Financial Literacy Starts Early

Sep 4, 2021 | Financial Planning, Free Resources

On this episode, Karl Eggerss welcomes Oliver Norman to the show to discuss explaining money to youngsters. It’s never too early to start and Oliver gives some practical ways to do it.

Karl Eggerss:

Hey everybody. Welcome to the podcast. My name is Karl Eggerss. Welcome back. We have a jam packed show for you today. Just a reminder, this show is brought to you by Covenant: Lifestyle, Legacy, Philanthropy. Our telephone number is (210) 526-0057. If you need to give us a call with the old fashioned telephone, you can do that. Or you can go to our website 24 hours a day at creatingricherlives.com. That’s creatingricherlives.com.

Karl Eggerss:

Hey, on this show, we are going to have Oliver Norman. He has a bunch of designations behind his name. He’s a great financial planner. And over the last several weeks and months, we’ve talked about investing and financial literacy and financial planning for really different age brackets. And we’ve talked about kids that were in high school going off to college, what they need to know to really propel them. And frankly, to put them a little ahead of probably a lot of their peers because most kids are not getting the financial education they need. And then we have also talked about people that are just starting their career, little older, maybe 22, 23 years old, graduating college and going off, what are some things they need to do right off the bat? Well, this week we’re going to go backwards and we’re going to talk about what little kids should be thinking about and understanding, what concepts we need to be teaching them. We’re talking about five, six, seven, eight, nine year olds. Let’s just call it elementary school or grammar school. Those are really the crucial age of understanding money and the scarcity of money and all the things that go along with really just understanding this exchange of this piece of paper for goods and services. And what does that mean?

Karl Eggerss:

And so we’re going to spend some time with Oliver Norman today talking about that because he has a passion for it. I have a passion for it. Again, if this is a podcast where you have little kids and you’re wondering how to get started talking to them about money, this is the podcast for you. If you’re an older person, maybe you’re a grandparent, this is something to pass along to your kids so that they can share it with your grandkids. That is an exciting topic for today.

Karl Eggerss:

Oliver Norman, welcome back to the podcast. I was going to say it’s been too long but it hasn’t because you were just on what, two weeks ago? Three weeks ago?

Oliver Norman:

I was. Thank you, Karl, always a pleasure to be back. Thank you for inviting me.

Karl Eggerss:

Yeah. The reason I asked you back and I did ask you specifically, you weren’t by default because we couldn’t find anybody else. I actually asked you specifically because how old are your kids?

Oliver Norman:

We have three children. There is a six year old, a three year old and then we have a seven month old as well. And the six year old has become very interested in finances, particularly hers. And she’s displaying an interest in money and as a parent, how do you navigate that? And so I thought it’d be good for us to maybe sit down and chat and navigate some of those issues.

Karl Eggerss:

It’s a great time to do it. And we’ve spent time on the podcast, the whole goal of this is always to educate but we’ve spent time, a lot of time in 2021 talking about financial literacy. And I did a podcast a few months ago, specifically geared towards high school, maybe college age. We did one a few weeks ago about what about after college? What are the first things you should do as a young adult, getting your first job? This is way before that. This is really for again, people, kids, that are five, six, seven, eight, nine years old, we’ll call elementary school and the basic principles they need to learn. Because again, they’re not only not getting it there, they’re not getting it in high school. And if they’re not a finance major or economics or accounting, they’re not getting it in college either. It’s very appropriate. I think if you are somebody that has kids in this age group or you’re a grandparent listening, this should be the podcast to at least start the foundation for their successful monetary path. Is that fair to say?

Oliver Norman:

Yes. Exactly. And Karl, maybe as a starting point, what is your earliest memory as a child pertaining to money? What kind of lessons did you learn if any, when you were maybe around that five, six years old? When did you realize?

Karl Eggerss:

I thought my grandfather made this up and he passed away when I was four so I didn’t really get to know him very well but I thought he made this up but I later learned that he did not but he came on a boat from Italy and opened a grocery store in Dallas. And so kind of had to build up from the ground floor and ended up owning some real estate and did very well. But my mother used to always tell me, “Well, my father always said, pay yourself first, pay yourself first, pay yourself first.” And I thought, man, that’s so wise. Man, he made that up. And no he didn’t make that up but it’s great advice. It doesn’t matter what it is, it’s that mentality of saving.

