RPF0268-Rocky_Lalvani_Interview
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00:00:31.500 | Today on Radical Personal Finance, we talk about how to train your kids for financial responsibility.
00:00:37.340 | This is a really good interview with longtime listener of the show, supporter of the show, and member of the Radical Personal Finance community, Rocky Lalvani.
00:00:44.840 | He's got an incredible story of coming to the United States as a first-generation immigrant and making it big, basically becoming the millionaire next door,
00:00:55.060 | and how he's worked really diligently to train his children so that the next generation doesn't squander all the money that he and his wife have worked so hard to save.
00:01:05.280 | [MUSIC]
00:01:21.320 | Welcome to the Radical Personal Finance podcast.
00:01:23.580 | My name is Joshua Sheets, and I'm your host.
00:01:25.260 | Thank you so much for being with me today.
00:01:27.960 | Today's going to be, I think, a really good interview.
00:01:30.380 | I love talking with members of the community, and Rocky is a tremendous asset to the Radical Personal Finance community.
00:01:37.420 | He's got a cool story, and as with everything, I like to interview people who are a ways down the road.
00:01:42.760 | And is there anything more important than how we can help the next generation avoid the mistakes that we all made?
00:01:49.020 | [MUSIC]
00:01:54.020 | The interview you're about to hear was a really neat opportunity.
00:01:57.020 | Rocky and I were able to connect at FinCon in Charlotte, North Carolina.
00:02:00.520 | There's been a rash of interviews, obviously, coming here that I recorded at FinCon.
00:02:04.520 | It was a productive time for me.
00:02:06.020 | I really enjoyed the conference and was able to meet a lot of people.
00:02:08.520 | I love meeting members of the community, which, by the way, special thanks to all of you who at FinCon listened to the show, who introduced yourself to me.
00:02:15.520 | I love, love, love interacting with you all.
00:02:18.020 | Thank you for making the time to do that.
00:02:19.520 | It helps so much.
00:02:20.520 | Podcasting is a very lonely endeavor sometimes in the sense that you're just pushing everything out, and you push it all out without that audience feedback, without that interaction.
00:02:28.520 | And so I really enjoy meeting up with some of you in person where I can connect with you, I can put a face to it, and I can hear the things that you've liked about the show and the things you haven't liked.
00:02:38.520 | We've had all kinds of interesting conversations.
00:02:41.520 | While there, Rocky and I sat down for an interview right in the middle of the hall on the last day of the conference, and we were able to record this in-depth conversation about working with children and how to train them.
00:02:54.020 | Obviously, as a father of two young kids, this is very important to me.
00:02:57.020 | Many more shows coming in the future on this topic as I bring further resources.
00:03:02.020 | We'll talk about specific systems, specific ideas for training, all of those things coming in the future.
00:03:08.020 | But for today, we're going to bring it to you in an interview format.
00:03:11.020 | And we talk about the lessons of Rocky, kind of what he's learned in his process from penniless immigrant to millionaire next door, and also the way that he's worked with his children.
00:03:21.520 | A couple of quick announcements as we begin today's show.
00:03:23.520 | We're going to skip the sponsors.
00:03:24.520 | I'm just going to make a couple of quick announcements today.
00:03:27.020 | Number one, some of you may be interested in a brand new podcast which I've recently launched.
00:03:32.020 | And specifically, the new show is called Encouraging Christian Fathers.
00:03:36.020 | And so if you're listening to a show on parenting or on how to train your kids, you might, if you are a Christian father, you might be interested in checking that show out.
00:03:44.020 | It is very specific.
00:03:46.020 | It's not intended to have a broad-ranging audience.
00:03:49.020 | It's very niche.
00:03:50.020 | It is a show by Christian fathers for Christian fathers.
00:03:53.020 | That is the exclusive audience that I intend.
00:03:55.020 | It's actually a show that is a hobby project of mine that I am doing with my own father.
00:04:00.020 | And it's basically scratching my own itch.
00:04:02.020 | I was looking for resources and encouragement and inspiration and ideas and challenging topics in the subject of how to be a better father.
00:04:11.020 | And I couldn't find a show that was specific to what I was looking for.
00:04:15.020 | So as I encourage you all, if you can't find something, go create it.
00:04:19.020 | So I thought about creating it myself, but I don't necessarily feel like I'm highly qualified or highly experienced to teach people about being a Christian father.
00:04:29.020 | And then I thought, well, I could do it as an interested learner.
00:04:33.020 | Even if I'm not an expert, I could at least talk about it.
00:04:36.020 | But then I had the idea to incorporate the views of my own father.
00:04:39.020 | So my dad is a 73-year-old father of seven adult children.
00:04:43.020 | He has been all the way through the parenting cycle from obviously newborns to now seven adult kids ages 30 to 50.
00:04:53.020 | So he's been at every stage and then here I am at the beginning of my own fatherhood journey as a father of two young children.
00:05:02.020 | And I thought it would be a really interesting dynamic.
00:05:04.020 | So we sat down and started recording episodes of the show.
00:05:07.020 | So far, five episodes have been released and you can find the show live now in the iTunes podcast store, podcast directory.
00:05:14.020 | So just simply search on iTunes for "Encouraging Christian Fathers" if you're interested in listening to the show.
00:05:19.020 | At the moment, it would be very helpful to me if you would simply subscribe on iTunes.
00:05:25.020 | I know that freezes out of some of you who are Android listeners.
00:05:28.020 | FYI, there will be a standalone app coming in the future.
00:05:32.020 | Also, the show will be listed in – is currently listed in Stitcher.
00:05:36.020 | So if you're a Stitcher listener on Android, you can listen there and I'll have a standalone app coming in the next couple of weeks where you can subscribe on Android.
00:05:42.020 | But if you would like to help me out with just a personal thing, I could just make a personal request.
00:05:46.020 | If you'd like to help that show out with its ratings, if you have any interest in the topic or even if you don't care but you just want to help out with one of my side projects, search iTunes for "Encouraging Christian Fathers" and subscribe to the show there.
00:05:58.020 | The way the iTunes algorithms work is it's most heavily influenced by the number of subscribers.
