Do you need rich parents to get ahead?

I’m going to start this essay with a confession. I am a trust fund baby.

Well, not really (unless my parents have an account lying around that I don’t know about). But it would be ridiculous to write an essay about parental financial privilege without acknowledging mine.

My parents paid for my college, which meant I got to graduate and start my career without a dollar of student debt. They let me stay with them for a couple months during the COVID-19 pandemic instead of my cramped NYC apartment. They still pay my cell phone bill (though, to be fair, it’s financially logical to stay on a family plan). And yet, since leaving home at 18, I have largely thought of myself as financially independent and have never asked my parents for money or financial support.

I am very, very proud of the financial foundation I have built, and for a long time I thought of that foundation primarily as the product of my own work.

But both things can be true: I support myself, and my parents’ money changed the trajectory of my financial life.

This distinction matters at a time when it feels like the only way to become financially successful is to have parents who were already financially successful.

When the basic markers of adulthood (college, housing, marriage, childcare, moving out of the house) have become prohibitively expensive and harder to access through your own income, we’ve started relying more heavily on our parents to fill that gap.

The Bank of Mom and Dad has become the most important financial institution in America.

When we think of a trust fund baby or someone getting money from their Mom and Dad, we picture a giant check or a full cash offer on a house. But oftentimes the biggest advantages are invisible. Parents can give you stability, or connections, or knowledge, or extra support. More than anything, they can offer optionality.

For example, my parents gave me a debt-free start and the knowledge that if things went sideways, I had somewhere to go. They taught me early about the importance of saving and investing, and are a phone call away any time I have questions about a work contract or job interview.

I personally wouldn’t consider that a trust fund, but it is an enormous financial advantage that’s shaped the risks I’ve taken, every career decision I’ve made, and the fact that I’ve been able to build the life I have. I don’t experience my life as funded by my parents. But their money and stability has had a huge impact on my financial life.

We live in an inheritocracy

Around 70% of Gen Z adults now say they’re financially dependent on their parents (31% say their parents pay all of their bills), and 42% of all adults rely on their parents for financial support. Nearly half of recent college grads (49%) moved back in with their parents after graduation, and 46% of them still live there. One of my favorite pieces of coverage is the Intelligencer article titled, “How many New Yorkers are secretly subsidized by their parents?”

And this is all happening against the backdrop of the great wealth transfer: Roughly $84 trillion in boomer assets are expected to pass to the next generation, much of it already flowing well before anyone dies.

Parental wealth increasingly determines how quickly — and if — you can reach the traditional markers of adult life. Homebuying is the biggest one: A LendingTree survey found that nearly 40% of recent buyers got help from family on their down payment. But it’s also weddings, college, childcare, living in an expensive city, paying off grad school, doing an unpaid internship, taking a lower-paying job that might lead somewhere better. These are all things that require a financial buffer most people can’t build on their own.

Maybe it’s not such a good thing that we’ve built an economy where your parents increasingly determine who gets security and opportunity, while pretending that most people’s outcomes are just evidence of individual merit.

The self-made myth

We tend to think about economic success through income — how much you yourself earn. But a growing body of research suggests it’s a lot more about stability, and stability is not always guaranteed by your paycheck. Can you afford a surprise medical bill? Can you survive a layoff? Can you afford to leave a bad situation?

Sure, you can save and invest and do all the “right” things. But as inflation has outpaced wages and the cost of housing, healthcare, and education have eaten up more and more of people’s income, it’s become increasingly difficult to build real financial security on a salary alone. This is true especially in your twenties and thirties. This is where parents come in, and increasingly, this is where parents have to come in.

Let’s imagine two young college graduates making the same amount of money ($60,000). Person A’s parents covered their tuition, allowed them to live at home for a couple of months to save, and send them $500 when their car broke down on the way to work. Person B graduated with $50,000 in student loan debt, who pays 45% of their income to rent because they don’t have another choice, who has to put a $500 car repair on their credit card.

Even though these two people make the same amount on paper, they are likely coming to the table with completely different relationships with spending and saving and risk and asking for help.

The real advantage is optionality

Parents can offer you financial capital (AKA money), obviously. But they also provide:

• Cultural capital: For example, understanding how college admissions work, what careers exist, what you should wear to an interview, how to negotiate a salary, how investing works, which opportunities to go for.
• Social capital: introductions, relationships, professional references, the ability to call someone who knows someone. (This is often considered nepotism.)
• But critically, there’s also psychological capital, or optionality, which I think is the most important one. It’s the relief of knowing that you have a back-up plan, a safety net.

So when we talk about parental privilege, it’s not just that some people get a bigger head start, it’s that some people get to play a completely different game. When you have a safety net, you can afford to be strategic. You can take the job that pays less now but leads somewhere better later. You can take two years to do your start-up. You can quit. You can wait. You can say no.

