6.5 Rules about money that I tell my kids.

I have two children that live back in Scotland while I live in China. It is not always easy being an absent father, for me and for them… the situation with the virus has kept us apart for over a year and so we have embraced all kinds of medium to keep in touch.

My daughter is in her twenties and my son is approaching 17 years old and they both use technology in very different ways. As a new comer/old timer I am having to adjust to keep the contact with them. I am using every social media tool that I know in order to keep the energy and the embrace between us and it is working. We are as tight as we have ever been even though we are 5,000 miles apart I feel close to them on a daily basis…

However, nothing beats being in the same room as them. Some day soon in the ‘new normal’. I hope.

2020, what a year.

While being an ‘absent father’ I try and do my best to guide and support them and so I leave breadcrumbs of information and insights hoping that they may find a path. Ultimately, I believe they will find the right path for them as individuals, but if I can guide them just a little bit and be about (in person and virtual) when they need me, then I will be happy with that.

Well, as happy as I can be.

The one thing I know, that they know I am passionate about, is that they learn to understand money and learn to respect and work with it openly.

Both are proving smart in that respect and they can see the economics of it even when they get dragged by the advertising and marketing campaigns they get bombarded with daily.

Three of the key rules I constantly drip to them in various guises are;

1. Understand the concept of compounding interest and plan for the long-term.

2. Pay yourself first and automate that part. I suggest to them 25% of their take home pay, but at the moment we negotiated 15% as they want to live a little. I get that, grudgingly. (LoL: I can use lol at my age. right)

3. Stay away from get-rich quick schemes as the only person getting rich is the guy selling the scheme.

When the moments are right and we dance around the subject and then get into a deeper conversation about how their money is doing, I manage to sneak in another couple of ideals for them to get familiar with.

4. Avoid debt. Debt is expensive and people with little money pay a lot of money over time to get a bit more money in the moment, the wealthy make the money from this sadness debt. Avoid debt.

5. The money that you are saving should be making money for you, “what interest are you getting rom the bank and what is the inflation rate?”, my daughter gets this…, ‘You mean, I am actually loosing money?”… ‘Yep’, I say.

When the conversations get going we usually talk more about investments and how to keep learning stuff. I use the word stuff as they like it, its their language.

6. Invest some money in simple and boring things. Indexed linked funds that are cheap to run and stay away from the stock-market it will stress you out and your bottle will crash… (particularly aimed at my son who was and is, a gamer his whole life, so is excited by the gamefication of trading now seen in some of the simple, fun, trading apps). Once you put the money in, add to it frequently and lock it and forget about it.

The point-five in this equation comes from the desire I have to get them to read more and build their knowledge on learning. Compounding works for learning as much as it does for money. They get half the score (the .5) because they both enjoy reading and learning, but they loose half the point because the financial books I sent them stay neat, tidy and unloved on their bedrooms shelves.

My take away from this is that it is likely that I need to do my own learning and research and find the correct medium for them to receive the equivalent of a great financial book, but digestible in the way they would like to consume it.

It is certainly a new world and I am learning all the time, so if anyone out there can give me a clue on what to adopt to get the communication across to them let me know. drop a comment below.

You can teach an old dog some new tricks.

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