I know a couple of men who are the same age (mid twenties), about the same intelligence and, for the most part, are equally good looking. One is a businessman with a rapidly growing marketing company grossing about $500,000.00 per year. The other works a routine job making enough money to live from hand to mouth. There is one difference between the two men?one comes from a wealthy family and the other comes from a lower income family. Can you guess which comes from which? I have talked to both of these gentlemen and discovered there was a very important factor that played a role in both their lives. One got financial training at an early age and the other did not.

I asked the successful guy how he had gotten so focused in business and his answer was interesting; he told me his father took him to the bank to open a savings account when he was around ten years old. When he started making money-cutting lawns, delivering papers and other jobs, his dad coached him and under that influence most all the money went into the savings account. He had a keen sense of understanding about saving money in an interest bearing account. He had a budget. When he was 18 he opened a checking account in his name. He was writing and managing a checking account at 18 years old. At 18, he had already been an entrepreneur with 8 years experience generating income, handling money, saving and spending money on (and within) his budget. He went on to college to get a degree in international finance, worked for a major corporation for a couple of years and now he has his own business. The other guy doesn?t have a college education and is just now getting around to setting up a checking account.

I bring this to your attention for a couple of reasons. First, wealthy people tend to groom wealthy children because the kids are taught to respect and manage money at a very early age. Whereas lower income people tend to ignore this issue and subsequently tend to raise lower income children. Obviously, wealthy people have advantages over lower income people like money to send their kids to colleges, etc. but that?s not the point. The point is in the training?the orientation to the banks, teaching kids wise money management, basic economics, how businesses work, about real estate and so on. Key word: Knowledge. I think all parents will do well by their children to teach and show them, at an early age, everything they know about basic banking, how to set up a savings account, how to budget their money, how checking accounts work, etc. My advice is to make sure you introduce your kids to basic economics at an early age. Don?t assume they will learn on their own or at school. High schools tend to fail miserably at teaching kids the ?street smarts? needed to function intelligently in business, real estate and finance.

I don?t think a college education is critical to make and manage money. Indeed, there are many millionaires in the country that don?t have a formal education. What is critical is teaching kids a high work ethic and how to manage money. If you need to get this information for yourself or your family, I strongly suggest you do so (the public library is free) because ?You pay once for knowledge but the cost of ignorance can last a lifetime. ?

Copyright © 2006
James W. Hart, IV
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