Some time ago, the kids and I discovered a song about being a billionaire by Travie McCoy (sung with Bruno Mars), most of which goes like this:
I wanna be a billionaire so <beeping> bad
Buy all of the things I never had
I wanna be on the cover of Forbes magazine
Smiling next to Oprah and the Queen
Oh every time I close my eyes
I see my name in shining lights
A different city every night oh I swear
The world better prepare
For when I’m a billionaire
Call me a pest, but after hearing them sing it many (many) times, I thought it might be a good chance to bring up the topic of money.
Ronit and I believe that kids should be exposed to various topics at different ages simply because they are part of life. They may not “get it” every time, but they “get” a little bit more and develop their understanding over time. This way, they have fewer surprises when they become adults and have to take care of themselves.
The issue of money is no different.
We also believe that in life, we get what we focus on, which is a great reason to encourage kids to focus on being happy and using their money wisely, rather than just on becoming billionaires.
So I worked my way up, starting with 9-year-old Noff. I asked her, “Noff, if you really were a billionaire, what would you do?”
“Buy all of the things I never had”, she said cheerfully.
“A [Nintendo] DS”, she said, “An iPod … oh, and a Wii … and Wii Fit”.
“Actually, you won’t”, I said, “Because the reason you don’t have them now isn’t money. Being a billionaire doesn’t mean our rules have changed. You don’t have those things because Mom and I think you watch enough TV and play on the computer enough anyway and we prefer that you do other things with your time”.
Noff let out a disappointed whine.
“What else?” I asked.
“Clothes. Lots of clothes. And SHOES”, she said. Noff just loves shoes, which is why when we go shopping, we often refer to her as Imelda Marcos.
“OK, so let’s say we go shopping with a billion dollars and buy you all those gadgets you wanted and lots of clothes and shoes. How much money will you have left?” I asked.
“I don’t know”, she said.
We worked out that if every piece of clothing and pair of shoes cost $100 on average, she would need less than $6,000 for everything she wanted.
“I also want to travel”, she said, her face lighting up with the discovery.
“You could buy an open ‘around the world’ ticket for $50,000 and travel for a pretty long time. This will get your total to $56,000. Let me write that down for you next to a billion, so you can see how much is left”, I said.
“I don’t know what else to do”, Noff admitted.
“Until now, you’ve only thought of yourself. Is there anything you want to get for anyone else?” I suggested.
“No, not really”, she said.
“Not even for the people you love?”
“No. I don’t know what they want”, she said. Later on, she added travel for Eden too, which would have been generous, if she did not explain that Eden would be traveling with her, taking care of her and keeping her company…
Then, I asked 15-year-old Tsoof what he would do if he were a billionaire.
“I’ll buy a big house”, he said, “I want to have a music room that’s the size of our house, so I need a bigger place”.
“What will you do in that music room?”
“I’ll compose and play my music. I’ll buy all the instruments I need and all the equipment and software and make music”, he said.
“So you’ll spend your days in the music room, just playing your music?” I asked, “Sound kind of lonely and you might run out of money at some stage. Will you do any work at all?”
“Um, oh, I’ll also record my music and sell it and participate in competitions and stuff to promote my career”, he said, “And I’ll perform it, too”.
“So you’ll be doing things that will bring you even more money”, I said.
“Yeah”, he said, “But I’ll be able to just do the things I love”.
“That’s great”, I said, “Combining your passion and having fun with creating a good income is a really smart way to live. This is what Mom and I are doing, you know. We love to help people and we love parenting and personal development, so we do these things for a living and have a great life that way”.
Just in case you wondered, it was not always like that for me. I used to have a corporate IT job, which was interesting and paid well, but had no soul.
By that stage, we were taking a nice walk in a park and I mentioned the term “investment”, explaining to the kids how to take someone else’s money (most often, the money comes from a bank in the form of a loan), invest it and make it grow quickly. I wanted to make it clear to them, so I drew this:
“You take some of your money, say $20,000, and borrow $80,000 from the bank. Now, you buy a house for $100,000”, I said.
“After a few years, your house has doubled in value. The bank still has the same amount, but how much money do you now have?”
“$120,000”, Tsoof said.
“Which is how many times your original amount, Noff?”
After a bit of thinking and calculating, she said, “6 times!”
I was actually a bit surprised they got it, but all this talking made me come up with a few ideas I wanted to share with other parents (you, that is):
- Dreaming about having a lot of money can help kids turn a vague concept into a detailed image of what it is like. Kids are very good with imagination, so this becomes a vivid experience for them, complete with pictures, sounds and feelings.
- Imagining a wealthy life also brings up the issue of enjoying that life and the kids quickly realize that money is not happiness by itself and neither are things you can buy with it. Instead, money is just a way to get happiness, if you know what makes you happy.
- There are 3 components to a rich and happy life: taking care of yourself, taking care of others and taking care of tomorrow. Kids are not very good at any of them, because they have little experience, but over time, they catch on well.
- Taking care of yourself means staying healthy, safe and happy. It includes buying the goods and services you need, as well as the things that make you happy. It also includes doing what you love and being able to express yourself.
- Taking care of others is what gives you purpose and keeps you motivated. It includes doing things that give others genuine value, being kind with your time and money and showing others the way to a good and happy life.
- Taking care of tomorrow means having a source of income to enable your great life and contribution. It includes turning your passion into a business, protecting yourself for a rainy day and making your money work for you.
- The main point in talking to your kids about money is NOT what you teach them. It is what you ask them. When they passively absorb information, that information fades quickly, but when they have to come up with answers, they engage in the learning and retain a lot more.
- Also, you may have a different communication style from your kids and when you explain things, they may not quite grasp them, but when they need to figure things out to provide an answer, they must create their own understanding of the situation, making it much clearer.
I hope this helps.
May your kids be billionaires,