what my parents had like helped us get to but part of the reason that this very
• 17:30 - 18:00 specific view of what it means to be a child teenager and then adult is perpetuated in our society and anyone who didn't live that way is looked at as the weird one is because the people who are deciding what our culture looks like from executives in office buildings to the people writing in newspapers and hosting shows on TV to the politicians who decide laws are generally speaking mostly from these more elite social classes and if there's one period in life in which this perception of generational wealth is turned into just
• 18:00 - 18:30 how everyone lives it is at elite colleges and universities which brings us to chapter 2 college affirmative action for rich kids in all of the enlightening and I use that word very loosely recent conversations about DEI and affirmative action especially after Scotas' anti-affffirmative action ruling a few years ago there is one very clear method of affirmative action that I for one haven't seen mentioned the elite college conveyor belt in college I basically thought that no one has money
• 18:30 - 19:00 for college everyone goes in and just digs themselves a lovely little hole of student debt and I thought it was the expectation that no college would allow you to attend unless you could fully finance your experience with debt so I never had a stress but it was because I was not well informed about how to complete college in a financially responsible way so every time I filled
• 19:00 - 19:30 out the FAFSA and I just said yes maximum loans of whatever I didn't know the difference between subsidized or unsubsidized because I was just taking whatever was offered um and though I had that um I still throughout college had two jobs two on-ampus jobs always and that was an expectation to be able to pay rent buy groceries um I was
• 19:30 - 20:00 involved in a lot of extracurricular activities that cost a lot of money so I wanted to not cut myself short on those experiences so being able to afford that was still um difficult at sometimes because having two uh two jobs and then wanting to still fully participate in whatever clubs or um kind of outside classroom things um was still something I wanted
• 20:00 - 20:30 to pursue and was not going to cut out of my experience now despite what politicians and pundits on the right want you to believe kids from wealthy families are much more likely to have an unfair advantage getting into top universities than minorities or disadvantaged kids from a 2017 article on CNBC quote "At 38 colleges in America including five in the Ivy League more students came from the top 1% of the income scale than from the entire bottom 60%." It also points out that at every one of the top 65 US universities the median parent income is over $100,000
• 20:30 - 21:00 that figure ranges from $272,000 at Washington University in St louis to $104,900 at UCLA reading that stat makes me lol because in my hometown there was like an extremely elite Montasauri school that was like a theater school and to a lot of elite colleges and I remember a lot of them would always go to Washington University in St louis and I was like what is going on what is this randomass school I've never heard of when the rest of them are going to like you know Dartmouth and Princeton and everything turns out a lot of rich kids
• 21:00 - 21:30 go to that school my uh producer here who uh whose family is from St louis and has spent significant time there is informing me in real time that it's a beautiful campus but also like I don't understand anybody paying that much money to go to school in St louis the St louis hater has logged on i will let I will let the uh what do you what do you call people that live in St louis st louis St luigi's do you call people who live St louisans anyway St louisans sound off in the chat what do we think about Washington University of St louis
• 21:30 - 22:00 the point is if a student's family is wealthy enough and they want their kid to go to college which is basically always the case they can always make that happen quote in one famous instance resurfaced this week by Vox and originally put forward in Daniel Golden's 2007 book The Price of Admission Jared Kushner's wealthy father pulled every string he could reach to get his son into Harvard he called two senators to whom he had donated to have them call the Ivy League school on his son's behalf and he directly pledged a gift of $2.5 million on his own merits Jared would not have gotten in since he
• 22:00 - 22:30 lacked both the top grades and the SAT scores we can also just look at the celebrity college admission scandal to see how this plays out with people who are arguably slightly less nefarious than Jared Kushner's father although didn't uh Felicity Huffman end up having to spend a little time in the clink for this and according to one 2023 study by Raj Cheddy and David D deming of Harvard University and John Freriedman of Brown University further confirms the advantage rich kids have in elite college admissions quote "The economists find that wealthy children even when
• 22:30 - 23:00 they have comparable SAT and ACT scores to less affluent kids are much more likely to get into these elite schools a student from the richest 1% of American families i.e earning over $611,000 per year is twice as likely to attend an elite private college as a middle-class student from a family earning between $83 and $116,000 a year with the same academic credentials and the study found that legacy kids only had an advantage over other students with similar credentials at schools where they were legacies and that the advantage didn't always transfer to other elite schools meaning that they were not in fact