00:06:04.020 | And so if you would consider subscribing to the show, if you'd like to help me out, I would be greatly indebted to you.
00:06:10.020 | And I'm excited about the project.
00:06:12.020 | It's a very niche project. It's nothing like with Radical Personal Finance.
00:06:16.020 | But so far, I've really enjoyed it. It gives me a great chance to sit down with my dad and it gives me a good answer to the question when people ask me, "What do you do for fun?"
00:06:23.020 | And since I spend so much time working on Radical Personal Finance with my family, I don't have a good answer.
00:06:27.020 | But now I can say I do this for fun.
00:06:29.020 | So I was worried and very concerned with the responsibilities that I have here with Radical Personal Finance and how am I going to incorporate more projects into my time.
00:06:38.020 | So what I actually do with that show is I record the entire thing directly on my iPhone.
00:06:44.020 | And I record, edit, and publish the entire thing directly on my phone.
00:06:49.020 | So that allows me to do it with a minimal amount of time.
00:06:52.020 | The time is just spent in preparation and recording.
00:06:55.020 | So some of you may enjoy that content over there.
00:06:57.020 | Thank you so much for your support with that endeavor.
00:07:01.020 | I will be mentioning that show a little – pretty frequently over the next couple of weeks as I release some new end-of-the-year shows so that the majority of the audience, not everybody listens to every episode.
00:07:10.020 | So you'll hear that and then it will kind of fade into the background.
00:07:13.020 | But I wanted to today encourage you, if you're interested, to check it out.
00:07:16.020 | And also I will provide a direct link to iTunes in the blog post or show notes for today's episode.
00:07:22.020 | One other quick announcement is I just wanted you all, since I consider all of you in some ways my friends and family, rejoice with me.
00:07:30.020 | We actually – this morning as I record this on Friday, December 4, 2015, this morning we closed on the sale of our house.
00:07:39.020 | So that was an exciting development in the Sheetz household.
00:07:41.020 | And I'll bring you a full show in the near future with actually the details about that, the lessons that I learned.
00:07:46.020 | It turned out to be a very profitable transaction.
00:07:49.020 | And so it certainly disrupted my schedule.
00:07:51.020 | That plus six kids this week certainly disrupted my schedule, which you – those – you daily listeners will have noticed with the paucity of shows this week.
00:07:58.020 | But that's a very exciting turn of events and it makes a huge difference.
00:08:02.020 | It frees up my cash flow.
00:08:04.020 | It also frees up money and allows me to make some cool changes to Radical Personal Finance, trying to continue to bring you more and better as I'm able to do it.
00:08:13.020 | I always want to do it faster, but I'm doing it as I can go little by little.
00:08:17.020 | That's it for the announcements.
00:08:19.020 | Here is the interview with Rocky.
00:08:22.020 | Rocky, welcome to Radical Personal Finance.
00:08:24.020 | Thanks.
00:08:25.020 | Glad to be here.
00:08:26.020 | I don't know when you – I'm not sure how many times you've heard those words, but I'm glad to have you on.
00:08:32.020 | You're a longtime listener and I love to have listeners on the show because it gives us an opportunity to talk just with people who have interesting experiences to contribute.
00:08:42.020 | And I was excited to invite you on because you have lived the millionaire next door story.
00:08:49.020 | And when I put those two things together and say, "Hey, just a normal guy next door who's worked hard and who's done a lot of things well and also a longtime listener," I thought this would be a fun interview.
00:08:58.020 | So kick us off with your story and specifically, since we talked a little bit last night over dinner, I would love you to start with your parents' story and how that has influenced your own financial story over time.
00:09:10.020 | Okay.
00:09:12.020 | We're immigrants to the United States.
00:09:15.020 | I came here when I was two years old and my parents moved to America because it was a land of opportunity, a land of abundance, and they wanted that new life.
00:09:29.020 | And so when we came, the rules were such that you weren't allowed to take currency out of India.
00:09:37.020 | So they came with very little money and we had some family local here.
00:09:43.020 | So my dad's brother was here.
00:09:46.020 | My mom's sister was here.
00:09:48.020 | And they just kind of helped us get a start in life.
00:09:51.020 | And we literally started off at the bottom rungs, the wrong side of the tracks in Chicago.
00:09:58.020 | And then also we lived in Newark, New Jersey.
00:10:02.020 | And then just steadily through hard work and saving and not spending a ton, they quickly moved up the ranks.
00:10:09.020 | What type of work did your father start doing at the beginning?
00:10:13.020 | So when my dad came here, he owned a pharmacy back in India, but his degree wouldn't transfer over.
00:10:20.020 | So he actually went back to college.
00:10:23.020 | So he went to college and my mom found a job as a math teacher guidance counselor.
00:10:29.020 | And so they didn't make a ton of money.
00:10:32.020 | You don't get paid a lot in the Catholic school for doing that.
00:10:36.020 | And he finished his degree, but then I think that was--I think there was a recession back then.
00:10:43.020 | So work wasn't that plentiful.
00:10:46.020 | He found a job as an import/export manager in a lighting company, and he literally stayed there his entire career.
00:10:53.020 | Wow.
00:10:55.020 | So it was good, but it was those principles of just not spending.
00:11:02.020 | But I think--and that's the one thing.
00:11:05.020 | People talk about frugality.
00:11:07.020 | Not spending doesn't mean you can't do things and have fun.
00:11:12.020 | As a kid, we traveled all over the world.
00:11:15.020 | Because I'm from India, we would go back to India.
00:11:17.020 | We had relatives all over the world.
00:11:19.020 | We'd go to London.
00:11:21.020 | We would do nice things and we would have nice things.
00:11:24.020 | We just didn't pay an exorbitant price to do those types of things.
00:11:31.020 | And so it worked out well, and it was just--everyone around us was also moving up that economic ladder.
00:11:39.020 | And so you could see opportunity.
00:11:42.020 | And education always, within our community, is big.
00:11:45.020 | So they're always like, "Where are you going to college? What are you doing?"
00:11:48.020 | The moment you graduate college, no one says, "Congratulations."
