The Stigma of Subsidized

Everyone has been given money, services, or goods at some point in their lives. Usually the main givers are parents. In most cases they at least provide food, shelter, and clothing until the age of 18, at a minimum. In addition, some parents even provide vacations, private music lessons, college education, inheritances, house down payments, cars, investing lessons, and passed down heirlooms. Everyone’s situation is different, but does that mean any one way is “more right” or “more wrong” than the other?

I am a big fan of reddit. In the Financial Independence subreddit there are over one hundred thousand subscribers, many of which share invaluable stories and information which help thousands of other people get ahead financially and reach their FIRE goals. Some people ask advice about how to start on the path to FIRE. Others share how they FIRE’d at 35 years old. Others ask what to do with a recent windfall.

Time and time again I’m shocked at the responses people receive if they received a leg-up financially. Parents paid for college? That is cheating on the path to FIRE! Aunt Ada worked as a secretary until she was 70, always saved money, and left all her grand nieces and nephews $30,000? Well those grand nieces’ and nephews’ financial accomplishments from then on aren’t earned. I don’t know where this negativity stems from. Maybe it is jealousy or it is just internet trolls who have nothing better to do.

I honestly could care less how you got to the financial position you are in? What people have to realize is everyone’s family and upbringing are different. So inherently their financial lives are going to have different paths than yours. In my mind, someone who was taught about retirement accounts and saving half their income growing up will be much better off than the person who received a free college education and $30,000 gift coming from a family that didn’t talk about money.

From growing up in a very rural town, to working in Manhattan, to now living in the Midwest, I’ve seen all sorts of financial situations. Some friends have fully supported themselves since 16, others are in their late 20’s and receiving large amounts of parental financial support such as Manhattan apartment down payments from their parents.

Personally my parents provided the necessities (and more) until I was 22. They would of done it longer but I wanted to act like a grown up and move out on my own. My family covered a little over one year of college and I footed the rest of the bill. Does that mean I’m better than my peers who had all four years paid for by mom and dad? Do my financial accomplishments matter more? HECK NO!

I know that if anyone was to hand me a check for ANY reason, I would put a huge smile on my face and say THANK YOU! Does that make me wrong? I sure hope not.

What is your take on being subsidized financially? Do you receive all gifts (even monetary) with open arms? Why the stigma?

35 thoughts on “The Stigma of Subsidized

  1. The Green Swan

    Interesting topic, thanks for the post! I’m not much different from you. I’m from a small town in the Midwest, moved it to San Francisco for a bit and now settled in Charlotte. Parents paid about half of my college. I loved having that support from them, but at the same time was really anxious to graduate, get out on my own and out from under their wing.

    I don’t think I’m any better or worse for having their support. I think it has more you do with what folks make of their life thereafter and the success of reaching FIRE is a heck of an accomplishment!
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  2. Mr. SSC

    I was essentially covering everything from about 17 yrs old onward, and like you, I’ve seen everything from people in my situation up to married with kids people in their 30’s still getting expenses covered by the bank of Mom and Dad. My take is, it doesn’t really matter if you’re being funded by yourself or mom and dad, or the gov’t, it all depends on how you spend it and live your life.

    Just because I supported myself doesn’t mean I was a financial genius, I was still financially ignorant and lived above my means and racked up a lot of debt. Everyone has their own goals and drivers for those goals and whether it’s subsidized or not doesn’t matter much to me.

    I think the stigma comes in to play with the fact that other people may get defensive that they’re “not good enough” as that person beacuse their parents/family/whatever wasn’t able to provide the same support. Therfore, I think it’s a reaction based on emotion that “they’re better” because they had to work for it, or something along those lines. Not necessarily about the money at all, rather the situation they may have wanted to be in and aren’t?
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    1. Fervent Finance Post author

      Yeah I think part of the issue is jealously? Would I have liked my whole undergrad covered – over course! I was a little jealous of my friends / classmates who had that, I’m not going to lie. But I don’t look at them any differently, that’s for sure.

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  3. Kate@GoodnightDebt

    I’ve seen the grumbles directed at people who’ve been helped. I don’t see being subsidized as a defining factor. What matters is what you do with it. Parents pay for college? Great! What did you major in? It’s really easy to get a leg up in life and not take advantage of it. That sub is such a microcosm of the financial universe, sometimes I think people miss the point. I know more than a handful of people whose college would have been paid in full, but they squandered it by not taking college seriously. Failing classes because they partied too much, dropping classes too late or completely changing majors so they were in school for.ev.er.

