If you want your kids to be wealthy then you need to train them to have a certain superpower. This superpower is something that will help them avoid overspending, to grow their money and, stop them being scammed.
The superpower won’t just help them financially but will help them at work, in relationships and any other activities they are involved in.
The superpower is PATIENCE!
DO NOT UNDERESTIMATE THIS SUPERPOWER! If you want your kids to be financially healthy and wealthy you need to train them to have this superpower.
I appreciate that it’s not the most exciting superpower out there (and hence it doesn’t get much focus) but without it then all the other financial training and knowledge that you give your kids won’t be fully utilised.
If you’ve read my other blogs, you’ll know that The Three Rules of Wealth are:
BE PATIENT
In this blog I’ll go through:
Why ‘Patience’ is a Superpower
Why it’s so hard to be patient in today’s world
How to train your kids to be patient
Why ‘Patience' is a superpower
Each of the points below shows how training your kids to be patient is going to help them grow up to be financially healthy and wealthy.
Research
There have been whole studies on patience (‘delayed gratification’) which show those that are patient have greatly more successful lives than those who aren’t patient.
The most famous is the Stanford Marshmallow Experiment. For those that haven’t heard of it, it was an experiment conducted in the 1970’s. They got kids to sit in a room with one marshmallow and told them they could eat it or they could wait 15 minutes and then eat two marshmallows. They then tracked the kids over many years to see if there was a difference between the lives of those that ate the one marshmallow versus those that waited and got two marshmallows. As you’d have guessed, those that waited were financially healthier, had stronger relationships and were doing better in their careers. I’d recommend you read the book on this experiment.
Patience reduces impulse spending
Companies want us to spend our money now. They know all the marketing tricks to get us to spend, including our ‘Fear Of Missing Out (FOMO)’. Those people who aren’t patient will see a deal and feel that the opportunity will be gone forever and then spend. If we can train our kids to be patient, they are less likely to want to buy things straight away and therefore avoid buying things they don’t really want or need.
Patience means your kids will save money when spending
If your kids are patient then they are more likely to wait to find the best price for the things they really want or need and to wait for the sales so they can buy it cheaper and save money.
Patience means your kids are less likely to use debt, be scammed or start gambling
Debt, scams and gambling all feed off our desire to want something straight away.
What people who don’t have patience say:
“Why save up for something when I can use debt?”
“Why wait to get rich when I can go on a ‘get rich quick’ course?”
“Why work hard for years when I can just take a gamble?”
If you want your kids to avoid these things, then you need to proactively teach them about the dangers but also be sure they are patient.
Patience will allow your kids to invest like a champion
Lots of people start investing and quit when they see their money not increasing fast enough or see it fall. To be a good investor you need to think long term which requires patience.
“The stock market is a device for transferring money from the impatient to the patient”
I’ve shown this chart before but it’s worth showing again. Those that are truly wealthy are the ones that have been investing for many, many years. This clearly takes patience.
Why it's so hard to be patient in today's world
Genetically impatient
Some people are just naturally impatient. You might have two children and notice one is patient and the other is the complete opposite. Without training, those who are impatient are going to find it harder than those who are naturally patient.
As I’ll talk about later, patience can be taught so don’t worry if you have children that are naturally impatient.
Companies are spending billions to ensure we aren’t patient
Companies want our money now. They spend billions (collectively) to do research on how our brains work so they can get us to want to spend our money now. We’ve all felt that desire to spend now in case we miss out. They have carefully crafted their marketing to make us feel that way.
Increased social pressure to spend now
We live in a world where our kids won’t just compare themselves to their friends at school. They are comparing themselves to everyone via social media. They will hear more stories of people getting rich quick or having the latest trends. Without patience, they’ll want all these things and this leads to overspending.
We’re never taught to be patient
It’s not a skill that people think about too much and therefore it isn't taught. This is something we need to change. I’ll talk more about training your kids to be patient later.
Lack of visible role models
There are lots of people who have had successful lives from being patient. Sadly, as they built their wealth up over many years it doesn’t make headlines. It means there are no clear role models for people to be patient. The only one known within some circles is Warren Buffett. He is one of the richest people in the world and built his wealth over decades. In fact, Buffett made 95% of his multi-billion fortune only after the age of 65.
When people asked Warren why more people don’t follow his strategy his response was
‘No one wants to get rich slowly’
How to train your kids to be patient
ONE: Visualisation
If you’ve read any of my blogs you know that I’m going to use a Blue Tree analogy here!
Get your kids to visualise money like a seed. When they plant that seed it will grow into a tree. Their goal is to grow their own financial forest. This works well as kids know it takes time for a tree and forest to grow.
If you can, why not get them to grow an actual tree so they can see it takes time but you end up with something beautiful.
TWO: Keep it small
Get them to be patient in small quantities. This could be saving just 10% of the money they receive (pocket money, tooth fairy, birthday or working). Highlighting that they still get to spend 90% of their money now.
You can also do the same with their favourite snacks. For example, get them to save a little bit of their chocolate bar for tomorrow.
They will be thankful for these extra items that they put away and as it’s only a small amount, it won't materially take away from their enjoyment now.
THREE: Reward them when they are patient
They will be rewarded handsomely in the future if they are patient. When they are young, look for mini-rewards when they are patient.
Here are some examples:
If they save up for something to buy in the future, offer to contribute something towards it once they save a certain amount.
If they put money in a piggy back, add an extra coin or two as interest.
If they don’t eat all their chocolate bar, give them an extra treat the next day.
FOUR: Grandpa’s Fortune Fables Story
One of the best ways to train your kids about being patient is to read them the ‘Richie Raccoon’s Red Tree’ story from my upcoming book, Grandpa's Fortune Fables. Make sure you subscribe below so you can keep up to date and buy a copy when available very soon.
FIVE: Show them the benefits of being patient
The other powerful action you can take is to invest and be patient with them.
By investing for your kids, and not doing anything with these investments, it allows your kids to witness that whilst it’s boring initially, by the time they become adults they’ll be seeing the benefits of being patient. If you are new to investing then here is a 3-step guide which you will find helpful.
I’m sure telling your teenager that the best way to make money investing is ‘to be as lazy as possible’ will be music to their ears!
Summary
You can teach your kids all about money but if they aren’t trained to be patient then they might still struggle.
PATIENCE IS AN ESSENTIAL SUPERPOWER FOR YOUR KIDS TO BE FINANCIALLY HEALTHY AND WEALTHY.
In a world where we hear stories of young people making a lot of money quickly, we need to make sure our kids know these cases are rare and those that are likely to become wealthy are in fact those that are patient. The sooner they learn to be patient, the sooner they’ll start to reap the rewards.
ACTION: Training your kids to be patient requires you to be ….. you guessed it …. PATIENT. We have to be good role models for our kids as they are observing what we are doing. Kids are not suddenly going to be patient overnight. It will require time and persistence but it will be worth it and make a huge difference to their financial future. Please take the time to reflect on your ability to be patient and consider when you have been rewarded (or avoided pain) from being patient.
Thanks for reading!
Will
Here are the links to the articles referred to in this weeks' blog:
The Three Rules of Wealth
Don't forget that there is also our Online course