Sunflowers

[Xenia]

How do you educate your children on investing and entrepreneurship?

Here's a quote from an article I wrote about my children..... I think they got it!

We gave each of them a handful of sunflower seeds and explained how money and investing works. We told them that now that they have the seeds in their hands they have a few options to decide upon. One is that they can eat all the seeds now and will have to work for more tomorrow or they can grow them and then eat some of the seeds that come from the sunflowers they grow. They chose to grow their seeds, so we then discussed the approach they would use; they could just scatter them everywhere and hope they land somewhere and grow (gambling) or they can give the sunflowers the best chance by preparing the soil and looking after the seeds as they germinate (education).

Once the sunflowers grew, we explained that they represent how money works in society and most people just choose to eat their seeds on the day they receive them without knowing that each seed can harbour many more seeds for future use if some thought was put into it.

 

[Amadio]

Cool.

I've always used this way to show the kids the value of investing - if you add up all the coffees and lunches a young person buys in a week (or something else like their phone bills) - show the compounding of that money over 40 years at about 9-10% (the average growth of both shares and property over decades) they are usually pretty astonished.

 

[evand]

Mine are kids, they don't need to know about investing and entrepreneurship. They do need to know about being kids.

If they choose that path later, ill certainly mentor them.

 

[RumpledElf]

I've discovered that confiscating money off the kid and putting it where she can't see the balance encourages her to save. If she knows how much she's got she has no incentive at all to make it bigger because she's already got some money. Telling her that $13 a week should be almost $700 a year but you've only got $100 in the tally by October didn't matter because she has $100!!!1!11!!

All the discussion in the world about building up money was completely pointless, taking it away worked a treat and the balance has been flying upwards since.

Also sunflowers wouldn't work on her, every plant she's grown either I've had to take it over, or the times I've let her do it it she kills it. I'm letting her have a pet the day she realises that plants and animals need daily food and/or water.

 

[Corey Batt]

I don't want my children to be farmers.

 

[redwing]

How old are the kids Xenia?

My girls at six and three wouldn't eat sunflower seeds even if I mixed them with ice cream and M&M's

They would be keen to watch the flowers grow though and have a ball watering and picking any fruit & veg in the back garden

Like the idea, I just need a better analogy for the little un's

Can't wait until they ask about seedless fruits

For the eleven year old I've explained to him about where the consumer sits in the business cycle and we've looked at and discussed the stock price chart of Apple (NASDAQ:AAPL) as it's the ducks nuts in his eye's

 

[travelbug]

Mine are kids, they don't need to know about investing and entrepreneurship. They do need to know about being kids.

If they choose that path later, ill certainly mentor them.

You teach your kids about money every day without mentoring them.

Pocket money. Getting paid for jobs. Getting handed money whenever they want it. Getting money for Christmas etc. Having to save for things they want. Forgoing goods for the sake of something else. Getting rewards for behaviour. Seeing parents give to charities. Seeing parents save for holidays, prioritising spending etc etc.

It all becomes part of being a kid. Kids have money and learn how to spend it. It's up to you to be a role model.

 

[INVSTOR]

My 11 year old often says, "I never want to have rental properties". She see's us having to do inspections and maintenance. We try to explain 'why' we have them, so we can retire earlier and that is why I haven't had to work for the past 12 years. It's all a bit over her head at the moment.

Sometimes I borrow money off my kids for a day when I need money in an emergency. I give them interest for letting me borrow it. Hopefully they'll get something out of it eventually!!

My grandfather had several businesses and commercial properties. (He died before I was born). As a child we had to clean one of them every week. I remember asking my parents heaps of questions about how he got them. The answers still stick in my head. I'm sure my kids will ask if or when they become interested.

 

[evand]

This was the original question.

How do you educate your children on investing and entrepreneurship?

Sure, i teach my kids about money every day but thats not what the question asked.

You teach your kids about money every day without mentoring them.

Pocket money. Getting paid for jobs. Getting handed money whenever they want it. Getting money for Christmas etc. Having to save for things they want. Forgoing goods for the sake of something else. Getting rewards for behaviour. Seeing parents give to charities. Seeing parents save for holidays, prioritising spending etc etc.