    It’s easy to look at the people who are successful and justify why I/you/ the reddit sub couldn’t achieve that. The same thing happens with debt payoff stories. “They make more than I do” “It costs more to live where I live” “Yea, If I wanted to live like a miser!” It all boils down to “I can’t do that, Does that make me inferior? I’ll say no because they had help.”
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    1. Fervent Finance Post author

      It boils down to everyone’s situation is different and people just need to accept that.

      Another thing I forgot to mention in the post is how having high income parents can hinder your ability to leave within your means when you’re on your own. If someone’s parents are both professionals who make a good living and outsource everything from yard work to cleaning to meals, then it could be hard to understand how to do those things yourself. But maybe that family is making a half million a year combined, and then the child graduates and is making $50k – they have A LOT to learn about living on that $50k.

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  4. Physician on FIRE

    I thought this was going to be about govenment subsidies. I had enough parental subsidy to have all that I needed and some of what I wanted. Most importantly, guidance and support were always available.

    When I first discovered these things called blogs, I approached them all with a healthy skepticisim. Until I really got into it, and started reading people’s stories, I assumed everyone had some angle or was trying to sell me something. As an outsider, I just didn’t get it.

    Now that I’m on the inside, I realize that most of us are just good people sharing ideas and stories. There’s no reason to be overly skeptical or critical. If a site exists for the purpose of selling you something or serves some other self-interest, it’s pretty easy to spot that in short order.

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    1. Fervent Finance Post author

      Totally agree PoF. I like the part where people share their stories (successes and failures) and lessons are learned from everyone. Subsidized or not.

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  5. Steve @ ThinkSaveRetire

    Amen to that, Fervent. I love reading rags to riches stories, but I also enjoy reading about people who invest in themselves, regardless of the source of that money. The reason is because it’s easy to squander money that’s been given to you. My folks paid for my college so I wouldn’t begin adulthood in debt. I majored in IT and proceeded over the next several years to build a decent career, earn a pretty damn good salary, and then retire early in 2016. Are my choices null and void because I didn’t have student loans?

    I could just as easily have taken the opposite path by skating through college on the dime of my folks, do half-assed work in corporate America and then bitch and moan because things aren’t working out for me, or go crying back to mom and dad for more dough.

    Actually doing something GOOD with your money is a rare feat these days, especially if that money was given to you. When people make wise investments with money that they didn’t directly earn, that to me is an *amazing accomplishment*. It means they were raised right. They are smart people. They look out for their own futures and, in a way, honor the hard work it took for *somebody* to have earned that money in the first place.
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    1. Fervent Finance Post author

      Couldn’t agree more Steve. I am always amazed by the people who were given everything on a silver platter but still have the drive to work extremely hard (even if they don’t have to). I know a couple of people who probably never need to work again in their life due to wind falls or old money, yet have the drive to push themselves on a daily basis. I guess at the end of the day everyone is different 🙂

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  6. Our Next Life

    I actually sometimes think that being highly subsidized is a big DISadvantage in that it prevents people from learning how to become self-sufficient and truly owning their own decisions. But, overall I agree — no one is better than anyone else or has a “less valid path to FI.” That said, what does make me crazy almost every day is when people spout the “anyone can do this” stuff (try telling that to a single mom who earns minimum wage), or do the bootstrap narrative that makes it seem like they earned absolutely everything themselves and doesn’t acknowledge their privilege or the ways they were helped by circumstances and the system.

    I didn’t get much parental help with college itself other than a few roundtrip flights home, BUT I had a full ride scholarship that covered everything except food, and I *know* I had major parental help to earn that scholarship. While my friends worked in high school, I wasn’t allowed to work so that I could focus on school and extracurriculars, and then the money my friends had to earn I had provided to me. So I could tell you some bootstrappy story about how I “earned my own way through college” but that’s a very narrow view of a story where I actually had tons of help from my parents, my teachers, and the taxpayers who footed much of my college bill. And I’ve never gotten money from parents (in fact, it now goes the other direction) since college, but I think all the time about how where I am now is very much thanks to their focus on setting me up for college and lots of other help along the way.
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    1. Fervent Finance Post author

      It’s not all about being setup financially. The support and knowledge that can be provided is often MORE beneficial than cutting checks for sure.

