Speaker 1: Hello.
Speaker 2: My name's Santasha Nabananga Bamblet. I'm a proud Yr the
Speaker 2: Order Kerney Whalbury and a waddery woman. And before we
Speaker 2: get started on She's on the Money podcast, I would
Speaker 2: like to acknowledge the traditional custodians of the land of
Speaker 2: which this podcast is recorded on a wondery country, acknowledging
Speaker 2: the elders, the ancestors and the next generation coming through
Speaker 2: as this podcast is about connecting, empowering, knowledge sharing and
Speaker 2: the storytelling of you to make a difference for today
Speaker 2: and lasting impact for tomorrow.
Speaker 1: Let's get into it.
Speaker 3: She's on the Money, She's on the Money.
Speaker 4: Hello, and welcome to She's on the Money, the podcast
Speaker 4: for millennials who want financial freedom today for a change.
Speaker 4: I'm joined by Victoria Divine A. Yeah, thank you so
Speaker 4: much for people, I mean, yeah, thank you so much
Speaker 4: for joining me.
Speaker 1: No worries, thanks for having me. What are we talking
Speaker 1: about today?
Speaker 4: There's a term we've been hearing a lot of lately
Speaker 4: in the media in everyday conversation. You guys have been
Speaker 4: messaging us. I think you know what I'm going to say, Yeah, inflation.
Speaker 4: It's not inflation. It is close kind of Not really.
Speaker 1: It's not even close. I can see what we're talking about.
Speaker 1: And you know what, that was a stab in the duck.
Speaker 1: What are we talking about today?
Speaker 4: Back today, we're talking about the bank of mum and dad.
Speaker 1: I would like a bank of mum and dad.
Speaker 4: It would be so nice.
Speaker 1: Did you grow up with a bank of mum and dad? God? No, neither,
Speaker 1: you know, no, no, no, no. I mean in a
Speaker 1: small way, potentially, yes, and we'll get into that. But
Speaker 1: I don't think I have a bank of mum and
Speaker 1: dad in the way that people are assuming a bank
Speaker 1: of mum and dad. I more have the financial security
Speaker 1: of knowing that if I was ever up, you know,
Speaker 1: sh one t Creek without a paddle, my parents would
Speaker 1: come and do absolutely everything that they could. But yeah, no,
Speaker 1: I don't have parents that are going to give me
Speaker 1: a house to shop at any time soon.
Speaker 4: Sure that is interesting. So there's like security of mom
Speaker 4: and dad.
Speaker 1: I feel like I feel like there's lots of different levels,
Speaker 1: and we'll get into that today.
Speaker 4: Sure. I guess what we'll start with is what is
Speaker 4: the bank of mum Dad? What does it mean? Why
Speaker 4: is everyone talking about it? Yeah?
Speaker 1: Yeah, yeah, So, as I said, before. I think that
Speaker 1: there are a number of different levels of it, and
Speaker 1: we'll talk about that, but the bank of Mum and
Speaker 1: Dad is quite literally just getting money from your parents
Speaker 1: instead of the bank. And obviously then each individual arrangement
Speaker 1: is very different, but they can look like lots of things, right.
Speaker 1: They can look like having access to money from your
Speaker 1: parents if you get into an emergency or you're in
Speaker 1: a bit of a pickle. It could be having less
Speaker 1: financial anxiety because you aren't afraid to miss out on
Speaker 1: a shift at work because if you fall short, there's
Speaker 1: going to be some help there. You might be able
Speaker 1: to take on a really valuable unpaid internship, which is
Speaker 1: a different story because I don't think unpaid internships should exist. Yes,
Speaker 1: but you might have that privilege while at university because
Speaker 1: there's no pressure to support yourself one hundred percent by working. Obviously,
Speaker 1: other specific support could also look like having an allowance
Speaker 1: from your parents or rent, or having your bills or
Speaker 1: your car or any other type of expenses paid for.
Speaker 1: It could be literally anything. It could be your parents
Speaker 1: gift a new money for a house deposit, or paying
Speaker 1: for holidays, or I went to university with people where
Speaker 1: their parents paid all their rent and all their bills
Speaker 1: until they graduated, and then they started paying for things
Speaker 1: if they got a job. Mustiness in Mumba Na's. It's
Speaker 1: one of those things that everybody's individual circumstances are really different.
Speaker 1: And I'm quite ambivalent about it, Like I don't actually
Speaker 1: care if you have a bank of mum and dad
Speaker 1: or not, but I think if you have that, we
Speaker 1: should be acknowledging that privilege and we should be talking
Speaker 1: about it. Because we keep throwing this term of the
Speaker 1: bank of mum and Dad around as though it's a
Speaker 1: really big thing. It's because it actually is, and we're
Speaker 1: going to talk about it. So when it comes to
Speaker 1: property ownership, we hear that term a lot, especially in
Speaker 1: the media, because I feel like you saw that article
Speaker 1: the other day where the like dad in Sydney got
Speaker 1: frustrated that his kid couldn't get accepted for a rental
Speaker 1: so he bought him like a three million dollar house.
Speaker 1: To see that that is real, I thought that was
Speaker 1: a Bituda advocate title yessnews dot com and I was like, oh, okay,
Speaker 1: that's legit happening. It's just so far from my reality
Speaker 1: that I just thought it was a joke, but it
Speaker 1: could look like a lot of different things. Obviously your
Speaker 1: parents buying house for you, all the way through to
Speaker 1: things like being a garran Taur where there's not actually
Speaker 1: an exchange of money, but your parents have assets that
Speaker 1: you can then rely on to get yourself ahead in life.
Speaker 1: It's not always a straight line of Mum and Dad
Speaker 1: have money and they gave it to you. Mum and
Speaker 1: dad might not actually have cash, but they have assets
Speaker 1: that you can then rely on, so there's a lot
Speaker 1: to it.
Speaker 4: God, they must be so nice, Emma benadh, my gosh.
Speaker 4: The reality is that for many people the bank of
Speaker 4: mum and dad or bomad.
Speaker 1: You've just come up with that bomad.
Speaker 4: Do you want to Can we call it that?
Speaker 1: Yeah, that's good bomad.
Speaker 4: It saves like a nanosecond, so you know, yeah, that's
Speaker 4: actually really efficient.
