Teaching the Next Generation About Money and Investing
As entrepreneurs and investors, it’s essential to pass on our knowledge and experience to the next generation. Eric Malka, founder of The Art of Shaving, learned valuable lessons when he sold his company and became an investor. Now, he’s teaching his kids about money management and investing.
From Entrepreneur to Investor
Malka realized that managing assets requires a different mindset than running a company. He took courses on wealth management, read books on investing, and diversified his portfolio to achieve long-term returns. His experience taught him the importance of patience and risk management.
Teaching Kids About Money
Malka’s approach to teaching his kids about money is hands-on. He lets them invest a small portion of their savings, allowing them to learn from their mistakes. His older son thought he could generate a 20% monthly return, but ended up losing 40% of his investment. Malka believes that learning from failures is more valuable than succeeding.
Developing Emotional Muscle
Gregory Van, CEO of Endowus, agrees that making mistakes is essential to developing emotional muscle and humility in investing. He teaches his kids that it’s okay to make mistakes when the stakes are low, as it helps them develop a growth mindset.
Starting Early
Dayssi Olarte de Kanavos, president of Flag Luxury Group, started teaching her kids about investing in middle school. She allocated a “low-risk” sum of money to each child, allowing them to pick companies to invest in. This approach helped them develop patience and a long-term strategy.
Age-Appropriate Advice
Eric Malka emphasizes the importance of age-appropriate advice. He’s currently teaching his kids about budgeting, providing them with a fixed allowance per month. As they get older, he’ll introduce more complex concepts like saving, interest, and debt.
Long-Term Thinking
Roshni Mahtani Cheung, CEO of The Parentinc, opened a fixed-deposit account for her eight-year-old daughter, teaching her about the value of long-term thinking. Her goal is to raise a financially savvy and confident child.
The Wealthy Perspective
For wealthy families, discussing inheritance can be a challenge. Michael Sonnenfeldt, founder of Tiger 21, notes that most members want to wait until their kids are close to 30 years old to discuss their inheritance. However, some prefer to start teaching their kids about responsible wealth management in their late teens or early 20s.
Open Conversations
Sonnenfeldt suggests that parents encourage open, values-driven conversations about money and investing. By doing so, we can raise a generation that’s financially literate, confident, and ready to make their own decisions.
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