It is a discussion we have a lot, two life coaches and their almost-19-year-old daughter who is looking for a sign from the universe to tell her what to do. She is on the floor, debating our suggestions to reconsider getting herself into the “Rat Race”.
At this point in a teen’s life, wealth is "a grownup word" and does not mean much. Teens value fun, friendship, love and being unique and accepted much higher than financial freedom. Many teens will sacrifice their future wealth for some good partying, which makes them pretty normal, just like we all were when we did exactly the same as teens…
Convincing a teen to save money is not an easy task, mainly because the benefits are in some unknown future, but the commitment and effort start in the present.
Oddly enough, the attitude towards money, saving and wealth passes from one generation to the next ;)
So, if you are a parent, ask yourself:
- When did I start saving?
- How much do I invest every year?
- Am I in the “Rat Race”?
- What will happen to me if I get sick and won’t be able to work for a year?
- When did I start my own business?
- Am I wealthy?
To hand teens the understanding of wealth, parents need to understand it first.
Wealth is not money
Contrary to what most people think, wealth is not equivalent to money, but to the freedom to get what we want. People have been wealthy long before money existed. Money is a tool to help us get what we want and desire was and always will be the greatest motivator to wealth.
When my 12 year-old son asked about life without money, I explained to him that money only made it easier for us to become wealthy, i.e. to get whatever we wanted. Whereas in an pre-money era of trading we could only trade our goods for what our neighbours grew, with money we can buy just about anything.
Explain to your teen that money is a means to getting wealth. It is an enabler, so never aim for money. Aim for what money can give you and let you do.
There is enough for everybody
Many people in our society, in fact 90% of them, believe that the amount of money in the world is limited and when someone gets richer, the others get poorer, where in fact if all the world’s money was divided equally, every person, including the people in third world countries, would have $3,000,000. Yes, that is 3 million dollars for everyone.
Teach your teens about their right in the world bank of $3,000,000 and help them go forth and claim what is theirs. The money is there only for those who will take it.
Luck has nothing to do with wealth
Wealth never falls on anyone from the sky, though non-wealthy people like to think that it does. Having luck as a factor in financial success and a wealthy lifestyle is the most disempowering belief parents can give their teens, because it only gives them an excuse for not having wealth.
Encourage your teen to look for opportunities, not luck. Wealthy people create their own luck in life. They work constantly to get their wealth by finding or creating opportunities and using them well. Help your teen gain a wealthy attitude by taking responsibility, controlling their life and finances and leading themselves into more and more wealth.
The magic of compounding
Would you rather have $1,000,000 or start with ¢2 and doubling them every day for 30 days?
Most people would take the large amount (and run), but here is what happens: on the second day, you have ¢4, after one week you have ¢128, after 2 weeks you have $163.84, after 4 weeks $2,684,354.56 and after 30 days you have $10,737,418.24!
Now, it is true that doubling your money daily is somewhat uncommon, but so is getting a million bucks from someone…
If a teenager starts with a fairly small amount of money and compounds it over 30 years, even by adding 20% annually, at the end of this they will have a lot of money (over 230 times the original amount) and many years to enjoy it. Not such a bad idea after all, right?
Goals make miracles
Unfortunately, only 10% of the people on Earth set goals and work towards them. The same 10% that hold most of the wealth in the world.
Teens will never come up with the idea of setting goals without guidance, either at school or at home, so explain to your teen that the difference between millionaires and billionaires is that the former read their goals twice a day and the latter read them 4 times a day. Help your teen set goals and work towards them. Goals give clarity and help overcome obstacles along the way.
What do you do for a living?
If you ask most people what they do for living, they will tell you what their job is. A much better answer is “I breath, I sleep, I eat and I enjoy life”. These are the only things people do for a living, whereas work is done for money. In fact, working is anything but living because it stops you from doing all the things you really want to do, yet getting a job is a common desire. We send out kids to school and spend lots of energy for them to get a good job, where in fact a job is no guarantee for wealth in life. Many wealthy people do not possess a high degree in their area of success.
My daughter is lying down on the floor as we talk about wealth, still far from comprehending. She does all the right things – putting money aside, excelling at work and already having a good chunk of money for a 19 year-old, but still she cannot see the future.
“Mum, for young people, 30 years is a long time”, she says.
“Dear Eden”, I tell her, “Even for a 40 year-old, 30 years is a long time, maybe even longer, compared to what we have left”.
Remember, if it is going to take 30 years, the most important thing is to start NOW. Whenever you are reading this, NOW is the right time to start becoming wealthy.
Wealth belongs to those who think they deserve it, so help your teens believe they do and until they grasp the concept themselves, wish them a safe journey towards their 3 million dollars.