How does it work with rich parents?

Associate 1 in IB-M&A

I'm a recent mba grad from a MBA business schools">M7 program...grew up in the midwest and was a military officer for several years after undergrad so b school was my first introduction to the corporate world/high finance. 

I was honestly shocked at the percentage of my classmates that came from very affluent upbringings (ie parents in top 1% of income earners). Most if not all these classmates still took out loans to pay for their mba, and the majority have since moved to mediocre apartments in NYC. Kinda surprised their parents didn't pay for their schooling/apartments...I see a lot of gorgeous 24 year old girls in NYC with shit jobs who live in nice apartments in West Village. Personally I think it's good parenting to not spoil your kids/teach them financial responsibility, but that's just my two cents..

For those with rich parents, what have you seen as the norm in regards to this?

Not sure if you are trying to make this a gender thing or not, but I see men and women with “shit” jobs with nice apartments/lifestyle, it comes down to parenting styles. I have friends with rich parents who are “artists”, DJ, etc but live absurd lives in nice “hipster” apartments. 

My child is too young for college, but I think learning the value of a dollar is extremely important. I plan on my child having summer jobs, taking some loans for college (especially grad school maybe not undergrad) and them not being able to get whatever they want. 

I haven’t seen a norm, although it seems more like people pay for a lot of stuff but I think that’s just what I notice more because it’s so egregious. When you see a spoiled kid you remember it much more than a grounded child. 

I think there’s more of an expectation that kids going to b school and who’ve spent half a decade in the real world pay for school as opposed to undergrad. I also expect while there might be some level of parental assistance right out of college, an MBA is expected to have their shit together. Most firms offer large enough sign ons to cover moving and getting set up (security deposits, furniture). The apartment piece is just reflective of people renting based on what they earn as opposed to parental subsidy.

I would classify my parents as wealthy ($20-30MM NW). They paid for my siblings and I to go to private K12 and private universities. And for graduate school for those of us who attended straight from undergrad. 
 

Speaking for myself, if I returned to get an MBA now, no way I would even think of asking my parents to pay for it. There’s a lot of generational wealth in the circle we run in and there’s a pretty wide spectrum ranging from (a) completely on your own to (b) your parents still give you/your wife an allowance, pay for your kids school, and bought you a house. I’m blessed that I think if something happened (my wife or I lost our jobs and were at risk of losing our house, or couldn’t afford to take care of our kids), I could probably fall back on my parents. Short of that would ever think of asking them for money nor do I think they would offer it. 

My parents are in the $5-10mm net worth bracket, so pretty well off but not uber rich by any means. I grew up in Miami and went to high school with a decent amount of kids whose parents are stupid rich, like $30mm+. Almost all those kids still live in Miami and are complete degenerates (didn't do well in high school, went to shit undergrad schools, making a living as a no-name dj or club promoter, etc). Pretty much all of them were given super nice condos in Miami from their parents.

Not to sound like a pompous dick but I went to an ivy for undergrad, and I noticed a huge difference in the culture when I moved off to college and eventually NYC... Education is definitely prioritized in the northeast vs where I grew up in Miami. Anyone else notice anything similar? or am I just full of shit on this lol

OP what proportion of your classmates come from very affluent upbringings would you say? like 80%+ of people you meet (no joke)?

My parents aren't wealthy, but they make and have enough to help me out. My father offered to cover half my rent in NYC for like 5 years but I personally turned it down because I don't want to be dependent on them for anything, even if this isn't technically dependance since I can afford to pay it myself on my income. I just like being more independent with my finances. 

Is this a bad financial decision? Probably. They say no strings attached, but I don't believe them. In college though, without an income of my own, I absolutely did go apeshit on his credit card. I also personally went to public school my whole life, while my brother went to private school his whole life. That's just how things kind of fell together. My parents wanted me to go to private at one point, but I didn't want to switch schools. It ended up fine all things considered. Part of the reason they offered me so much money was that they saved a ton when I went to public school, so my brother didn't get the same offer. 

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I went to a public high school in CA with a lot of mid-affluent ppl ($5mm - $20mm), and a few $50mm+.

I noticed a lot of the rich rich kids were pretty good people. Ex. one kid's dad was an exec at a company that exited in the $bns and was obviously loaded. The kid drove an AMG to school and had a lot of cool tech. But all in all, was very smart and accomplished In his own right, and had absolutely no ego/disdain for other students. The kid ended up going to a HSW. 