00:11:51.020 | They look at you and say, "Well, what are you getting your master's in?
00:11:53.020 | What are you doing next?"
00:11:55.020 | And I think that just culture of drive and just seeing people constantly be successful.
00:12:01.020 | So you can start out with nothing and go all the way up the rungs and do great things.
00:12:09.020 | Is that--so I'm fascinated by various immigrant cultures to the United States from different backgrounds.
00:12:15.020 | And I'm fascinated because I think this is--it seems--I can't cite the statistic.
00:12:22.020 | I know where I heard it years ago, but the statistic that I heard was that an immigrant to the United States
00:12:29.020 | is four times more likely than a natural-born citizen to become a millionaire.
00:12:34.020 | And I haven't researched to be able to cite the specific study for that.
00:12:39.020 | But if that's true, why do you think it is among immigrant communities?
00:12:44.020 | Or what is it in immigrant communities that influences this natural--I guess this natural approach and ability to really build wealth?
00:12:54.020 | I think of the immigrant shop worker who opens a store and lives above their shop.
00:13:01.020 | Just yesterday--and I know I'm asking a long question with a story involved, but just yesterday--
00:13:06.020 | or two days ago at the hotel here, I was talking with one of the--with the waitress who was serving me breakfast.
00:13:13.020 | And she is from Korea, South Korea.
00:13:16.020 | And her husband and she had just opened a smoothie restaurant, one of these chain franchise smoothie restaurants.
00:13:23.020 | And here she is working as a waitress in a hotel, and they diligently have been saving money to be able to open the franchise
00:13:30.020 | so that they can launch their business.
00:13:32.020 | And that's so much different than so many of my U.S. American friends who--you know, non-immigrant U.S. Americans
00:13:41.020 | who work a waitress job without any thought of doing anything can't seem to save a dime.
00:13:46.020 | What is it in an immigrant community from your perspective that makes such a difference?
00:13:50.020 | I don't think it's an immigrant community. It's a mindset.
00:13:54.020 | So if you think about it, my dad at the age of--he was probably 40 years old with a 2-year-old kid and a wife,
00:14:02.020 | gets up and moves halfway around the world.
00:14:05.020 | If someone's willing to shake up their life, get up, and be radically different,
00:14:13.020 | then you're self-selecting people who are going to go do something.
00:14:19.020 | And I think that's probably the difference.
00:14:22.020 | That's true.
00:14:23.020 | If you went back to those home communities, you'd probably find--you'll find those same people like you find here--
00:14:29.020 | Right.
00:14:30.020 | --who aren't doing anything.
00:14:32.020 | But if you're willing to make that big a change in your life, that radical step,
00:14:37.020 | then I think you're selecting out a group of people who are just determined to go do something different.
00:14:45.020 | And that's probably what you're seeing is that self-selected group who took the risk and went and did it.
00:14:52.020 | That's a great point. I've never thought of that.
00:14:54.020 | But that makes all the sense in the world.
00:14:57.020 | By the time I meet somebody here in the United States, they've done something unusual,
00:15:02.020 | and they've overcome tremendous obstacles.
00:15:04.020 | I even think of--so I hired a couple guys to work on my house when I was getting it ready to list on the market.
00:15:12.020 | Went and hired some day laborers, and these were Spanish guys.
00:15:15.020 | Both of them were from Guatemala.
00:15:16.020 | And we were talking about their immigration.
00:15:20.020 | I was asking them how they got in the country, and they came through the desert illegally
00:15:24.020 | and hired a mule--I think coyote is a mule.
00:15:29.020 | Anyway, they hired the traffickers to get them in.
00:15:32.020 | And we were talking about--I was asking them kind of what the trip was like and all those types of things.
00:15:38.020 | And as we were talking, I was just incredibly impressed with the type of--
00:15:43.020 | specifically the one man that I spent a lot of time with.
00:15:46.020 | I was incredibly impressed by the type of person he was, where he was just an incredibly hardworking, focused guy.
00:15:53.020 | And as we were talking about his story, he has been trying to get--he has grown children,
00:15:58.020 | and his wife is in Guatemala.
00:16:00.020 | He's been here for, I think, six or seven years.
00:16:03.020 | And he works at day laboring jobs, earning probably on average $10 an hour.
00:16:09.020 | He sends--exact number statement--but he sends over thousands of dollars per month back to his family in Guatemala.
00:16:17.020 | We figured out--I went through his budget just because I was curious.
00:16:20.020 | He lives on about $700 a month, as far as him personally.
00:16:25.020 | But he had cumulatively over a period of years, he had spent $50,000 trying to get his son into the United States.
00:16:33.020 | And his son has tried three times, and all three times they've lost all of their money paying the trafficker
00:16:41.020 | to get them across the southern border.
00:16:43.020 | All three times. $50,000 that he's been able to pull together and pay.
00:16:50.020 | Now, when he came into the U.S., he came in in debt, because he didn't have the money to pay the fee.
00:16:55.020 | So he, after getting--after he was smuggled into the U.S., he owed the--I can't--
00:17:01.020 | do you remember if it's called a coyote or a mule, the person who brings people across the border?
00:17:05.020 | I think it's a mule.
00:17:06.020 | I think so, too.
00:17:07.020 | So he owed the mule--look at that guy--he owed him, I think, $6,000.
00:17:13.020 | Well, he worked and worked and worked and paid it off.
00:17:16.020 | And his son, even helping his son to avoid having to owe the debt back,
00:17:22.020 | to have to send the debt back by paying cash for it.
00:17:25.020 | But the type of person he was to be able to do that, you know, to say,
00:17:28.020 | "I'm going to leave my family. I'm going to leave where everything is--you know,
00:17:34.020 | I'm going to leave these relationships. I don't know anybody.
00:17:37.020 | I'm going to go and trek across the desert, the southern desert of the United States,
00:17:41.020 | which--where I very well could die.
00:17:44.020 | I'm going to put myself into indentured servitude for a period of months and years to pay this back.
00:17:51.020 | And I'm going to live on nothing while I keep sending money back to my family."
00:17:55.020 | That is a very unique type of person.
