Do As I Do

We have kids. As you know if you've read some of my posts, we have lots of kids. What do we want to pass along to them when it comes to business and investments?

We tell our children the following, not just in words, but by our actions (this advice is for those who have completed college--yes, we feel that a higher education is preparation for life, not just a job):

You'll never be financially secure working for someone else. Your job, as much as you love it, is always at risk for many different reasons. Therefore, you need to make your job a bit less important. The only way to do this is to start a business of your own. You can begin small, while you're still working. That way, you will be prepared if your fired, laid off, or the company you work for shuts down.

We live in the greatest country in the world--no offense to my many foreign readers, but I'm sure that you feel the same about your country. One of the advantages to living in America is the opportunity to start any business that we can imagine. Jokes in this country abound about the 7-11 owner from India, the Chinese dry cleaner, middle eastern gas station owner, or the Ethiopian self-employed cab driver. Instead of laughing at them, I think they should be making fun of Americans who take entrepreneurship for granted and don't use it to their advantage.

Where do you begin? A business can be an off-shoot of what you do in your job. It can be what your heart's desire (or vocation) has been, but you didn't pursue professionally. You can start to invest in stocks or real estate. You can buy an existing business. Try to find something that doesn't rely on you to be there every second in order to make money. Also, it would be great to be able to duplicate it in order to multiply your return, like owning several store locations.

We discuss all business matters in front of our children. Most of the time, they don't seem to be paying attention or they're not interested. However, over the years, it's apparent that much of what we've talked about has sunk in. My 17 year old is very adept at understanding mortgages, equity, and most of the general aspects of real estate and management. I know this because, after 7 years, he's starting to ask pointed questions about the way to purchase and sell property. He talks about things that most people don't know until after they've bought their first home, or later. We didn't set out to teach him, he merely observed what we do.

I hope that by watching us succeed and fail, my children will not be afraid to venture into a business endeavor of their own one day. They also know that, even with the best research and planning, if they don't make it the first time around, it won't be the end of the world. That they get back on that entrepreneurial horse and start over again--the next time not repeating the same mistakes as before.

Most importantly, do not continually spend your money on depreciating assets. Buying too many "things" has the potential of robbing you of your financial goals. Save some money. Each time you have enough, buy a stock, or a condo, or a small retail strip. In the end, these investments will buy you so much more than the "things" you sacrificed in the first place. They may even be able to gain you what money can't buy: time, peace of mind, security.

We'd never be capable of encouraging our children to become financially independent, if we didn't set the example ourselves.