• 23:00 - 23:30 standout applicants on their own merit and the study also found that rich kids are more likely to have a resume padded with impressive extracurriculars than middle or working-class kids with similar academics and this is where we take it back to our friend Sophia who shows us just how important it can be to have things like elite athletics on your resume to compensate for things like being a dumb dum i'm kidding she wasn't a dum dum in this story but you know if your parents can pay for you to become an elite level fencer as a teenager you're probably going to do okay and by the way the sports advantage in college
• 23:30 - 24:00 admissions is actually most significant for you guessed it white students quote "A University of California Riverside study cites research that found 43% of Harvard's white students were admitted through what researchers termed an ALDC status athletic legacy deans preferences and children of faculty between 2014 and 2019 and that threequarters of these students would have been rejected without their ALC status comparatively less than 16% of Harvard's black Asian and Latino students were ALTC students sports admissions generally leave behind
• 24:00 - 24:30 economically disadvantaged students especially those from inner cities while college football and basketball garner the most media attention elite universities also fill the rosters of golf fencing crew tennis and lacrosse teams among other country club sports and these sports are mostly fostered in private prep schools or public schools in predominantly white and wealthy school districts and it's important to note that even if Mel's crappy public school did for some reason offer fencing or crew she wouldn't have had time to become really really good at those sports because she had to work a job
• 24:30 - 25:00 which is the case for many middle and lower income students i felt a difference of financial responsibility but it was a slow creep um because eventually my first year I just assumed everybody is here via debt and then I did join a sorority and so you have the full experience of students who are on full ride scholarships at college who are in this a sorority you have me who has to you know work two jobs and then
• 25:00 - 25:30 eventually you had people who are fully supported by their parents they don't have to have jobs while they're in school they feel comfortable they're you know from an outsers's perspective oh they're going to get food more than I am so then I felt like I saw the discrepancies between the h you know people who have a lot more financial stability and people who do not at that time whether that is accurate or not again I don't know because somebody
• 25:30 - 26:00 might have looked at me and thought oh Sarah gets whatever you know she would like she's in this very expensive sorority that costs a lot of money that she doesn't have to spend in order to graduate from college um so I guess it's all public perception of um kind of the responsibility that I felt a lot of that I put on myself of I didn't feel comfortable asking my parents for extra money for this extra
• 26:00 - 26:30 money for that hey groceries are really tight this week i tried to keep it all very to myself because I knew and I still had that understanding that oh parents are stressed at home about money i do not want to be you know the kid that was always asking for money uh grocery money laundry money so I just tried to kind of push through in that sense so the pressures that I was feeling or expectations were a lot of self-imposed and it's also worth noting that generational wealth doesn't just
• 26:30 - 27:00 get you into colleges disproportionately especially the elite ones it also makes you vastly less likely to graduate with student loans which completely changes your adult finances because some people's experience of what generational wealth means only really comes in the form of having their college tuition paid for but even this gives them a huge leg up financially quote "A recent study showed that Americans making student loan payments have up to 36% less saved for retirement compared to those without such debt additionally nearly half of millennial and Gen Z retirement
• 27:00 - 27:30 investors surveyed say that they've dipped into their retirement savings to cover expenses with student loans being the leading culprit basically not having debt doesn't just mean not having this burden to pay back every month it means being able to take advantage of long-term wealth building a lot sooner if you're able to invest more aggressively right out of school that means that your investment will have a ton more time to mature and enjoy that compound interest for which the major ingredient is just a longer time to do it and the value of these educations is
• 27:30 - 28:00 not just limited to the degrees that you can get or the academic status they confer you or even whether or not you graduate debtree it's also about the people you meet there and that means everyone from future potential employers to your literal spouse which brings us to the next chapter chapter three the cost of making connections when it comes to getting a job especially at the entry level getting your foot in the door is very often a case of just knowing the right person which tends to be easier for people who come from generational wealth and one thing that makes wealth
• 28:00 - 28:30 accumulate and perpetuate in elite circles is the fact that they often become deacto professional social and romantic circles for example the iconic scene from Sex in the City where the women are reading through the New York Times wedding announcements is just as true today as it was then you know who those women marry the Roman numeral guys charles Duffy Anderson IV ding ding ding making connections is by far the most important work of the wealthy and often this happens through mergers of family and romance whose father knows whom and who married into which dynasty by the