Speaker 1: This conversation has not been ralroaded at all but introduction. Yeah, bomad.
Speaker 4: But no, the reality is that a lot of people
Speaker 4: don't have access to bomad. No, but let's talk about
Speaker 4: some of the practical and mental health realities of.
Speaker 1: This totally, and it can present in a number of
Speaker 1: different ways. So children who don't rely on the bank
Speaker 1: of mom and dad. Often have to prioritize work over
Speaker 1: other things such as social outings, and I feel like
Speaker 1: you've probably got some really good experiences here back to
Speaker 1: share a little bit later. But they might also have
Speaker 1: to prioritize a solid paycheck over a learning opportunity that
Speaker 1: might put them into further debt, like they might have
Speaker 1: to take out some more hex loans and that might
Speaker 1: increase their prospects later on, but they don't actually have
Speaker 1: that opportunity. They might feel really guilty if they do
Speaker 1: need to ask for money or feel as though they're
Speaker 1: in debt for asking their parents for help. And it's
Speaker 1: obviously tough too for parents who are willing to help
Speaker 1: then can't. And I think that needs to be addressed too,
Speaker 1: because I think a lot of people put pressure on
Speaker 1: themselves if their parents and feel really awful that they
Speaker 1: can't then be that bank of mom and dad, like
Speaker 1: maybe their friends can be to their children. And I
Speaker 1: just I don't think that's a judgment that anybody should
Speaker 1: carry on themselves, Like it is what it is, and
Speaker 1: you shouldn't feel bad about it. At the end of
Speaker 1: the day, kids need love and that is it. But
Speaker 1: they will often feel guilty if their child struggling and
Speaker 1: they just don't have the opportunity to help, which would
Speaker 1: make anyone feel bad, right like you just want to
Speaker 1: swoop in and look after people.
Speaker 4: I know that would actually be really tough. I know
Speaker 4: that my mom struggled without a fair bit growing up.
Speaker 4: I kind of had to pay rent very early on,
Speaker 4: which is like, no, you know, not a big deal,
Speaker 4: but I ended up kind of being in this vicious
Speaker 4: cycle of having to pay my way to live very young,
Speaker 4: not being able to go out and study instead of work.
Speaker 4: So I tried to balance both from a young age,
Speaker 4: ended up just immediately in the workforce. Still to this day,
Speaker 4: I kind of, you know, I don't have any qualifications,
Speaker 4: I never really had time to had to work full
Speaker 4: time immediately, and I feel like that's something a lot
Speaker 4: of people can relate to. But here I am, and
Speaker 4: I'm happy about it. I feel like it, you know,
Speaker 4: it makes us all strong, resilient people having to kind
Speaker 4: of find your own way financially. Hope that doesn't sound
Speaker 4: silly proud, but.
Speaker 1: I don't think it sounds silly at all. I feel
Speaker 1: like there's a level of independence that comes from you
Speaker 1: as well, that a lot of people would be envyous off,
Speaker 1: like you're so easy to just go oh, I want
Speaker 1: to do this or I want to do that. And
Speaker 1: I think another thing that a lot of people, you know,
Speaker 1: listening to this are going to go, oh, yeah, I
Speaker 1: have bank of mom and dad, but there's a lot
Speaker 1: of guild associated with it, or it could actually transpire
Speaker 1: into financial control or you know, you feel like you
Speaker 1: owe your parents for that. And I know that a
Speaker 1: lot of this sounds airy fairy. I'm like, oh, mom
Speaker 1: and Dad just gave you some money, but that could
Speaker 1: actually be a motion of control. And we've seen that
Speaker 1: in our community before, where parents are like, well, I
Speaker 1: give you money, and I give you this life, and
Speaker 1: I have made you and I've done this, and you
Speaker 1: need to do these things for me. So it actually
Speaker 1: isn't always a good thing. We just want to talk
Speaker 1: about it a little bit more holistically and I think,
Speaker 1: you know, cast a little bit more light on it
Speaker 1: because I feel like if you have access to the
Speaker 1: bank of mum and Dad, you don't usually talk about it.
Speaker 1: But it's been really large, Yeah, like in Australia it's massive.
Speaker 4: Yeah, absolutely, that actually brings me to my next point.
Speaker 4: How common is it in Australia?
Speaker 1: So BOMAD, the Bank of Mum and Dad was actually
Speaker 1: in twenty twenty one, the ninth largest Australian lender. Why
Speaker 1: isn't that wild? And we know that the top four
Speaker 1: banks obviously take out the first four positions, but the
Speaker 1: Bank of Mum and Dad dished out get this, thirty
Speaker 1: four billion dollars in loans throughout the year, according to
Speaker 1: an analysis by the Research of Digital Finance Analytics or DFA.
Speaker 1: Isn't that wild?
Speaker 4: That is so outrageous.
Speaker 1: But I was also talking to the team about this
Speaker 1: and like, a couple of people on our team do
Speaker 1: have parents that you know have lent them money historically?
Speaker 1: And I was like, how did they measure that? And
Speaker 1: then I asked one of our team members, I was like,
Speaker 1: did your parents, Like would your parents ever like you know,
Speaker 1: were survey on that. No, So, like, thirty four billion
Speaker 1: dollars is massive, But that's what they tracked, not what's
Speaker 1: going in and out or the financial security that these
Speaker 1: parents are providing. And thirty four billion dollars is more
Speaker 1: than what actual lenders like the Bank of Queensland HSBC AMP,
Speaker 1: the Heritage Bank, Beyond Bank and the Greater Bank actually
Speaker 1: currently have in outstanding loans. What those are big banks? Yeah.
Speaker 1: And it also found that sixty percent of first time
Speaker 1: home buyers are getting financial help from their parents, with
Speaker 1: parents contributing an average of ninety two thousand dollars in
Speaker 1: twenty twenty one, which is enough for a twenty percent
Speaker 1: deposit in most parts of Australia. Wow, that's a lot
Speaker 1: of money.
Speaker 4: It's a lot of money.
Speaker 1: It is so much money.
Speaker 4: Yeah, I am curious about how they tracked that, contracked
Speaker 4: that shared spreadsheet that only rich parents use.
