Today I will talk about a little bit about kids and money. I have two young boys and time to time I have thought about this topic; How I will teach the 8th wonder of the world, different between good and bad loan, and etc. to them. There are some rules about money which my parents taught to me, but nothing related to stocks and power of compounding. So, I want to give them a little bit smoother start if they want to have it.
I found an article about this topic and I decided to wrote my TOP5 list about the topics which are important to me as a father and which are the rules and hints I want to teach to my kids:
The purpose of lesson 1 is to learn the value of money. How much you get candy if you have one euro or one dollar; one candy or two candies or the whole bag of candy?
With a patience, I mostly mean power of compounding. I have already talked about this on my blog, but the idea is; use a little bit less today and get much more back in the future.
Be the Bank
What is interest and how it will impact to future salaries and purchasing power? What is the difference between good and bad loan?
At some point, I will start to give weekly money to my kids. This will be the money they can use to buy something from themselves, candy, toys and etc. Also, I want to create a rule that at least 10% of this money will be saved. They will learn the rule; pay yourself first and then for others.
Okay, this is a likely scenario for sure with some topics 😀 They just need to learn some aspects in a hard way.
This is an additional topic, but it would be nice they want to read at least one book about investing and money. And if they would only read one book it would be A Random Walk Down Wall Street by Burton G. Malkiel. At least this was the “eye-opener” for me.
What will be your tips for your kids or what those were?
Have a great summer,