29 Apr 9 important money tips to teach your children
„If only I knew then what I know now…” In today’s show Michael Yardney, from Metropole Property Strategies, tells us the 9 important money tips to teach our children.
Kevin: I wonder if you, like me, have asked yourself this question: if only I knew then what I know now, would I have done things differently?
I’m going to ask that question right now of Michael Yardney from Metropole Property Strategies. Good day, Michael.
Michael: Hello, Kevin.
Kevin: Have you ever asked yourself that question?
Michael: How often have I asked myself that? There are so many things I’d do differently in my personal life, in my business life, and definitely in my investment life.
Kevin: One of the great reasons why you should ask yourself that question, too, Michael, is so we can pass on so much great information to our kids, can’t we?
Michael: Yes, we can, because most of us haven’t been taught how to handle money by our parents.
Kevin: Michael, what lessons should we be teaching our kids?
Michael: Kevin, one of the first lessons is today’s debt can equal tomorrow’s slavery. When we’re young, we tend to think in narrow, short time increments. We want immediate gratification. We don’t often like delaying purchases of things we really want.
Unfortunately, this leads a lot of young people into a credit trap, where they borrow using high-interest rate store cards or personal loans only to pay back thousands of extra dollars of interest, owing people money for a long time, and that robs them of the ability to use their money in the future to use it more effectively like investing.
Kevin: I suppose when you’re young, too, Michael, you become very blasé about debt, don’t you?
Michael: You do. Again, there’s good debt, there’s necessary debt, and there’s bad debt. We’re really here talking about bad debt for toys. We all like our toys, Kevin – at least I know I do – but our expectation often is that we see in all these magazines that other people have got the glossy toys, the big computers, the fancy phones. Consumerism is the new black.
And the truth is positions don’t make for a rich life. It’s the experiences and the people, the things that money can’t buy that makes us truly wealthy, Kevin.
Kevin: Michael, I think, too, sometimes when we’re young, we tend not to take responsibility.
Michael: It’s everyone else’s fault, Kevin. It’s your boss’ fault, it’s the employer’s fault, it’s the government fault. The fact is there are no rich victims. However, unfortunately, people are too quick to blame others for perceived failures in their own lives. Yes, that is a good lesson to teach your kids – that you actually have to take responsibility for all the things that you choose to do and all the things you choose not to do, Kevin.
Kevin: Indeed, mate. What’s the next one?
Michael: Patience and waiting. In fact, it’s been shown that people who have a longer time perspective and are patient are more likely to achieve things not just financially but in other areas of your life. If you know that it takes time and hard work to invest and eventually get a deposit, save up, get a deposit, buy a property, be patient, wealth is a transfer of money from the impatient to the patient, Kevin.
Kevin: Michael, what about all those lucky people, though?
Michael: Yes, everyone else is more lucky than me. I think you and have been around long enough to know that luck’s made through hard work. Many of us like to attribute the success of others to good fortune or the fact that they had rich parents or they were in the right place at the right time or they knew the right people. In fact, it’s really only a small group of people who’ve lucked out by winning the lottery or successfully been at the right place at the right time.
Find something you’re passionate about, make a living doing it, and then you’re much more likely to enjoy the work – it won’t be hard work – and then you won’t be struggling and you’ll be lucky.
Kevin: How much do you need, really, though, to strive to get financially free?
Michael: It’s interesting when you look at most Australians, they’re going to earn millions and millions of dollars over their lifetime. People don’t believe it, but multiply your average wage by 20, 30, or 40 years of work, and you’ll actually find that you’re going to earn millions, but most people never save it.
It’s really not how much you earned, but you have to learn to spend less than you earn, save it, invest some of that, and eventually move to the point of becoming an investor. Financial freedom has nothing to do with how much money you’ve earned, but on the relationship you have with money and learning financial fluency, Kevin.
Kevin: I guess the other thing, too, Michael is that you’re not going to remain young forever, are you?
Michael: No, you’re not. I guess one of the ways you can look at it is you can just live for now because you don’t know – the old “eat, drink, and be merry, because tomorrow you die.” But on the other hand, if you’re young, you have time on your side, and that’s one of the great things about real estate and compounding. It relies on money, but it also relies on time. If you start early enough and start saving and start investing, you’re going to have the universe at your feet, Kevin.
Kevin: Wonderful. The bottom line, Michael?
Michael: Wealthy people do certain things every day that sets them apart from everyone else. Wealthy people have good daily habits that they’ve learned from their parents. These habits are the reasons why the wealth gap unfortunately keeps increasing in Australia. The rich keep getting richer.
We’re only likely to be as good as the mentors and the people who learn from, so it’s important for us to teach our children good daily success habits and level the playing field. There’s no reason why our children can’t be amongst the wealthy people in Australia.
Kevin: Indeed, and on that note, Michael, we say thank you very much.
Michael: My pleasure, Kevin.