Speaker 1: Do you know how much money mum and dad were
Speaker 1: looking after me with at Union, like when I was like, hell,
Speaker 1: I need money for grocer. Like, they're not tracking that stuff.
Speaker 1: It's just the official stuff. Yeah, like that maybe the
Speaker 1: property stuff, but obviously so much more. Only get what
Speaker 1: you get when you look at analysis than they give
Speaker 1: you absolutely everything. But it's one of those things and
Speaker 1: I was like, it has to be more than that,
Speaker 1: it has to be has to be.
Speaker 4: Well, it seems like it is such a big thing,
Speaker 4: So why are we just hearing about it more lately?
Speaker 1: Because the world's getting more expensive. Beck the world is
Speaker 1: getting more expensive. We're talking about the rising cost of living.
Speaker 1: We're talking about I feel like during periods of rising
Speaker 1: cost of living, which this isn't the first time the
Speaker 1: cost of living has increased. We have been through ebbs
Speaker 1: and flows and recessions before. But during that period of time,
Speaker 1: people are more likely to want to point out privilege,
Speaker 1: and this is a very good way of doing it.
Speaker 1: Talking about the bank of Mum and Dad is often
Speaker 1: not just a pragmatic thing of us being like, Wow,
Speaker 1: here's how people get into their first homes, here's how
Speaker 1: people finance their lives. As you can tell from the
Speaker 1: way the media is talking about it, there's a sense
Speaker 1: of entitlement, like oh, well, the bank of Mum and
Speaker 1: Dad will cover that, and like I don't think I've
Speaker 1: ever used personally, and this is probably not a good thing,
Speaker 1: but I've never used the term bank of mum and
Speaker 1: Dad as a flippant term. It's always been like, oh, well,
Speaker 1: it might have been coming from the bank of Mum
Speaker 1: and Dad if there was a question around, Oh, I
Speaker 1: wonder how that person got into that one point two
Speaker 1: million dollar house. I didn't realize they were saving a
Speaker 1: deposit kind of vibes. So I feel like there's a
Speaker 1: lot of judgment and it usually comes during times of stress.
Speaker 1: And obviously the property market is absolutely booming, and home
Speaker 1: prizes push ownership further out of reach for first home buyers.
Speaker 1: So we start going, well, how on earth up these
Speaker 1: other people who I thought were in the same position
Speaker 1: as me getting into that property, and I think we
Speaker 1: just start talking about it more. It's not a new
Speaker 1: or novel concept.
Speaker 4: Right, that makes sense. That makes sense, and I guess
Speaker 4: it kind of makes people feel better, like if you
Speaker 4: can't get to yourself, don't worry. Maybe some people have
Speaker 4: a bit of a helpy.
Speaker 1: Heck, yeah exactly. And I feel like it makes us
Speaker 1: genuinely feel better to know, Okay, it's not just me struggling.
Speaker 1: Everyone's struggling, but if they're doing well, I don't know.
Speaker 1: It's an interesting concept and I had I was actually
Speaker 1: doing a presentation yesterday. I do a lot of speaking engagements.
Speaker 1: When I was at one and we were talking about
Speaker 1: tall poppy syndrome. Someone asks like, you know, how do
Speaker 1: you deal with that? What does that mean? How does
Speaker 1: that work? And I said, it's interesting because the more
Speaker 1: successful you get. And I guess this really ties into
Speaker 1: the bank of mum and dad. People want to really
Speaker 1: support you when you're the same as them, we're on
Speaker 1: exactly the same page. But I find the more successful
Speaker 1: you get, the less people want to see you be
Speaker 1: successful because others. And this is such an Australian thing,
Speaker 1: and I find it really gross. People want to see
Speaker 1: you do well, but they don't want to see you
Speaker 1: do better than them, and I find that's so gross.
Speaker 1: And that plays into this tall poppy Australia thing. And
Speaker 1: I feel like this is where the mum and dad
Speaker 1: thing comes in, where you go, I want to see
Speaker 1: you do really well, Beck, But then if your parents
Speaker 1: went and bought you a house, I don't want to
Speaker 1: see that. That's rude, that's entitled, you know, cut you
Speaker 1: down for that. I just think that's not the way
Speaker 1: that she's on the money community acts like. I don't
Speaker 1: think any of us feel that. We know we're not
Speaker 1: like that. Oh, but it's an interesting concept that I
Speaker 1: think in Australia we talk a lot more about the
Speaker 1: bank of mum and Dad than they would internationally, because internationally,
Speaker 1: cultures are different. Internationally, there are a lot of different
Speaker 1: cultures where it's actually expected your parents move in with you,
Speaker 1: it's actually expected that you provide for your Like, there
Speaker 1: are just so many different ways of approaching money. But
Speaker 1: I genuinely feel like people want to see you do well,
Speaker 1: but they don't want to see you do better than them.
Speaker 4: Yeah yeah yeah, or at least if you do well,
Speaker 4: people kind of want to see you struggle to get that.
Speaker 1: It's so frustrating, and it happens in every aspect of life,
Speaker 1: right whether you are at UNI, people really want you
Speaker 1: to do well, but then if you go get a
Speaker 1: better job than them, they're not that impressed.
Speaker 3: By it all.
Speaker 1: They feel like that's some type of personal attack, you know,
Speaker 1: even with She's on the money, Like you see some
Speaker 1: people wanting us to do really well when we were
Speaker 1: tiny and struggling, and I couldn't favor episodes to be
Speaker 1: edited to now they're like, oh they're terrible. Rah ah,
Speaker 1: they're so commercial. It's like, no, we're the same people
Speaker 1: doing the same things, and we're just passionate about it.
Speaker 1: So it's an interesting concept, and I think the Australian
Speaker 1: tall poppy syndrome really plays into why maybe we are
Speaker 1: talking so much today about the Bank of Mum and Dad,
Speaker 1: and the media gets on it so much because the
Speaker 1: Australian media in particular, I think, really love a good
Speaker 1: tall poppy syndrome story, classic, classic, And we were just saying, like,
Speaker 1: you know, in different cultures and stuff, the I suppose
Speaker 1: like the dynamics, so just dynamics a little different. Do
Speaker 1: you feel like this would maybe be a thing for
Speaker 1: you know, in Britain for example, like in England or Yeah,
Speaker 1: so in England there is a from my understanding, a
Speaker 1: tall poppy syndrome thing going on too, But in America
Speaker 1: it's not that prevalent. It's just the you know, the
Speaker 1: land of the Great, Land of the Free. Everyone wants
Speaker 1: to do well. It's an interesting concept. I don't think
Speaker 1: it's international. But I think also like if you looked
Speaker 1: up the Bank of Mum and Dad and wanted to
Speaker 1: see what type of American media there is around that,
Speaker 1: I really don't think that there is much. It's a
Speaker 1: very Australian term.
