Dear stock sailor,
I’m thinking a lot right now about what I want to teach my children about money. Of course there is a reason for this: I am currently expecting my second child, a daughter. It may even be there by the time you read these lines, even I don’t know that at the time of writing.
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Financial education is very important to me. For me, as the one who is currently addressing you. But also for you who reads these lines. And of course I will do my utmost to ensure that my children also have their finances and their money under control. I would like to convey the following three essential principles to you.
Consumption, investments, interest and debt
A very important lesson I want my children to learn concerns their everyday choices. We can subordinate almost every decision we make to a certain benefit or consumption. Often it is an either/or decision. Accordingly, we have to live with the costs of the option we did not choose.
I would particularly like to make my children aware that they can either put their money to work. Or have to work for their money and the wealth of others. Depending on what they decide, they will become wealthier or happier as consumers. Or maybe not.
When we invest in stocks or an ETF, we initially forego consumption. However, this allows us to increase our assets and have more in the long term. However, if we buy expensive cars, other items or even real estate with a loan, we have to pay interest on them. This means: We have the choice whether our money will increase in the long term. Or whether interest will consistently reduce it. To put it even more concretely: whether we want others to work for our wealth. Or we work for other people’s assets.
My approach is: I want to use my money as cleverly as possible in order to be able to achieve financial freedom and therefore lead a self-determined life. It would go against the goal of self-determination if I patronized my children and forced them into my concept. But I will at least explain this fundamental difference to you.
We can invest in companies we like
I hope that my children will lead an active, happy and fulfilling life. The second financial lesson I will teach you is: You can participate and have a say in a certain way. In public discourse, if they wish. But also in the world of business, companies and stocks.
So the second lesson I want my children to learn is: You can participate in companies. Even the ones you like. No matter if it Netflix is where their favorite series are definitely on. Or McDonald’s, where my son already loves the McNuggets. Or even at Coca Cola or Nestléwhen it comes to (perhaps) favorite drinks and sweets. I would also like to explain to them that we support the companies to a certain extent when we consume their products and, for example, a dividend that enables us to consume them comes from a lot of consumers who also like to eat the products.
It’s important to me that my children understand the options they have with their money. Above all: that stocks are not something that dad does on the Internet with tables and in the broker. But something very real in our lives.
Finance is a marathon, not a sprint
Last but not least, I want to teach my children that finances are a topic that constantly affects them. Of course there are phases in which it comes more into focus. In others, however, less so. But we have a constant responsibility to take care of our money and our assets. Also about our expenses, income and everything in between.
In addition, we are more likely to achieve many of our goals if we view them as a marathon rather than a sprint. This is a rule that naturally applies to the stock markets. But also when we save up for something in order to buy it.
The other advantage of this idea is that if we approach our finances as a marathon and not a sprint, we don’t have to invest too much time. Regularity and certain habits will eventually bring success on their own. This is also particularly important to me. Ultimately, as a father, I want to achieve one thing above all: that my children never have to worry too much about money and their finances. After all, there are more important things in our lives.
To our children, grandchildren and our families,
your Vincent
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2024-03-02 09:04:53
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