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Rich Parent’s Teach Kids About Money Differently

August 26th, 2010

Each of us have our own attitudes towards money, but what you may know is that most of these views are taught to us by our parents and carry on throughout our entire life. Is there a difference between rich parents and working class parents? You bet there is! The lessons that they teach about ways for kids to make money couldn’t be more different.

Rich parents teach different ways for kids to make money, so if you’ve ever wondered about this then here are a few points that you might find interesting.

Spend Your Life Buying Assets, NOT Liabilities. Assets are things you own that put money back in your pocket. Liabilities are things that take money out of your pocket. Let’s think about the guy who focuses on consistently building his property portfolio, compared to the guy who’s always buying the latest gadgets slowly increasing his credit card debt. Who would you rather be? By spending you life buying assets, you will create so momentum, because the money your assets pay you can be used to buy more and more assets. Eventually you will get to a critical mass where your assets will be big enough to free you from ever having to work again.

Companies Win, Employees Lose: Modern society is set up to unfairly benefit the rich, and take advantage of the poor. This is obvious when you consider how our tax system is set up. As an employee we pay tax to the government first, and we get to take home the rest. Whereas companies only pay tax on what’s remaining after it has earned and spent whatever it wants.

The rich take advantage of this system, by ensuring they own companies. In contrast the poor and middle class, generally will remain employees their whole life. This means that the rich actually pay less tax than the poor which may come as a surprise to many people.

The poor and middle class have a habit of telling their kids to study hard in school, get good grades, go to college and get a secure job. In contrast to this rich parents encourage their kids to invest in property, start their own companies.

So the moral of the story is this: As a parent, your own attitudes to money are important, very important, because your kids are watching and learning by example. Parents always want the best for their kids, so make sure you are setting the example for them.

David Rokhan advises parents on how to teach kids about money. For more ways for kids to make money visit teaching-kids-about-money.com.