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Kids & Money


Just another taboo subject: Money! Along with politics, religion and sex. These were topics that were best not spoken about around the dinner table. I won’t argue about the other bunch, but money is different and somewhat imperative in today’s world and economy. Like Zig Ziglar used to say: “Money is not everything, but it ranks up there with oxygen”. You are correct Zig, but why are we so afraid to teach our kids about money? I won’t try to tackle the subject of money here - too big and broad of a subject to elucidate in one blog but I will try and give my 2 cents (pun intended !!)


Why is money so important?

Money is important because everywhere you go people ask you for it. Things cost money. Experiences costs money. Everything costs money. Even money costs money. You don’t believe me?? - Try borrowing some! Even going to the park costs money because you need to pay for parking. As parents, we must teach the value of money. When you buy something, you are not paying it with money. You are paying with the hours of time you had to spend earning that money. Money does not buy happiness, but it does buy everything else. I don’t know of any problem where having money made it worse. I strongly believe If you treat your money well, it will return the favor and treat you super well. Money doesn't take away all your stress but having some aside sure reduces it. Money fuels choices and choices are welcome!


Why didn’t I hear about this in school?

Everyone values academic education: basic reading, writing and simple arithmetic. Everyone values professional education, but only the rich value financial education. Professional Education is when you learn a trade to earn money; Financial education is when you learn how to have money make money. Which one sounds better? If there was Wealth building 101 in school, I don’t think I’m then only one that would have taken that class. School doesn’t teach wealth so that education stems from home which can lead to either poverty or wealth because both are generally inter-generational. (Poverty here is relative poverty in a civilized capitalist society like ours – I am not talking about abject poverty).


Where did you hear about money?

If you’re like most middle-class families, you learned about money from your parents, at home, directly or indirectly through conversations, arguments, fights and struggles over bills that needed to be paid, disputes and so on….Your brain consciously and subconsciously picked up the programming. Your money blueprint was developed from what you experienced, what you saw and what you heard. So, if your parents had good money habits, chances are, you got good training but if your parent’s had bad money habits… guess what? You didn’t get the right information that could have prevented much of the money struggles that will lay in front of you in the future.


If you heard any of the following mottos: Money is the root of all evil, money is hard to make, mo money mo problems, all rich people are greedy, we can’t afford it, do you think I’m made out of money, do you think money grows on trees, we can’t afford that, chances are you have a very dysfunctional relationship with money. Don’t, I repeat, don’t make the same mistake with your kids. There is a panoply of books on finance and wealth building. It is no longer information that is kept secret by a few. The information is out there. You just need to show your kids that it’s in arm’s reach. Teach them the value of money and let it elicit positives emotions instead of the negative list of sayings that we are all used to hearing.

If you want to be an engineer, you need to study engineering;

If you want to be a doctor, you need to study medicine;

You get the point, right??


So, let’s teach our kids about money and stop thinking that money is bad!!! Teach your kids to have a millionaire’s mindset, not a thousandaire’s! Help calibrate you childrens’ blueprint so it can set them up for success, not mediocrity and certainly not failure.


What are some rules of money?

Rich people don’t do different things, they do a few things differently. Poor people spend their money and invest what’s left, while the rich invest their money and spend what’s left. We all know profits are better than wages, so why do we intuitively tell our kids to go to school, get good grades and get a good job. When Job means just over broke! I’m not here downing jobs, I’m just an advocate of financial knowledge, wealth building, investments, multiple source of income, diversification, real estate, business, paper assets and commodities, etc.….

Teach them the different profiles that exist….

(A little caveat before I list the profiles)

Yes, I’m generalizing……and yes there are exceptions……and please don’t get offended !!)

Poor: no education, government support, no investment

Middle class: education, high-paying job, some savings, small investments

Rich: entrepreneurial, business(es), big investments


Teach your kids what to do with a dollar

Don’t give your kids money. Teach them about money and more importantly how to earn money. The old Confucian adage says, “Give a man a fish, and you'll feed him for a day. Teach a man to fish, and you've fed him for a lifetime.”