00:17:57.020 | So, the concept of selection and you're past the screening criteria, that's really powerful.
00:18:05.020 | Really powerful.
00:18:06.020 | So, share with me--so you had the fortune of growing up here.
00:18:10.020 | Did your parents instill those values in you?
00:18:14.020 | Of hard work and frugality?
00:18:17.020 | Absolutely.
00:18:18.020 | I mean, it's just the little things that you don't normally see, but it's just--it's kind of our normal.
00:18:26.020 | So, if we went to McDonald's, we wouldn't buy a drink at McDonald's.
00:18:30.020 | There's always a cooler in the car with a can of soda.
00:18:33.020 | Right.
00:18:34.020 | My dad would walk instead of paying the quarter for the bus.
00:18:38.020 | And it's just all those little things.
00:18:41.020 | You were taught somewhat of a balance.
00:18:44.020 | You can have great things, but you just don't have to pay for them.
00:18:48.020 | Everything's negotiable.
00:18:51.020 | Even today, I negotiate with everybody.
00:18:53.020 | I negotiate with Sears.
00:18:54.020 | I negotiate with Home Depot.
00:18:56.020 | You can negotiate everywhere.
00:18:59.020 | And that's something I don't think people--it's not culturally here.
00:19:04.020 | India is a culture, and in a lot of parts of the world, everything just is negotiation.
00:19:09.020 | And here, we kind of shy away from that.
00:19:13.020 | The other thing that--we always had nice things, but you don't have to buy it today.
00:19:21.020 | So, it was about waiting for the opportunity.
00:19:25.020 | So, Christmas in our house wasn't a tree full of presents.
00:19:29.020 | Christmas in our house was five days after Christmas, all the toys are 75% off.
00:19:35.020 | Go shopping.
00:19:36.020 | Go get whatever you want.
00:19:39.020 | And that's literally the way--that's the way we live in our household, too.
00:19:43.020 | We wait for the opportunity.
00:19:45.020 | Five days isn't a big deal.
00:19:47.020 | And for five days, you can get four times as much as you could have beforehand.
00:19:53.020 | So, those principles and those things are just naturally there.
00:19:58.020 | That's just the way we think, and it's the way we do.
00:20:02.020 | And so, yeah, it's very--and then saving.
00:20:04.020 | It's just constantly about saving and no debt.
00:20:08.020 | I don't know that my dad ever had a car loan.
00:20:11.020 | He always paid cash for his cars.
00:20:13.020 | And he drove them until either they broke or there might be a wreck,
00:20:20.020 | and at that point you were forced to go buy a new car.
00:20:23.020 | Right.
00:20:24.020 | And even then, I don't--our first few cars didn't even have air conditioning
00:20:30.020 | because it was an expense, and then there was the upkeep expense.
00:20:34.020 | I think that's the one thing I've learned as an adult.
00:20:38.020 | You go buy a big house, and it's not just all of a sudden the big house.
00:20:44.020 | Now you have to pay the expenses of the big house.
00:20:47.020 | The lawn's three times as big.
00:20:49.020 | The fertilizer costs three times as much.
00:20:52.020 | There's three times as many lights in the house.
00:20:54.020 | Your electric bill comes to three--and the heat and everything else.
00:20:58.020 | So, when you go buy something, it's not just about buying that.
00:21:02.020 | It's all the obligations of now maintaining that and keeping it up that are also there.
00:21:08.020 | I think we talked about that last night.
00:21:11.020 | When you make a decision to buy a house, there's so many other things that come along with it
00:21:15.020 | and so many other costs that you don't originally consider that you get trapped into.
00:21:20.020 | If you're in a nicer neighborhood, I think you said you end up at--
00:21:23.020 | your neighbors want to go to nicer places for dinner,
00:21:26.020 | and so it just kind of continues to roll like that, and it builds up and up.
00:21:31.020 | And so trying to maintain that is the important thing.
00:21:36.020 | If you can keep that in line, and if you can pay yourself first before you pay for anything else,
00:21:43.020 | then you're guaranteed success.
00:21:45.020 | I mean, that's probably been my biggest thing.
00:21:48.020 | When I got my first job, they had a 401(k) and they had a credit union and they had a stock plan,
00:21:55.020 | and so I put little bits into each of those.
00:21:58.020 | I'll join all the accounts and I'll start with a little bit, and then I just kept allowing it to build.
00:22:05.020 | And every time I'd get a raise, I'd split the raise between me and the savings.
00:22:09.020 | And I would just--those things just kept building and building and building.
00:22:15.020 | Now, I took out car loans, but what I did when my car loan was done being paid,
00:22:22.020 | I just transferred the payment into my brokerage account.
00:22:26.020 | So it became now savings.
00:22:29.020 | I was already used to spending it.
00:22:31.020 | Now that I'm done, I'm just going to save more.
00:22:34.020 | And as you continue to do that, little by little, it's just amazing how much it grows
00:22:40.020 | and then just how that balloons and explodes.
00:22:44.020 | And it's a simple process, and I think we all do it.
00:22:49.020 | The one thing that I've been surprised about is that no matter how much money I've made
00:22:54.020 | and how we've gone up in our income, we've always spent up to it.
00:22:59.020 | I remember when we were newly married, and I'm like, "Cool, my wife makes good, decent money.
00:23:04.020 | I make decent money." I'm like, "This is pretty good."
00:23:07.020 | And then I had a friend, and he and his wife made a little bit more.
00:23:12.020 | I was like, "If we could get to that level, life would be awesome.
00:23:15.020 | We'd be done. We could have everything we wanted."
00:23:19.020 | Well, we got to that level, and our spending went up, and it wasn't done.
00:23:25.020 | And now we're at double that level, and yet at the end of the month, it's like,
00:23:31.020 | "Where's the money in the checking account?"
00:23:33.020 | It just goes.
00:23:35.020 | And I think the more you make, the more you get expectations.
00:23:40.020 | And it grows.
00:23:42.020 | Just like you can build up your savings little steps at a time,
00:23:45.020 | you end up building up your spending little steps at a time.
00:23:49.020 | You want to go to a little nicer restaurant.