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  7. Maggie @ Northern Expenditure

    I agree that there shouldn’t be a stigma associated with getting a leg-up financially, but there definitely needs to be an acknowledgement that we’re lucky to have that. My journey to FI will be a LOT easier because my parents have helped out when I needed them. We lived in their beach house while unemployed! We didn’t end up on the streets with our baby. We’re incredibly lucky to have a fail safe in our families. A lot of people don’t have that. That doesn’t make our journey any less real or important or accomplished. But it does make it a whole lot easier.
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  8. Claudia @ Two Cup House

    I’m always amazed at the comments people post on FIRE articles, which appear to be fueled largely by jealousy and regret. As you mention, subsidies doesn’t always give someone a leg up, but when they do, we should focus on celebrating the positive choices the person made instead of tearing them down. My vote? Use whatever advantage you have to get ahead and be grateful for your success!
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  9. Mr. PIE

    I think the only subsidies I ever got was the occasional £10 ( in the UK) from my parents as a student to keep me from going hungry ( or thirsty. ….hint…..beer).

    Seriously, education in UK funded largely by government. Finished with two degrees debt free.

    Relocated to US with my company and got international relocation package which helped us get a solid footing in this fine land. Did everything we could to make maximal use of it to find a home and start our journey….at the time, did not know to where!!!

    Agree with Claudia@TwoCupHouse….gotta seize the opportunity and not look back.
    And thanks for your kind words to Mrs PIE. Much appreciated.
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  10. Amber Tree

    Nice thoughts… To me, what matters is what you do after the gift! do you live financially irresponsible and blow all the money on cars, trips and consumables? Or do you keep living below your means and building up a nest egg for FIRE? then, you clearly deserved it.
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  11. Jacq

    Regarding the ‘disadvantage ‘ comment – I think it depends on the person receiving the money. If someone paid your rent/mortgage for 1 month, what would you do with the money? I have friends / coworkers who would go out more, drink more, play paid video games, go to the casino, maybe take a trip. I would save it. If I knew in advance pump up the 401k, if not hey look money for my Roth.
    Some people take windfalls (or bonuses) and splurge, others have a bit of celebration and save. Work bonus = nice dinner, rest to savings.

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  12. Finance Solver

    I have absolutely no problem with someone being more rich than I am and if they’ve gotten there through parental help or inheritance. I do have a problem if someone brags how rich they are though as a result of that.

    Putting that aside, I can say that I have been very lucky to be in the position that I am now. My parents paid for my living situation and my scholarships paid for my tuition. I worked a little to get a healthy bank account balance and hopefully my will to work and save continues throughout my working years.

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  13. Jeff @ The Lifestyle Accountant

    Having received some financial subsidies in my earlier years, I didn’t value that money or what the money bought as much as when I’ve worked for it. I’m happier being more independent and paying for everything myself as an adult. Nobody has any control of who their parents are and what level of wealth they were brought into. Of course, if they were in that person’s shoes they might feel a bit different about getting some FREE money.
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  14. DC @ Young Adult Money

    I have so many thoughts on this but a comment box is probably not the right place : ) I honestly respect people more who built a business from the ground up versus someone who was given a job through Mom & Dad, so I guess I do fall in the camp who put an asterisk next to certain people who had a leg up. But like I said I really don’t think a comment is the right place for me to divulge all my thoughts on this. I will say the biggest thing I hate seeing is someone who has a leg up or had a high paying job handed to them from their parents who don’t recognize and appreciate the fact they had an advantage. I do have one friend who was pulled into the family business who I respect greatly, but I think it’s mainly due to the fact he realizes that his Dad built the business and he’s hard-working and trying to double/triple the revenue as quickly as possible (and putting in a ton of work doing it).
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    1. Andrew@LivingRichCheaply

      I think I’m with DC on this one. While I absolutely wouldn’t look down on someone who had a “leg up”…I’m gonna give more props to someone who built something from the ground up or came from a background where they didn’t have that leg up. And I absolutely agree with DC that I hate seeing someone who had a leg up and doesn’t recognize that. A wonderful comic that illustrates this is:
      http://thewireless.co.nz/articles/the-pencilsword-on-a-plate

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    2. Fervent Finance Post author

      I hear you DC. We’re taught growing up to value hard work. Everyone always loves telling that “I came from nothing and now look where I am story.” It’s the American Dream.

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  15. Doug

    I got no problem with someone inheriting money. I got no problem if someone that needs assistance gets assistance. The problem I have is when someone needs assistance gets it and keep getting it even though they can get a job or get married and the spouse has a good job.
    I love rags to riches stories people coming from nowhere to be self sufficient
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  16. Ten Factorial Rocks

    Good post. There is nothing wrong with subsidies if done in moderation and if helps the marginalized sections of society. The problem comes when it serves to dis-incentivize people from productive work. That’s when they truly become burdens on the rest of us. A progressive compassionate society should take care of its weaker sections without making them dependent entirely on the dole.

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