It all becomes part of being a kid. Kids have money and learn how to spend it. It's up to you to be a role model.

 

[charlieandkath]

Awesome anology Xenia. There is some passage similar in the bible about the preparing of the land etc.

Our kids are 3 and 4. We have not really taught them about money yet but we are teaching them about saving. During the day our kids earn special treats (usually smarties). After dinner in the evening they are then allowed to eat their special treats or they can save them for the next day. For every two they save we add another in for the next day. It is amazing how many they save. The temptation gets too much after a few days though and they pig out and eat the lot. Bit more teaching to go yet!!

 

[Dazz]

My grandfather had several businesses and commercial properties. As a child we had to clean one of them every week. I remember asking my parents heaps of questions about how he got them. The answers still stick in my head.

Nice one Invstor.


I've also done similar things with our kids. From a very young age they have had to come out with me and sweep out factories and clean out laydown areas on industrial sites.


When you are out there all morning, you get some very intuitive questions, which can be asked and answered in a very informal way whilst you are sweeping / raking / picking up rubbish.


I found it a double good thing, they get exposure to some fantastic assets and are curious as to how we acquired them, and also they get some excellent life skills about hard heavy hot work, determination, not chucking a poopy and giving up, how to drive a broom / rake / axe / shovel which most kids can't or won't or don't use nowadays.


Years ago when we going through all that, it didn't quite gel completely.


Now, two major things have happened since that has cemented their understanding. # 1 is that their maths skills have improved to the point where they fully understand what is going on, and # 2 their old man gets to stay home full time and doesn't dread Sunday nights or Monday mornings.


It's the tangible results at this stage that they get.


When they are adults, I'm confident they'll want to know more.

 

[wylie]

I would just add that our kids grew up helping with painting houses, laying pavers, ripping out kitchens, bathrooms and walls (our own and IPs). As littlies I had to sometimes go over what they had just painted and fix it up. I tried to do this surruptitiously when they were little in case they were hurt by not doing a good enough job, but as they got older I was able to show them techniques to improve their skills.

Our three boys had more skills in ripping out kitchens and bathrooms and painting than most other kids. Those skills will be useful forever.

We were certainly not renovating all the time, but probably once or twice a year we would do "something" to an IP owned by us or their grandparents.

I know about ten "jobs" ago Mum and I sat down one day and counted to 30 the number of times we had tackled some job in a house, as small as an internal paint job, to installing new bathroom, ripping out a kitchen and replacing it, etc.

What I would say is that just as I am tired of renovating (just turned 50), my kids also have lost interest in being up a ladder painting a roof in a 40 degree summer day and are not interested in it any more. As they got old enough, and were actually helping us, as opposed to just being there because we had to be there, we paid them well for their help. They worked as hard as any other tradesman on the site. On days when they were not interested, they stayed home.

Their enthusiasm in their younger days has not continued through the late teenage years. I don't think it is because they did it a LOT or we worked them too hard. They just have other things that interest them now.

Our oldest rips his own bathroom out on Monday when he picks up the keys. He will save money doing this. If hubby was not working right now (he has sort of "retired" but doing a contract to help someone out), he would probably tile the bathroom.

Mum sold a house in 2009 that was the last one we worked on together before she fell ill and it was interesting to see the tiling in the bathroom that my father did probably 25 years before. It was obvious it was not done by a professional tiler and I was reminded of how hubby can tile as well as a professional through doing it many times, and also being very fussy about his jobs.

 

[RumpledElf]

I found it a double good thing, they get exposure to some fantastic assets and are curious as to how we acquired them, and also they get some excellent life skills about hard heavy hot work, determination, not chucking a poopy and giving up, how to drive a broom / rake / axe / shovel which most kids can't or won't or don't use nowadays.

Hehe I keep trying to teach mine to use a broom. She takes almost an hour to sweep the gravel off the (very small) concrete path in our (very small) front yard, for which she gets paid $2. We just convinced her to do the bulk of our (very large) kitchen with a regular broom instead of the tiny dustpan and brush, which was taking her forever. Today I noticed she stopped doing the edges - turns out telling her to use the big brush for the big part of the kitchen translated in her mind to not being allowed to use the small one at all and she had a go at me because the big broom doesn't reach the edges thus the grotty edges were all my fault not hers. Much explaining about using big broom for big open spaces, small broom for small fiddly spaces and I finally have a swept kitchen. Have to watch your words around kids (this one at least), they take everything 100% literally and there's no room for interpretation.