• 28:30 - 29:00 way much conversation has been had about why Big married Natasha and not Carrie we could unpack this for years and yes there are multiple reasons but the number one is that Natasha is from his social class harry's a brokie with a shopping addiction who writes a sex column and lives in a ramshackle apartment natasha is the kind of woman who gets you printed in the New York Times wedding section and when it comes to our careers according to recruiting firm Robert Walters personal connections almost always help with the job search and especially for the already wealthy quote "Nearly four in five employers
• 29:00 - 29:30 prioritize personal connections over skill sets when making hiring decisions with 68% of highly qualified candidates being overlooked in favor of those with better personal connections or networks according to a recent survey into DEI in the workplace just 29% of employers said that they value a candidate's qualifications and skills in equal measure to the people they know this type of judgment impacts employees significantly 62% feel as though their progression opportunities are hindered even though their skills or output
• 29:30 - 30:00 qualify them for a promotion 70% of employers admit that their personal relationships also influence promotion decisions with just 11% saying that they have measures in place to prevent workplace nepotism the study reveals a stark gap in career advancement between the classes upper class professionals have a 71% higher chance of getting a promotion than working-class counterparts and they also have a clearer vision of how to climb the career ladder while 70% more workingclass professionals are unsure of what they need to do to progress and coming from a family with an established
• 30:00 - 30:30 corporate presence isn't just valuable in terms of who they know or the financial benefits they offer they literally teach you the norms culture and language of corporate life before you're even out of high school so much of being professional is all about these subtle unspoken codes most of which you wouldn't even learn at college unless you already happen to be surrounded by people who'd mastered them thinking about my early job search I definitely didn't rely on any connections um the field that I wanted to go into at the time was communications and um nobody in
• 30:30 - 31:00 my family like had any connections in that it and really in the US it's just me my parents my sister um and and that was the family that we had to to rely on and even just thinking about the you know where I grew up there wasn't it was like a smaller town and to really be able to make more money in that field I would have to be looking for jobs in the city so I really just relied on applying
• 31:00 - 31:30 making sure that I had a great cover letter but outside of that you know that networking aspect never knew about that until like a couple jobs into my career i never put any focus on that never knew how to do it um I knew about like career fairs and like networking there but I thought it was just limited to that i didn't think there was anything outside of that that I really needed to focus on um but yeah I again it just whichever
• 31:30 - 32:00 job I was able to get my foot in the door with an interview just based on applying and hoping that a recruiter likes my resume likes my experience that's that's just what I relied on yeah and having these connections doesn't just help you get a job or to keep a job it means having more stability basically from the first minute of your career quote "Before turning 30 nearly onethird of Americans will work at the same firm as a parent in those jobs these young adults earn almost 20% more than they
• 32:00 - 32:30 otherwise would and due to gender sorting the tendency of men to work in higher paying professions than women and existing wage gaps white men from high-income families benefit from nepotism far more than poorer people women and minorities do and interestingly when you look at the data you can see that this kind of chain of nepotism and connections actually also plays out in blue collar fields this is not to say that these advantages are on the same level as massive generational wealth but it is another way in which who we know ultimately shapes almost everything about our lives in fact some
• 32:30 - 33:00 data indicates that bluecollar careers like manufacturing have just as much if not more of a nepatism problem in their hiring practices than Fortune 500 companies and these professional connections are still a kind of wealth because they limit opportunity for others regardless of qualifications when literally about a third of American workers under 30 have the job they currently have because a parent works there it means that children born to parents who for whatever reason can't offer them that same pipeline are basically starting from several yards behind and even if your parent figure
• 33:00 - 33:30 isn't necessarily doing the hiring perhaps their successful career will make it so that you for example can afford to do an unpaid internship for this company rather than having to work jobs that actually make money which goes back to our earlier point about wealth above all providing a smooth and gentle transition into adulthood and the fact that theoretically we're all up for the same jobs or could all take the same internships is part of what makes the gaslighting so unbearable because it's never acknowledged that for example only a certain portion of the population can work for free so taking it back to Mel