This directly contradicts the idea of the “self-made man” that’s so embedded in our meritocratic country. Many of the people we celebrate as self-made or who brag about being from humble beginnings often received some form of familial help. Exhibit A:

Exhibit B:

I remember when I interviewed a tech founder on his “rags to riches” story (his words). He waxed poetic about his days starting out as a “broke college kid” to building a multi-million dollar company, how he “survived on ramen” and “didn’t buy new clothes for years”. After pressing him on how he was able to not make any income for two years while building his company, he offhandedly mentioned his mom paid his rent.

We tend to brush aside that kind of support as an aside instead of recognizing it as a huge part of how risk was even possible in the first place. His optionality wasn’t simply the result of grit. It was at least in part due to a parent who could afford to fund it.

Today, the cost of starting out has ballooned to the point where most people cannot get ahead unless they have support from their parents, whether that’s a check or just a bedroom to move back into while they save. And in some cases, the parents themselves can’t even afford it.

I think the reason why so many young people are living at home today isn’t because this generation is lazy or entitled or whatever people on Twitter are saying. I think it’s in part because the path to financial independence has gotten harder, so staying home has become a realistic wealth-building strategy. But we haven’t updated our cultural narrative to match: We still talk about living at home like it’s embarrassing, because we still believe (or pretend to believe) that everyone should be able to do this on their own.

The nepo baby debate is about the wrong thing

Why are we so bad at admitting we got help from our parents?

Getting financial support from your parents can carry real stigma in this country, because we’ve attached so much moral meaning to being “self-made.” But how are we even defining self-made? We don’t have language to describe the difference between someone whose parents pay their cell phone bill and someone whose parents bought them a $4 million brownstone. Instead, everything is collapsed into “nepo baby” or “trust fund baby”, terms that have become so broad they’ve almost lost meaning. A loose definition:

• A nepo baby inherits access, aka connections and opportunities thanks to help or support from their parents. (It’s also interesting that we almost exclusively apply this label in entertainment and the arts, as if nepotism doesn’t exist in investment banking.)
• A trust fund baby inherits capital, or family wealth that reduces the financial consequences of, well, living.

There is absolutely no shortage of discourse about nepotism, which is really a conversation about “fairness” and if someone “deserves” what they have. And most people often see this debate in black and white, when really there’s a ton of nuance. For example:

• Your parents give you $5 million
• Your parents give you a $300,000 down payment
• Your parents pay your graduate school tuition
• Your parents pay your undergraduate college tuition
• Your parents pay your rent while you’re doing an unpaid internship
• Your parents let you live at home for two years
• Your parents keep you on the family phone plan
• Your dad gives you his old car
• Your parents don’t give you a single dollar today, but you know they have $4 million and you’re probably going to inherit some of it

Are all these children not self made if they accept these things? Where is the line? We have no coherent way to decide which forms of help “count,” and I think that’s because the nepo baby discourse is really a proxy for a deeper resentment and reflection of our current economy.

But obsessively policing who qualifies as a nepo baby, or judging people for accepting help from their parents, doesn’t actually address anything. It ignores the structural factors that made parental help so necessary in the first place.

So what do you do with this?

We spend a lot of energy resenting people who got help or feeling shame about accepting it. I think way more of our energy should be spent recognizing that we have an economy in which housing, education, and ordinary adulthood have gotten so expensive that family money now largely determines who gets security and who doesn’t. Some ad hoc thoughts and advice I have here:

Think through how your own parents influenced how you think about and behave with money. How they talked about money, how they behaved with money, what they modeled for you. Understanding where your financial instincts come from can help you make better money decisions that feel like yours.

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Advantage and achievement can go together. I can be proud of building my career and also acknowledge that graduating without student loans made building wealth easier. You don’t need to downgrade your accomplishments because your parents helped you. But it’s worthwhile data in helping you understand your own financial life.

Be careful about benchmarking yourself against somebody based only on age or salary. So your friend bought a house at 28 and their parents gave them the down payment — that may feel unfair to you. In some ways, it is unfair! But that doesn’t change reality and definitely doesn’t help your situation. As I’ve written about before, how you perceive your financial life is often more powerful than the reality, and constantly comparing yourself to people with invisible advantages will wreck your relationship with money.

If you’re someone without a family backstop, prioritize optionality itself. That may mean holding more cash than someone whose parents could bail them out, keeping your fixed costs lower, paying special attention to disability and health insurance, and so on. Flexibility can have real value here.

If your parents can help, have the upfront convo. A lot of families avoid talking about money entirely, which means the help that does happen comes with expectations and invisible strings. If you’re in a position where parental support is on the table (or already happening), be direct about what the arrangement actually is. Is it a gift or a loan? Does it come with expectations about your career, your choices, your life?

Direct the frustration where it belongs. I think it’s reasonable to be frustrated about the unequal system we live in. But rather than directing that frustration at individuals, the more useful move is to ask why the system requires that kind of help in the first place. Support policies that actually reduce the dependency on family wealth: affordable housing, student debt reform, paid internships, stronger public infrastructure.

The goal should be to build an economy where access to ordinary adulthood doesn’t depend quite so heavily on whether your parents happen to have enough money to help.

This is also, by the way, a big part of why money complicates the parent-child relationship. Support that gives you economic independence can also create emotional dependence on the person providing it.