I became a dentist at 23. I was older than most in my class. There were 20-years old in the same group. In North America, the more realistic age would be 26. If you add 30 years to 26, that means that by age 56, you should be ready to retire comfortably if you were properly educated. To get the education that allows you to do that continues to evade many. Only smart grandchildren who listen to smart granny’s get it. The above claim of a wealthy future is irrespective of your financial starting point. You don’t need a huge inheritance. In fact, it may not be smart to plan on inheritance that has not been assigned yet. In addition, you do not have to be a college graduate to be wealthy or aspire to be wealthy, what we propose is that you plan for it and succeed. The trick is taking advantage of the time rather than blowing it away floating in the deceptive euphoria of your newfound freedom. You cannot leave it to when the house is paid off and the kids are preparing to leave the house. It may be achievable, but it will be daunting. Remember, thirty of your 40 active working years will have been used by that time.
What Did Your Parents Say?
I was sort of snoring out the unending hours of my delayed flight in the airport one day when a family found their way to the seats behind me. Eventually, they also became comfortable and were sharing details from their visit. Apparently, the first child had come back to the US for a job interview and was in the middle of deciding whether to stay in her current higher paying job in the UK versus the more prospective career-enhanced job in the US. There was the advantage of being closer to home in the US but more importantly were the unending potentials for career growth with the US offer. For me, the message was in the money discussion.
The father was not with them. One of the younger kids, a boy asked the mom an interesting question. This young man, about 10-years old wondered what her sister is doing with all that money since she has no responsibilities, and the job practically pays for her livelihood? The mother then made everyone understand that beyond socializing, she was happy to say that not only was his sister following the education that she had received concerning money management before she left for the UK, but that she also had her eyes firmly on the ball around money management.
I listened to the details of how she went about some of the discussions that they had, and she made sure that things were in proper order, without insisting on the seeing the savings passbook which will be considered intrusion into her personal life. One of the girls also confirmed that from her own unrelated interaction with their senior sister, her could not be on better grounds financially. My lesson was that without the need to grind into details and specifics these young people understood the fundamentals of remaining wealthy. And the mother was happy that she has successfully raised that one well and was doing a good job with the others.
My own parents were not so savvy. My mother insisted that my father taught us about managing money in real life. However, all he could say is that you must learn to discipline yourself to save. That you must learn that it is not smart to spend all the money that you earn. However, what to do with the savings or how much was not clear even to him. We were expected to open a savings account and maintain it. He had a limited knowledge of the values to pass on. The 20-somethings age group needs more than that. The motivation must have a purpose that resonates with them. That is why the mom at the airport can breathe a sigh of relief because she knows that her daughter is motivated to remain safely on solid financial grounds. Essentially, the parent needs to understand what to pass on, not just how to do it.
I told one young man how the proceeds from my life insurance actually paid my way to emigrate to the United States and he was shocked. When my friend convinced to take the insurance in those early years, the money that he was projecting did not really make sense to me and I could not imagine what use I could have for them. Don’t mind the apparent sweet talk that accompanies the presentation, a 23-year-old fresh dentist hardly sees himself needing that kind of money at 60, without being able to find it. That glass barrier can be difficult to shatter. But I took the insurance anyway because I could afford it, and this was my best friend talking here. We grew up together. However, about 20 odd years later, when I needed to emigrate to the US, and decided to collect on what had accumulated, it was a mind-blowing financial leverage that smoothed my journey. I have never been able to say a big enough thank you to my friend for insisting.
Money The Creates Wealth — The Future Is Now
I know that we all get offers from our banks in the mail all the time. And they have much more detailed information on their websites, yet many of us hardly glance at them, say this is nice and then trash them. We promise to get to that later. There are more urgent bills that came with the same packet of mails that day. But we never go back to look at the offers from the bank because we don’t know where the extra money to pay those premiums will come out from. If we are not motivated enough to suffer the discipline, how much do we know to teach our children? That’s the dividing line between the wealthy and others.
During one of my trips, a female court of appeal judge who was returning home after seeing the children off to their colleges in Canada and the US was on board the same flight with me. These were kids that went to high school in Europe. And they were not even freshmen. They should know their ways around by now, you would think. In addition, she must be busy as a judge herself. Therefore, to spend two weeks chaperoning grown-ups around the world is probably not necessary. They proved that they are smart and were among the best.
In her response, she pointed out that no time spent on kids while they were still kids was wasted. That as a mother the protection of the family wealth may depend on these kids, but it was her duty to make sure that they understand the expectations . If her children failed, it meant that she had failed her primary responsibility. Being a judge is an acquired status, family name and legacy on the other hand remain permanent. The sustenance of the financial stability and wealth of the family depends on how good a good job she turned out.
Then she went on. That irrespective of whether you flew a private jet, sit in the first-class cabin or economy, the statements of account reveal your worth. It does not matter if you like Warren Buffet or Donald Trump, those three one-pager accounting statements determine what you can afford. Yet, those statements are equally valid whether you are an individual or a huge company. Whether you are Mr. Donald Trump, Trump Golf Course or The Trump Organization, what mattered is what those one-pager statements jointly tell us about you. Further, that professors teach you is how to be a good manager working for Trump Organization or Trump Golf Course, they never teach you how to be a wealthy Mr. Trump. Smart parents take care of that aspect as you grow. She had to make sure that appearances are not deceptive, they are real. At least while she still can. That’s why she had to get up. No one can do that part for you. She wants to enjoy her old age, its the least she can do to prepare for that.
One technicality every parent must understand, even if it meant asking your financial advisor is how to package your investments to beat the real rate of inflation. Beating inflationary rate is the basis of building wealth and one’s investments must meet serve that purpose; build wealth. Anything short of that grounding is gambling or procrastination, and your accounting statements will not hold up when called out.
Wealth Creation and Sustenance Require Education
Every group had their adolescence to post-adolescence maturation issues; from being dependent on parents to the freedom of personal responsibility and running the world in general. A new air of realization that you now must hold the baton or take the driver’s seat. When you compound that with the mother’s fear of finally needing to lose the grip, then you understand the cause of so much anxiety and hula baloo. Gen Z’ers find themselves in the crosshairs of this social transformation in the 21st Century. Every one of them that I talked to wants to be wealthy, and they believe that they have the gifts or learned skills that can be exploited to achieve wealth. But it ends there.
Most of them lack the weapons to reverse the financial predictions for their future. They are not even considering the glaring indices because no one has told them what to look out for. Since, professors will not do this, parents who care must ensure that their children optimize their potentials. Even so, the parents themselves need to know what to teach. Do you know what message to pass on, or do you need to get some education yourself? How are you preparing your children for their future? We may be able to help, ask us!