00:23:51.020 | You want to go on a nicer vacation.
00:23:53.020 | You want to buy a nicer car.
00:23:56.020 | And it's that creep.
00:23:58.020 | I guess it's human nature, but it doesn't matter how much you make.
00:24:02.020 | If you don't save it, you're done.
00:24:05.020 | And you can live pretty nicely for just a little bit less.
00:24:09.020 | What do they call it? Hedonic adaptation, right?
00:24:12.020 | I think that's the term that some of the behavioral economists are using now.
00:24:17.020 | We get used to it.
00:24:19.020 | We get used to a certain standard of living,
00:24:21.020 | and once you get used to a certain standard of living, it becomes the norm.
00:24:26.020 | It really does.
00:24:27.020 | So you have children, and I'm interested to know what some of the things are
00:24:33.020 | that you have done to try to move intentionally to train your teenage children
00:24:38.020 | with success habits.
00:24:40.020 | Because there is the saying that shirt sleeves to shirt sleeves in three generations.
00:24:44.020 | So according to the normal expectation,
00:24:48.020 | if your father was an immigrant to the United States, he made some money.
00:24:52.020 | You grew up in a slightly cushier environment,
00:24:55.020 | and in watching him, though, you learned his work ethic,
00:24:59.020 | so you've been able to go beyond him.
00:25:02.020 | But now the expectation would be that your children have grown up in a very cushy environment
00:25:07.020 | and that they've just adopted that as a lifestyle instead of a lifestyle of work.
00:25:13.020 | What are some of the things that you've done with your children
00:25:16.020 | to try to encourage the character in them to be able to accumulate and maintain wealth?
00:25:23.020 | You're very correct about that.
00:25:26.020 | I think--and I've heard it written about, and it's kind of something I know.
00:25:30.020 | The first generation, they bust it, and they work hard, and they save everything.
00:25:36.020 | The next generation, my generation, comes up,
00:25:39.020 | and we rise up and above, and we have a great life as we climb because we've been boosted,
00:25:47.020 | and then we don't want our kids to suffer.
00:25:49.020 | And so we give them everything.
00:25:52.020 | But in doing that, you're failing your children because you haven't taught them any values,
00:25:57.020 | and they become the ones who just blow it all.
00:26:02.020 | And so I saw that up ahead, and I knew that I didn't want to raise kids who were like that
00:26:09.020 | and that were going to--you know, if I'm going to spend all my time,
00:26:13.020 | and I'm going to hustle, and I'm going to save this money,
00:26:16.020 | I don't want to leave it to kids who just go out and blow it.
00:26:18.020 | And I've seen that within other parts of our family where you end up with kids
00:26:22.020 | who just go drink and party, and their lives are horrible.
00:26:27.020 | So you have to be intentional about this,
00:26:30.020 | and you have to find a balance.
00:26:32.020 | So when my kids were little, we used to fly first class.
00:26:37.020 | I did it because I had little kids, and I knew they were going to be a pain.
00:26:40.020 | I'm like, "Well, if I'm up front, the stewardess is going to do everything
00:26:43.020 | to keep those kids quiet for the rest of the passengers instead of the cattle in the back."
00:26:48.020 | So the kids are getting used to a certain lifestyle,
00:26:52.020 | but then you've got to set the expectation of not spending money.
00:26:57.020 | And I actually came up with a plan that we have implemented.
00:27:01.020 | So you asked, "What do you do to make sure your teenagers are like that?"
00:27:05.020 | If you want your teenagers to behave a certain way,
00:27:09.020 | you have to focus on them when they're between the ages of probably 3 and 7.
00:27:15.020 | There's a Chinese proverb, you know, "Show me the boy of 7, and I will show you the man."
00:27:20.020 | And that's something culturally in America.
00:27:23.020 | We let our kids play.
00:27:24.020 | We don't actually--you hear a lot of low expectations for young kids,
00:27:29.020 | and we didn't grow up with that.
00:27:30.020 | We have very high expectations for little kids.
00:27:34.020 | So the easiest way to teach people about money is to give it to them, and that's what I did.
00:27:41.020 | So with our kids, we started at age 5, and I would give them their age in allowance.
00:27:47.020 | So every week, you got handed $5 bills,
00:27:51.020 | and you were required to give $1 to charity,
00:27:55.020 | and then whatever was left, you had to put into two envelopes.
00:27:59.020 | One envelope was savings, and one envelope was spending.
00:28:04.020 | Your savings envelope, the idea behind it is you can save this,
00:28:09.020 | and you can spend it after you get married.
00:28:14.020 | Maybe you can buy a house.
00:28:16.020 | It was just a concept of you're never going to touch this money.
00:28:20.020 | And sometimes, like now, my kids, "Can I use it for a car?"
00:28:23.020 | No, you're not going to buy it.
00:28:25.020 | This is forever long-term money.
00:28:29.020 | Whatever money is left, your other $2, you can go do whatever you want with.
00:28:36.020 | Now, we didn't reason.
00:28:37.020 | We won't let them buy things we don't approve of.
00:28:39.020 | We go to Target now, and my kids would be walking around, "I want this."
00:28:46.020 | Well, great. You have money. Go buy it.
00:28:50.020 | And you would be amazed at how a 5-year-old can make decisions about money.
00:28:58.020 | My daughter was much better than my son,
00:29:02.020 | but literally, they would pick something up, and they would walk around the store,
00:29:05.020 | and it was time to leave.
00:29:07.020 | They'd put it back.
00:29:10.020 | And they made that decision on their own.
00:29:14.020 | The nice thing is it takes all the arguments away at Target.
00:29:17.020 | You don't have to sit here and argue with your kid, "Can I have this? Can I have that?"
00:29:20.020 | No, no, no.
00:29:21.020 | Now, it's like, "Yes, yes, yes. Have whatever you want.
00:29:24.020 | Your money. Spend it."
00:29:26.020 | The other thing, though, is that's step one.
00:29:29.020 | Put the money in their hands.
00:29:30.020 | Now, start having conversations.
00:29:33.020 | And so, we would go walk around the store, and they'd be like, "I want this."