Karl Eggerss:

And when you think about, I remember one of the first finance books I read was the Robert Kiyosaki book, Rich Dad, Poor Dad. And in there, the basic element of you have a dollar bill and wherever you put it, it can either depreciate or it can appreciate. For example, you go buy a car outside of a COVID world where cars are going up in value, in a normal world where cars go down in value, it’s a depreciating asset. Or you buy an iPhone, that’s going to depreciate. Those are things you may need but they’re not investments. Versus a piece of real estate, a stock, a mutual fund, things that are going to appreciate over time, even a savings account in a normal environment where interest rates are okay.

Karl Eggerss:

And that’s a great concept I think for kids to realize every dollar you go and do something with, you’re making that fork in there, that choice, it’s either going to go down in value or it’s going to go up in value. And I think it’s a great concept. And I think pay yourself first was one of the first things I heard was just the mentality of saving, period. That is delayed gratification is huge.

Oliver Norman:

That’s right. Karl, one of the funny stories that we had with our family recently, my daughter was asking me about money and she was kind of saying, “Hey, my friends get an allowance. Am I going to get one?” And I said, “Well Alison, there’s three things you can do with money. You can either spend it, you can save it or you can give it.” And then on the third point, she looked at me, Karl, she looked at me with absolutely bewilderment and said, “Why would I want to do that?” Okay, we need to sit down and we need to talk about this. Karl, for me, there’s a number of concepts here. My earliest memory of money by the way, was when I was about five years old and I went to a department store in England and they had these Ghostbuster figures.

Karl Eggerss:

Did you see Mr. Bean there?

Oliver Norman:

Yeah, it wasn’t Harrods like in the Christmas one, great episode, by the way, listeners. For those of you who haven’t seen the Mr. Bean Christmas special, that is a must. That is a staple for every Christmas.

Karl Eggerss:

Sounded like you had too much eggnog.

Oliver Norman:

Yeah, exactly. Yes, I went to a department store. I had about five pounds back then, which was a decent amount for a youngster and I loved Ghostbuster figures. And I remember pulling a Ghostbuster figure off the rack. And I said, “Mom, how much is this?” And she said, “Oh, it’s three pounds.” I was like, “Okay.” And at some point, Karl, that was the point where the idea of currency and what I have versus what I can spend, it clicked in my mind. And that’s when I understood the scarcity of my money and that began the process of prioritization for me. And one the things which I really like the idea of and I know now in today’s days, we just use plastic. We use credit cards to pay for everything but I really love the idea of using physical money. You can get digital bank accounts for children nowadays but just maybe even having a clear jar, not the money bank because with a money bank, you can’t see through it but a clear jar maybe for where your kids can save into and they can see how much they have.

Karl Eggerss:

And they better hurry up because digital money is going to, forget the cryptocurrencies, but just the idea of paper money and paper coins being around is going to fade away. I’m surprised it hasn’t already. If you want to use this little trick by Ollie, better do it soon.

Oliver Norman:

That’s right. Oh gosh. Even if you don’t have coins laying around, you can even get just money sets so that they can understand the difference in denomination. But what I like about it, Karl, is that it’s tangible and they can see exactly how much they have rather than just this arbitrage number sitting in a digital format. And the second piece, which I would encourage people to do is set an example as well. Your kids are watching, especially at this age, five or six, they’re watching everything that you do. Not just how you spend money but how you talk about money. Are you and your spouse arguing all the time about money? They’ll pick up on that. And really just showing them that things do cost money.

Oliver Norman:

And one of the things which we’ve tried to do is not just around purchases but also giving as well. For example, we sponsor a child from Compassion International and it’s really a way of engaging with our children that they write to this child in Africa and that they know her name and that they’re really part of that process. Also using money as a way to facilitate values and communicate values such as generosity is very important to us. Karl, I’d love to hear some of your thoughts on that as well.

