Learning to Manage Money

Financial Myth about smart kids are always successful no matter how they start out

There is a financial myth that smart kids are always successful no matter how they start out or what their upbringing may be.

When I was growing up, I knew plenty of very high IQ kids that didn’t have the proper preparation during their childhood and turned out not being very successful in life.  Perhaps you know of such occurrences too?

The Thinker

These days, it only makes sense to prepare your child by starting certain things out of the gate while they are growing up from baby to adult.  Using certain teachings and with certain pattern establishment while kids are young can greatly increase the probability that they will be prone to be successful in life both careerwise and financially.

A good portion of the problem is that the parents of smart kids don’t have the upbringing themselves to teach such skills.  I guess if you don’t know such activities happen in other households, then you don’t know to be concerned about such activities.  And such activities could be incredible intimidating since such techniques aren’t really spelled out in society.

So to give you child an edge, here is what we do in our household:

  1. Homework must be done nightly and done to completion!  Unfortunately, this also means that if your child doesn’t understand the homework, you will have to review and assist them.  If you don’t know how to do a topic, then seek help from a tutor or some smart relative or friend.
  2. An allowance and exposure to financial information is critical.  I give both my kids allowances and showed them how to split the allowance stream into two categories (spending and saving).  Charity, while noble is not a good thing to teach them at earlier phases (unless you are very rich and your kids will be very rich).  Instead, my kids contribute to charity via time spent in such activities.  By volunteering time, they view a more tangible experience versus just sending money to some invisible entity were the results are unknown (sounds almost scammy huh, lol).
  3. School is work, and work requires schooling.  They are related and so I reward my kids for good grades by paying for grades.  This works for us.  Both my kids are straight A students.  I provide a kicker that if they do get straight As, then they get an extra “bonus” amount of $20.  An extra $20 won’t break me, and at the same time demonstrates how bonuses are achieved.  While I don’t know what my kids will do as adults (maybe they’ll be self-employed), at least the understand how the corporate bonus structure works.
  4. Sticking with the reward theme, instead of “real” savings, I put the money that they save in investments that pay dividends.  I also explained and created various charts to help them understand how a dividend tree works.  I call such a stream a dividend tree because it as it grows, it produces more “money” fruit that they can receive.  To me, money is not the goal, instead a money income stream is the goal.
  5. Life is competitive.  It’s just the way things are.  You are constantly competing against someone or thing.  The key is to make competition intense but not stressful (is that possible? lol).  I expect my kids to do their best on whatever they do.  This is natural for me, but they aren’t competitive naturally, so I’m still developing an action plan for this one.

I typed the above so that you can see some of the activities that I’m doing to help my kids get ahead and hopefully succeed in life.  I do the above in a friendly yet firm manner because I want to be both their teacher and friend in these processes.

Thanks for reading,

Rich

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