Last week, Income Surfer wrote a great piece about the money advice he learned from his parents. He suggested I come with a piece about how I ‘try’ to teach my children about money. I thought it was a great idea because while I find it very easy to manage money, I’m not too sure about how I want to teach my kids about how it works. I must admit; I didn’t receive the best money education while growing up either…
My Parents + Money = Bankruptcy
My relationship with money didn’t start very well; at the age of 14, my parents went bankrupt. They told me it was not their fault, they couldn’t do anything differently, that the world is unfair. Wow… so much irresponsibility for adults… In fact, they were careless with their money and spent each penny they made before it was earned. I might sound a bit harsh, but I didn’t really appreciate losing everything, including some of my friends, in the bankruptcy process. However, several years later, I can say it may have been the best money lesson I’ve ever learned:
Make sure you always make money.
The lack of money became a source of fear, and also a source of motivation. This is what has driven me to a strong academic background and a sky rocketing career in the financial industry. I understood that by not caring enough about your job and not becoming “employable anywhere”, you put your financial situation at risk. Today, I can tell I could lose my job tomorrow morning and could easily find another one within a week. I know that it will be the case forever, but in the meantime, I’m well positioned for the future. Still, I’m about to quit everything, speaking about irony!
But this is not the lesson I want to teach my children. In fact, there is way more to learn about personal finance. Here are a few things I hope they will learn from me:
The way we handle money is often linked to our job. I want my children to do something they enjoy as there is nothing worse in life than waking up each morning and not wanting to go to work. Since my children are 10, 8 and 3, I can’t really discuss about their future careers yet. However, I tell them it’s very important to find something they like and that quitting school is not an option. I really don’t mind if they become a plumber or a rocket scientist, as long as they have a job they like. I tell them about my day job, how I like it and how it is pleasant to work when you like what you do. We also discuss how much you can make from one job or another and I don’t put the emphasis on the money aspect of a job, I would rather lead them to find what they enjoy doing.
I’m not the guy who followed the train when it comes to borrowing. I started leveraging at the age of 23 and have never pulled-back when it was time to take risk to make more money. In 2008, I remortgaged my house to buy more websites and build a solid side income. To this date; it was one of my best money decisions ever. Still, would you borrow 30K while the market is tumbling to buy website properties? This is what I did. I want to show my kids to not fear credit but to utilize it. There are two reasons to borrow; to buy goods and to invest. If you do the first one, you’ll never be rich (I know, I’ve tried it, lol!). But if you borrow to invest, it could be a good decision. But, you have to follow one last rule; only borrow what you can payback regardless if your investment goes well or not.
Investing / Saving
One simple rule; invest in things you understand. This is why I buy websites and also why I buy dividend stocks. This is a Warren Buffet rule. It’s so simple most people forget to follow it. They let greed blind their ignorance. I did that too when I was younger and paid the price. If you invest wisely, the money will work harder for you. The first key to investing is obviously saving. One doesn’t come without the other. I started giving money to my children when my first one was 6. They manage their own money and pay for small things by themselves. They understood the importance of money when they have to save for months before buying what they want. Soon, I want to introduce them to the concept of investing but I’m not sure if I’ll invent “dad’s bank” with an interesting investment return or I’ll have them purchase real stocks in one of my accounts…
Money is the fuel for any project
My mom told me I was 8 when I told her I wanted to work with money. I didn’t know exactly what to do back then, but I knew I wanted to work with money. I always liked money. I ended-up being a banker so I can tell I’m definitely fit for the job! Some people think I like money because of the buying power it gives. They are wrong; I like money because it’s the fuel for any project. Money is usually the only thing missing to make several projects great, to live awesome life experiences. I know frugalists will tell me I can achieve a lot without much money, but I’ll make a quick list of experiences I’ve lived and created awesome memories so far because I had money in hand;
Traveling 40 days backpacking across Europe (read my about page to learn more);
Study in France for 6 months;
Living the incredible excitement in the Bell Center during the Stanley Cup Playoffs (and did the same thing in Denver watching the Broncos and in St-Louis watching the Cardinals);
Reuniting my 10 best friends and their children during a complete weekend in a vacation property;
Living 10 days of dreams come true at Disney World with my kids;
Proposing to my wife in Bruge on the top of a tower;
Coaching my son at competitive soccer;
Giving my daughter the choice of doing her favorite activities;
Going to Hawaii to dive into lagoons with my wife and renewing our vows
Going to a crazy weekend in NYC for my 30th birthday!
I don’t mind the clothes I buy or the car I drive anymore, I know “stuff” is not life changing. However, I do remember each special moment I’ve spent with my wife, children and friends. Each moment was enhanced by money. Then again, the biggest project I have ever had in life is only realized with money. I couldn’t quit everything and go travel across several countries if I hadn’t put some money aside.
This is what I really want to teach my children about money; that it should be used to create moments.
What do you think?
Photo by JGI/Jamie Grill/Getty Images