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- 4 Principles For Financial Success
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90% of fortunes are lost within 3 generations.
It's not about how much money you make, it's about how much you keep.
All of your hard work will be wasted if you don't teach your children these 4 financial principles.
Let's get into it:
1. Work Ethic
Kids need to learn that money doesn't grow on trees.
Use money to incentivize good behavior while simultaneously teaching them the entrepreneurial mindset.
Remember what Charlie Munger said:
"Show me the incentive and I'll show you the outcome."
Incentives are extremely powerful, use them to set your children on a winning trajectory.
Help them figure out a business idea and implement it.
Show them that hard work done smartly is a cheat code for making money.
2. Delayed Gratification
Studies have shown that individuals who can delay gratification, even for only 15 minutes, are way more likely to have successful life outcomes.
This trait is partially congenital, but can also be developed and strengthened through good habits.
Put them in situations where they have to decide between short-term and long-term outcomes.
If your child repeatedly chooses short-term, you may need to get the other parent into the same situation where your child can see them make the other, correct choice.
Celebrate the right choice and reinforce this good habit.
Make the benefits of delayed gratification obvious to them through healthy rewards.
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3. Investing 101
Our kids follow our example, not what we say.
Make investing a game that the entire family participates in.
If they see mom and dad investing, getting returns, and feeling excited, they are going to want in on the action.
As Dale Carnegie said:
"People rarely succeed unless they have fun in what they are doing."
Make money fun for them.
4. Money Talks
Make money a topic of conversation.
Discuss how you manage the family economy, such as:
• How you make decisions on big expenses
• How you keep money coming in month after month
• How you plan for the family's financial future, including their own
Share with them your multigenerational vision.
Dare I say, sell them on your vision because it will be up to them whether or not it comes to fruition.
And that's a wrap!
By instilling these principles into your children from a young age, you can rest assured that they will achieve financial success.
Now, let’s get investing!
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