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