• 33:30 - 34:00 and Sophia given that Sophia went to an Ivy League school and married someone from another elite family it's very likely that her current job in the publishing house a famously very competitive industry was at least in part started by family connections or at minimum the ability to work for free for a while as someone who's published many books I can tell you that the publishing world loves making people work for free whereas Mel even if she was able to take such an internship likely had to make it work while also working multiple jobs and when we were talking about Mel and
• 34:00 - 34:30 Sophia's lives we mentioned the fact that their housing situations even at 40 years old are drastically different but this makes sense when you consider chapter 4 how generational wealth ruins housing for the rest of us now many of you sent me this story from New York Magazine recently which talked all about generational wealth and the divide in places like New York City between people who can and can't afford to essentially be adults and I can tell you firsthand being a homeowner here in the city who did not come from wealth but was financially privileged enough to have a
• 34:30 - 35:00 large down payment that for the most part getting into this housing market is just a matter of having people who can help you and with housing becoming increasingly out of reach regardless of where you live in the country this divide between who can and can't afford to buy even a very basic home is becoming worse each year because more and more home buyers are depending on their parents to get their foot in the housing door which we can assume means fewer people without family assistance even buying homes at all as of 2023 quote "Approximately 38% of first-time home buyers under the age of 30 relied
• 35:00 - 35:30 on either a cash gift from family members or an inheritance in order to afford a down payment on a new home purchase illustrating the reliance that young home buyers have on family largely in the senior demographic." And it's not just here by the way in Canada quote "Since 2015 the share of firsttime home buyers who received financial help from family members rose from 20% to 31% and though the trend has leveled off in recent years it has not declined 40% of people requiring a gift from their parents to buy a home is literally insane i just want us like I know that
• 35:30 - 36:00 our brains are completely cooked by late capitalism and we think all of this is normal i mean I know we don't think it's normal but we've kind of just resigned ourselves to a kind of acceptance but like these numbers would be unthinkable even just like a few decades ago in America it used to be that the cost of homes were at least somewhat aligned with what one person was paid most people used to buy a home on one salary and very few of those people worked white collar jobs or had a college education the fact that now close to half of people need to come from some kind of wealth in order to buy a home
• 36:00 - 36:30 like we're so cooked and this isn't even taking into account the huge rise of all cash offers especially in super competitive housing markets like New York City quote "This April 64% of Manhattan's home sales were all cash that's almost double the number of large US metros 39% and a much larger difference than just 2 years ago this trend is significantly a result of high mortgage rates which incentivize home buyers to use their savings rather than to borrow money from the bank also low housing supply and high demand means
• 36:30 - 37:00 that buyers are eager to stand out to those selling their properties including by promising an immediate cash payment and there are many reasons why this is extremely bad for housing markets but one of them is that it ensures basically no one but the richest of the rich or at least the most liquid can actually buy homes and for the vast majority of younger adults looking to enter the housing market that huge payment is going to have to come from their parents i actually know a few people whose parents gave them like literally seven figures to buy a home in New York City which you know shout out to them if my parents were going to write a check for
• 37:00 - 37:30 a million plus to me i mean can I sit here and say that I have the political conviction I guess to be like "No thank you i'll I'll I'll struggle." Um I probably wouldn't i'd probably take that money too but it is just wild as hell to know you're just like going to brunch with people whose parents are like "Here's a million dollars." But that's the reality of a lot of New York City especially here in Manhattan and it's important to note that owning a home isn't just about getting into the home in terms of financial benefits because even though owning a home can come with a lot of potential drawbacks especially if something goes wrong it also confers
• 37:30 - 38:00 huge perks quote "At the federal level a substantial share of public subsidies for housing goes to homeowners through the federal home mortgage interest deduction at an annual cost of around $30 billion roughly equal to expenditures on housing vouchers and orders of magnitude more than annual federal expenditures for public housing homelessness or the construction of new rentals more than 90% of the value of the HMID goes to households earning over $100,000 and the program disproportionately services white families because of New York City's low
• 38:00 - 38:30 home ownership rate it also significantly underserves New York City's households and as we mentioned even just buying a home at all is insanely more expensive than it used to be according to nationwide data from the Federal Reserve Bank of St louis between 1963 and 2023 when adjusted for inflation the most expensive time to buy a home since 1963 was 2022 the average home price in the US was $552,600 whereas in 1963 the average house price in the US was just $19,600 which adjusted for inflation