Karl Eggerss:

Well, I was going to say we’ve actually sponsored two children as well and they were the same age as my kids when

Karl Eggerss:

Or three and five, and so they’ve grown up together with letters and so forth as well. I do think that concept of save, spend, and give is really important, and understanding why, and physically having three buckets, and I did that. And I wasn’t fantastic at being real, real consistent, but they literally had a spend, save, and give. And what I did was, when it was the save portion, I would match them dollar for dollar.

Oliver Norman:

Yes.

Karl Eggerss:

And then they were forced to give. Now that’s not what we’re called to do down the road, just to… that it’s an obligation. We want to give. We want to. And so to your point, they need to see you generously giving and having a smile on your face, and showing maybe what that money’s going towards, right? As opposed to just, I mean we can give to the IRS. That’s not real joyous and that’s not what we want to do, but we could do that. So we want to give, and of course with time as well. But I think those three buckets are really important, and there’s lots of ways to actually do that. But I think what you said is spot on with the scarcity of money.

Karl Eggerss:

And I even see this with teenage kids. They see their accounts go down, and then they get paid from a job or whatever and they see it go up, and they’re okay, then they want to spend some money. It goes down. I think the scarcity part of it is one part of it, but also the building part and the longer term, and that this isn’t just about getting by for what you need today. This is about building. So as soon as they’re… and you can do this before 18, but with my kids when they were 18, opened Roth IRAs for them and said, “That’s really long-term money,” so they can see it. And really breaking out this money into timeframes. Once you get past the spend, save, and give, I think having these buckets of money for timeframes. And this is for adults too, right? I talked about it on the podcast a few weeks ago. But this short term needs and then kind of long-term retirement needs.

Oliver Norman:

Yes.

Karl Eggerss:

And once they see that, and to your point seeing it building up whether it’s digital or not, it’s kind of like losing weight. Once you start working out and losing weight, it motivates you to do more once you see the results.

Oliver Norman:

Exactly, that’s right. And just in terms of, just like losing weight, in terms of instilling habits and behaviors, one of the things, and I am in no way Karl holding myself out to be an expert in this area when it comes to parenting. Like most parents, we learn as we go along and we respond to our children on an individual basis. But I know for me and my wife, we really wanted to instill a sense of belonging and a sense of significance with our children. And we to instill a sense of contribution to our family, so for example, what does that look like? Well we don’t refer to the day-to-day stuff as chores. We refer to them as family contributions. And I know there are schools of thoughts out there where, oh, we’re going to pay our children for doing chores. Well what we found with this approach with one of our children in particular, this led to a sense of entitlement, and I just didn’t want my children to have a sense of entitlement towards money every time they help. I mean-

Karl Eggerss:

You don’t think entitlement’s an issue in the United States, do you?

Oliver Norman:

Oh no, not at all. Not at all.

Karl Eggerss:

Or across the pond for that matter.

Oliver Norman:

Yeah, exactly.

Karl Eggerss:

It’s not just a local thing.

Oliver Norman:

Well, exactly. Well they don’t pay me every time I pick up their toys, so why should I pay them, right?

Karl Eggerss:

Touché.

Oliver Norman:

Yeah. Now if they go and do something extra above and beyond, that might be a little bit different. But just even that concept of rewarding them for doing the basics for that stuff, that’s just something we’ve had to navigate.

Karl Eggerss:

You’re trying to not only model like you said, but you’re trying to teach them even in small amounts, and get used to this mentality. So for example for me, we decided long ago we were going to make them pay for half of their cars. But we were also able to match dollar for dollar into their savings, so we’re trying to teach them, hey, down the road you’re going to probably work at a company that’s going to match you, but only if you’re willing to put the money away and you’re not going to touch it for several years.

Oliver Norman:

I was going to say Karl, that wasn’t lost on me, the fact that you matched the savings and then they have to pay for certain other areas. By the way, is that offer still open to your kids? Do you still match?

Karl Eggerss:

That’s funny you say that, because my son was like, “So when I get my next car…” I was like, “No, no, no, no, no. That was a one time deal, because when you get your next car you’re going to be graduated from college and you’re going to be on your own, buddy.”