00:29:37.020 | I'd be like, "Well, that's expensive, so think about it."
00:29:40.020 | And say, "By the way, we're here at this store, and at this store, that costs $5."
00:29:48.020 | After we leave here, we're going over to this other store.
00:29:52.020 | That other store probably has it for $4.
00:29:55.020 | So, if you really want it, why don't you wait, and we'll go get it at the other store.
00:30:01.020 | And then sometimes we take it a third step.
00:30:05.020 | My son was into all of these Pokemon cards,
00:30:08.020 | and I don't even remember what the other ones were.
00:30:10.020 | And I'm like, "Tell you what."
00:30:13.020 | We would sit and do the math.
00:30:15.020 | Like, this pack is $5, you get 10 cards.
00:30:19.020 | This pack is $10, you get 25 cards.
00:30:22.020 | So, you can get more cards if you put up a little bit more money.
00:30:26.020 | But there's this thing called eBay, and we can go on eBay, and we can bid.
00:30:32.020 | And for $15, you can get 250 cards.
00:30:38.020 | And so, they would be like, "All right."
00:30:40.020 | And they'd come home, and they'd find something on eBay,
00:30:43.020 | and they'd learn to discern what it was.
00:30:47.020 | And then they'd bid, and then they're like, "Well, where is it?"
00:30:50.020 | "Well, now we've got to wait seven days, because someone's shipping it, and it takes time."
00:30:55.020 | But so, they're learning delayed gratification.
00:30:59.020 | They're learning to wait. They're learning to comparison shop.
00:31:03.020 | They're learning to control themselves.
00:31:06.020 | And that's really the biggest thing.
00:31:08.020 | We can control ourselves from not just blowing money on stuff,
00:31:12.020 | because we think we need to, or we feel like we have to.
00:31:17.020 | That's just an amazing value to learn.
00:31:22.020 | And so, this has actually worked out well.
00:31:25.020 | And it's funny, because my daughter would go to the store with my wife.
00:31:29.020 | My wife is much more of a spendthrift than I am.
00:31:32.020 | She spends as she loves.
00:31:35.020 | She's a spendthrift?
00:31:36.020 | Yeah.
00:31:37.020 | So, she spends less.
00:31:38.020 | No, she spends more.
00:31:39.020 | Okay, so she's a spender.
00:31:40.020 | She's a spender.
00:31:42.020 | Thankfully, we don't let her in the store that often.
00:31:44.020 | You keep her chained up at home so she can't get out.
00:31:48.020 | But literally, she would go to the store, and my daughter would look at her and go,
00:31:52.020 | "Mommy, that dress is $70. That's expensive. Are you sure Daddy is okay with you buying that?"
00:32:01.020 | So, they were learning those values.
00:32:03.020 | And now that they're 15 years old, my kids have fat wallets because they don't spend.
00:32:11.020 | And they don't feel like they need to spend.
00:32:15.020 | And when they have money, they don't feel like they have to just give it a go.
00:32:21.020 | Just because I have money doesn't mean I have to buy something.
00:32:24.020 | And I think that's a mentality I hear.
00:32:26.020 | I've heard--I think, you know, I'm standing in a store one day, and I hear these two teenage girls talking.
00:32:33.020 | And the one's like, "I still have $500 limit left on my credit card that I can go use up."
00:32:40.020 | You know, it's like, "No, you have to pay that back. You can't just go spend that."
00:32:47.020 | And it's that mentality.
00:32:49.020 | And so, as my kids grew, they learned.
00:32:51.020 | They would want to buy something bigger, so they want a trampoline.
00:32:55.020 | And the two of them would go in together, and they would save up week after week to do that.
00:33:01.020 | And then, as time went on, I said, "You know, if you want to buy something larger, I'll help.
00:33:06.020 | If you come up with half, I'll come up with half."
00:33:09.020 | And so, they did that. And it's amazing.
00:33:11.020 | Kids can, you know, just on a couple bucks a week, learn to make a $200 purchase.
00:33:17.020 | And they save up, and they make the decisions.
00:33:20.020 | And sometimes, when you're ready to go make that $200 purchase, they may decide, "You know what?
00:33:26.020 | We no longer want that. We've changed our minds, and we're going to go buy something else instead
00:33:32.020 | because it's more important to us now."
00:33:35.020 | And I've told my kids up front, "If you want a car, you better figure out how to pay for it."
00:33:39.020 | So, get to working, and go do it.
00:33:43.020 | We did make one other change in the allowance.
00:33:47.020 | And I said, "My kids wouldn't come ask for the allowance.
00:33:51.020 | I'd have to remember to give it to them."
00:33:53.020 | And it seemed like they were nonchalant about it.
00:33:55.020 | And so, I said, "There's a new rule.
00:33:57.020 | If you don't ask for your allowance between Friday and Monday, you lose it."
00:34:02.020 | So, I wanted them to at least learn to do something.
00:34:04.020 | That's harsh.
00:34:05.020 | It's harsh.
00:34:06.020 | And you know what?
00:34:07.020 | The first few weeks, they would forget sometimes.
00:34:11.020 | And then, about halfway through the week, I'd remind them,
00:34:13.020 | "Oh, you forgot your allowance this week. Too bad."
00:34:17.020 | But they learned to build systems to remind themselves.
00:34:20.020 | So, now they put reminders in their iPhones.
00:34:23.020 | So, they've learned to schedule.
00:34:25.020 | They've learned to do that.
00:34:27.020 | And so, now they come and they ask.
00:34:29.020 | They're better about it.
00:34:31.020 | And again, it's just teaching those little bits of skills of learning to do something,
00:34:35.020 | learning to ask, learning to take action,
00:34:39.020 | that comes around and it works well for them.
00:34:44.020 | So, they're good with money.
00:34:46.020 | I'm not the least bit worried that if I gave them a large sum of money, they'd be fine with it.
00:34:53.020 | And I also told them, "If you want to go to college, you better figure out how you're going to pay for it."
00:34:57.020 | I think I've sent them a couple of your shows to listen to as well.
00:35:02.020 | So, it's literally about exposing them to things and talking to them.