• 38:30 - 39:00 would only be $196,000 in 2023 and the home ownership question also takes us back to something we mentioned earlier between Mel and Sophia which is the difference in adulthood of having to take care of parents versus being taken care of by parents for many lowerincome Americans their home is often literally the only asset they have for a lot of boomers who are able to get into desirable housing markets when they were much much cheaper they may have essentially nothing saved for retirement they may have rising
• 39:00 - 39:30 medical costs they may have all kinds of financial burdens that will now fall to their adult children that wealthier children don't have to worry about but they're also in a position where essentially their entire nest egg is tied up in their home so for many Americans keeping these housing costs exorbitantly expensive and ensuring that you're going to get paid many orders of magnitude over what you initially paid for your home is not just a huge win on the housing market it's the difference between being able to retire or not so even if your parents are not one of the parents who need to be taken care of
• 39:30 - 40:00 later in life you're likely still impacted by the extent to which aging Americans are relying on a completely outof whack housing market in order to retire which then trickles down to screw over their own children who can't buy a home so essentially today the only surefire way to be getting into a home at least in a lot of markets is to call up mom and dad and ask them to cut you a check but if we reverse it and we look at another key difference between Mel and Sophia as 40-year-old women we see that it is the cost of child care which brings us to our final chapter when did
• 40:00 - 40:30 child care start costing as much as rent even anecdotally as someone who does not want children does not have them I can see a massive difference in the people around me who have children who can rely on their parents for child care or helping to pay for child care versus the ones who can't and while it is not the same thing as literally cutting a check for your child being able to provide them with free child care or at least heavily subsidized child care in 2025 is essentially akin to a massive grant because whether or not you've personally
• 40:30 - 41:00 noticed it the cost of child care has become completely unsustainable and the pandemic has had a huge impact here but the uncontrollably growing cost of child care has been an issue for literally decades according to an analysis from Business Insider quote "The US Department of Health and Human Services considers child care affordable if it costs less than 7% of a family's income but nearly 2thirds of parents including 95% of low-income parents spend far more than that only 2% of counties in the entire analysis fell within the limit
• 41:00 - 41:30 meaning that by the government's own definition child care is unaffordable in 98% of counties across the country and like everything else in our country these costs of child care wouldn't be such a big deal if wages had actually kept up with the growth of production but spoiler alert they didn't and our politicians are so out of touch about this that they think that the answer for everyone should just be to ask mom and dad according to unfortunately our vice president JD Vance quote "One of the ways you might be able to relieve a little bit of pressure on people who are
• 41:30 - 42:00 paying so much for daycare is maybe grandma and grandma want to help out a little more or maybe there's an aunt or uncle who wants to help out a little more if that happens you relieve some of the pressure on all the resources that we're spending on daycare which again even as someone who is not at all implicated personally in this scenario I find to be so offensive and presumptuous because let's be very clear in this country grandma and grandpa and especially aunt and uncle and whoever the hell else you're thinking is going to pitch in those people have to work the people who are least likely to be
• 42:00 - 42:30 able to afford child care are the people who are also least likely to be able to depend on other family to just randomly work a full-time job for free for them and as someone who used to be a full-time child care professional if you don't think that that is a job that someone is going to have to make huge sacrifices in order to do for you if you're asking them to come regularly you are delusional and by the way even if the solution were "Hey guys live intergenerationally so you can help out." Spoiler alert no one can afford to buy homes anymore unless they already have generational wealth in which case they probably aren't that worried about the cost of child care and for women
• 42:30 - 43:00 like our friend Mel who is the highest earnner in her family and still stretched extremely thin not only is leaning on well-off family members to pitch in for free not an option she's having to lean in for them and so currently in my situation I'm not like supporting them in a major way i send my mom some money per month just to make sure that she has enough to take care of my grandma just because there's a lot of expenses in that um and my mom's already retired so that check isn't that large
• 43:00 - 43:30 um so just to offset some costs I spend some money per month but again it's nothing major maybe a hundred or $200 a month but yeah I did keep in mind just whenever I was thinking about what I was going to what career I wanted to get um what jobs I had throughout education that eventually I wanted to set my minds on if my parents needed support I'd be able to support them and not to mention many Americans don't even live in close proximity to family members especially