Oliver Norman:

And by the way, for any future little Normans who are listening to this podcast, that does not apply to you. Yeah, different cultures.

Karl Eggerss:

Yeah, you only have a 50 cents on the dollar match at the Norman Corporation. You need to talk to the HR department over there at Norman Inc.

Oliver Norman:

By the way, there’s no Roth options either.

Karl Eggerss:

Yeah, I do think the repetition of this stuff is really important, right? Whatever you’re doing in your household with intentionality, continue to do it so that they get used to it and they can see this consistency. It’s not, “Remember a few years ago when we did that savings thing and now we don’t?” It’s got to be consistent, and you will see the results of kids being a little more aware of money. I’ve seen it. They’re aware of money, and they really, in fact they even… my kids even will, when we splurge on something it’s like, “Should we be spending that money on that?” And I’m like, “Yeah, we’ve got savings.” They’re checking on that, which is great. I love their awareness of those things.

Oliver Norman:

Yes, yeah. I’m pleased you brought that up Karl, because I was saying to my daughter, I said, “Hey, I’m thinking of buying this. What do you think?” And she’s like, “Well so long as we’ve got the money to do it, Daddy.” I’m like, “We’re good. It’s all right.” But you’re right, like you say. Just being aware that this is a finite resource as well. I mean, that’s a huge landmark. The other thing for me Karl as well is utilizing money as a way to foster generosity. And you might say, well what does that even look like? For me, for example when we go out to a restaurant and the waitress or the waiter is working really, really hard, I will try and draw my child’s attention. “Hey, look. Look how hard he or she is working. Aren’t they doing a great job? Alison, why don’t you go and give the tip?” Which is in the form of cash. “Why don’t you give it to them, thank them, and tell them what a great job they’re doing?”

Oliver Norman:

And then all of a sudden, I mean it’s really drawing attention to the merits of hard work and acknowledging other people, and money being a conduit to not just bless others, but also foster a sense of gratitude as well. And so there’s ways in which you can do that. And gosh Karl, we love garage sales, or garage sales as you say. And I’ll tell you it’s so valuable, because when they go with their pocket money as we say in England, or their allowance or whatever the case may be, they go, they know how much they have, and they know how far that money goes. But also, just the interaction is just as important. And often, people are just so delighted that these little children are going. It’s just really good fun, but it’s a great way of interacting with members of the public whilst also thinking about how to spend your money.

Karl Eggerss:

Yeah, I think the generosity thing’s really important, because I think the idea of, “I’m going to give the money away with nothing in return,” even the waiter may be doing you a service, so I think there’s even a step beyond that. And that’s great because you’re rewarding them for… acknowledging somebody’s hard work. But what about just giving $20 to somebody on the street or whatever, or a friend, and say, “You don’t need to pay me back. I don’t want anything in return.” And again, a little bitty five or six year old like you said is going to say, “Why? That doesn’t make any sense to me,” because they’re seeing around them that there’s an exchange. The money’s used for something in exchange. And what we’re saying is, no, it’s sacrificial giving.

Oliver Norman:

That’s right.

Karl Eggerss:

Give money just to give it away, because somebody else may need help.

Oliver Norman:

Exactly. And Karl, just to follow it through, what I love about something our church does each year, there’s a mission called Mission Norman. And what they do, you go and you buy a gift for a-

Karl Eggerss:

Did you say Mission Norman?

Oliver Norman:

Mission Norman, yes.

Karl Eggerss:

As in Oliver Norman?

Oliver Norman:

Yeah, I won’t bore you with… I live in a city called Norman.

Karl Eggerss:

Norman, yes.

Oliver Norman:

Yes, Oliver Norman who lives in Norman, yes. And what you do, you go and buy a gift for a child who otherwise would not receive a gift at Christmas. And what I love about this is, our girls can each go and pick their gift, purchase it, take it to the church, wrap it, and then actually give it to the parent who will then go and pass it on to the child as a recipient. And I just love that. I like for them to see just kind of the impact of their gift, and how that will work out. So that’s another one as well which we [crosstalk 00:20:03].

Karl Eggerss:

Well it combines a little bit of service in there too, where-

Oliver Norman:

Exactly.

