G2 EZ EE THE WASHINGTON POST.SUNDAY, MAY 15 , 2022
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Washington, D.C. 20071 • Advertising: Noelle Wainwright, 202-334-7610, [email protected]BUSINESSDilbert Scott Adamswill help them weather the
financial storms that are still to
come.
It’s not a sign of arrested
development to live in your
parents’ home if you’re a
productive young adult trying to
save or pay down debt, or both.
It’s a smart move when a
rental could eat up so much of
your take-home pay. Let your
adult children eliminate the
heaviest burden in their budget.
They will have plenty of time to
manage their own households.
A decade at home starting in
their 20s, and saving most of
their income rather than paying
rent for all those years, could put
young adults on the path to
homeownership that could end
with a smaller mortgage or no
mortgage at all. That would be a
financial game changer.internship in Texas, our eldest
moved home and is saving the
vast majority of her yearly
income. At 27, she’s plowing
15 percent of her gross pay into
her 401(k). She’s saving up to pay
cash for an electric vehicle in
about three years.
Our son graduated from
college last year and is still living
at home. He’s working two part-
time jobs while studying to enter
the actuarial field. We are in no
rush to see him go. He’s lovely to
have around — plus he’s the main
dog-walker.
My husband and I agreed not
to charge any of our children rent
as long as they are saving, so that
when they finally launch they
will have a substantial cushion
that should keep them from
boomeranging back home.
Financial independence
doesn’t have to come with a
monthly rent payment. It can be
measured by how well the folks
under your roof are managing
their money within their means.
We should champion long-
term multigenerational housing
as a way not just to beat inflation
now but to help younger
generations build wealth thatthe number of people living in
multigenerational family
households quadrupled.
When asked why they share
their home with relatives,
Americans often say it’s because
of finances or family caregiving,
according to Pew.
Among adults 25 to 29, nearly
a third live in multigenerational
households, often in their
parents’ homes, according to
Pew. Nearly 4 in 10 young men
are in multigenerational
households.
And while a quarter of adults
in multigenerational homes say
it is stressful all or most of the
time, more than twice that say it
is mostly or always rewarding,
Pew found.
I feel for the men who are
ridiculed for still living at home
— and for the daughters who feel
pressured to leave.
My husband and I have taken
a different tack with our
children. We have begged them
to live at home. We want them
here at least until their 30s. Hear
me out before you claim we’re
just coddling them.
A year after getting her
master’s degree and doing anto the Pew Research Center. But
now that coronavirus cases have
declined and businesses have
gotten back to normal
operations, many people want to
live on their own. After all, we’ve
been conditioned to think you’re
not a real adult until you have
your own place.
Living alone is viewed as a
sign of economic maturity.
But the high cost of housing
makes it nearly impossible for
many young adults to build a
cushion to handle a financial
emergency. Their housing
expenses can keep them from
quickly paying off their student
loans. Exorbitant rent payments
can delay them from getting
started on saving for retirement.
And we know the power of
compound interest favors the
young.
People keep asking me what I
recommend for folks struggling
with rising inflation. The answer
for many is to do what they can
to cut the largest expense in their
budget, and that’s housing. This
may mean you can’t afford to live
alone.
Pew looked at census data
from 1971 to 2021 and found thatthe family home.
With inflation at a 40-year-
high, it just makes economic
sense for adult children to live at
home for several years.
Overall, prices rose 8.3 percent
in April compared with a year
ago, according to the latest
consumer price index summary
from the Bureau of Labor
Statistics.
The cost of shelter is a big
driver of rising inflation.
Rent averages $1,927 across
100-plus large metro areas, an
increase of $323, or 20 percent,
since the pandemic began,
according to a rent index
produced by Zillow. Of course,
depending on location, the
monthly cost can be substantially
higher. The average rent in April
was about $3,000 in New York
and more than $2,800 in Miami.
In Charlotte, it was about $1,700.
Rents grew more last year
than in any year on record,
according to Zillow. The high
demand for rentals is keeping
vacancy rates near all-time lows,
pushing up rent prices.
The pandemic pushed
millions of Americans to move in
with family members, accordingI hate the jokes
and
condescending
comments about
adult children
living at home —
or those returning
to the familial
nest out of
financial
necessity.
In the name of
teaching young people how to be
fiscally responsible, we often
applaud parents who rush their
adult children to move out soon
as possible. If they stay too long
they’re seen as resisting
“adulting.”
Rents are rising at the fastest
rates in decades, and house
prices are surging, too. It’s time
to embrace the economic truth
that independent living at an
early age may get in the way of
achieving real financial security.
Understandably, not everyone
can live at home. They’ve moved
away for a job, or the home
situation is too toxic or
overcrowded. But space and
sanity willing, consider the
savings young adults could
amass if they continued to live in
With inflation like this, living with your parents is nothing to be ashamed of
Michelle
Singletary
THE COLOR
OF MONEY
If you have a personal finance
question for Michelle, please call 1-
855-ASK-POST (1-855-275-7678). Her
award-winning column The Color of
Money is syndicated by The
Washington Post News Service and
Syndicate and carried in dozens of
newspapers.He said he has zero regrets about
the $85,392.99 he spent (minus
his $1,000 deposit and before fac-
toring in the $7,500 federal tax
rebate).
The large size comes in handy
as he moves into a new home and
for storing his snowboard and
camping gear, as well as traveling
with a husband, a Great Dane and
a Weimaraner. He’s also the mod-
erator of the Rivian subreddit.
As for the company’s future and
his own stock holdings, he’s taking
a long view: “It might be a bumpy
ride, but the product itself is in-
credible.”of the Rivian RT1. But that’s not
the only competition. General Mo-
tors Silverado EV is expected to
come out in early 2023, GMC’s
Hummer EV is currently avail-
able, and General Motors is plan-
ning to release both the Chevrolet
Equinox EV and Blazer EV next
year.