• 43:30 - 44:00 people like Mel who moved to places like New York for work opportunities and of course the importance of building community and having a village is crucial and maybe in his heart of hearts that's what JD believes he was getting at but I doubt it i cannot trust a man who does his eyeliner like that but when your village is already struggling to take care of themselves they cannot be the structurally sound foundation that you need and if you're thinking well child care is a strain but it's just a couple years and then they can go to public school ignoring the fact that public school depending on where you live in this country is a vastly different experience and that is also
• 44:00 - 44:30 tied to the local wealth in the area that that school is found daycare and preschool have a huge impact on the rest of your child's trajectory so even those very first years are a part of the generational wealth pipeline preschool attendance whether public or private has been shown to increase a child's chances of graduating high school on time and attending college and metaanalyses of evidence across decades of evaluation research indicate with confidence that preschool programs have a substantial impact on early learning and development positive impacts on children's
• 44:30 - 45:00 development include improved language literacy math social and emotional outcomes as well as physical health and research also shows that positive effects extend to dual language learner children and children with special needs and early childhood education is crucial for long-term success which is why public programs like New York City's free 3K and preK are so important because they give kids access to this education regardless of their parents socioeconomic status and we mentioned this before but it's worth reiterating the flip side of this of not being able to afford child care is having to afford
• 45:00 - 45:30 caring for your parents which is only a burden on people in this country who don't come from generational wealth basically take any group of friends in any city and you're going to have like half of them who are like "Wow I really hope my parents don't like fall down when they're shoveling snow or something because if literally anything goes wrong then I am completely screwed financially because they don't even have enough money to retire let alone take care of themselves if they're injured let alone deal with being disabled and I'm already going to have to subsidize their living costs for the foreseeable future even if they do retire with quote unquote full
• 45:30 - 46:00 health and the other half were like I hope my parents fall when they're shoveling snow so I can finally get my inheritance i'm kidding they're probably not thinking that but they are thinking can't wait till mom and dad retire so we can go to like Italy more and i don't know i feel like I see people on my social media feeds whose parents are like traveling to Europe all the time and taking the whole family and I'm just like is that what life is like for boomers in parts of this country like unimaginable anyway because in all seriousness for people without generational wealth and for people like Mel who carry a lot of responsibility for their families it is not a question
• 46:00 - 46:30 of being taken care of by their parents it's a question of taking care of their parents or elder relatives at a certain point in their lives quote according to a MetLife study adult child caregivers in the US suffer a cumulative loss of nearly $3 trillion in earnings for sons the average in total lost income including wages pension and social security is $28376 16 per person and the news is even worse for daughters who lose an average of $324,044 in total earnings as a result
• 46:30 - 47:00 of their caregiving responsibilities $325,000 is crazy you guys these poor women florence Pew was right in Little Women marriage is an economic proposition don't sit there and tell me that marriage isn't an economic proposition because it is you got to marry someone who can help you take care of your parents now as with most of these questions of there's something really wrong in our economy and what can we do to fix it the answer is going to come down to policy we need reform around our inheritance tax around the marginal tax rates of the wealthiest in
• 47:00 - 47:30 this country we need to raise wages we need to strengthen social security we need to reduce the cost of child care and many more things than that unfortunately we could have had it all with Bernie Rolling in the deep and we'll link you guys to a ton of resources in the description if you want to start helping move in the right direction on any of those fronts because listen assuming nothing goes catastrophically wrong and at this point who knows we will eventually have midterms and in the meantime we have to keep fighting for the policy changes that we need to fix some of these
• 47:30 - 48:00 structural issues and to make it very clear that fake economic populism backed by culture war nonsense is not a real replacement for actual economic reform because not all things were better in for example the 1950s as a woman as an LGBT person a person of color as basically anyone who wasn't a white man there were clearly many ways in which we were found lacking let's say as a society in the 1950s but economically for the working and middle class a lot was better and there can be a future with a much more inclusive and diverse