So, what should your kid (or you for that matter !!) do with a dollar? What not to do is go out and spend it all at once!!!! Too many people spend money they earned to buy things they don't want, to impress people that they don't like…I digress!) Back to our topic…

This is what to do with a dollar:

- Never SPEND more than 50 cents. This will teach your child control. Spending is part of life because we have instant gratification lodged in our being. It is ok to spend money for our necessities, needs, wants and our play. We just can’t spend the whole damn dollar. Don’t live within your means, live below your means.


- We imperatively, absolutely, no exceptions, need to SAVE the next 20 cents. NO MATTER WHAT. This portion can then be split into three, 10 cents for a rainy day, a small security fund. 5 cents for something in the future called Education (university, college, seminar, certificate, youtube, webinars,) and 5 cents on something big that will take time to accomplish and make you proud you finally did it, like saving for new laptop. (This teaches our kids delayed gratification).


- The next one is where most people fail to stay consistent. You child needs (not should) INVEST the next 20 cents for wealth building. He can start small and go big later. This will force them to read and learn about the different types of investments that exists (there are plenty!). This will teach patience and set them up for life)


- This next one is overlooked but is as important as the others and that is what you GIVE. Your child should allocate 10 cents to some sort of charity of his liking or simply supporting people that can’t help themselves, maybe church or any worthy project. This teaches generosity which in turn shapes character! This is how you pay it forward!

Now that is a plan!!! Remember, it’s not the amounts that count, it’s the plan and the commitment to the plan. By the way, if you are over 16 and you are not doing this, don’t start now……..START RIGHT NOW!!


So, now you’re thinking, if I had more money, I’d have a better plan…. NO! If you had a better plan, you would have more money (thank you Jim Rohn). And eventually these numbers will change, and they will need to be adjusted as wealth grows. It is impossible for your kids not to become wealthy if we (parents) teach them how follow these principles and not violate the rules of money.


So, what’s next?

First, be open about the concept of money. Talk to them about the value of money. Be the example. Explain to them what things cost, for example hot water costs more than cold water. Then, open a bank account for them or if they’re too young - get them jars! They can put their money inside jars every time “pappou” gives them a 50 for their birthday. What do they do with the 50? You guessed it.


They can spend → $ 25

They must save → $ 10

Must put aside to invest later → $ 10

Must Give → $ 5


It’s that simple! Don’t be like most people that add an extra 20 and go buy shoes (unless they really need them).


Kids need to learn early on about assets, liabilities, income and expenses. (This is called a financial statement) Teach them about credit, trade (trust me, kids know how to trade, the understand barter very well. Hey, I’ll trade you my cookies for your granola bar)

But don’t teach your kids to trade time for money, teach them how to leverage and trade money for time and freedom.


Allowance is ok but you shouldn’t tie the allowance to chores. It should be for something extra like reading a book, being nice, doing the right thing. Not for doing something that someone that is part of a family should be doing anyway.


Encourage them to go get a job and learn the first skills. When? As soon as it is legally possible.


Let them experiment with entrepreneurship where they can learn about risk and reward and how to fail forward. Today it is so much easier than when I was growing up. You want proof, one-word YOUTUBE!


Push them to go out and give their money to support a worthy cause or even better become a volunteer!


Get them to come out of their comfort zone; if they want to be comfortable, they probably won’t become rich but if they treat money correctly, that money will take care of them and make them comfortable.


Lastly, make sure they stay committed to the process long enough to yield the desired results. I mean committed, not just interested, committed (Interested is when you do what’s convenient, committed is when you do whatever it takes. Track the results with them. They’ll learn how to have measurable results in a reasonable amount of time.


Remember, results are more valuable than intentions. They may want to be judged by their good intentions, but as you and I know, life rewards results, and results only.

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