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Parental Welfare

the_jay_garvens_show_parental_warefare Any candid observer of our government’s approach to welfare would conclude that over-generous handouts are incredibly destructive. In fact, states that restricted how long an individual could collect unemployment witnessed faster improvements in their employment rate than those that didn’t, and the national employment rate improved faster after Congress voted to stop extending benefits. Why should it be any different? If people are comfortable on welfare, why would they elect to work? This seems obvious when you think about it, but few parents consider this when dealing with their own children. Many put their kids onto “parental welfare” and are baffled when their kids stay and home and refuse to work. This week’s show was a wake-up call to welfare-dependent Millennials and the parents who enable them.

Millennials today are better educated and have more material possessions than past generations, but they’re far more indebted and impoverished, too. As of January 2015, the unemployment rate for 18-34 year-olds was over 10%–18% for those under 20!—compared to a national average of 5.7%. More >30 year olds are living with their parents and fewer are getting married and starting households of their own.

To be fair, the 2008 recession and subsequent state of the job market has not been easy on Millennials. They left college with high levels of debt and dim employment prospects. But the recession was 7 years ago! All other age groups have recovered to their pre-recession states except Millennials. Clearly it is no longer the state of the economy keeping this demographic down. Rather, they have become comfortable living at home and are refusing to mature: to get jobs, move out on their own, and start their own families.

But, as the saying goes, it takes two to tango. Millennials could not enjoy such a regressed state of near-infancy if parents were not there to enable it. It is, of course, a natural parental impulse to want your kids to be happy and to give them as much as you can—to make sure they have more than you did—but at some point this abundance of charity becomes oppressive. It obliterates their work ethic and prevents them from wanting to achieve more for themselves. There are, however, three simple steps you can take to prevent this from happening:

 

  1. Teach kids to fish early – Don’t just hand them fish; teach them to fish! Give them chores and responsibilities early on to help them understand the value of earning things for themselves.
  2. Give them a hand-up, not a hand-out – The founder of Kinkos, for example, took out his first business loan with his father as a co-signor on a $5,000 loan. His father did not give him $5,000 outright, but did help him secure financing for his business. Helping your children is not an all-or-nothing issue. It is, rather, an issue of balance.
  3. Connect yourself and children with others to seek advice – Mentors are invaluable. Entrepreneurs of all ages should connect with others who share their interests and aspirations and gain as much knowledge from them as possible.

 

The role of parents is to teach children to support themselves. Parents don’t have to be as callous and ruthless as, say, waterfowl—throwing their offspring from great heights and hoping they figure out how to fly before hitting the ground—but the principle is the same. Oftentimes the most compassionate thing you can do for your kids is to force them to fend for themselves.

2-21-2015 Parental Welfare

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About Jay Garvens

Standing at the intersection of our local real estate market and the nationwide financial industry, Jay Garvens gives you the complete picture of every story affecting today's mortgage market! From personal finances to the political decisions moving markets, tune in for a weekend dose of straight talk from Colorado's most candid mortgage industry commentator! Honest, unbiased, and always unpredictable, Jay explores every facet of today's mortgage industry with an approach that's refreshingly blunt and enormously entertaining!

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