Speaker 4: So interesting.
Speaker 1: I think it's a judgmental term too.
Speaker 4: Oh.
Speaker 1: I genuinely feel like it's quite judgmental, Like as I
Speaker 1: said before, like it's not coming from a place of love.
Speaker 1: It's coming from a place of us trying to give
Speaker 1: reason to why that person might be doing well right,
Speaker 1: because like the bank of mum and dad, that term
Speaker 1: there's a real sick got a real stigma to it, right,
Speaker 1: And they're doing that on purpose, not like, oh, she
Speaker 1: bought her first home. That's so beautiful. Yeah, her mum
Speaker 1: and dad were so supportive, Like, oh, I'm so proud
Speaker 1: of her and her parents worked really hard and they
Speaker 1: must be so proud to see her get into for
Speaker 1: her first home, like they've worked hard all their lives.
Speaker 1: How good is it that they can see their child,
Speaker 1: you know, being really successful too. That's not how we talk,
Speaker 1: is it. And beck I guess to take it a
Speaker 1: step further, we're not going, oh my gosh, that family
Speaker 1: is so smart. They've created this beautiful intergenerationational wealth. You know,
Speaker 1: they're buying properties and really supporting their children, but they're
Speaker 1: not relying on commercial entities to do that. They're just
Speaker 1: being self sufficient. Isn't that sexy? No one's saying that.
Speaker 1: They're saying it's entitled and intergenerational wealth is ekey and disgusting,
Speaker 1: and you know, someone would have been compromised along that process, Like,
Speaker 1: I just think it's so interesting because having come from
Speaker 1: a space where I worked with intergenerational wealth. So my
Speaker 1: experience historically as a financial advisor before starting She's on
Speaker 1: the money and before you know, actually getting to work
Speaker 1: on my passion project was working with multimillion dollar families
Speaker 1: and even billion dollar families and talking about family constitutions
Speaker 1: and how they would lend money to children to buy
Speaker 1: their properties or start their businesses. And it's really interesting
Speaker 1: seeing that dynamic because you get to sit in these
Speaker 1: meetings and I had no like I felt like a
Speaker 1: fly on the wall because that was so not my experience.
Speaker 1: Like if I needed to borrow fifty bucks from dad,
Speaker 1: I felt a bit sick asking. And I'm not saying
Speaker 1: Mum and Dad didn't do well. I just that was
Speaker 1: never something that made me feel good. Whereas these families
Speaker 1: are talking about, okay, cool, my son is bringing me
Speaker 1: a business plan in a couple of weeks and he
Speaker 1: wants to start this brewery and it's going to cost
Speaker 1: five million dollars and I think that's a good investment.
Speaker 1: I'm like, far out there are families having conversations like that,
Speaker 1: and again no judgment, like how cool is it that
Speaker 1: they can be self sufficient and create this life that
Speaker 1: they want to create. Like imagine you just waking up
Speaker 1: being like, you know what, start a brewery. I'll just
Speaker 1: ask Dad, what what I know?
Speaker 2: I know?
Speaker 5: Do you know what?
Speaker 1: I've always wanted to own a cafe?
Speaker 6: How about I just own a cafe? How about I
Speaker 6: just start a series of them? Because we've got the
Speaker 6: funding to do that. It's interesting as well, And I
Speaker 6: mean to go on another tangent. It's one of those
Speaker 6: things where I have always said from that experience that
Speaker 6: there are two really big differences between the wealthy and
Speaker 6: the not wealthy, and that's the wealthy have the ability
Speaker 6: to seize an opportunity. So you know, if they sought
Speaker 6: something for sale that would create more wealth, they have
Speaker 6: the ability to seize it.
Speaker 1: But you or I might sit down it might be
Speaker 1: a cafe. And I think that's a good example. You
Speaker 1: and I sit down and go, oh, well, that cafe
Speaker 1: is for sale far out It would be a goodbye.
Speaker 1: That cafe earns so much money. We do not have
Speaker 1: the opportunity to seize that. But then also the networking connections,
Speaker 1: you and I would never know that that cafe was
Speaker 1: for sale to begin with, So it's for me the
Speaker 1: ability to seize an opportunity and the people that you
Speaker 1: were surrounded by is often what, from my experience, differentiates
Speaker 1: the ultra high net wealth from even just the wealthy.
Speaker 1: And when you and I talk about wealthy, I'm saying,
Speaker 1: you know, you might become financially independent, you might have
Speaker 1: an investment portfolio that pays you an income. There's actually
Speaker 1: an entirely other level to that, and it's so interesting
Speaker 1: to learn more about it, right, Yeah, And the cafe example,
Speaker 1: I think is a very diluted down version of that.
Speaker 1: But you and I would never hear about the cafe
Speaker 1: because we're not the type of people that are in
Speaker 1: those circles to have those conversations. And even if we were,
Speaker 1: we'd be like, I don't know why I'm here because
Speaker 1: I can't afford to play here. But let's go back
Speaker 1: to the bank of Mum and Dad. But I think
Speaker 1: that's an interesting, I guess addition on what wealth looks like.
Speaker 4: Yeah, that's a really really good way to look at it.
Speaker 4: And it's it's so true. Like I remember I was
Speaker 4: thinking the other day, like why you know, right now
Speaker 4: we are trying to become financially free, and maybe if
Speaker 4: we have children one day, we would like to pass
Speaker 4: not money straight onto them, but the knowledge on you know,
Speaker 4: how to better yourself and be you know, financially free
Speaker 4: and all this kind of thing. That's what I'm going
Speaker 4: to use this term very loosely. NEPO Baby's parents done,
Speaker 4: not parents done.