Getting money for Christmas etc.

Mine got $205 for Christmas!!!! (basically $20-$40 off lots of different relatives). She complained that I put it in a high interest account and turns out this means she's not allowed to go to the pool. This came up when we asked why she hasn't asked to go to the pool despite weeks of perfect pool weather since Christmas - its because we took all her money away. Again, had to explain that if she wants to go to the pool, we'll drive her there and pay for the entire family to get in (like we usually do), she doesn't have to use HER savings to pay for herself to get in.

Argh. Kids

 

[charlieandkath]

Nice one Invstor.


I've also done similar things with our kids. From a very young age they have had to come out with me and sweep out factories and clean out laydown areas on industrial sites.


When you are out there all morning, you get some very intuitive questions, which can be asked and answered in a very informal way whilst you are sweeping / raking / picking up rubbish.


I found it a double good thing, they get exposure to some fantastic assets and are curious as to how we acquired them, and also they get some excellent life skills about hard heavy hot work, determination, not chucking a poopy and giving up, how to drive a broom / rake / axe / shovel which most kids can't or won't or don't use nowadays.


Years ago when we going through all that, it didn't quite gel completely.


Now, two major things have happened since that has cemented their understanding. # 1 is that their maths skills have improved to the point where they fully understand what is going on, and # 2 their old man gets to stay home full time and doesn't dread Sunday nights or Monday mornings.


It's the tangible results at this stage that they get.


When they are adults, I'm confident they'll want to know more.

Dazz, you didn't get back to me on the negotiations with the solar for your sheds. The last post I remember is I offered you 5% and I take 95%.

 

[Xenia]

My children are 8, 7 and 3 and yes they do eat sunflower seeds and raw broccoli, cabbage and anything else other kids don't eat. They are not normal in that respect.

Here is another question, what would you invest kids money in? Mine have been putting money into an investing money box, a saving one, a spending one and a tithing one.

Angelo and I are now discussing what we should do with their investing money. Long term bank accounts, shares, gold coins? The oldest one wants property but clearly his deposit is not quite there yet.

 

[Xenia]

My 11 year old often says, "I never want to have rental properties". She see's us having to do inspections and maintenance. We try to explain 'why' we have them, so we can retire earlier and that is why I haven't had to work for the past 12 years. It's all a bit over her head at the moment.

.

I initially rejected it too seeing my parents door knocking to collect money every Saturday and associated it with a lack of formal education. "I'm going to uni, I'm too smart for all this property investing"

That changed when I discovered that I couldn't rely on government grants for medical research so fell back onto property investing as a safety net.

Good to provide the foundation but yes kids find their own path and after all - we don't own them.

 

[INVSTOR]

Nice one Invstor.


I've also done similar things with our kids. From a very young age they have had to come out with me and sweep out factories and clean out laydown areas on industrial sites.


When you are out there all morning, you get some very intuitive questions, which can be asked and answered in a very informal way whilst you are sweeping / raking / picking up rubbish.


I found it a double good thing, they get exposure to some fantastic assets and are curious as to how we acquired them, and also they get some excellent life skills about hard heavy hot work, determination, not chucking a poopy and giving up, how to drive a broom / rake / axe / shovel which most kids can't or won't or don't use nowadays.


Years ago when we going through all that, it didn't quite gel completely.


Now, two major things have happened since that has cemented their understanding. # 1 is that their maths skills have improved to the point where they fully understand what is going on, and # 2 their old man gets to stay home full time and doesn't dread Sunday nights or Monday mornings.


It's the tangible results at this stage that they get.


When they are adults, I'm confident they'll want to know more.

Definitely!!

I initially rejected it too seeing my parents door knocking to collect money every Saturday and associated it with a lack of formal education. "I'm going to uni, I'm too smart for all this property investing"

That changed when I discovered that I couldn't rely on government grants for medical research so fell back onto property investing as a safety net.