“A lot of people in the United
States can’t afford that price point
of over $70,000. But a Ford 150
Lightning for $40,000 is maybe
something that they can afford,”
she added.
Gibson, a senior manager at
Google, remains all in on Rivian.and Lucid struggled to bring their
stylish promises to reality, tradi-
tional carmakers developed their
own electric trucks and SUVs.
These are now coming onto the
market in bigger numbers and at
mostly lower price points,
Caldwell said.
“Ford has a lot riding on the
truck market. They’ve been king
of it for years. So they don’t want
the new up-and-comer to come
and take their crown away,” she
said.
Its first electric pickup, the Ford
F-150 Lightning, is on its way to
dealerships at about half the pricesurvive in the long term, they have
to appeal to the mass market. That
means producing thousands upon
thousands of vehicles,” she said.
Rivian debuted with strong fi-
nancial backers such as Ford,
Amazon, T. Rowe Price and Black-
Rock.
Ford initially invested $500
million in Rivian. Amazon owns
about a 20 percent stake in the
company and placed an initial or-
der of 100,000 of Rivian’s custom-
made commercial delivery vans.
(Amazon founder Jeff Bezos owns
The Washington Post.)
But while start-ups like Rivianwith massive supply chain issues,
increased material costs affecting
battery production and logistical
hurdles.
But Jessica Caldwell, executive
director of insights at Edmunds,
noted that the shortages of semi-
conductors and microchips over
the past year were particularly
humbling for start-up carmakers.
Although automakers and
manufacturers in general have
scrambled to deal with pandemic
disruptions, it’s been that much
harder for smaller companies like
Rivian that are still trying to ramp
up production.
In addition to starting the proc-
ess from scratch, a start-up
wouldn’t necessarily have the
clout or relationships with pro-
ducers or the promise of large
volumes of the more established
players.
“Production in general is large-
ly underestimated — it almost
bankrupted Tesla when they start-
ed to ramp up and try to go mass
market,” Caldwell said.
“For somebody like a Ford or
Toyota, it could seem fairly easy
and straightforward, but only be-
cause they’ve been doing it for
decades,” she said.
Meanwhile, another flashy EV
maker bursting onto the scene,
Lucid Group Inc., has suffered
similar setbacks resulting in cut-
ting production forecasts and also
having to raise prices for its luxury
sedans, which were originally
poised to compete directly with
Tesla.
“A lot of start-up companies are
going to realize that it’s pretty cool
to create that concept and a niche
vehicle that has low volumes, and
is very expensive,” Caldwell said.
“But frankly, for a company tofor its R1-series truck and SUVs as
of May 9, signaling continued
strong demand.
“Let’s call it like it is, Rivian has
been a train wreck since its IPO
and an overall black eye for the EV
industry,” Wedbush analyst Dan
Ives wrote in a research note
Wednesday night. “The company
has potential to change the EV and
auto industry with much hype
coming out of the gates, and in-
stead has been a massive disap-
pointment.”
Frustrations aside, Ives is still
bullish on the company, noting a
lot of interest as expressed in the
preorders.
“This quarter was not without
issues, but it does finally appear
that Rivian is on the right track,”
he wrote.
The roller coaster ride for the
Irvine-based start-up culminated
in this past week’s staggering
share price drop after Ford sold
about 8 percent of its holdings, or
8 million shares, when the post-
IPO lockup period expired.
Ford still holds about 94 million
shares. Amy Mast, director of cor-
porate communications for Rivi-
an, said: “It’s not unusual to see
investors take an opportunity like
this after a successful IPO. We’re
grateful to them for supporting
our journey to bring the first EV
truck to market.”
However, Ford’s dumping of
some of its Rivian shares comes
right as the first batch of custom-
ers receive its own iteration of the
electric pickup truck, the Ford F-
150 Lightning. Developed in-
house, the truck hits the market at
about half the price of its start-up
competitor.
On Wednesday, Rivian reported
lower-than-expected revenue of
$95 million for the first quarter,
against a loss of $1.6 billion.
In March, the company bun-
gled the announcement of signifi-
cant price increases for its R1T
trucks and R1S SUVs — $12,000
and $14,500 respectively — only to
reverse course after severe back-
lash from customers who had al-
ready put down $1,000 deposits.
Rivian quickly said it would honor
the original price for those cus-
tomers.
The same month, the company
announced it would produce only
half of the 50,000 vehicles it had
planned this year because of logis-
tical and supply chain concerns.
Yet even after the price increas-
es and production delays, the
company received over 10,000
R1T preorders in the United States
and Canada, despite a relatively
hefty average price of over
$93,000, Scaringe said in the earn-
ings call.
“We’ve done all this in one of the
most challenging operating envi-
ronments in decades. We have $17
billion of cash and believe we have
a clear path to launch R2 in Geor-
gia in 2025 with our current cash
on hand,” Scaringe said, referring
to the company’s midsize SUV.
The company also hoped to
ramp up in its Normal, Ill., plant to
its full capacity of 150,000 vehicles
a year, Scaringe said. From Janu-
ary to March, the company pro-
duced 2,553 vehicles and delivered
1,227 to customers like Gibson.
“We’ve seen really the worst of
it, or sort of the valley if you will, of
the supply constraints,” Scaringe
said.
Like other carmakers during
the pandemic, Rivian has been hit
RIVIAN FROM G1
High hopes for electric SUV start-up m eet tough reality
JUSTIN SULLIVAN/GETTY IMAGES
Rivian electric pickup trucks sit at a service center in South San Francisco, Calif., on May 9. The start-up is facing tumbling stock prices, production delays and a recall.