Speaker 1: It's't that T shirt that says NEPO baby. I'm not
Speaker 1: on NEPO, but I just feel like it might be
Speaker 1: nice to wear that T shirt. I feel like I'm
Speaker 1: saying it with the word wrong too, NEPO. I don't
Speaker 1: know you no, I know what you mean in nepotism.
Speaker 4: And their parents wanted that for them, and they worked
Speaker 4: hard for that, and like, why has it got such
Speaker 4: a stigma? Why is it such a negative term, Like
Speaker 4: someone somewhere worked very hard for this.
Speaker 1: One hundred percent, and I think that their stigma actually,
Speaker 1: you know, breaking this down and having this conversation now,
Speaker 1: I think it actually comes from this concept of hard work.
Speaker 1: Your mum worked hard, Yeah, Like she probably worked harder
Speaker 1: than the average bear to put food on the table
Speaker 1: and look after you and like provide for you. So
Speaker 1: it's not actually that somebody worked really hard, because everybody
Speaker 1: works really hard. Like, and I've said it before, you
Speaker 1: cannot budget your way out of poverty. It's about education,
Speaker 1: it's about understanding, it's about access to resources. It's about
Speaker 1: you know, being educated to even know that you need
Speaker 1: to be educated to get to that next level. So
Speaker 1: I think when we say, oh, someone worked really hard,
Speaker 1: like taking it back, your mum worked really hard, and
Speaker 1: so did that person who has a ten million dollar business.
Speaker 1: But I guarantee you that person who has that ten
Speaker 1: million dollar business might have had access to different resources
Speaker 1: and different information and different ways of working. Because you know,
Speaker 1: you just don't know what you don't know. And it's
Speaker 1: not just oh, hey, here's this concept of compound interest
Speaker 1: and here's what superanuation is, and here's why you should
Speaker 1: be saving. It's not that it's access to opportunity. It's
Speaker 1: access to those things that you know. Your mum didn't
Speaker 1: have that. No one sat her down and said, hey,
Speaker 1: did you know that if you did this, this and
Speaker 1: this and this, like your entire situation would change. But
Speaker 1: what she did was work her butt off. So now
Speaker 1: you're in the position to learn that, and that's beautiful.
Speaker 1: And that's amazing. But I think that the judgment comes
Speaker 1: from people blaming it on hard work and then being like, no,
Speaker 1: but I work hard too, you do, you absolutely do.
Speaker 1: So I don't think we can say, oh, someone worked
Speaker 1: really hard for that. I think that's really good, but
Speaker 1: it really distills down the reality of the situation they did.
Speaker 1: But there's a lot of privilege there as well. Well,
Speaker 1: what opportunities did they have? What opportunities did they see
Speaker 1: that they knew to seize, Because there are opportunities that
Speaker 1: literally pass us every single day that we just don't
Speaker 1: see because we don't know that's an opportunity.
Speaker 4: Wow, I never even thought about like that.
Speaker 1: You can goose They just pass us by every day
Speaker 1: and you have absolutely no idea. So when someone invents something,
Speaker 1: you're like, oh my gosh, I've literally struggled with that
Speaker 1: issue for ages. That opportunity to invent that existed before
Speaker 1: they thought about it. But they thought about it. What
Speaker 1: was their education? Where did that come from? It's even
Speaker 1: about thought processes, right, it's even you know, going back
Speaker 1: to an episode we did earlier this year, mindset being
Speaker 1: more optimistic instead of pessimistic, having a mind frame of
Speaker 1: abundance literally changes the way that you see opportunities. So
Speaker 1: it's one of those things that, yeah, let's get back
Speaker 1: on track. But I think that that's worth calling out
Speaker 1: because it's not just hard work.
Speaker 4: Yeah. Perfect, Ye, I feel like we need to really
Speaker 4: absorb everything. How about we go for a really quick
Speaker 4: break a cup of tea after that? I think a
Speaker 4: cup might be nice.
Speaker 1: Yeah, do that.
Speaker 4: Welcome back? Was it nice?
Speaker 2: No?
Speaker 1: I didn't get a tea.
Speaker 4: I'm going to get right to that.
Speaker 1: I don't want to ruin the magic for people, but
Speaker 1: it was a fake break for us when we're recording. Yeah,
Speaker 1: like we say brain true and then they put the
Speaker 1: ad in so that I can pay you and I
Speaker 1: can pay the rest of the team. But yeah, I
Speaker 1: sat here for three seconds and then we started recording again.
Speaker 4: Wow, everyone's our secret now.
Speaker 1: But after this episode is recorded, I will be getting
Speaker 1: a cup of in between we're recording another episode.
Speaker 4: So I hope you get that tea.
Speaker 1: Eventually I'll get you a tea too. I'm really good
Speaker 1: at tea.
Speaker 4: They were talking about the Bank of Mum and Dad.
Speaker 1: We are so mad.
Speaker 4: You're talking about like the undercurrents and how it's kind
Speaker 4: of like secretly, you know.
Speaker 1: Yeah, it's not just hard work.
Speaker 4: It's not just hard work. Yeah, there are many aspects
Speaker 4: and elements to this, So I'd imagine that the true
Speaker 4: nature and the impact of bank of Mum and Dad
Speaker 4: would be hard to measure though.
Speaker 1: Yeah, that's why I was talking about that stat earlier
Speaker 1: when we said that Bomad had dished out what was
Speaker 1: at thirty four billion dollars. But how do you measure that? Like,
Speaker 1: there are so many families that would not talk about that, right, Like,
Speaker 1: and to go back to my wealth days and when
Speaker 1: I used to work, we worked with this client and
Speaker 1: he was really beautiful and like he was just one
Speaker 1: of the kindest human beings in the entire world. Had
Speaker 1: six kids. That's not actually true, he didn't have six,
Speaker 1: But I don't want you to be able to pinpoint
Speaker 1: this individual, so trying to change it. But he had
Speaker 1: a lot of kids, right, And he spent most of
Speaker 1: his time not in Australia because he had international companies
Speaker 1: that he ran, had you know, family here. His family
Speaker 1: didn't know that he was a billionaire. So we ran
Speaker 1: his family wealth division. We talked about, you know, what
Speaker 1: he wanted from his wealth what he wanted through his kids.
