Teach Your Kids Money

There's this old belief that money spoils, especially when it comes to children. Parents try to keep their children away from financial issues so that they can concentrate on their education. Even wealthy people have a tendency to keep their kids away from those million dollar accounts. They provide them the best and the most necessary, but never spoil them with useless and expensive trash. Those few millionaire kids in majority are spoiled offsprings of parents who don't really care about what's going on around. The real, the smart and the reasonable wealthy parents never spoil their children with money. This of course, whether in reach families or the middle class, is a good habit to follow. Nevertheless, children must be financially educated. They must know where the money comes from, how it is earned and how it should be spent. They must understand all of it from their early years. This is also one of the basic principles of Robert Kiyosaki's bestseller: we all must be financially educated and for children it is never too soon. So what are the fundamental money-related facts every parent should teach his kids?

1. Teach them what money is. Help them understand that money is not only a tool to buy them sweets and toys. Help them understand how paper money works for trading and which assets they can be backed by (i.e gold and etc).

2. Teach them how money is earned. Describe them your job and even give them a tour to your office so that they understand what you do every day after you live them at school. Tell them how you get paid for what you do. If possible, describe them a few other simple professions.

3. Give them a chance to do something for money. Personal experience will help them realize that earning money is not as easy as it seems and as a result, they will think twice before asking you about buying something for them. Plus, children love to act as adults as they can not wait to grow up. Doing some work for money will definitely motivate them.

4. Teach them budgeting and saving. Don't teach your children to be cheap, instead teach them to be generous but along with that, show how not be wasteful and why to know where every penny is spent. 

5. Teach them investing. This may sound funny to you because what would a kid know about investing? Personally I, knew a kid who at age of eleven, would rent his bicycle out to other kids for pennies. But those pennies were not spent for candies. They were spent to buy another bicycle in a few months. Thus he had two bikes, one which he rode himself, the other he'd rented out for some time. 

6. Teach them to be creative in money issues. Google some success stories to inspire them. There are many children interpreters around the world who of course never worked on construction sites or as personal accountants. Their age just wouldn't allow that. They rather acted creatively and examined money from a different angle. Some time ago, I've read an interview of a successful entrepreneur from eastern Europe who mentioned that his first business and passive income came to him at the age of 12. I can't claim whether it is true or not, but I'll tell this story anyway: 

"we lived in small country-like town mainly consisting of small farms. My father worked a senior "something" in a pig farm and during summer time they would be faced with a serious problem: rats. They had too many rats around and couldn't fight them. They wouldn't use poison because it was dangerous for pig food. So one day my dad takes me with him and as soon as we arrive into the farm, they give me a light air rifle and small bullets to shoot any rat I see. They even paid me a small wage for that and I was very happy because I loved both the rat shooting and the money. A few days after, when I got sick of chasing rats under hot sun, I told kids from my neighborhood that I got an air rifle and endless supply of ammo. They immediately fell for the idea and I started selling each of them ten shots for a small wage. Thus, I was resting under a tree and getting paid both by my father and his peers and by the kids from our neighborhood and rat-murder process was also successfully implemented. This was the first time I realized that I don't need school anymore and I'll concentrate on making money. Of course my parents didn't let me quit school that very year but I've been a businessman since then"