00:35:07.020 | We will literally sit down and have these kinds of conversations.
00:35:10.020 | So, at 13 and 15, we sit down in the evening and we talk about life.
00:35:15.020 | We talk about these principles.
00:35:17.020 | We talk about, "Well, so and so does this and why do they do that?"
00:35:22.020 | And, "What's the thinking behind it and why isn't that thinking correct?"
00:35:28.020 | "What's that going to lead to in life? What's the outcome?"
00:35:33.020 | So, I'm giving them that future orientation.
00:35:36.020 | And I think a lot of people don't look to, "If I do this today, where is that going to take me tomorrow?"
00:35:43.020 | They don't think about that.
00:35:45.020 | My kids are--we're having the conversations that they learn about tomorrow.
00:35:49.020 | And they see how the step that they take today leads to a step and an outcome tomorrow.
00:35:56.020 | I'm going to ask a question about the allowance.
00:35:58.020 | So, I never received an allowance when I was growing up.
00:36:01.020 | And I think it was partly because money was tight when I was growing up.
00:36:07.020 | When I was younger, it changed.
00:36:09.020 | I was the last of the kids.
00:36:11.020 | So, over the course of my life, my parents were able to--they had more money floating around than they did a little bit younger--when I was younger.
00:36:22.020 | But, you know, the special treat was once a week that we would go to McDonald's and have cheeseburgers.
00:36:28.020 | That was the extent that we ate out because my parents weren't willing or able of supporting seven kids on a single income.
00:36:37.020 | And my dad never made a ton of money.
00:36:39.020 | It required careful frugality and thrift.
00:36:43.020 | So, I didn't have an allowance.
00:36:45.020 | And partly, it may have been based upon the dollars involved.
00:36:48.020 | But more importantly than that, it was just my dad's desire not to simply give me money and just have kind of this automatic, "Well, I give you money."
00:37:00.020 | What he did very well, and looking back on it, I realize now the incredible sacrifice that he made, was later--and I'm not talking at the younger ages--
00:37:12.020 | later, he worked very, very hard to facilitate work opportunities for me.
00:37:19.020 | So, he would be talking with people.
00:37:21.020 | He would talk with friends.
00:37:22.020 | He would negotiate things.
00:37:23.020 | And then he would get up and he would take me to work at 7 in the morning on a Saturday morning and then go and pick me up and do it without complaining, do it without being angered or frustrated.
00:37:33.020 | "Oh, I got to take my kids."
00:37:35.020 | He would do that so I would have the opportunity to work and earn money through work.
00:37:39.020 | Thinking, though, about the allowance system, the problem is that's very appropriate maybe at 14 or 15, although it's increasingly hard to build employment and find work for kids at that age.
00:37:55.020 | As our society changes.
00:37:57.020 | But at a younger age, I really like the idea of allowance because, as you mentioned, starting at 5, you can start to teach money management.
00:38:04.020 | So, I'm not sure whether to do it with an allowance system, whether to do it with a payment for certain chores system.
00:38:12.020 | Have you thought about that?
00:38:14.020 | Did you see any downsides to giving an allowance looking back in hindsight?
00:38:18.020 | Yes.
00:38:20.020 | There is a downside to the allowance.
00:38:24.020 | And I know even when we did it, people would go back and forth about pay for chores versus just handing them money.
00:38:32.020 | What was my goal? My goal was to teach money management.
00:38:37.020 | I didn't want to have anything interfere with that.
00:38:41.020 | And so, we didn't have the chores so that they get into the fight over money.
00:38:47.020 | Like, "You didn't do this, you didn't do that, you didn't do this, now you're not getting paid."
00:38:51.020 | And, by the way, learn about money with no money in your hand because you didn't do the work.
00:38:55.020 | Right. And come and ask me for everything all the time so I always have to say yes, no, yes, no.
00:39:00.020 | If you're going to be giving money for those certain things, I mean, buying birthday gifts or Christmas gifts is one thing,
00:39:04.020 | but if you're going to be giving money, I like that idea of here's a certain budget, now you budget for it rather than me having to, on a whim, say yes to this toy and no to that toy.
00:39:16.020 | Exactly. So, looking back, I think you go with a high bar.
00:39:21.020 | And we've kind of done that as it's gotten a little bit older.
00:39:26.020 | I think going back, what I would do is say, "Alright, here's your baseline budget and here's your money. This is yours no matter what.
00:39:36.020 | And you will get this allowance. Now, if you want to work harder, you can get more."
00:39:42.020 | So, I think I would give them the opportunities to earn above and beyond their allowance.
00:39:48.020 | So, at that point, you can pay for certain chores.
00:39:51.020 | But you also get to the other point is, if you start paying them for chores, then what's the family all about?
00:40:01.020 | Right.
00:40:02.020 | And so, you get that whole dynamic.
00:40:04.020 | So, I think you have to give them opportunities and we do that.
00:40:09.020 | So, if my kids mow the lawn, I pay them to mow the lawn.
00:40:13.020 | But they still have to do a lot of base chores that are just expected.
00:40:18.020 | So, if you've got to clean your room, that's just an expectation of being part of a family.
00:40:23.020 | Right.
00:40:24.020 | So, figure out the opportunities.
00:40:27.020 | I would say, give them the money so they learn the money management because honestly, that alone is worth its weight in gold of raising kids who aren't going to come to you at 25 and say, "I need money."
00:40:43.020 | Right.
00:40:44.020 | I mean, that's the worst thing in the world.
00:40:46.020 | Right.
00:40:47.020 | And that's the way society is going.
00:40:49.020 | So, get that down.
00:40:51.020 | Then give them the extra opportunity to earn above and beyond.
00:40:57.020 | So, you give them the opportunity to earn more on top of it.
00:41:02.020 | And I think you can do both of them side by side.
00:41:07.020 | And that's probably one thing we didn't do.
00:41:13.020 | And I think going back, we probably would, is give them the extra opportunity to work for a little bit more.
00:41:19.020 | Right.
00:41:20.020 | So, that they're not comfortable.
00:41:21.020 | Right.
