6 Money Lessons Rich Parents Teach Their Kids

June 20, 2024

6 Money Lessons Rich Parents Teach Their Kids

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most schools don’t teach about money as part of their lessons even though many people agree they should instead most individuals acquire knowledge about money from their parents at home but it’s important to look into what parents are teaching their kids about money what makes some people rich and successful While others aren’t in today’s video Let’s delve into six key principles that affluent individuals teach their children about money which are often overlooked by those from less fluent backgrounds before we begin kindly give the video a thumbs up and consider subscribing to our channel so you won’t miss out on more awesome content like this let’s get started one rich parents teach their kids the importance of money practically every self-made millionaire who has attained financial success emphasizes the significance of money making it a priority in their teachings to their children Rich parents consistently demon demate the importance of money regardless of their personal beliefs about its role in happiness they recognize money as a crucial tool for expanding options and enhancing quality of life viewing it primarily as a resource understanding that money equates to Freedom they appreciate the ability it provides to dictate aspects of their lives from choosing vacation destinations to selecting where to reside and helping others in need they understand that having enough money makes life less stressful conversely individuals from less affluent backgrounds often avoid discussions about money and some may even downplay its significance these beliefs can harm their kids in the future making them unprepared to deal with a world where Money Matters a lot just because the parents think money isn’t important two they teach the difference between assets and liabilities understanding the difference between assets and liabilities is foundational to achieve aing Financial Independence assets are sources of income while liabilities deplete funds for instance purchasing a property and renting it out constitutes an asset generating monthly rental income conversely buying a residence to live in is a liability as it entails ongoing expenses many affluent parents instill in their children the importance of accumulating assets and minimizing liabilities this strategy enables them to establish businesses or Investments that yield recurring income streams while avoiding Ventures that drain finances thus fostering a surplus of wealth they also recognize the ability of assets to decouple time from income as assets generate Revenue irrespective of active labor this enables scalability and the allocation of time towards acquiring additional assets rich people often stress understanding and teaching good spending habits comparing those of wealthy people with those who have less money consider two individuals earning identical salaries of $7,000 per month but they spend their money very differently the first individual promptly spends their income on bills indulgences luxury items and conspicuous consumption acre significant debts over time conversely the second individual adheres to a strict budget allocating a portion of their earnings towards savings and prudent Investments by consistently reinvesting Surplus income into cash flow generating assets they progressively expand their wealth over time these differing spending habits lead to Divergent Financial outcomes Robert kosaki saying looking good but going nowhere means that some people care more about how they seem to others than about being financially secure while some argue that wealthy individuals also indulge in luxury the key distinction lies in their approach the less affluent often utilize personal funds or incur debt to fund expensive things while the wealthy leverage assets to finance such expenses Rich parents often impart this critical lesson to their children if one desires a luxury item they should first establish an asset capable of covering its cost ensuring minimal impact on their financial standing this principle underscores the importance of leveraging assets to improve your lifestyle without risking your financial security three how to manage their money a highly effective method employed by many affluent parents to educate their children about finances is by involving them in the planning and management of household expenses these parents often engage their children in reviewing financial statements and crafting budgets acquainting them with the practicalities of living costs this hands-on experience equips children with financial management skills from an early age which proves invaluable as they mature and assume responsibility for their own finances this approach stands in stark contrast to the mindset of many parents with limited financial means a significant portion of these parents hardly ever talk about money especially how much they make themselves they typically formulate monthly budgets independently if they engage in budgeting at all often harboring negative sentiments toward the process when parents argue or feel negative while planning money it can make kids feel the same way this might affect how they manage money when they grow up rich parents understand that spending money on daily needs is just a part of life nowadays they try to help their kids see this in a positive way despite its unconventional nature many individuals Express gratitude for these expenses as they provide essential amenities and a comfortable standard of living four the the different ways of earning money many affluent parents prioritize teaching their children about the various Avenues through which money can be earned did you know that Barack Obama’s daughter once had a normal job in customer service similarly numerous wealthy individuals encourage their children to engage in conventional employment there are many reasons for doing this one is to show them different ways people make money and explain how each way works for instance one method entails exchanging time for money whether through traditional employment or freelancing another strategy involves creating systems that generate income or allowing money to work for you such as establishing a business and leveraging the efforts of employees harnessing automated online systems or investing in income generating assets as explained in Robert kiyosaki’s book cash flow quadrant wealthy families prioritize understanding and imparting these princip to their children empowering them with the flexibility to explore multiple Avenues of wealth creation on the other hand lots of poor parents only know about working for money by giving their time sadly this is usually the only thing they teach their kids consequently these children grow up with a limited understanding of alternative methods of income generation thereby constraining their potential for financial prosperity five no one owes you anything self-made Millionaires and those who have achieved wealth through their own efforts know how tough it is to get rich they know that you have to keep trying and never give up to be successful they don’t expect to get anything without working for it this perspective is particularly crucial for affluent individuals as their children often grow up in a privileged environment where they may feel entitled to inherit their parents wealth aware of the pitfalls of entitlement wealthy parents emphas ize the importance of earning Success Through hard work and Merit prominent figures like Bill Gates and Warren Buffett exemplify this philosophy both billionaires have publicly expressed their intention to leave their children minimal inheritance emphasizing the value of self-reliance and industriousness in a 2011 interview Bill Gates articulated this sentiment stating they have to find their own way by instilling principles of Independence and diligence these parents aim to empower their children to forge their own paths to success six there is always more money a fundamental mindset prevalent among the affluent is the belief in abundance lots of people think there’s only a limited amount of money so they feel Limited in what they can do financially but rich people know there are endless chances to make money while those with a scarcity mindset may feel limited by their income the affluent are driven by the conv ition that there is always more money available whether for entrepreneurial Ventures or Leisure Pursuits this abundant perspective shapes their approach to financial decision-making this concept holds significant influence over our financial choices while conventional wisdom often emphasizes frugality and cost cutting the wealthy prioritize expanding their income streams this doesn’t negate the importance of prudent spending but rather highlights the emphasis placed on augmenting cash flow entrepreneurs who think there isn’t enough to go around might end up not charging enough for what they offer because they feel bad about it conversely those with an abundance mindset recognize that individuals are willing to invest in what they truly desire enabling entrepreneurs to confidently offer value to their clients looking at society as a whole it’s clear that people consistently find ways to fund their dreams whether it’s saving up for a dream vacation investing in education or starting an investment Journey individuals show resourcefulness in getting the money they need to pursue their Ambitions the array of opportunities available reinforces the idea that there’s always more money out there for those willing to go after it that’s all for today’s video I hope you found it informative and helpful if you did please give it a thumbs up I value your feedback so feel free to share your thoughts in the comments below and don’t forget to subscribe and turn on notifications so you don’t miss any future videos thanks for watching and I’ll see you in the next one

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