Wedding season for my group of friends was more than a decade ago. Attending most celebrations as a bachelor, the veterans proudly passed me pictures of their little tykes, adorning that they have given them “purpose” in life.
Having believed I was of solid foundation with a firm connection to my life’s meaning, I smiled and agreed, “I’ll bet they do.”
Years later and now with a couple sons of my own, I too have discovered that awesome purpose earlier told.
Parent’s put their heart and soul into teaching their kids so they have a chance at a richer life. From baseball, to math, dealing with bullies or heartbreak; we might not always know what we’re talking about - but we sure try our best.
I wrote Wealth Is a Choice driven by the thought of an unforeseen unfortunate event taking me before I had time to teach my boys my craft and understanding of the investment industry. Wanting them to avoid struggles I’ve seen so often with others and instead excel financially at an early age, I spelled out what they’ll need to know about money and how to get it to work for them throughout life. The book is dedicated to my boys, but aside from leafing through the pages and looking at some of the pictures, it’s written for adults and they probably won’t actually read it for a number of years.
Until then I’ll teach them the core principles that can be applied even under the age of ten.
Here are three:
How to Make Money
If you ask my boys how you make money they will tell you with confidence “Solve someone else’s problem.”
I don’t want my sons to get caught up in the idea that they can only get paid by having a J.O.B., with their financial stability teetering cautiously on employment rates. Sometimes we solve other people’s problems through our manual labor such as my many childhood jobs mowing lawns, stacking wood and even trapping neighborhood skunks.
Other times we use problem solving skills, consulting or other service jobs.
Solving a problem is not limited to a time of the day or day of the week. I want my boys to realize that if they want something that requires money, then they need only to work toward a solution for someone and they will likewise be rewarded.
The bigger and more complex the problem and the fewer the people capable of delivering the solution the more they could get paid. They are given a weekly allowance for being part of the family unit and doing their share of work around the house. They are paid double time for showing resolve and creativity in solving unique situations.
Not only does this idea of problem solving inspire the freedom in realizing that they can control their own destiny with income, it shows them the importance of shared success. Often in our competitive world we want to win and feel at some loss when others also profit from our idea or labor. The thought of getting paid by another to solve their problem celebrates the fact that success happens in tandem.
Save Your Money
All of our earned money is deposited into one of two types of assets, good or bad. In my book I describe that good assets represent everything we intend on converting into future income. And bad assets are everything else.
I don’t want my boys to grow up enslaved to their income because they spend most of it on depreciating assets, bills or other things that cost money to maintain. That’s a rat race not easily escaped and keeps many well intentioned people from reaching the independence they desire.
So they save their money in a couple of different places - the piggy bank (cash reserve) and other investments. To help them understand the value of investing, we match dollar for dollar everything they put into their other investments.
Debt is unacceptable. If they don’t have the money to buy what they want - then they don’t get it. They will not receive an advance in their allowance because their piggy bank is empty.
Through their discipline fortunately their piggy bank has never been empty. But they do know they have the opportunity to make money by solving another’s problem if they need to.
Investing is Tangible
Investing can seem like a mysterious transaction full of hope and gamble. But I know the more connected we are then the more we participate in the endeavor. So we talk often about the components of investing. Who owns the company, who has lent money to the company, who runs the company and receives an income from the company. When my boys have a business idea we’ll ask them what level of the business is their involvement, where will they raise the money and how much will they pay their investors back?
We also talk about public stocks, and look up companies on the internet to see their numbers. I tell them about stocks we own, which ones worked out really well and which investments didn’t and why. They ask about companies with products they play with such as toy manufacturers or video games. We find out if they are publicly traded, and whether or not we should buy it. They know that stocks go through cycles, and sometimes they are expensive to buy and other times cheap.
When their investment statements come in the mail we open them up and talk about their performance. The more tangible investing is for them the more likely they are to get involved. And in my opinion, the younger you get started the wealthier you can become.
This father’s day I’ll be playing baseball with my sons. Something I know much less about than investing. Relishing in their every movement, sound and smile; I’ll take a day off of trying to solve their future problems and staying in the moment, will just enjoy the “purpose” in being a dad.