As Sean and I talk more about family and kids, we were thinking about what concepts we want to talk to our kids about. Here is a list of 9 things I’ve compiled that the wealthy teach their kids about money. What are some concepts you would teach your kid?
9 Things The Wealthy Teach Their Kids About Money
Transcription
Below is a transcription of the podcast. This transcription was taken from Otter.ai so it might not be completely accurate:
This is the digital nomad quest podcast with Sharon Tseung. teaching people how to build passive income, become financially free and design their best lives.
Hey guys, Sharon from digital nomad quest, and today we’re gonna go over nine things, the wealthy teach their kids about money. So I think some of you guys may know already me and Shawn recently got married. And we had talked about kids and everything like that, it’s probably going to be a few years out the way but because of this discussion, I kind of thought about what do people talk to their kids about their finances, I did some research and I started gathering my thoughts. And this is basically based off of my research, as well as personal experience. I think that the earlier you prep your child around personal finance and about certain topics, it can really help them dramatically with their future. I’m super lucky that my parents were financially savvy and really taught me certain concepts that I really carried over as an adult. And I feel like for many families, money is a taboo subject. And I really feel like it’s better to normalize discussions around money, because to be honest, it will really change your future. So if you’re looking for a reason to start that conversation with your kids about money, I’m gonna go over these nine different tips. Okay, so first off, the wealthy teach the importance of money. So money isn’t everything. But it’s still very important to teaching that money is bad, and it’s bad to talk about money is honestly harmful. In my opinion, Self Made Millionaires or people who have achieved financial success know that money helps to have a better quality of life, it can be extremely stressful not having money. And building financial security helps to create a healthier lifestyle. And it allows you to be intentional with your choices. That’s kind of why I built this brand, where I talk about how to create passive income to achieve that financial freedom because it really helps you design your life for me, I’ve been able to become way more intentional with how I choose to live my life, because I’m not restricted financially, a lot of people feel stuck at their jobs or are doing something they hate. And it’s because they have to for money. But if you learn a lot of personal finance concepts and start building multiple income streams, investing that money, you can create that freedom. So if you’re stuck in a situation you don’t like you can tell your employer that you’ll quit, things like that it gives you so much more freedom to live the life that you are meant to live. And not only that having more wealth and abundance will allow you to help other people in their lives and allow you to give more and donate more and things like that. So if you’ve worked on your finances and built your wealth, you would have more opportunity to help others and make a greater impact. Number two, the wealthy teach that there is no ceiling to the amount you can earn, I think many grow up with this idea that the pie is limited. And there’s just a limited amount to go around. Basically, with that concept. It’s like if someone takes a bit more than you would have less and you just have the scarcity mindset. But in reality, there are tons of opportunities out there, especially with the Internet. In this day and age back in the day, it was a lot harder. But now I’ve mentioned so many side hustles and passive income ideas on this channel that you should feel like there are a lot of opportunities out there. So for example, with side hustles, you can even start a YouTube channel like I did, right? It’s very low capitalist start one, you can also start a money making blog, you can start selling shirts on merch by Amazon, you can start selling digital products on Etsy or you can start flipping items on Craigslist, right looking at the free section and then restoring items and then flipping them. A lot of people make tons of money just doing that. And for example, if you have a full time commission based role, there is actually no ceiling to how much you can earn is based off of the results that you actually produce, you’re getting paid, for example, based off of the sales you bring in. So there’s actually really no ceiling to the amount you can earn. And if you as a parent teacher, kids that there are so many opportunities out there, then that gives a kid and abundance mindset and really allows the kid to feel more optimistic about their future and what they can achieve. And on top of that, if you are a new parent or you’re going to become a parent, chances are your child’s going to grow in a different environment than you in a sense of they’re probably going to have even more opportunities than yourself. So I can’t even imagine what’s going to be out there when my child grows up, they’re probably going to have so many more opportunities. Maybe there’s going to be more Metaverse opportunities on top of the opportunities online. So make sure you let the kid know that there is really no ceiling to what they can achieve how much wealth they can have, and just give them the feeling of abundance and that they can achieve their dreams. Number three is to teach them about patience and delayed gratification. You’ve probably heard about that marshmallow study where kids sit in a room, they’re tested whether they can postpone eating marshmallows. So they’ll basically put a marshmallow in front of the kid and the grown ups gonna leave and by the time the grownup comes back, if the marshmallow is still there, then they get to have that one and another one, but if the kid eats it right away, then they’re not going to be able to get another one. So interestingly enough, the kids who actually were able to practice delayed