Teach your children how to be productive and make money.
When we lecture about the relationship between cash gifts and economic achievement, people from the audience typically ask: ” If not cash, then what form of gifts are more beneficial ?” The are eager to learn how to enhance the economic productivity of their children.
Herr again we remind them that teaching their children to be frugal is critical. Often those who are trained to be otherwise as children become adult hyper spenders, needing cash subsidies during their young and middle adult years.
To enhance personal finance and more productivity, every parents need to show their children the way to fish, not giving them fish all the time, because when you teach your children how to make money, save money, and spend money wisely, they will do more better in their lives and also they will be more valuable and productive to the parents, saving their parents the stress of taking care of them in the old age.
What intergenerational transfers could help your children become economically productive adults? What should you give them? The affluent have a great appreciation for the value of a high quality education. We asked millionaires if they agreed with the following statement: School/college learning is/was of little use to me in the real world of making a living.
Only 14 percent agreed ; 6 percent had no opinion ; and the balance 80 percent, disagreed. That’s why millionaires spend a large amount of their resources on their children’s educations. What was the most frequently mentioned gift that millionaires received from their parents?
All other economic gifts are mentioned by a significantly smaller proportion of millionaires. About one in three received some financial support in purchasing his first home; about one in five received an interest-free loan during his lifetime; only one on thirty five ever received funds from his parents for mortgage payments.
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What can you give your children to enhance the probability that they will become economically productive adults? In addition to an education, create an environment that honors independent thoughts and deeds, cherishes individual achievements, and rewards responsibility and leadership. Yes, the best things in life are often free.
Teach your own to live on their own not depending on you always. It’s much less costly financially, and in the long run, it is in the best interests of both the children and their parents.
There are countless examples of the inverse relationship between economic productivity and the presence of substantial economic gifts.
Our own data, collected over the past twenty years, repeatedly support this conclusion. Independent of college tuition, more than two-thirds of American millionaires received no economic gifts from their parents.
And this includes most of those whose parents were affluent.
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Person finance is very important in everyone’s life, parents need to teach their children how to make money and earn a productive living, rather than giving them money very time. When your child learns how to be productive, he/she becomes more valuable.