As a young parent, Sandy – who uses a pseudonym online – was, as she herself says, a “yes mom”. This means that by the age of five and six, their two sons could do pretty much anything they wanted. But they were responsible for the consequences.
“We had about seven guys in the neighborhood and they all came over and baked cookies,” said Sandy, who retired in December 2019 at the age of 62 and a fortune of over a million dollars. “They made a huge mess and it was fine, but then I said, ‘OK, now you have to clean up the mess.'”
She took a similar approach when it came to teaching her children about money: Sandy encouraged her sons to be self-employed and presented them with real-world situations.
One of her sons, who goes by the online name Drock, recently became a millionaire at the age of 35. He calls Sandy “the greatest financial influence” in his life. Here are five of the most important money lessons Sandy taught her boys from an early age.
1. How to be mindful of money
Sandy gave each of her children from the age of ten or eleven a monthly allowance of $ 200. They were enthusiastic at first, she says, until they realized that they were responsible for almost everything – from the toothpaste to the contributions to the hockey team. Sandy and her husband took care of the essentials, such as meals and visits to the doctor.
“You can choose what you want to do, but then you will run out of money to do these other things. So make your decisions wisely, ”Sandy advised her children. “I let them decide these things. Sometimes they made decisions that I didn’t think were best, but that’s how they learned. ”Along the way, Sandy taught them some of their own frugal habits and eventually helped them sew their own clothes at home.
2. How to make extra money
In addition to a generous monthly allowance, Sandy gave her sons the opportunity to earn extra money by doing housework. “There were always task lists on the fridge,” she says – and the pay was listed next to each housework. “When they really wanted to buy something, they would pick these jobs and do them to earn what they wanted,” says Sandy.
They also inherited their parents’ entrepreneurial spirit. “Her dad and I had a graphics business and we worked a lot, but the kids could see how tough it was,” Sandy said. The boys printed flyers to advertise their own businesses – like raking leaves from the neighbors or pulling weeds in the garden to secure their income.
3. How the stock market works
For Christmas and birthdays, Sandy and her husband bought their sons some shares in companies that were important to them, such as the chocolate manufacturer Herschey’s, and showed them how to follow the development of the shares in the newspaper.
“It just helps them get interested in it, learn about it and see it grow or go down,” says Sandy. “You know, it can go downhill and you can lose money, but they see it in small pieces so it’s not that overwhelming.” They also gave the guys a choice of when to buy or sell.
4. The power of delayed rewards
Another common gift at Sandy’s house: savings bonds. They bought bonds in small denominations for the boys and essentially explained the concept of the delayed reward.
“They kept it and waited for it to come due and cashed it in as it got older,” says Sandy, adding that interest rates were much higher 30 years ago than they are now. “In any case, it was like, ‘Wow, we have to wait all the time until we can make money with it. But it showed them that it happens, that it accumulates and over time you earn, ”she says.
5. How to be self-employed
Sandy’s goal as a parent was to ensure that her sons would be financially independent by the age of 18. “I said, ‘If I die when I’m in an ambulance on my way to the hospital with a penny left, I’ll stop the ambulance and buy half a candy bar. I spend my money. I am the one who deserves it. I take it, I don’t leave it to you guys. You can make your own money. I took care of you until you guys were adults, ”Sandy said.
That wasn’t entirely true, she added. But she didn’t want her kids to think they could sit back and view their mother’s fortune as a convenient backup plan. “A lot of people think I’m too tough or too cold,” Sandy said, “but I just think that when it comes to things like that, it’s the only way to really let the kids know that it’s in their own hands to have.”
This article was translated from English by Steffen Bosse. You can find the original here.