gratification had higher chances of scoring better on their SATs and had more success in their life. They also had fewer behavioral problems. I think this concept is really important because it is an important factor when it comes to building your wealth. This goes along with the concept of lifestyle, inflation and lifestyle creep. Basically when people increase their income, they start spending more and they essentially don’t save up or invest in anything, so all their money just goes to different pleasures like this rather than waiting and allowing that money to grow exponentially over time. Same thing with entrepreneurship or being a content creator, you know, that was starting a brand, it takes maybe at least five to 10 years right to build it up to see more results. And someone who isn’t good with delayed gratification may want to give up really quickly in the beginning. Whereas people who are able to practice that patience, they’re able to work towards their goals, even if they don’t get any positive reinforcement back right away. They know that it’s a long timeframe. And they can work on it for a long period of time until things actually start to pop off. So kids need to be taught to work consistently and be patient and look at the bigger picture. Number four, the wealthy actually teach the difference between assets versus liabilities, they teach kids that some things are going to cost you every month, whereas other things are going to actually make you money every month. So assets actually bring money to your bank account, while liabilities take money out of your bank account. So as an example, if you purchased a rental property and you rented that out, that’s going to be an asset, whereas a car loan is a liability, because it actually costs you money every single month. Now, if you teach your kids this, you can also let them know that if they have more assets like this, then they can get more and more cash flow and income. And that way they can live more of a stress free life, they don’t have to worry as much because they’re getting money even when they’re not physically working on it. One way to easily teach that concept is to play Monopoly because I feel like I got a lot of inspiration, just playing that game. And knowing that if I had more properties, I would be able to get more cash flow when people landed on my square whatever. Number five, the wealthy actually teach to not depend on inheritance money. 88% of all millionaires are actually self made. So a lot of people think you need to be born in a rich family or be lucky or things like that, so that they can have a lot of money. But this statistic really shows that that’s not actually true. So instead of having a kid rely on their parents money, you might want to have them work for money instead. So for example, that could be with different chores and things like that, if they complete the chore, they make money, that could be a possible good way to showcase that as well as not spoiling the kid. For example, even Bill Gates said in one of his interviews, that his fortune is actually going to go to his foundation rather than his children, he’s going to only have minimal assets go to his kid, he thinks it does kids a disservice by giving them large sums of money because it distorts what they would do to forge their own path. I honestly really resonate with this because one of my fears is to raise spoiled children, I want them to know that they can achieve anything by themselves have confidence to work on their dreams, without relying on other people. Number six, the wealthy teach their kids that having money doesn’t make you better than others, your child should be able to understand that everyone deserves the same respect from a CEO to a janitor, everyone should be treated equally, your income is not correlated on how decent of a person you are. It doesn’t correlate to any sort of status. And honestly, one of my big pet peeves is people thinking that they’re better than others, I would say that money really becomes toxic when it becomes tied to your self worth and you start judging other people for it. So treat everyone equally with kindness, respect and love. As a parent, you can teach your kids that as well as showcase that example by really showing other people kindness in front of your kids. So your kid knows that’s how you should be treating other people. Number seven is that wealth creates freedom, you can teach the kid that there’s a difference between looking rich versus actual wealth, the best thing about wealth is that security and that freedom it offers you it’s not about the fancy cars or bags or things like that those material goods don’t necessarily buy happiness. Essentially, when you get those nice things, you usually feel happy for a bit. And then ultimately, that becomes your baseline and you just kind of level out and then it even makes it so that there’s more things to worry about. For example, when my husband gave me my engagement ring, I ended up losing it. And that brought so much more sadness versus like, if I didn’t even have it at all, you just worry about more things. Like if I had a nice car, I’d probably worry about it getting scratched. Whereas I have this used cheap car so I don’t have to worry about anything. It gets me from A to B safely. So I love that car. So that’s why material goods don’t necessarily equate to happiness. And that’s why you should teach your kid that wealth is more about financial security and freedom having wealth and cash flow means you don’t have to actively work for money if you have money working for you. Number eight, the wealthy actually teach their kids about socializing and the power of influence. So I think this is an important concept that people don’t talk about as much because the ability to socialize and communicate with others in a certain way can allow you to get a lot more opportunities. It’s the ability to influence others and create a sense of leadership when you’re talking. I honestly find this very true in life that if you’re good at talking, you have more potential to get promoted to take on bigger roles. People will respect you more or for example, in