An entire generation locked out of property ownership

ninky_2

Percy1983 wrote: »

I must say My plan for my children (if it works out that is) is not to just give them anything. I will save up a fund but it will be in my name to which they may never see it. With that it would always been used on a contribution basis, ie 25% of the value of there first car.

To me there is helping and there is spoon feeding.

i don't consider what the rothschilds have done to be spoon feeding. do you?

i mean prior generations leave knowledge behind. they don't go....let them discover gravity and invent the motor car for themselves.

likewise it's not spoon feeding to leave your kids at a higher financial start point than you had.

Graham_Devon

Percy1983 wrote: »

I must say My plan for my children (if it works out that is) is not to just give them anything. I will save up a fund but it will be in my name to which they may never see it. With that it would always been used on a contribution basis, ie 25% of the value of there first car.

To me there is helping and there is spoon feeding.

I looked into doing the same sort of thing. Has tax implications though. Better to save through a bare trust or nominee account.

Between the age of say 11 and upwards, you can start teaching them the value of money and working for it. i.e. he could have some of his money, so long as he washed my car first. Something to actually "earn" the withdrawing of the money. It is, afterall, his money as soon as I do the transfer. I'd rather him have drip fed access as he wants it (he'd have to go through me until 16), than one lump sum at 16 to go crazy with after doing nothing for it.

One of my best mates got a massive lump sum at 21. Trouble with that is, he cannot relate to the rest of us now. His mortgage is paid off at 29. His house was gutted and renovated (kitchen and bathroom) FOR him before he moved in. He just picked the house. Trying to get through to him that it doesn't just happen for everyone is sometimes difficult.

DervProf

Graham_Devon wrote: »

One of my best mates got a massive lump sum at 21. Trouble with that is, he cannot relate to the rest of us now. His mortgage is paid off at 29. His house was gutted and renovated (kitchen and bathroom) FOR him before he moved in. He just picked the house. Trying to get through to him that it doesn't just happen for everyone is sometimes difficult.

I think that with the relatively recent increase in credit card avalaibility, MEWing etc, the current young generation are losing touch with the value of money. Some of my friend's kids seem to have much more "handed on a plate" to them than I ever did. And it's not like they have wealthy parents, some of them do have a fair amount of debt which helps to fund their kid's lifestyles. My first computer (ZX81 - £50) was bought with money I earned washing cars, cutting lawns and doing a paper round. I worked for nearly a year to buy it. I don't see many, if any of my firend's kids doing the same. Mum and Dad just buy them a 3DS or an iPod when they want one. OK, they don't get everything they want, but when I see them getting £10 per week pocket money + occasional "expensive" gifts, I do think they are missing out on the pleasure of actually working to save up and buy something they want. It is ture that you get more enjoyment from something that you have had to earn, rather than be given.

chewmylegoff

DervProf wrote: »

MEWing etc,

mewing isn't really something the "young generation" do, as the "young generation" don't own houses, 38 being the supposed average age of a first time buyer.

as i suppose it depends what you call young really.

Percy1983

Well I am aware of tax implications keeping money in my name but as other have pointed out, I can save in my childs nameand when they hit 18 its theirs to do with as they please, now I have no idea what my child will be like 18 years after birth.

Funnily I do plan to run the bank of dad with my children to which if they leave there money with me they gain interest and if they want to borrow they pay interest, in short I will get the rewards of saving and the perils of debt into them from an early age.

DervProf

chewmylegoff wrote: »

mewing isn't really something the "young generation" do, as the "young generation" don't own houses, 38 being the supposed average age of a first time buyer.

as i suppose it depends what you call young really.

When I mentioned "mewing", it was with respect to the parents obtaining funds, some of which can be used to "treat" the kids. My parents didn't MEW, and I had to be satisfied with what they could provide for me. If I wanted anything extra (like a relatively expensive small computer), I had to go out and earn the money. I think some (not all) of the current younger generation are being taught a bad lesson in the way to handle money.

chewmylegoff

Percy1983 wrote: »

Well I am aware of tax implications keeping money in my name but as other have pointed out, I can save in my childs nameand when they hit 18 its theirs to do with as they please, now I have no idea what my child will be like 18 years after birth.

Funnily I do plan to run the bank of dad with my children to which if they leave there money with me they gain interest and if they want to borrow they pay interest, in short I will get the rewards of saving and the perils of debt into them from an early age.

i hope you're going to declare the interest income on your tax return

wotsthat

Percy1983 wrote: »

Funnily I do plan to run the bank of dad with my children to which if they leave there money with me they gain interest and if they want to borrow they pay interest, in short I will get the rewards of saving and the perils of debt into them from an early age.

I'd suggest that if you want to give gifts then do so but if your kids want to borrow money you help them to find a decent provider and not lend directly. I bailed out a son and lent him money because he was in trouble with other creditors. Guess what happened?

I thought we (his parents) had taught him the value of money and a sense of responsibility - we were wrong. It's one of the biggest mistakes I've ever made, although the sums of money are relatively small it's damaged our relationship. I should have let his creditors take him to court to face the consequences.

As an aside I've seen first hand how easy it is to get credit. His first debt was with Vodafone, he never paid the monthly fee got cut off and got passed to a debt collection agency. When he paid this off a £100 debt had more than doubled. A couple of years later though Vodafone gave him another contract and the same thing happened. Earlier this year he was sporting a nice Iphone on a contract - guess who the contract was with; guess whose direct debit isn't being paid.

Percy1983

chewmylegoff wrote: »

i hope you're going to declare the interest income on your tax return

Sure why not. (I am an accountant remember)

Of course the intention is that they never want to borrow, eg, 'if you want it now it will cost you £x extra'.

I will start this from a very early age to be honest, the dynamic will change as they get older. As mentioned I have already seen my brother clear my parents out, yes he is paying it back but he is well behind on payments.

FTBFun

Percy1983 wrote: »

Sure why not. (I am an accountant remember)

Of course the intention is that they never want to borrow, eg, 'if you want it now it will cost you £x extra'.

I will start this from a very early age to be honest, the dynamic will change as they get older. As mentioned I have already seen my brother clear my parents out, yes he is paying it back but he is well behind on payments.

Although of course, when they're adults that would be up to them to decide.

I assume this excludes mortgages and student loans as that would be silly.