Scott Pape – The Barefoot Investor – called in this morning with Bianca, Mike and Bob.
His 2004 best-selling book The Barefoot Investor has been a financial bible for people all over the world and this morning he shared with us some of his wisdom and advice that every parent needs to give their kids to set them up for life financially.
First off, Scott advises Mike on his son buying a car and what every young person should know about the reality of the costs of owning a car.
“Go to Money Smart, they’ve got this car app. It’s actually really good. Download it. It shows how much a car will cost over 1, 3, 5 years. We do this with high school kids and it blows them away because everyone thinks of the car, they don’t think of the running costs – rego, insurance, all that stuff.”
When asked, what should all parents teach their kids about money? Scott said:
“I did a survey before I wrote my last book and I said ‘What’s the biggest fear you have for your kids?’. And the number one fear they have is that their kids will grow up to be entitled, spoiled brats.
Because we live in one of the wealthiest countries on Earth, you know they’re worried about that – I’m worried about that with my kids. And so the big thing for me is, from a young age they should learn that money comes from working – the idea that I work hard and then I get paid.
I have this thing called the jam jars, where they put money into their jam jars so they learn that it’s okay to spend, it’s good save, and we like to give, you know, because we do live in the one of the greatest countries, and one of the wealthiest, and it’s good to help people. So it’s just those basic behavioural building blocks we want to do.”
So basically, as Scott says, these are just conversations you can have with your kids that hopefully means they’re not living with you in the spare bedroom when they’re 35.