sales. If you’re good at listening to others, understanding people’s needs and showing that you are on their side. They’re more likely to buy from you versus As you just continuously talking and not listening to them, so there’s an art to getting better at talking and becoming more of a leader and also learning to listen, I think real estate is also a great example because it’s all about relationships. It’s all about building your team of contractors, agents, wholesalers, lenders, and investors so that you have more chances of building partnerships and having the right team to make the deals actually work. For me, this has been something a little bit more challenging. You might not think this because I make these YouTube videos. But basically, I am introverted, and I guess scared of talking. So I decided to challenge myself with taking improv classes for half a year, I also challenged myself to speak at a conference and even doing these YouTube videos. It’s not that natural for me, but it gets me better and better at talking to people. If you want to get better at speaking with people, you should check out How to Win Friends and Influence People by Dale Carnegie. That’s a great one to read as well. The last tip I have is that the wealthy teach their kids to use the tools of their generation. Like I mentioned earlier, in this day and age, there are so many possibilities back in the day, building your own side hustles and businesses would be a lot trickier, right? You would have to meet in person and try to advertise in person, you wouldn’t be able to put up an online shop, you would have to have like a brick and mortar shop, for example. Whereas now there are online side hustles like Amazon, Etsy, Shopify blogging, YouTube, and there’s so many more that you can pursue to make a ton of money. And on top of that, with recent times, remote work has even become normalized. So that’s another opportunity that you know our generation has, so who knows what your child will have in terms of opportunities, there are going to be more and more things that they can pursue. So they need to learn the tools of their generation. For example, in this generation coders get paid a lot coders are super important to be able to make certain websites certain programs and software and apps as well. So that’s why getting ahead of it looking at the opportunities there are and actually seizing them is super important. So hope you guys enjoyed this episode on nine things that wealthy teach their kids about finances, I feel like as a summary, really don’t let your kids settle for less let them know that there are abundance of opportunities out there and they can achieve whatever they want to achieve and then really teach them the fundamentals. So they’re set up for the future for example, that you know, you have to get more assets versus liabilities you have to start saving and investing your money growing your income these are all great things to teach your kids in a future episode I want to go over how to teach your kids exactly about these concepts because you know there are these things but how do you actually talk to your kids about these things and I hope you stay tuned for that episode as well.
So I hope you guys enjoyed this episode. Please make sure to rate review and subscribe. It really helps our podcast grow. And thanks again. I’ll see you guys in the next one.
Hey guys, Sharon from digital nomad quest, and today we’re gonna go over nine things, the wealthy teach their kids about money. So I think some of you guys may know already me and Shawn recently got married. And we had talked about kids and everything like that, it’s probably going to be a few years out the way but because of this discussion, I kind of thought about what do people talk to their kids about their finances, I did some research and I started gathering my thoughts. And this is basically based off of my research, as well as personal experience. I think that the earlier you prep your child around personal finance and about certain topics, it can really help them dramatically with their future. I’m super lucky that my parents were financially savvy and really taught me certain concepts that I really carried over as an adult. And I feel like for many families, money is a taboo subject. And I really feel like it’s better to normalize discussions around money, because to be honest, it will really change your future. So if you’re looking for a reason to start that conversation with your kids about money, I’m gonna go over these nine different tips. Okay, so first off, the wealthy teach the importance of money. So money isn’t everything. But it’s still very important to teaching that money is bad, and it’s bad to talk about money is honestly harmful. In my opinion, Self Made Millionaires or people who have achieved financial success know that money helps to have a better quality of life, it can be extremely stressful not having money. And building financial security helps to create a healthier lifestyle. And it allows you to be intentional with your choices. That’s kind of why I built this brand, where I talk about how to create passive income to achieve that financial freedom because it really helps you design your life for me, I’ve been able to become way more intentional with how I choose to live my life, because I’m not restricted financially, a lot of people feel stuck at their jobs or are doing something they hate. And it’s because they have to for money. But if you learn a lot of personal finance concepts and start building multiple income streams, investing that money, you can create that freedom. So if you’re stuck in a situation you don’t like you can tell your employer that you’ll quit, things like that it gives you so much more freedom to live the life that you are meant to live. And not only that having more wealth and abundance will allow you to help other people in their lives and allow you to give more and donate more and things like that. So if you’ve worked on your finances and built your wealth, you would have more opportunity to help others and make a greater impact. Number two, the wealthy teach that there is no ceiling to the