Karl Eggerss:

You’re going to get it, you’re doing the wrapping. And we talk about that all the time, that just writing a check doesn’t have the same impact as going and doing something, so the service goes along with it. I did want to mention though that I’d been looking to move to a place called [Eggerssville 00:20:21]. I just can’t find it, so if you see where it is, I want to go how you did it. Norman, Norman. I can only imagine what that little town looks like.

Oliver Norman:

Yeah. I can imagine Karl, what’s that scene from It’s a Wonderful Life where if Karl wasn’t there versus when he was there.

Karl Eggerss:

Well it’d be like utopia when I wasn’t there, yeah. They’re like, “Hope he doesn’t find out about this place.” So what other things? I mean again, as we’re talking about, Oliver Norman, our guest, we’re talking about kids that are obviously old enough to understand these concepts. But five, six, seven, eight, nine years old, I mean we’ll just say before middle school, to where they’re 100% reliant. They’re not even mowing yards yet. They have zero chance of probably earning income outside of the home. And so to your point, I’ve never liked the term allowance. Chores are okay, I kind of feel like those are just, you’ve just got to do those. Period. But I’ve never liked the term allowance. I don’t really like that concept that, well just because you’re in the household-

Oliver Norman:

Just because you’re breathing?

Karl Eggerss:

You’re breathing, yeah, you get money.

Oliver Norman:

Exactly.

Karl Eggerss:

Unfortunately in the last year in the United States, we’ve seen a lot of people that are adults with that attitude, and do get rewarded. But that’s a whole nother subject. So I don’t like that attitude and I don’t like the term allowance, but I do like starting to get them into the concept of working for something, and getting compensated for something. And perhaps the harder they work, the more they get compensated.

Oliver Norman:

Yes, exactly. And Karl, someone mentioned something to me which I thought was

Oliver Norman:

… very interesting quote. It said, “If they’re too young to give, they’re too young to get.” I thought it was a very interesting quote in my mind. One other lesson, which I think I would share here is let the child know the consequences of their purchase, and here’s what I mean by that. My daughter went to the Oklahoma Zoo with me and she saw … We went into the gift shop and …

Karl Eggerss:

Was she dropping you off? Taking you back home? “Hop in the cage, daddy.”

Oliver Norman:

It’s never a dull moment with you, Karl. I lock into the storytelling and I’m there, I’m visualizing it. And then there’s something like, “Oh, what would Eggerssville look like?” Yeah, I really appreciate …

Karl Eggerss:

A calm pond and then a rock dropped in it.

Oliver Norman:

Yeah. Exactly.

Karl Eggerss:

Welcome to the Creating Richer Lives podcast.

Oliver Norman:

It’s like when you’re lying on a lilo. Do you have those in America, a lilo, or are they the floaties? And then someone jumps in with a huge cannonball. Yeah. That’s you, Karl, the conversation cannonball. Anyway, I digress, back to my story. We were going to the Oklahoma City Zoo and we went into the gift shop and Alison saw this killer whale transformers toy, and it was 16 bucks. And Alison had saved her money diligently, right, and she had about 25. And I knew what was going to happen. “Daddy, I really want this toy. I really want this toy.” Sweetheart, I’m just going to tell you right now, if you buy this, you will play with it for a day and you’ll regret it. I know you’ll regret it. And she was like, well, I really want it, dad. I really want it.

Oliver Norman:

And I said, how about this, sweetheart? We’ll sleep on it. You sleep on it. Give it one night. And then if you still want it, I will go and personally pick it up for you tomorrow. And she said, okay, and we trudged off. And next morning, you guessed it, Kyle. She woke up, she still wanted that killer whale. I said, okay, sweetheart, please, would you give me the $16. She took it out of a jar and she gave it to me. And I came back, I bought her the killer whale transformer, and she played with it.

Oliver Norman:

One week later, I see it sitting on the side, and I went up to her and I said, Allison, what’s happened to your killer whale? Do you regret buying that? And she goes, dad, you were right. I do regret buying it. And that was $16 well spent for me because she has now learned that once when you go with a purchase, that she knows the lasting effects and how it makes her feel as well. And I’ve seen it in her choices since then, that she’s been a lot more thoughtful about what she chooses to spend our money on. So little things like that, helping them learn what the impact of a purchase is and how that affects them.