Most of the mid-affluent kids were retarded pricks. Took a lot of pride in their parent's accomplishments and were incredibly materialistic. Most ended up do some bullshit email marketing job or stagnated in an SDR role (don't have the drive to succeed in a sales role), and of course, worked in client service for their parent's PWM. Most of them are just coke-addicted retards that hang around our hometown gym. Oooo they also sell solar now. 

Teaching your kid math and reading early as well as the basics of not being a prick paid off for most of the rich rich parents. A lot of the mid-affluent parents fucked up letting their kids flunk through school and constantly reward them with designer shit and porsches. 

My dad (20M NW) told me I would need to pay for my MBA, but if I went into public school teaching he would buy my first home lol. MBAs have such high expectations for earnings in addition to years of workforce experience, I understand why parents (especially though who built their own wealth) would have higher financial expectations.

Bruh how do y’all find out your parents’ nw lmfao my dad won’t tell me shit

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I don't really know anyones whos parents paid their rent...but while its unspoken about who paid for the house...I have noticed several people I'm friends / friendly with getting houses they clearly can't afford once they start having kids. Must be nice. 

This thread makes me think I should try to raise $ for our fund from rich parents of WSO users 😂 

“I see a lot of gorgeous 24 year old girls in NYC with shit jobs who live in nice apartments in West Village”

God this annoys me so much because I see it too. They either have sugar daddies, don’t give a damn about saving money, or have a fat trust fund. Also I feel like women are more likely to live together with multiple roommates to save money on rent but then use that saved money to travel and/or buy luxury stuff. 

I know a lot of people at an MBA program whose parents pay for 100% of tuition and they are totally normal and down to earth, hardworking, motivated and very well educated. I think the “learning the value of a dollar” is pretty over blown. I think there are ways to teach the value of a dollar and also pay for something like grad school. 

My dad has a NW of 20M and I haven’t gotten much/ any money since I was 18, my school was paid for and part of my rent at university but other than that I’ve been on my own in term of expenses. My last year of college I went into bad credit card debt at the time it was 11k and felt like a nightmare to pay off but I didn’t want to ask my parents for the money. I would love to have the ability Just to be handed everything but my dad has come from nothing and he won’t let that happen unfortunately

Just had a conversation today with my dad pertaining to family money. A relative recently visited that I knew was well off, but it’s become increasingly obvious to me as I have gotten older (and found his instagram) that he’s a lot more wealthy than I imagined. I asked my dad where the money comes from and he juked it like prime Michael Turner, but basically my great grandpa started a business (3rd world country) which was passed down to 4 brothers. Each brother got a quarter: 2 stayed in the country, one moved to another country where he died and his son inherited it all, and the other brother came to America (my grandpa).

My grandparents live with my dad’s sibling in a small house ($550k). The other two brothers live in our home country in multi-million $$ compounds. Not sure if my grandpa blew all the money or just doesn’t spend it - his English isn’t the best and we just say “hi how are you” when we talk. Sounds like we (my grandpa) still owns parts of all the stuff we own overseas, but my dad wouldn’t expand on this. He did mention that now that I’m older, I will begin being told stuff and to not tell my cousins. My dad is the oldest sibling, and as the male, he’ll inherit everything.

It’s interesting to me because my dad’s cousin who runs the main business with his dad (very smart guy who took over the reigns when his dad died) lives in a $10M compound with security and travels the world, meanwhile my dad’s family lives a very middle class life. Any luxuries we in America have are funded with self-made funds. Will be interesting to see what happens as everyone gets older.

I guess everyone's parents are worth 20 mill + these days.... 

God is my Father so jokes on yall. The Lord is my shepherd

Funny.  My wife and I watch a show on Netflix called Singles Inferno.  It is Korean, and the guys and girls are good looking, and supposedly looking for love.  Most looking for fame.

It takes some time but eventually you find out the age and occupation of the contestants.  You find out the contestants are very accomplished and some come from very rich families.

My wife remarked that that sucks, these already rich kids get a platform to market themselves.

We did contrast the Korean dating show with American dating shows - and it’s a lot more trashier.  So a more “egalitarian” platform, where you can get famous and/or make a fool of yourself.  The Americans seem less accomplished (but who knows if they came from generational wealth, or they just auditioned well).