Speaker 1: His kids obviously knew that Dad did well. He did
Speaker 1: all of these things, but Dad also owned a whole
Speaker 1: heap of companies and really like parts of really big
Speaker 1: companies that if I talked to you about them, you'd
Speaker 1: be like, I know that, I know this. That makes sense? Yeah, wow,
Speaker 1: far out that is big dog stuff. His kids didn't
Speaker 1: know that. And it got to a point where his
Speaker 1: kids were at university and a few of them were,
Speaker 1: you know, at that stage where they were talking about
Speaker 1: what their jobs would be next, and he kind of
Speaker 1: had realized he wanted to extend the opportunity for his
Speaker 1: kids to potentially either run some of those businesses or
Speaker 1: be involved in those businesses because they were kind of
Speaker 1: family businesses and epic opportunities. But how do you bring
Speaker 1: that up? How do you go, Hey, so I've been
Speaker 1: trying to keep you humble for a little while, and
Speaker 1: actually we're billionaires. Yeah, so if you don't want to work,
Speaker 1: you don't actually have to. I just really wanted to
Speaker 1: teach you to be humble and self sufficient. That's actually
Speaker 1: a conversation that ended up happening. Wow, where you know
Speaker 1: they knew Mum and dad were doing very well. Like
Speaker 1: I mean, you don't accidentally own as many homes as
Speaker 1: they do, and you don't accidentally go to the best
Speaker 1: schools in the country and all of that other stuff.
Speaker 1: So they knew that they were privileged, but I don't
Speaker 1: think they knew to the extent. But what I do
Speaker 1: know for sure is that person never ever, ever, would
Speaker 1: have ever consented to doing a survey about wealth and
Speaker 1: how much that they had or how much that they shared. Yeah,
Speaker 1: absolutely not.
Speaker 4: Yeah, that makes sense. Also, I think you've narrowed it down.
Speaker 4: I know exactly who took him. Yeah, good good, I
Speaker 4: don't I don't know.
Speaker 1: It wasn't even a male. It sucks to me.
Speaker 4: My gosh, that was the internal misogyny in me.
Speaker 1: I said he, I said, hey, I said, hey.
Speaker 4: Oh good, Okay, wasn't the internal less and such any then?
Speaker 1: But did I just make that pod ole? Gosh, Wow,
Speaker 1: this is a You're right, you're right. Let's get back
Speaker 1: on track, because you're right. The true nature an impact
Speaker 1: of bloomad I just don't believe can be measured because
Speaker 1: in those circumstances, especially in high netwalthare lists, they're not
Speaker 1: going to share it It's interesting because you see those
Speaker 1: lists come out on Forbes, like the Forbes Rich List,
Speaker 1: which side note. I got a message from a family
Speaker 1: member ages ago when I made the Forbes thirty under thirty,
Speaker 1: and that was thank you. It was twenty twenty one
Speaker 1: and it was like the highlight of my entire life.
Speaker 1: But they didn't know the difference between Forbes thirty under thirty,
Speaker 1: which is like, you know, people crushing it in their careers,
Speaker 1: not necessarily rich, and the Forbes Rich List. And they
Speaker 1: thought that I'd made the Rich List, and I was like, no,
Speaker 1: but thank you for assuming and believing that maybe I
Speaker 1: could have.
Speaker 4: It's like the opposite of that conversation of telling someone
Speaker 4: you've been secretly rich. Now you tell your family I'm
Speaker 4: actually secretly poor.
Speaker 1: But the Forbes Rich List, right like lists the richest
Speaker 1: people in the world. And I remember seeing the Australian
Speaker 1: Forbes Rich List and going through it and being like, Coop,
Speaker 1: I've got clients richer than them. Coop got clients like
Speaker 1: met people richer than them. That's what's visible. That's when
Speaker 1: people are very happy to share their net wealth, or
Speaker 1: their net wealth is so obvious that you know you
Speaker 1: could work out. Okay, they own this big listed company
Speaker 1: that's worth X, therefore they're probably worth a minimum of
Speaker 1: ten million dollars. And plus, oh, we know that they
Speaker 1: have you know, family beach house importsy we know we
Speaker 1: can just google that that's worth seven million dollars. Like
Speaker 1: do you know what I mean? So some people's wealth
Speaker 1: is really and you can put them on a rich
Speaker 1: list and we can talk about the richest man in
Speaker 1: Australia and you don't actually know who the richest man
Speaker 1: in Australia is because wealth can be very secretive and
Speaker 1: with the right structures you will not find it, like
Speaker 1: you will not be able to see who's worth what
Speaker 1: and when and where? Insane, right, But when you start
Speaker 1: talking about stuff like that, you're like, wait, I thought
Speaker 1: that was the rich list and it is what it is. No,
Speaker 1: that's not how it works.
Speaker 4: Wowow, well, a lot of modest people out there, one
Speaker 4: hundred percent.
Speaker 1: And that's why we can never judge anybody.
Speaker 4: No, and you shouldn't. I guess we kind of you
Speaker 4: just kind of went over this. But do you know
Speaker 4: if there are any studies or metrics available for how
Speaker 4: it kind of impacts the property market? In first home ownership.
Speaker 1: Yeah. Look, I did a little bit of research, and
Speaker 1: I'm obviously very jaded by my experience to be like,
Speaker 1: that's not everything. So there was actually a research article
Speaker 1: published last year by a couple of economists from the
Speaker 1: Curtain University and also from the California Center for Population Research,
Speaker 1: and it found out a few interesting things and I've
Speaker 1: not pointed them here to read them out to you today.
Speaker 4: Back.
Speaker 1: So first things first, it found out that living in
Speaker 1: a rent free home led to a threefold increase in
Speaker 1: the chance of entering home ownership compared to someone in
Speaker 1: the private rental market trying to save up a deposit.
Speaker 1: Checks out, story checks out. That's actual research. I like that.
Speaker 1: Using data from the longest running longitudinal study of Australian households,
Speaker 1: the Household Income and Labor Dynamics in Australia, or the
Speaker 1: hill To Survey, which I've spoken about a couple of
Speaker 1: times on the Pod, the researchers were able to isolate
Speaker 1: just over eight thousand instances of survey respondents moving from
Speaker 1: non home ownership to home ownership in any year. They
Speaker 1: then looked at the parental assistance received by these homeowners
Speaker 1: and the role it played in increasing their chances of
Speaker 1: making the transition compared to someone else with the same
Speaker 1: characteristics who didn't buy property. And interestingly, they found that
Speaker 1: only a small proportion four point five percent of successful
Speaker 1: first home buyers received an outright cash transfer of more
Speaker 1: than five thousand dollars from their parents around the time
Speaker 1: of their home purchase. So that's less than what I thought.