Karl Eggerss:

Yeah, that’s really good. I’ve got a statement, and then a question. The statement is I think we constantly need to be pointing out little lessons when we’re with these kids. For example, you’re at the grocery store and you’re about to check out and you look on the right and there’s candy bars and there’s cookies and there’s batteries. And you look on the left side and it’s the same thing. There’s magazines to explain to them what impulse buying is. Why do you think these things are sitting here right when we’re about to check out?

Karl Eggerss:

And kids are pretty smart. And I’ll say, we’re standing here for two or three minutes waiting, why do you think this stuff’s sitting here? And they’re like, well, because you can just grab it and pay for it. I’m like exactly. You didn’t put any thought into it and they know that. They know people are going to say, you know what? I’m hungry, that Reese’s looks really good, and it’s called an impulse buy. So I think using everything you see around them as little bitty lessons over and over is really beneficial to them.

Karl Eggerss:

But what I was going to ask you is when do you think it’s too early to really start giving actual financial lessons in terms of investing and what that looks like? I would imagine that it’s probably a high school thing, where you’re getting into a little more details on actual investing and interest and those types of things.

Oliver Norman:

Yeah. I think for, for me, the effects of compound interest is one of the biggest lessons I learned. I learned that when I was about 15 years old and it changed me incredibly, profoundly. But the idea of saving, that’s something we could introduce, gosh, at the age of five or six, which I would associate as a form of investing. But in terms of getting into the, oh, should you be buying ETFs or individual stocks and all that stuff, emergency fund, that’s later down the road. But Karl, here’s one big thing. College is massive and I would bring the children into the financial equation for this so that they know what either they, their parents or their grandparents are investing in and exactly the numbers behind it and the impact behind their decision as well. That’s the other big landmark there, which is one of the biggest ticket items you’re you’ll ever pay for in your life.

Karl Eggerss:

Yeah. I think a good lesson would be, let’s assume, child, that you were going to pay for college yourself and you had the money. You had the money sitting there to start explaining to them this return on investment, right? Public university in Texas is going to cost at least $100,00 dollars. So you’re going to pay $100,000 dollars, and then you’re going to go get a job at X. The difference between you going and getting a job without your degree, versus going to get your degree, that difference in income divided by what you paid for college is your return.

Karl Eggerss:

But there’s also the element of what if you would have just started working at age 18 and didn’t waste four years or defer four years? And really just walking them through. That’s the kind of stuff we have to think about, and having them think, wow, so you’re telling me that it really … until I crossover eight or 10 years or whatever the math is that, yeah, it wasn’t just a slam dunk that I should go to college and get this degree. Yes. There’s a lot of people who go and spend this, and they could have made the same money without that particular degree. So what the degree is on all of that, and that is probably obviously a high school, late high school conversation. But there’s those types of conversations, I think, like you said, bringing them into these decisions and college being the biggest expense is really, really beneficial.

Oliver Norman:

That’s right. And then even the general lessons of debt will choke you. Well, there’s not too much of a leap between debt will choke you at the age of 18 versus, honey, if you don’t have the money, we’re not going to buy it. There’s no leap, right? Really.

Karl Eggerss:

Right.

Oliver Norman:

It’s different sides of the same coin. So for us, in terms of teaching our children at a very early age, those basic principles, if you haven’t got it, you can’t buy it. And two, making sure that they’re just aware of some of these other things, which we’ve discussed on the podcast today, are just going to lay the foundation for a great financial life.

Karl Eggerss:

Kids love this subject. When you start talking to them about money, they love it. They may not like math as a subject, but they love money and talking about it and thinking about all this. And I think the earlier you have the conversations, the five to 10 year olds, I think it will make math class that much easier and better in middle school and in high school and in college.

