Let’s not mince words: by most measures The AJC Family is Rich!
But, does that mean that our children are rich? Does it mean that Mom and Pop will buy them cars, vacations, etc.?
The inspiration for this post comes from a comment (on a post by Diane about her car), where Debbie says:
I think most 16 year old’s get cars these days.
I had one before I turned 17, although I had to pay for it with my own money and get my own insurance (but I think the trend is now parents buying their kids first vehicles and insurance from what I’ve been seeing and in fact- I wrote a post about how teenagers are in the perfect position to put aside some money during their high school years on Wisebread.com and do you know the comments I got?!
Parents saying that the idea was ridiculous, kids shouldn’t be expected to save the money they earn on jobs nor would they do it if they understood the value of compound interest and how much those first few thousands would be when they were ready to retire; if kids work during the summer how will they take trips to Europe and attend soccer or music camp, etc. I am still in shock!)
I must admit that I am in ‘shock’ as well …
… but, this brings me to an interesting point: how do ‘rich parents’ bring up their kids?
After all, when you all reach your Number, maybe you need some guidance as to how YOU should face these same issues?
All I can tell you is what we do:
We are in one of the highest socio-economic levels, yet our children (11 and 14 years old) already know that if they want cars, they will need to buy their own. We will contribute (prob. up to 50%) … but, they will need to save up their portion and fund the running costs.
I’m guessing that most of you reading this blog had to do it the same way (?) … at least we had to, so why shouldn’t they?
We feel that just because your parents are ‘rich’ doesn’t mean that YOU are … at least these are the conversations that we have with our children
We feel that the best FINANCIAL gifts that we can give our children are:
a) Teaching them to take sole responsibility for their own financial situation, and
b) Teaching them how to become rich on their own
… we hope, leading them to the type of confidence and independence that only self-sufficiency can provide.
Think about the second one: what an advantage is it to have parents who have gone from $30k in debt to $7million in the bank? It’s got to be better than reading a blog, or having an occassional mentor … of course, the disadvantage is the child’s natural inclination to rebel from their parents, so, we add a couple of extra advantages:
c) We pay for their formal education. 100% … no “if’s” and “but’s”, for any course, in any reasonable location (we’re not sending them to Switzerland to go to Finishing School!) as helps them achieve their academic goals … but, only their first ‘real’ degree. If they want to sacrifice current earning potential for future by earning Masters, PHD’s, and/or MBA’s, that’s their financial trade-off to make, and
d) [AJC: This is the secret advantage that we do NOT tell them about up front] They will never starve … if all else fails, we are their Safety Net. But, they will not be able to “mooch off the folks” … this is simply an ‘insurance policy’ against disaster.
To that, we add all the ‘normal’ non-financial parenting, PLUS the luxuries of private schooling; after-school activities; bedrooms with private bathrooms, robes and studies (equipped with MacBooks, of course!) for each; as well as the swimming pool, tennis court, travel, etc. lifestyle that living in a ‘rich household’ provides …
What do you do (or plan on doing) with your children?