amount you can earn, I think many grow up with this idea that the pie is limited. And there’s just a limited amount to go around. Basically, with that concept. It’s like if someone takes a bit more than you would have less and you just have the scarcity mindset. But in reality, there are tons of opportunities out there, especially with the Internet. In this day and age back in the day, it was a lot harder. But now I’ve mentioned so many side hustles and passive income ideas on this channel that you should feel like there are a lot of opportunities out there. So for example, with side hustles, you can even start a YouTube channel like I did, right? It’s very low capitalist start one, you can also start a money making blog, you can start selling shirts on merch by Amazon, you can start selling digital products on Etsy or you can start flipping items on Craigslist, right looking at the free section and then restoring items and then flipping them. A lot of people make tons of money just doing that. And for example, if you have a full time commission based role, there is actually no ceiling to how much you can earn is based off of the results that you actually produce, you’re getting paid, for example, based off of the sales you bring in. So there’s actually really no ceiling to the amount you can earn. And if you as a parent teacher, kids that there are so many opportunities out there, then that gives a kid and abundance mindset and really allows the kid to feel more optimistic about their future and what they can achieve. And on top of that, if you are a new parent or you’re going to become a parent, chances are your child’s going to grow in a different environment than you in a sense of they’re probably going to have even more opportunities than yourself. So I can’t even imagine what’s going to be out there when my child grows up, they’re probably going to have so many more opportunities. Maybe there’s going to be more Metaverse opportunities on top of the opportunities online. So make sure you let the kid know that there is really no ceiling to what they can achieve how much wealth they can have, and just give them the feeling of abundance and that they can achieve their dreams. Number three is to teach them about patience and delayed gratification. You’ve probably heard about that marshmallow study where kids sit in a room, they’re tested whether they can postpone eating marshmallows. So they’ll basically put a marshmallow in front of the kid and the grown ups gonna leave and by the time the grownup comes back, if the marshmallow is still there, then they get to have that one and another one, but if the kid eats it right away, then they’re not going to be able to get another one. So interestingly enough, the kids who actually were able to practice delayed gratification had higher chances of scoring better on their SATs and had more success in their life. They also had fewer behavioral problems. I think this concept is really important because it is an important factor when it comes to building your wealth. This goes along with the concept of lifestyle, inflation and lifestyle creep. Basically when people increase their income, they start spending more and they essentially don’t save up or invest in anything, so all their money just goes to different pleasures like this rather than waiting and allowing that money to grow exponentially over time. Same thing with entrepreneurship or being a content creator, you know, that was starting a brand, it takes maybe at least five to 10 years right to build it up to see more results. And someone who isn’t good with delayed gratification may want to give up really quickly in the beginning. Whereas people who are able to practice that patience, they’re able to work towards their goals, even if they don’t get any positive reinforcement back right away. They know that it’s a long timeframe. And they can work on it for a long period of time until things actually start to pop off. So kids need to be taught to work consistently and be patient and look at the bigger picture. Number four, the wealthy actually teach the difference between assets versus liabilities, they teach kids that some things are going to cost you every month, whereas other things are going to actually make you money every month. So assets actually bring money to your bank account, while liabilities take money out of your bank account. So as an example, if you purchased a rental property and you rented that out, that’s going to be an asset, whereas a car loan is a liability, because it actually costs you money every single month. Now, if you teach your kids this, you can also let them know that if they have more assets like this, then they can get more and more cash flow and income. And that way they can live more of a stress free life, they don’t have to worry as much because they’re getting money even when they’re not physically working on it. One way to easily teach that concept is to play Monopoly because I feel like I got a lot of inspiration, just playing that game. And knowing that if I had more properties, I would be able to get more cash flow when people landed on my square whatever. Number five, the wealthy actually teach to not depend on inheritance money. 88% of all millionaires are actually self made. So a lot of people think you need to be born in a rich family or be lucky or things like that, so that they can have a lot of money. But this statistic really shows that that’s not actually true. So instead of having a kid rely on their parents money, you might want to have them work for money instead. So for example, that could be with different chores and things like that, if they complete the chore, they make money, that could be a possible good way to showcase that as well as not spoiling the kid. For example, even Bill Gates said in one of his interviews, that his fortune is actually going to go to his foundation rather than his children, he’s going to only have minimal assets go to his kid, he thinks it does kids a disservice by giving them large sums of money because it distorts what they would do to forge their own path. I honestly really resonate with this because one of my