Oliver Norman:

Karl, I did an education series with some kids in school and I did the whole effect of compounding. Hey, if you put in a hundred bucks a month and it was invested at a rate of return at 8%, let’s say, how much do you think you would have at the age of 50, 60, 70? And when the numbers came out, and it was something astronomical, I mean, it works out like you have over a million dollars or something like that by the time you reach age 70, depending on the rate of return. And I said, what would you do with a million dollars? You could just see their eyes light up. Oh, I would do this. I would do this and … and you’re right, Karl, you can make it fun. There’s ways in which you can engage it, even at Christmas. Hey, kids, you’ve got a budget of $100. Here’s the catalog, figured out what you want, and they’ll get into it. And they’ll be thinking about what things cost and how to prioritize. I mean, you can have some great [crosstalk 00:30:25] fun with it.

Karl Eggerss:

Well, that’s why you have the spin bucket we talked about at the beginning.

Oliver Norman:

Right.

Karl Eggerss:

It’s not just about saving and giving. I mean, you can certainly do that and give it all away if you want. That’s fantastic. But there is a spend element in once you have a … and this is a conversation for adults, but once you have a financial plan and you know what you can spend, and you’ve talked about this mad money account over the last few podcasts we’ve talked about, but it gives them the freedom to go spend and not feel guilty about it, because savers have trouble with it. I see it in retirement. Savers are savers and they don’t want to spend on something fun, because it doesn’t feel right to them.

Karl Eggerss:

If you have a master plan, a financial plan, you can do both. And I think kids need to understand that. Do not feel guilty for going out and buying something, but really think about, could you have bought it cheaper, an equivalent cheaper? Number one, and number two, what you said about your daughter earlier, did you really need it? Because half the time when you sleep on it, you probably aren’t going to want it the next day.

Oliver Norman:

Karl, any experiences you want to share before we wrap up? I mean, our listeners love the story of the green machine.

Karl Eggerss:

That was something else. Yeah. I don’t know. I think part of why I was intrigued with it and why I liked it was because that was one of the few subject I was really good at was math the whole time. So I do know that there’s going to be a struggle for kids that aren’t so good in math. And there’s a lot of kids that are much better at history and English and anything else other than math, that’s even more important to talk to those kids about that. My son’s very artistic. He just thinks differently, but I feel like he’s got a pretty darn good foundation, because we had these conversations for 19 years. Whereas my daughter is much more math focused, much more business-minded and it’s easier for her, but I’ve had the same conversations with both of them.

Karl Eggerss:

And so if you’re a parent saying, my kid doesn’t like numbers, they don’t like math, that’s even more reason to be having these conversations. And somebody pulled me aside at church the other day and said, we didn’t do a good job with our 18 year old and she’s about to go off to college. Can she come see you? And you can talk to her about investing. And I said, absolutely. Unfortunately, they never followed up and that is a problem. But also they acknowledged that we didn’t know what to tell her. We didn’t do a good job. We didn’t model successfully. And now she’s off to college and I don’t know what that looks like for her. And so I think if you are saying, I don’t know what to tell my kids, this is what these podcasts are for.

Karl Eggerss:

Spend some time on creatingricherlives.com. We’ve done other podcasts. Or reach out. Reach out. We love talking to kids in groups and even groups of adults. I went and talked to a group of retirees probably two months ago. And they have a lot of questions about things like cryptocurrencies and what does retirement look like. So this education stuff never stops. But the reason we want to talk about this today is that you’ve got to start early and build that foundation.

Oliver Norman:

That’s right, Karl. To pinch a quote you said from your previous podcast, “The best asset children have is time,” because of their age. And when we have an 18-year-old or a 21-year-old, gosh, it is invaluable, that time which they have to save.

Karl Eggerss:

Well, you know and you’ve probably read a lot because you’re going through it right now. But the real learning in the watching and the absorbing of what their parents are doing, comes at a really, really early age. By the time they’re in high school, they’re pretty much going to be who they’re going to be. And yes, you can keep teaching them stuff. But man, starting them out early and just getting that mindset of a saver or a spender and not spending beyond your means, those are… I think what you said earlier is right. You can’t start too early with that stuff. But I do think modeling is a big, big deal. They see you buying a car every couple of years, their concept is, well, that money just comes from somewhere and they don’t value it as a scarce asset.

