Social security is going to be a fading memory by the time the kids of today are ready to retire. So what do we do? Do we push for privatization? Do we elect a president who is going to expand federal powers and budgets until we are basically a black-hole of a country?
Nope. We need to take the bull by the horns, hold the reins in our hands, take control, take the wheel and any other cliched phrases you can think of that mean that you are in charge. The point here is that it would be incredibly naive of anybody today to expect the federal government to be able to help us in our dotage. This is a government that goes millions into debt each day.
So if you haven’t started yet, now is the time to get into investments. What’s more, you have the wonderful opportunity to teach your children about making investments as well. Here are some rules of thumb to keep in mind as you go about educating your children about investing.
1.) Lead by example. That’s right, the best teacher is your example. Children naturally emulate their parents’ example, be it good or bad. Therefore you need to be certain that your investment example is good and productive. This will mean that you need to become educated about what you are doign and be willing to learn from your mistakes.
As you lead by example, you will also have opportunities to share with your kids what is going on with your portfolio or investment properties. Discuss what is going right and what is tanking. Talk about what you plan to do turn bad performers around.
Finally, take the long view. Kids are kids and you can’t expect them to be totally enraptured by the Dow Jones or the ticker marching across the top of your browser.
2.) When they are old enough, encourage your child to get a job and start putting together some capital. You will need to watch out and avoid heavy-handedness. What’s worse, you will need to allow your kid to make mistakes and learn from them. Of course if your offspring seems unwilling or unable to learn from their errors, you’ll want to go ahead and step in with kind, gentle, loving words of advice.
Be sure to encourage and guide them as they earn money. Discuss debt openly, but include in these discussions the principle of using debt to leverage your way into bigger and better investments through real estate.
And that’s it. There are two (2) general rules of thumb regarding teaching your kids about making investments. How do I know thees will work for you? Unfortunately not because they worked for me, because I didn’t learn this stuff as a kid. But I know a guy who is about thirty, owns thirty properties, and doesn’t do much of anything but play all day. Sounds good, eh?