Speaker 1: But that doesn't include like that's actual cash. Remember how
Speaker 1: I said that you don't have to just get money
Speaker 1: from your parents. You can also have a garran tore
Speaker 1: and just lean on their assets. That doesn't take that
Speaker 1: into consideration. A further two point six however, benefited from
Speaker 1: an inheritance around that time, not many, which actually is
Speaker 1: really good to Inheritance is a thing that I don't
Speaker 1: think is a blessing. Can change your life, but I
Speaker 1: would prefer to have the person there. While seventy four
Speaker 1: percent of first home buyers lived in private rentals before
Speaker 1: their purchase, thirteen point four percent had been co reciding
Speaker 1: with their parents. It's just kind of interesting. Yeah. A
Speaker 1: further four point five percent had been living in rent
Speaker 1: free dwellings provided by family or friends, like an investment
Speaker 1: property or a holiday home in Melbourners and their remaining
Speaker 1: first home buyers had either been renting in public housing
Speaker 1: or living rent free in homes provided by non family
Speaker 1: members or friends. And interestingly, in kind transfers like these
Speaker 1: from parents or family members to aspiring buyers were found
Speaker 1: by the researchers to play a critical role in helping
Speaker 1: them into the market, so they wouldn't have been able
Speaker 1: to do it without them. Yeah, okay, interesting, right, very interesting?
Speaker 1: Interesting right? But also I just feel like the Hilda
Speaker 1: study doesn't take into consideration guarantors because distilling it back
Speaker 1: down again talking about smart financial decisions. If hypothetically, Beck,
Speaker 1: i'm your mother, hah, nice, I'll adopt to you. It's fine.
Speaker 1: But if hypothetically i'm your mum and you and I
Speaker 1: sit down and go all right, Beck, you want to
Speaker 1: buy a house, and I have one hundred thousand dollars
Speaker 1: in my bank account and I also own some property,
Speaker 1: and you say, all right, Victoria, I really want to
Speaker 1: buy a house. I need fifty thousand dollars as a deposit.
Speaker 1: It is a smarter financial decision for me, as your mum,
Speaker 1: to let you put a guarranteur on my home. As
Speaker 1: opposed to giving you the fifty thousand dollars in cash,
Speaker 1: even though I've got it. So it makes more financial
Speaker 1: sense for me to hold onto cash because obviously cash
Speaker 1: can help me pay off the loan that I might
Speaker 1: have on that property, it can give me a bit
Speaker 1: more financial security I could invest it, and we know
Speaker 1: that the average return of the Australian share markets just
Speaker 1: over nine percent, So that's actually a better choice in
Speaker 1: this moment, in this very very simple example for me
Speaker 1: to give you a part of equity that doesn't actually
Speaker 1: impact my financial circumstances. All it does is put a
Speaker 1: caveat over that property to say, okay, well, beck's you know,
Speaker 1: using some of that equity to buy a home because
Speaker 1: I'm there not out that cash. So to me, it
Speaker 1: makes sense that the hill To study is showing that
Speaker 1: there's actually a low amount of people that have cash
Speaker 1: being transferred to them. Because if your parents can actually
Speaker 1: afford cash, I'm just shot in the dark. They probably
Speaker 1: also have some assets that you could rely on, and
Speaker 1: I'd really like to see those statistics, but.
Speaker 4: They're not there, and they're also probably very financially servious.
Speaker 4: They know that that's the bitter choice.
Speaker 1: Yeah, exactly, And like if you go to a mortgage
Speaker 1: broker as well, they'll help you through that. Like if
Speaker 1: you're at a point where you're like, hey, v I
Speaker 1: know we're talking about our bomad, but I'd actually like
Speaker 1: to make use of bomad, talk to a broker. Go
Speaker 1: talk to Kate from Zella Money, and she can actually
Speaker 1: help you through that one. How do you talk to
Speaker 1: your parents? What does that look like? What are the
Speaker 1: best options, because sometimes your parents will be like, oh, Beck,
Speaker 1: I actually have some cash saved. I'd love to be
Speaker 1: able to help, and they actually haven't thought about the
Speaker 1: implications of that, and it might actually be better to
Speaker 1: get a guaranteur as well because of your parents and
Speaker 1: like you know, again, another example, we had a client
Speaker 1: whose parents were like, Oh, we really want to help.
Speaker 1: We've got some savings that you know, we've been putting
Speaker 1: aside for you. It's like twenty grand to go towards
Speaker 1: a house deposit. Keep your cash. Can I actually just
Speaker 1: have that guarranteur? Because that way, it was a guaranteur
Speaker 1: of about one hundred thousand dollars, They got immediately into
Speaker 1: the property and everyone was actually in a better financial position.
Speaker 1: So it's definitely worth talking to a good broker about
Speaker 1: that because sometimes your parents are like, oh, here's this cash,
Speaker 1: like that's really sexy. We've tried really hard. Yeah, you have,
Speaker 1: but there's actually a better outcome for literally everybody.
Speaker 4: In this circumstance. Interesting, very interesting. So from where I'm sitting,
Speaker 4: it looks like there are only benefits to having a
Speaker 4: bank of mum and dad.
Speaker 1: No, that's not true. Yeah, if we didn't talk about
Speaker 1: the cons, I guarantee my dms would absolutely blow up
Speaker 1: with people being like, it's not all sunshine and roses.
Speaker 1: And I get that. I totally get that. There's a
Speaker 1: lot of upside, but in this position, there's also a
Speaker 1: lot of downside, and we covered a few of them
Speaker 1: at the very start of this episode when I talked
Speaker 1: about financial control, but obviously having financial control was one
Speaker 1: of them that I mentioned really early on. But also
Speaker 1: having a bank of mum and dad actually can delay
Speaker 1: your financial literacy until later in life when you're forced
Speaker 1: to learn instead of learning along the way, because why
Speaker 1: would you learn how to budget and why would you
Speaker 1: learn how to do cash flow if mum and dadd
Speaker 1: are just giving you cash like to be honest, if
Speaker 1: my parents did that, I wouldn't be interested in budgeting either.