Good to provide the foundation but yes kids find their own path and after all - we don't own them.

Yes, I'm sure some idea's will stick with them. The kids saw one of our rental properties last week which has a pool. For the first time they got a bit excited about resi properties! My daughter was the most interested she had ever been and was asking heaps of questions. I answered her questions and then asked her if she noticed her dad's been on holidays for the past 4 months. She hadn't noticed! He'll have to go back to work soon though. ($$$) We could get used to this lifestyle easily!! I cooked my first dinner in 2 months tonight.

 

[oracle]

Here is another question, what would you invest kids money in? Mine have been putting money into an investing money box, a saving one, a spending one and a tithing one.

Angelo and I are now discussing what we should do with their investing money. Long term bank accounts, shares, gold coins? The oldest one wants property but clearly his deposit is not quite there yet.

A low fees index fund with dividends re-invested. I plan to put some money in the child's name when he/she is born. By the time the child turns 18yrs it should turn out to be a significant sum that can be used to pay big ticket items (uni. fees, property etc.) or just left there to let it continue to compound. I am sure by 35yrs it should have turned into a small fortune.

The beauty of index funds is it is pretty much set and forget type of investment with minimal input ongoing effort but you still get a pretty decent return over long term (10+ yrs). Atleast thats what history has shown.

Cheers,
Oracle.

 

[Lily House]

Oracle - I like your index funds idea, but are there any that don't require a minimum of $5,000 to start? Have to save a LOT of pocket money to get to that level for start-up.

Thanks
Caroline

 

[Aaron Sice]

How do you educate your children on investing and entrepreneurship?

Here's a quote from an article I wrote about my children..... I think they got it!

We gave each of them a handful of sunflower seeds and explained how money and investing works. We told them that now that they have the seeds in their hands they have a few options to decide upon. One is that they can eat all the seeds now and will have to work for more tomorrow or they can grow them and then eat some of the seeds that come from the sunflowers they grow. They chose to grow their seeds, so we then discussed the approach they would use; they could just scatter them everywhere and hope they land somewhere and grow (gambling) or they can give the sunflowers the best chance by preparing the soil and looking after the seeds as they germinate (education).

Once the sunflowers grew, we explained that they represent how money works in society and most people just choose to eat their seeds on the day they receive them without knowing that each seed can harbour many more seeds for future use if some thought was put into it.

i don't see that as teaching them about nvestment, more about understanding consequences and good things come to those who take measured action and are patient for the results.

my daughter (6) is beginning to understand the concept of money.

a continued example was only a few weeks ago.

firs tof all she said she wanted a barbie. $20. so she did odd jobs around the house, washed windows, cleaned her room and the play room and did her best to be good. she eventually saved enough money to buy the barbie. but we went to buy then thing and she looked at me and said,"i worked so hard for this, i'm not sure i want to buy a barbie with it, i have a lot of them anyway". i said she could either spend it or save it - but to remember that we all work hard for the things we want and money is wasted if we don't use it for something. if she is going to save for seomthing bigger, like a bike, then that's a good thing. if she's just going to keep it in her piggy bank then she should probably make sure at least some of that money is going to good use and donate some.

time passes.

she wanted a ZhuZhu pet last week. i hate the things, but it was $20. i don't need any incentive to say no, but she really, really wanted one.

i asked her what she had done with the $20 she was meant to buy a barbie with a few weeks ago. she said she had spent some of it on lollies. fearing the worst, we raided her piggy bank to find she still had $17.50 left and she was very upset, thinking that it was all over and she couldn't get one. i told her that she's done very well to keep so much money and that's its okay to treat yourself a little with your hard work.

so we got her to empty the dishwasher, clean the windows and the rooms and sure enough, by the end of the week, she had $20.

she still, really, really, wanted a ZhuZhu.

so, off we went. she put her hard earned money on the cash register bench, got the rolled eyes from the goth behind the counter and walked out with a huge smile on her face.

we got home and she was so happy. a different kid. i asked why she wanted the ZhuZhu and not the barbie. want to know the answer?

one of her little "friends" at school has been telling everyone that she has all the ZhuZhu pets - and ganging up on and teasing the kids that don't.

now she has one, she won't get teased.

i melted and nearly cried.