Grand Rounds: Finance. The Next Generation
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Welcome to this session of grand rounds, a collection of posts I have discovered in the blogosphere and have found of interest and hope you do too.
This offering of Grand Rounds looks at articles from around the web that deal with the financial implications of children.
One of the biggest reasons why wealth often does not last beyond the 2nd generation is that the financial principles/skills that were first used to accumulate said wealth do not get passed down along with that money.
I personally would love to create a lasting financial legacy that can be passed down multiple generations so that they do not have to start from scratch each time.
But what is a parent to do?
Finance is likely the last thing on a kid’s mind.
If only there was a guide to what information needs to be introduced to a child at each stage of development.
Well fortunately Fatherly has got you covered in, “Teaching Kids About Money: The Financial Lessons Parents Should Teach Children At Every Age.”
I personally have introduced my daughter to the magic of compound interest and how savings works by designing her very own bank.
You have sacrificed so much to build a high net worth, trading your time for money, spending below your means and saving the rest.
If only there was an easier way.
Wait. There Is!
And your kids have figured it all out.
Their secret is exposed in this Money article, “63% Of Rich Kids Say They Will Rely On Their Inheritance For Retirement.”
I, like most parents, hate to see my child struggle or fail at anything.
It is hard not to rush right in and save the day when such an occasion does occur with my daughter.
But it is important to show self restraint and not bail our kids out at the first sign of difficulty, otherwise your children will be ill-prepared to face adulthood adversity when you may not be around.
Millionaire Mob highlights the importance of failure as an important teacher of life in, “How To Teach Your Kids About Money…Let Them Fail.”
It is not earth-shattering news to find out that most kids are financially irresponsible.
Kids live in the moment and planning for adulthood is the furthest thing from their minds.
As parents we try our best to instill values, both financial and otherwise, into our kids so that they can be productive members of society.
But what about the other end of the generational spectrum, our aging parents?
If you are lucky your parents were financially responsible throughout their adult lives and do not require close supervision.
But what if you are not?
Winning To Wealth broaches this topic in the post, “How To Deal With Financially Irresponsible Parents.”
It is pretty common for children of wealthy parents to automatically assume that it means they are wealthy as well.
This leads to children expecting/demanding luxury vehicles when they turn 16 such as a BMW 3 class or a C class Mercedes.
I used to be dumbfounded when I saw some kids on MTV’s Sweet 16 show throw tantrums when they didn’t get the luxury car they wanted and had to “settle” for a $30-40k car instead.
We all already know that White Coat Investor is very fortunate with his business, but I think he is even more fortunate because he is raising a daughter who “gets it.”
This is one of my favorite posts from WCI, an interview style format between his daughter and himself regarding the purchase of her first car, “Lessons Driving An $800 Car Can Teach Your Kid.”
I only hope my own 14 year old daughter follows in her footsteps.
Hope you enjoyed the reading material.
Have a great rest of the week.
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