Speaker 4: No, that's why would I.
Speaker 1: If my dad could just step up, get a job
Speaker 1: where he can get a black amex and then give
Speaker 1: me a copy, so I have unlimited funds, I need
Speaker 1: a budget.
Speaker 4: That hard is too much, dads.
Speaker 1: Apparently it is. Apparently it is. But it can delay
Speaker 1: financial literacy, which is obviously going to put you backwards.
Speaker 1: People who grow up with the support from their parents
Speaker 1: can actually often be a little bit more reckless with
Speaker 1: their spending as they know that they have their parents
Speaker 1: to fall back on. So for example, they might view
Speaker 1: their parents as their emergency fund and never build one
Speaker 1: up themselves. Or and it's a very privileged position to
Speaker 1: be in, right beck. Or they might just go, oh,
Speaker 1: there's five grand in my account, that can be a
Speaker 1: UROP trip. Yeah, great. Like they're not thinking about the future,
Speaker 1: they're not thinking about wealth creation, whereas somebody who doesn't
Speaker 1: have that to fall back on is not going to
Speaker 1: make that decision. Like I guarantee today, if you had
Speaker 1: five grand in your bank account, you're going I'm going
Speaker 1: to blow it on and just a holiday. In general,
Speaker 1: it wouldn't happen with it. Probably not no, no, So
Speaker 1: it's one of those things where you are a bit
Speaker 1: more reckless. Again, not judgmental, no, just a fact it
Speaker 1: actually eats into parents' retirement savings. So parents can actually
Speaker 1: be overly generous. I think we need to be really
Speaker 1: aware that the bank of mum and dad. While it
Speaker 1: can be really sexy, you don't actually know their financial position.
Speaker 1: Your parents might just be being super generous because they
Speaker 1: love you so much, and it might actually be negative
Speaker 1: financially for them. So I think it's also really responsible
Speaker 1: to go, Okay, well, where is this coming from, how
Speaker 1: does this work, and actually step up and be an
Speaker 1: adult and learn a little bit about financial literacy. I'm
Speaker 1: not saying don't do it if that's your family life,
Speaker 1: because you know what, again, there are heaps of cultures
Speaker 1: where their parents are like, no, you will take my
Speaker 1: money or offend me greatly. I want to be adopted
Speaker 1: by them. If you're here going to adopt me, let
Speaker 1: me know. I'm putting my hand up exactly. And if
Speaker 1: the relationship sours amongst your family, things get really pickly
Speaker 1: really quickly. Money and obviously we're not talking about things
Speaker 1: like financial abuse and financial control, all of which are
Speaker 1: really to take into consideration there too. And I think
Speaker 1: that people don't see that as abuse because they're in
Speaker 1: quote well off situations. But it is like if your
Speaker 1: parents give you money and then lord something over you,
Speaker 1: that is actually abusive. Yes, so that's really shitty to learn,
Speaker 1: and I think that a lot of people would be like,
Speaker 1: I need to be grateful, and like, we've heard it before.
Speaker 1: There was a money diary, I think in twenty twenty
Speaker 1: one or very very early twenty twenty two, where we
Speaker 1: spoke to somebody who was in a financially abusive relationship,
Speaker 1: and we'll find that and put that actually in the
Speaker 1: show notes, because I think it's a really good listen
Speaker 1: off the back of this where she really didn't feel
Speaker 1: like she could reach out to her family or friends
Speaker 1: because she had this really big house in this really
Speaker 1: fancy area, and you know, she had everything she could
Speaker 1: ever want, but her mum was financially abusive and lauded
Speaker 1: that over her and it really ate into her mental
Speaker 1: health and she's still in therapy for that and trying
Speaker 1: to get through that. And like, even though mum is
Speaker 1: now worth millions, she now doesn't have the education she wants,
Speaker 1: because like, she just didn't go out and get the
Speaker 1: edge she wanted. And it's an interesting story that I
Speaker 1: think really plays into it because I think if I said,
Speaker 1: to your name, a financially abusive relationship can go, you'd
Speaker 1: be like, oh, husband and wife immediately instead of thinking okay, cool.
Speaker 1: It could be a moment, could be a dad, It
Speaker 1: could be you know, a child abusing an elder. It
Speaker 1: could be so many different things. And I think we
Speaker 1: really need to open that part of the conversation up
Speaker 1: as well, because as much as you're right, bo mad
Speaker 1: sounds so sexy, like the bank of mom and dad.
Speaker 1: I would love to have stupidly rich parents great ten
Speaker 1: out of ten because I know that they'd be so
Speaker 1: much less stressed. Like imagine if your mum was real rich.
Speaker 1: So I want that for everybody.
Speaker 4: I'm actually hoping that she sits me down one day
Speaker 4: and says, I've been secretly a billionaire your.
Speaker 1: Whole Yeah right, I've been teaching you Beck to just
Speaker 1: be humble. I've been giving you life experience. I have
Speaker 1: been making you the best person ever. Don't worry about
Speaker 1: it now.
Speaker 4: Oh my gosh, wouldn't that be nice can someday? What
Speaker 4: took you so long?
Speaker 1: Do you know what if that is your money story
Speaker 1: and you had a parent turn around at some point, Instaid, Actually,
Speaker 1: we've been teaching you to be humble for a really
Speaker 1: long time. Please write in that story so much, because
Speaker 1: it's just a pipe dream for us, that would be
Speaker 1: it's a pipe dream. All right, Well, I think that's
Speaker 1: all we have time for today. Beck what do you reckon?
Speaker 4: I reckon?
Speaker 1: Let's get out here.
Speaker 4: Let's make that tea once and for all.
Speaker 1: My gosh, yes, all right. I hope there's oat milk
Speaker 1: in the fridge in this office. Otherwise I'm gonna ris
Speaker 1: I'm gonna run, all right, See you guys on Friday.
Speaker 1: Have a good week.
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Speaker 5: in nature and does not consider your individual circumstances. She's
Speaker 5: on the Money exists purely for educational purposes and should
Speaker 5: not be relied upon to make an investment or financial decision.
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