Karl Eggerss:

And so I always have the conversation when I do something like that and I buy a new car, the concept of, number one, I could’ve bought a used one. Let me tell you why I did or didn’t. And then, number two, we’re fortunate we’ve saved a lot of money to be able to do this. I always caveat that stuff, right?

Oliver Norman:

Yeah.

Karl Eggerss:

Because if I just go do it, they’re just going to assume money just grows on trees, which I used to tell my mom, technically it does because it’s paper and it comes from wood and it comes from trees. But she didn’t like that. She would always see the smart aleck stuff. I’ve been doing that for 49 years. But you know, I do think the parents are a big influence because my mom was a saver. She was a widow at a very young age. She was 43 as a widow. And so she had to do it.

Karl Eggerss:

And so we watched her save and she instilled it in us. And she would take us back in the day, up to the bank counter and say, “Here’s what’s in your savings account.” And they would stamp the interest in there and stamp the deposit and say, “Here’s your new total.” I remember watching that. And it was scarcity, and that was when interest rates were actually something good. So kids nowadays, it’s even more important to understand and start teaching them, especially in high school, we don’t have a lot of interest rates. Like interest rates are very low, so this is why we invest in the stock market. Right? This is why you’re seeing costs go up. Yeah. This stuff’s costing more. That’s a great lesson. Explain to them why are costs going up. Just start talking to them about it.

Oliver Norman:

That’s right. And, Karl, the other thing which I’ll mention as well is just like whether it’s disciplining children or teaching children, each child is different. Right? I’m sure you’ve seen this. We’ve had clients who have two children in the same household with the same values. One of the children turns out to be an incredible saver. The other is a lavish spender. So you want to adjust the lessons and the teaching depending on how the child is as well. And that’s the other thing which I would be aware. I don’t think there’s just a cookie cutter approach when it comes to this stuff. You have to work at it, and you have to identify what the child is, and what parenting styles you want to incorporate.

Karl Eggerss:

Right. If I was on to kind of put a bow on this, I would say start early, early and often, but intentionality. There’s a lot of lessons out there every day. And so do bring them into some of those conversations because you’ll be fascinated how much they’re interested in this stuff. They may not be interested in a lot of other things that you can talk about as a parent, but they will be interested in this.

Oliver Norman:

They will. Yep, absolutely.

Karl Eggerss:

Oliver Norman, thank you very much. Appreciate your time. This is a great, great subject. Fun subject. I love the financial literacy stuff. And I think you and I both share that. It’s a lot of fun because it’s just we have more tools nowadays. YouTube. Podcasts. creatingricherlives.com. I mean, we have a lot of tools available to us, and so there’s no excuse for people not to go out and seek some of that advice. If you’re not equipped as a parent to do it, or a grandparent, reach out for help.

Oliver Norman:

That’s right. And we’re all learning, right, Karl? We’re all on this journey of life together. And we’re all trying to figure this stuff out.

Karl Eggerss:

I did not, and I tell people this all the time. Got a finance degree, specialization in financial planning in college. They didn’t teach me about the great recession and what happens when people borrow too much money and have eight houses and don’t have any income. Right? That’s a learn-on-the-job. They didn’t teach me about the .com bubble. They didn’t teach me about a pandemic and how to invest in that arena.

Karl Eggerss:

So to your point, we’re always learning. We’re always learning. That is something I always tell people that as an advisor, you want an advisor, who’s curious.

Oliver Norman:

That’s right.

Karl Eggerss:

If your advisor’s not curious and not learning. I mean, do you want a doctor that’s still doing stuff they did 30 years ago the same way, or are they learning about new techniques and what’s out there right now?

Karl Eggerss:

Oliver Norman, thank you very much. We will have you back on the podcast. And guys, this has been Creating Richer Lives, the extended version with Oliver Norman. Have a great day. Yes, Oli, before we wrap up.

Oliver Norman:

Thank you for having me. Always a pleasure.

Karl Eggerss:

Thank you. Mr. disclaimer guy is chomping at the bit to start talking and doing disclaimers for this podcast. So let’s cue it to him. Take care, everybody.

Speaker 3:

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