The Wealth Academy is here to assist parents to help their children improve their financial capability. We look forward to providing news, research, readings, hints, provocations—and some humour—that we hope will help younger generations become financially capable.
You don't have to be smart to be rich
Quite recently, research was undertaken to explore the relationship between intelligence and wealth.
Jay Zagorsky, the research scientist who conducted the study, made the following comments: “People don’t become rich because they are smart.”
“Your IQ has really no relationship to your wealth. And being very smart does not protect you from getting into financial difficulty.”
“...when it came to total wealth and likelihood of financial difficulties, people of below average and average intelligence did just fine when compared to the super-intelligent.”
What do you think? What message from this can you pass on to your children?
We discuss this more thoroughly in a forthcoming edition of Teenfinca.® Make sure you get your copy of Teenfinca® from your accountant, financial adviser or broker.
Financial habits start at home
As parents, you know you are your child’s first teachers. There is no debate.
The food your child eats, the manners they demonstrate and the activities they participate in, are all largely determined by us, their parents. It is a challenging but rewarding responsibility because, while there is no manual, we take great pride in preparing our children for their future. All of us learn on the job, often researching, reading and seeking guidance whenever we can.
When it comes to financial learning, parents also establish the habits and values which children learn to use in their lives, and which determines how and whether they appreciate money. Once again, there is no manual; most parents will be challenged when deciding how best to guide their children as they grow from toddlers to teenagers and beyond.
Talking about money is essential. This does not mean saying just “Yes, you can” or “No, you can’t.” Conversations about saving, budgeting, making good financial decisions, and seeking expert advice, should be a shared with children weekly, if not daily. Sharing such conversations builds awareness, responsibility, accountability and safety. If parents keep their financial situation hidden from their children, and never discuss the importance of good financial knowledge, those children will remain harmfully ignorant of the real world.
Think about the ‘good’ financial habits you want your children to develop in the years ahead. How can you help your child to develop those habits? We look forward to supporting you with this through our newsletter and other resources.
Teenagers want ...
Teens want to learn about money, according to research by the Charles Schwab Corporation in America.
• 86% say they would rather learn about money management in a class before making mistakes in the real world
• 75% say that learning about money management is one of their top priorities.
How can you help your child learn about money? What formal and informal strategies do you have in place? In which places and situations do you implement these strategies?
Read more about this research here >>
NOTE: The Wealth Academy provides your accountant, financial adviser or broker with images such as this, which can be forwarded to parents. These images can be used to print posters or as screen savers on computer monitors.
Visit our Tutorials page and view the Farrah Gary video with your child/ren. Here are some questions you could ask your child/ren after viewing this video.
- What is amazing about Farrah?
- Is this realistic for every young person? Why?
- What unique characteristics do you think Farrah possesses? Why?
- What is one thing you could learn from this experience?
Do you have a teen looking for work?
Getting a job is a great way for teenagers to make new friends and become more independent.
Before they start looking for work, there’s a few things they should think about which will help you and help them find a job which best suits them:
• What do they like to do?
• What are they good at?
• What would they not want to do—even if they were being paid?
• Do they want to work before or after school, or on weekends?
• How would they travel to work—by public transport, bicycle, car or walking?
As well as their parents or carers, their school and some state government departments can all help them to find out what is and what is not allowed to happen at work, and what to do if you think something at work is unfair.
This website is one of many that explain things about work which adults might expect teenagers to know, like ‘employment contract’ or ‘award’.
I know I like to read quotations and advice by well-known and successful people. Does your teenager like to also?
Here are a few to try. But don’t just tell your son or daughter; make a sign and put it on the fridge door. When the teenager comments (or grunts), “What’s this?”, you will have your chance for a 30-second parent commercial. All conversations like this will help to build their future.
Opportunity is missed by most people because it is dressed in overalls and looks like work.
He does not posses wealth that allows it to possess him.
Success is your dreams with work clothes on.
Learning from mentors
Do you value the concept of mentoring? Have you had a mentor or many mentors? Do your children have mentors?
It is no secret that we all have benefited from mentoring as we have grown into adulthood. At times we have had many mentors, each positioned in different corners of our life, for example, education, sport, music, health, faith etc.
I believe there is an increasing need for mentors in a financial sense.
Who are the mentors of your teenage children? How would you identify a suitable mentor, and what would make them suitable? While parents are mentors by default, it is worth considering the formal and informal use of friends, accountants, advisers, brokers and Elders as potential mentors for your children. Give this some thinking time; your children will benefit.
Mentoring will be a regular feature of both the monthly newsletter and teen ezine Teenfinca.®
Deadly money sins
Most of us are familiar with the ‘seven deadly sins’. Allison Tait, a journalist with ninemsn Money, applies these ‘sins’ to money.
• Sloth: being lazy with financial habits.
• Envy: using money to keep up appearances with peers or neighbours.
• Gluttony: just as people can over-eat, we can also over-spend.
• Pride: spending to preserve or build status.
• Lust: spending on an emotional high.
• Anger (wrath): blaming others for your lack of money or financial decision-making.
• Greed: the desire for ‘wealth’ at all costs.
This article should make us think about our own use of money, and what we are modelling to our children. The article also gives us a mental reminder to talk with our children when we believe they are being slothful, envious, greedy etc.
Read the article
Financial capability does not happen by accident or by default—it requires effort.
Thank you for reading the newsletter.
Yours in learning
The Wealth Academy
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Information provided is for educational purposes and does not constitute financial advice. You should obtain independent advice from an Australian financial services licensee before making any financial decisions. Although The Wealth Academy (TWA) has made every effort to ensure the accuracy of the information as at the date of publication, TWA does not give any warranty or representation as to accuracy, reliability or completeness of the information. To the extent permitted by law, TWA and its employees, officers and contractors shall not be liable for any loss or damage arising in any way (including by way of negligence) from or in connection with any information provided or omitted or from any one acting or refraining to act in reliance on this information.