• 48:00 - 48:30 and robust middle class it's not a question of an imagined future it's a question of recreating things we've already done when we were a much less productive efficient and advanced society but in the meantime while we are fighting the good fight the most important thing we can do for our day-to-day mental health is to detach ourselves from this matrix that convinces us that generational wealth is normal to play out in the way it does that there's something wrong with us for not being able to achieve the same milestones when we had none of the same resources to get there or that we
• 48:30 - 49:00 shouldn't be immensely proud of ourselves as children who did not come from those kinds of backgrounds or have those advantages for having gotten where we are in the first place not having generational wealth was not something hugely impactful to me because I had kind of a warped definition of it until very recently my warped definition was that generational wealth means you have a trust fund means that having a job or career is like a fun side gig for you that you don't have to have it's all
• 49:00 - 49:30 gravy and really you're just cruising through life which is not it's a part of that definition but it's definitely not all-encompassing so when I thought about that lifestyle it was similar to thinking about what would happen if I won the lottery it was an idea that's fun to dream about and brainstorm you know all the cool things that you could do if money was not an object but it was almost just an exercise in futility eventually now growing into it having
• 49:30 - 50:00 more conversations with my friends about what generational wealth really could be beyond that limited scope of definition um it's a lot more nuanced I would say so being able to say my upbringing without generational wealth even in the sense of financial stability and comfort knowledge that if I do hit a a large financial pitfall and I need support um then I could have someone to lean on i
• 50:00 - 50:30 would say that is also somewhat in you know on the spectrum of the definition of generational wealth growing up I feel like it was very stable and great but the economy and upbringing was so different than what I'm seeing now that if I had an income a household income similar to my parents today I would not be able to have a house to support three kids and make sure they get all of the um things that
• 50:30 - 51:00 I received as a child so that is a little bit worrisome because now it's a lot of pressure to find a career and keep up with a career a lot better than my parents in order to keep it the same in order to stay middle class um in order to have similar happiness and you know opportunities for myself and my kids so there is a lot more pressure now to maintain or do better than
• 51:00 - 51:30 um and it's sometimes disheartening when you think that you're putting in a lot of effort and pursuing all of um kind of hard work and career fields just so that you can have the same amount of kind of lifestyle and effort that you were receiving as a kid they are planning to have children in the future in a few years and it would definitely their upbringing would definitely look different i my jobs actually started off
• 51:30 - 52:00 in like higher education and so now I have an understanding of that system that you know I didn't have growing up and one of the things that I've been trying to save up for and really put our focus on is once we get to the point where we have children um I'd be able to spend more time with children whether that means taking time off of work or just switching to part-time and being more involved olved in like the
• 52:00 - 52:30 opportunities that they can find and also one of the things and this is something that my mom did when we were little like starting at like four or 5 years old she'd always whenever we'd go like grocery shopping or like any type of shopping she'd always give us like this tiny amount of money to be like "Okay like whatever you want like budget you have $5 think about how much it costs how much the tax could be." and like from a very early age she did instill a knowledge of what spending is
• 52:30 - 53:00 into us and that's something that I would definitely want to continue but also now include the financial education I've gotten now of like investing um making sure like how we're saving up for big purchases and just those types of habits um starting them off early on with that so that that would be like a huge difference for them and just thinking about you know even college opportunities like there's trades as well there's not like there's other
• 53:00 - 53:30 avenues of generating wealth that we didn't know about that's something that I I would want my children to have the opportunity to learn about and grow in because when you think about how uneven the playing field is like for example a college education putting one person into a lifetime's worth of debt versus barely making a dent in another person's bank account and how little it gets talked about people without generational wealth are made to feel like they're the outliers in this situation i highly recommend the trust fund episode of
• 53:30 - 54:00 Dairy Girls on this subject just dip into your trust fund i do it all the time i did not know about this did you know about this oh it's a shout out Dairy Girls but in reality the vast majority of Americans do not have access to these things it's just not those Americans who are controlling our narratives our politics and our media so even if the elite institutions and the people who populate and control them are not going to stop gaslighting anytime soon we can stop gaslighting ourselves by thinking that generational wealth
• 54:00 - 54:30 isn't I'm going to be generous and say 82 to 83% of the answer of where adults find themselves anyway stay curious stay angry but definitely stay moving forward and I'll see you back here next month