Saturday, April 5, 2014

The financial success we don't earn

Recently, I read a book about how wealth perpetuates inequality, specifically how it motivates wealth/success differentials between whites and blacks.  The author, Brandeis professor Thomas Shapiro, argues that assistance through wealth transfers plays a crucial role in white families' ability to buy housing & access to better school districts, and accumulate wealth.  Inheritance and financial assistance for a timely down payment amount to a large difference in outcomes for families with similar income.  There were layers & layers of more disturbing racially-motivated findings on top of that, but one thing was quite unfairly, unsurprisingly, constant:

Everyone had a narrative for their own lives built around hard work and perseverance.  Even (especially?) when that was largely a simplification and all-around dismissal of a whole host of other factors.  "Our retirement savings?  All ours, we worked for them.  We worked hard.  Our 401Ks, IRAs, they're the result of a lot of work.  The money is all our own, we earned it."  So the families said.  What else had the families disclosed (through directed questions, if not right away)?  Having college paid for, having assistance with a down-payment for a house, money to furnish their abode, cars gifted by family, vacation provided by parents, money from inheritances paid out early.  Some of these were 'loans' except ... nobody was rushing to pay the money back, or really intending to.  They were gifts, transfers of wealth from their family to them.

It's a fact of life that it's remarkably easy to remember all the things you do for others, and to forget the many things others do for you.  It's even easier to remember everything you did for yourself - all the hustling, the hours, the deliberate choices.  Doesn't it feel *so* much better to have a life that's entirely self-determined, to have just yourself to thank for your own success?  Except, oh wait.

We don't live in a vacuum, we live in a world with many people where we're not all on a level playing field, and many of us are fortunate to have family, communities, and resources that have enabled us to succeed, especially financially.  The inconvenient truth of the matter is that while you might have earned and contributed all the money in your 401K yourself, every other financial aspect of your life has affected your retirement savings.  If your parents paid for college, provided you with health insurance, paid for your cell phone, financed your wedding, gave you a place to stay while job-hunting, bought you a car, or paid the security deposit for your apartment, they've directly contributed to your financial well-being.

It's so important not to forget all the financial help we get along the way.  On an individual level, I'm all about owning my choices, mistakes, decisions.  But ignoring my position and privilege in a system would make me a total asshat.  So I'm taking a moment to be thankful for things outside of my control that contributed to my financial well-being.  It's humbling to remember that my amazing parents, the ones who spent more on my & my brother's activities & education than on their mortgage, are the biggest reason I'm in a good place financially.

What kind of family help do you think has the most impact on someone's finances? What financial assistance are you most grateful for?  What assistance do you take most for granted?

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