What do you teach your kids about money, prosperity and how to get rich? If you’re like most parents, the answer is probably: not much. If you ever needed a reason to start the conversation about money with your kids, here it is: the median savings balance among working households aged 50 to 55 is $8,000, according to the Economic Policy Institute. For households aged 56 to 61, the median savings balance isn’t much better, at just $17,000.
The only way we can combat this great financial plague and help ensure our younger generations don’t continue to struggle is to teach them from a young age the right ways to make the big money.
Over the past 34 years, I’ve had the chance to interview and observe more than 1,200 self-made millionaires. The lessons I watched the self-made rich teach their kids were mind blowing, and the polar opposite of what we are taught about money in middle-class America.
Here are seven of the secrets self-made millionaires teach their kids:
Most people believe that you can only be rich if you were born into the right family, attended the best school or possess uncommon talent. While these advantages certainly help, they are by no means required to be rich. In a free market economy like America, if you serve enough people and solve enough problems, you deserve to be rich. This is capitalism at its best.
The best thing about wealth is the freedom it offers you. It’s the freedom to live life on your own terms. Being rich allows you to live anywhere you want, do anything you want and be anything you want to be. If you want to start a business, take up a new sport, learn a language, donate to your favorite charity or anything else, all that’s required is the decision to do so. Most important, having money eliminates financial worry and allows you the freedom to choose and enjoy life.
The world owes you nothing. No one is entitled to anything. It’s up to you to create your own future. The idea of entitlement seems to be growing in popularity, yet it’s based on the delusion that we are born with certain rights. We’re not. We’re just born. The rest is up to you. Teach your kids the opposite of the entitled mentality, which is self-reliance. The irony of this is that the more you exhibit your self-reliant attitude and don’t act as if you need help, the more people want to help you.
Get rich solving problems
The world wants you to be rich because it has a lot of challenges to solve. If you want to be rich, solve a problem. If you want to be very wealthy, solve a bigger problem. The larger the problem you solve, the richer you get. In a free market economy, that’s all there is to it. I’m not implying that getting rich is easy, but it is that simple. Match your unique talents, abilities and passions with a problem-solving idea, and you’ll be on your way to wealth.
The average person is taught what to think. The millionaire in the making is taught how to think. Your kids will learn many great lessons from well-intentioned and well-educated individuals, but odds are that most of these people won’t know the first thing about acquiring wealth. Teach your kids to think big, reach their own conclusions and blaze their own trail no matter who may criticize their ambition, doubt their ability and laugh at their vision.
Many psychologists believe that people should lower their expectations so they won’t be disappointed if they fail. They believe people will be happier expecting and settling for less. This is another mass oriented formula for failure. Teach your kids to stop living in fear, and instead, live in a world of possibilities, potential and opportunity. Let the middle class be satisfied with mediocrity while you reach for the stars. Remember, many of today’s biggest success stories were mocked by doubters at one time.
As a striver and achiever, you will attempt many great things. The odds are that some will be successful, and others won’t. The road to world-class success is usually paved with setbacks, disappointments and failures. The secret to survival: never abandon yourself. No matter what happens in your life, you must always believe in yourself and your ability to handle whatever life throws at you. You may lose the popular vote, but never allow yourself to lose your own support. Always believe in yourself and your ability to comeback, even if everyone else gives up on you.
Children learn from their parents, so start having conversations with your kids about money early on. Even parents who haven’t been the most financially successful can see to it that their kids really understand what it takes to become wealthy. Imagine growing up being tutored on how to become a self-made millionaire. The advantages would be difficult to deny.