fears is to raise spoiled children, I want them to know that they can achieve anything by themselves have confidence to work on their dreams, without relying on other people. Number six, the wealthy teach their kids that having money doesn’t make you better than others, your child should be able to understand that everyone deserves the same respect from a CEO to a janitor, everyone should be treated equally, your income is not correlated on how decent of a person you are. It doesn’t correlate to any sort of status. And honestly, one of my big pet peeves is people thinking that they’re better than others, I would say that money really becomes toxic when it becomes tied to your self worth and you start judging other people for it. So treat everyone equally with kindness, respect and love. As a parent, you can teach your kids that as well as showcase that example by really showing other people kindness in front of your kids. So your kid knows that’s how you should be treating other people. Number seven is that wealth creates freedom, you can teach the kid that there’s a difference between looking rich versus actual wealth, the best thing about wealth is that security and that freedom it offers you it’s not about the fancy cars or bags or things like that those material goods don’t necessarily buy happiness. Essentially, when you get those nice things, you usually feel happy for a bit. And then ultimately, that becomes your baseline and you just kind of level out and then it even makes it so that there’s more things to worry about. For example, when my husband gave me my engagement ring, I ended up losing it. And that brought so much more sadness versus like, if I didn’t even have it at all, you just worry about more things. Like if I had a nice car, I’d probably worry about it getting scratched. Whereas I have this used cheap car so I don’t have to worry about anything. It gets me from A to B safely. So I love that car. So that’s why material goods don’t necessarily equate to happiness. And that’s why you should teach your kid that wealth is more about financial security and freedom having wealth and cash flow means you don’t have to actively work for money if you have money working for you. Number eight, the wealthy actually teach their kids about socializing and the power of influence. So I think this is an important concept that people don’t talk about as much because the ability to socialize and communicate with others in a certain way can allow you to get a lot more opportunities. It’s the ability to influence others and create a sense of leadership when you’re talking. I honestly find this very true in life that if you’re good at talking, you have more potential to get promoted to take on bigger roles. People will respect you more or for example, in sales. If you’re good at listening to others, understanding people’s needs and showing that you are on their side. They’re more likely to buy from you versus As you just continuously talking and not listening to them, so there’s an art to getting better at talking and becoming more of a leader and also learning to listen, I think real estate is also a great example because it’s all about relationships. It’s all about building your team of contractors, agents, wholesalers, lenders, and investors so that you have more chances of building partnerships and having the right team to make the deals actually work. For me, this has been something a little bit more challenging. You might not think this because I make these YouTube videos. But basically, I am introverted, and I guess scared of talking. So I decided to challenge myself with taking improv classes for half a year, I also challenged myself to speak at a conference and even doing these YouTube videos. It’s not that natural for me, but it gets me better and better at talking to people. If you want to get better at speaking with people, you should check out How to Win Friends and Influence People by Dale Carnegie. That’s a great one to read as well. The last tip I have is that the wealthy teach their kids to use the tools of their generation. Like I mentioned earlier, in this day and age, there are so many possibilities back in the day, building your own side hustles and businesses would be a lot trickier, right? You would have to meet in person and try to advertise in person, you wouldn’t be able to put up an online shop, you would have to have like a brick and mortar shop, for example. Whereas now there are online side hustles like Amazon, Etsy, Shopify blogging, YouTube, and there’s so many more that you can pursue to make a ton of money. And on top of that, with recent times, remote work has even become normalized. So that’s another opportunity that you know our generation has, so who knows what your child will have in terms of opportunities, there are going to be more and more things that they can pursue. So they need to learn the tools of their generation. For example, in this generation coders get paid a lot coders are super important to be able to make certain websites certain programs and software and apps as well. So that’s why getting ahead of it looking at the opportunities there are and actually seizing them is super important. So hope you guys enjoyed this episode on nine things that wealthy teach their kids about finances, I feel like as a summary, really don’t let your kids settle for less let them know that there are abundance of opportunities out there and they can achieve whatever they want to achieve and then really teach them the fundamentals. So they’re set up for the future for example, that you know, you have to get more assets versus liabilities you have to start saving and investing your money growing your income these are all great things to teach your kids in a future episode I want to go over how to teach your kids exactly about these concepts because you know there are these things but how do you actually talk to your kids about these things and I hope you stay tuned for that episode as well.
So I hope you guys enjoyed this episode. Please make sure to rate review and subscribe. It really helps our podcast grow. And thanks again. I’ll see you guys in the next one.
