As we all know the topic of money wasn’t taught in school, most people learn the topic of money at home from their parents, but what are parents really teaching their kids about money, what makes me difference with somebody who eventually become successful and somebody who don’t. Here below are the following things the rich teach their kids that the poor don’t
1. Rich parents teach their kids the importance of money
All self made millionaire and all who achieve theirs or anyone who achieve financial success believe that money is very important, one of the first thing they teach their kids, is about money, rich parents often show how important money is whether they believe money is for happiness or not, they know money is to have options and better quality of life even if they consider money as real source or nothing else.
Most people understand money give them freedom from their location to their next location to the freedom where they lives and even the ability to help others, they know they can have less financial stress for life when they have abundance of money, the poor on the other hand hardly talk about money, saying money is not important which can affect their kids.
2. They teach the difference between assets and liability
One of the most important and basic concept of financial independent is understanding the difference between assets and liability, if you haven’t heard of this before assets are things that bring money to your bank account why liability is the opposite they take money out of your bank account.
For example, if you buy a house and rented it out to someone it is an asset because it brings cash flows every month in form of rent, if you buy a house to live in, is a liability because it takes money out of your pocket every month, many rich parents teach their children to build an asset and avoid liability.
3. How to manage their money
Many ways rich parents teach their kids about money is by planning and managing their households expenses, many parents include their kids when they go over their financial statement and plan their budget, they often familiarize their kids on the reality of having living expenses, this gives the children the experience of managing their money from an early age which can help when they grow older and have to manage their own money.
But parents with Poor mentality, the majority of Poor parents hardly talk about money, they tipically plan their monthly budget without their kids, if they even plan alone they will associate a negative attitude when planning their monthly expenses budget causing their children to take such similar pattern which translates to similar behavior later in life.
4. The different ways of earning money
One thing that I know is many wealthy parents teach their kids different ways to make money, do you know the formal president of the United States of America Barack Obama daughter have a normal service job, many wealthy people got their kids having a normal job, there are few reasons for this, but one of them is to have experience in different ways money is earn and teach each of them work.
For example one of them is exchanging time for money, weather working on a job or freelancing, secondly is to build systems that generate you money or having money work for you, like building a business and leveraging the time other people as employee’s, leveraging online system that provide other dimensions or using money to buy asset that generate income for you.
5. Developing productive habits
The rich know that not what you do that makes you wealthy, but what you do consistently, if the wealthy parents are self made, they know in order to achieve financial wealth they must have to work in carrying out their plans on a consistent basis, is not just taking actions once or taking hard ones, by doing it over and over for a long period of time and the best way to do that is by build habits on things you can’t do naturally.
So many wealthy parents focus in developing productive habits on their children so they can attract wealth themselves naturally in the future, wealthy parents also teach their kids how to build habits.