Anyways, a bit of an observation.  In most societies, if you’re from a rich family, you can do things that make you more interesting.  You can build a platform for yourself because you are interesting.  And then you can accelerate that growth via media.  Definitely takes hard work, but the first part - being interesting - is what you build off of.  Doesn’t take rich parents, but your parents need to see that.

It will be no coincidence that once many of these people hit 30 or 35 they immediately purchase a multimillion dollar residence and no longer seem concerned about spending a few thousand on xyz.   Paw paw usually releases the funds around that age under the condition they are working.  Oh, many will also stop working once that clause has been met. Surprise  surprise. 

It's not typical for post-MBA associates to come from wealthy backgrounds.  That path is more merit-based, i.e. you had to do decently well in some pre-MBA career, then get into b-school, then prove your chops in the MBA recruiting process.  Also, that crowd is later to the game for one reason or another, and often times that reason is they didn't attend a target undergrad or in many cases, didn't know the IB route when they were in undergrad.

It's much more typical for post-college grads in IB, and NYC generally, to come from rich backgrounds.  Knowing that landscape early in college is a big factor in landing something, and obviously rich kids will know that landscape better.  They have a leg up in getting into the right colleges too.  Last but not least, as you point out, it takes rich parents to afford that life on an entry-level salary.  Even an IB analyst who might make enough to "afford" a decent place the west village, would rather go cheaper unless his parents are super well off.

del

1. How do you know that people in your program have parents who are in the 1%? (Not accusing just asking). It would seem somewhat improbably that all of the people besides you are in the 1%, maybe its just the people mentioning it the most so it "seems" that everyone is (isn't that how social media works?).

2. The real answer to "how it works with rich parents" is, everyone is different. The saying with money is, one generation earns it, the next spends it, the next wastes it. It's a lot easier to spend money when someone gives it to you and you don't earn it. If people are getting an MBA, maybe their parents are smart enough to make them earn it. 

3. Not to throw shade on anyone, but the OP's observation of "gorgeous 24 year old girls in NYC with shit jobs who live in nice apartments", I don't want to say that's far off (probably some of the things I said in point 1), but OP is somewhat correct. Just taking an observation, there are probably more marriages where the husband is making a ton of money and the wives job is just to be hot, then the reverse. So some of these young girls are raised by woman who put looking hot on a pedestal, and the cycle repeats. Very similar to how they say if a toddler falls down, if its a girl we coddle them, if its a boy we tend to tell them to be a big boy. Much as its probably hated by some people, there are woman out there whose job it is to just be hot or make a living off their looks. Harder for men to do that in a way. 

As background my parents are relatively wealthy ($5m-$10m in NW) through my dad's career as well as inheritance from my grandparents. They immigrated to the US from a 3rd world country where extended family on both sides have been involved with pretty lucrative family businesses. My parents were one of the few family members that moved out of the country and it was less about the incentives of money / finding a better life and more about country stability and carving their own path. Growing up they had the means to enroll my in private school and pay for my tuition in college.

A lot of my peers when I was younger were wealthy as is the nature of private school and it was a mixed bag. Some kids would get new luxury cars for turning 16 while other's drove their dad's old beater car to school. I think one of the main difference was the better off kids were given a lot of personal attention vs. trying to pacify them with material items. 

For me personally, my parents thankfully paid my college tuition and offered to pay for an MBA if I ever went down that route (probably won't). They also offered to pay for my rent out of college, but I declined as that felt kind of weird. In their minds they're not big spenders and would rather help me with their savings now than wait until they pass away, which I appreciate. They'll pay for larger purchases (e.g., house repairs, baby stuff, etc.) here and there to help out and I know where they're coming from so I'll usually accept. For me I just take it as motivation to be mindful of my spending and figure out how I can be a good steward of whatever I save / receive from them. 

I'll eventually inherit a portion of their wealth and would want to do the same for my kid too. Financially, I would hope he / they would have a similar mindset of wanting to be a good steward of the resources they've been given.

A lot of it depends on the upbringing and the status of the family itself.  In the Northeast you have a lot of legacy WASP families that care a lot about extending the family name through generations.  If you have 4 generations of Harvard grads, the parents want to make sure that their children don't screw it up and make sure they are capable in their own right.  Same thing with recent immigrants, they teach their kids to be hungrier given how the parents' upbringing was.  Then you have more recent self-made wealthy people who may not care too much about their children's future career goals other than them being happy.  There's no right answer, but I've encountered the full spectrum of wealthy people.