00:41:22.020 | Well, even just in thinking of the dollars, let's say that you do a dollar per week for each age in today, 2015 as we record this.
00:41:31.020 | Then, a 15-year-old, that means they're getting $15 a week, $60 a month on average.
00:41:38.020 | There's not a lot that you can do for $15 a week, $60 a month.
00:41:43.020 | It's something.
00:41:44.020 | But it's not like you're rolling in dough.
00:41:47.020 | But if you teach a 15-year-old has an opportunity to work.
00:41:52.020 | And if they're a hardworking young man or young woman, $10 an hour should be basically a minimum laboring wage.
00:42:00.020 | So, even for a laborer, if they have the ability to labor physically, then they can go in a day.
00:42:05.020 | And in a day's work, you can earn $80 or $100 with a good day's work.
00:42:09.020 | So, to me, it would be and should be possible, could be possible to do both.
00:42:15.020 | Have the allowance system so that there is a continual inflow of money to teach the management.
00:42:20.020 | But also, provide opportunities for work.
00:42:23.020 | And when you compare the easy $15 for showing up versus the $115 for working a day's work on Saturday,
00:42:31.020 | then it starts to put into comparison, "Hey, if I work, I can really get some money and now I can make a massive difference."
00:42:37.020 | So, that might be one, at least in listening to you, that occurs to me.
00:42:41.020 | Make sure that there's some money there with an allowance system.
00:42:44.020 | But make sure that it's far less than what's available through work opportunities.
00:42:50.020 | Absolutely.
00:42:52.020 | I mean, the problem is because of where we live, there are not places close for them to get to.
00:42:59.020 | Because of my wife's work schedule, my work schedule, it's difficult for us to drive them back and forth to an opportunity.
00:43:08.020 | And there are less opportunities for kids.
00:43:11.020 | The paper route's gone. I had a paper route.
00:43:13.020 | Everyone I talked to who's financially successful, they all seem to have had a paper route when they were a kid.
00:43:18.020 | And now, kids don't even have the opportunity for the paper route.
00:43:22.020 | Now, what I try and talk to them about is to say, "Okay, you can't go find a job at McDonald's because I can't drive you there,
00:43:31.020 | but there's this thing called the internet. Get on it. Create a Netseascore. Create a website.
00:43:37.020 | Figure out how to connect and talk to people and try and offer a product."
00:43:43.020 | My daughter did that. She started off with a business of making bracelets.
00:43:50.020 | And so, we sat down side by side and we went through the whole process.
00:43:54.020 | I'm like, "Well, okay, you're going to make the bracelet. You have to ship the bracelet.
00:43:57.020 | Figure out where are you going to get your boxes from?"
00:44:00.020 | And she went on the internet. She found boxes.
00:44:02.020 | We talked about, "Well, this box looks like this and this box looks like that.
00:44:07.020 | When somebody receives that, how are they going to feel? Does it look good? Is it presentable?
00:44:12.020 | Do you need to put the bracelet then inside of something before you put it in the box?
00:44:16.020 | How much does it cost to ship the box?
00:44:18.020 | What are you going to ship the box in? Oh, so you need an envelope."
00:44:21.020 | So, she literally sat down and was able to cost out all of that, figure out her costs,
00:44:27.020 | figure out her shipping, figure out the cost of the beads, and then her time to make them.
00:44:33.020 | And then she went out and she got on a Netseastore and she started doing these things and she learned.
00:44:38.020 | It's very hard to stand out.
00:44:40.020 | Right.
00:44:41.020 | But she also learned to sell them in person.
00:44:46.020 | So, she would go somewhere with me and people would say, "Well, what are you doing?"
00:44:49.020 | And she'd have a couple of samples which she learned.
00:44:52.020 | Like, "I need to take my samples with me wherever I go."
00:44:55.020 | And so, she learned how to build a business and I think that was more the bigger lesson.
00:45:02.020 | Working at McDonald's is nice and that's hard work and that's good.
00:45:07.020 | But I think learning bigger ideas is more important.
00:45:11.020 | So, for her, it's about learn how to start a business, learn about how to do bookkeeping,
00:45:17.020 | learn how to connect with people, learn how to stand out, learn that it's not easy.
00:45:22.020 | This is difficult.
00:45:24.020 | It's not like you can just show up.
00:45:26.020 | And so, you're learning the grind.
00:45:30.020 | The business eventually folded because she realized how much at work it was
00:45:34.020 | and how little return she was getting at the end of the day.
00:45:38.020 | But she's learned the lessons and now she can apply them to something bigger and something greater.
00:45:45.020 | Yeah.
00:45:46.020 | I think all of us have an opportunity to help our children work through that process
00:45:53.020 | and help them start it and give them room to fail and give them room to succeed.
00:45:58.020 | I look back, one of my failed businesses was businesses.
00:46:01.020 | I used to raise rabbits and I would butcher them and sell them to my neighbors for meat.
00:46:07.020 | So, at one point, I think it was in sixth or seventh grade,
00:46:10.020 | and I had almost 200 rabbits when you counted all of my young ones that were fattening up,
00:46:18.020 | as you would say in the meat business.
00:46:21.020 | And I would sell my rabbits for five bucks a piece to my neighbors.
00:46:27.020 | And after I'd butchered them and packaged them up in a bag, I would just sell them for five bucks a piece.
00:46:31.020 | Well, I went back and one time I went to a farmer's market on a Saturday morning near Easter,
00:46:39.020 | and I decided, "Let me see if I can sell some of my rabbits alive instead of butchered and processed."
00:46:44.020 | And when I took the rabbits to this farmer's market,
00:46:48.020 | all of a sudden I found that in no time I was able to sell them, I think maybe $20 a piece.
00:46:53.020 | But the problem was that my entire stock of rabbits were pure white based upon the type of rabbit.
00:47:01.020 | So, I took, I think, six or eight little bunnies to the farmer's market.
00:47:06.020 | Two of them were spotted, dappled, had some kind of brown and black coloring,
00:47:11.020 | and then the balance of them were all white.
00:47:16.020 | So, the two that were $20 each sold in no time at all.
00:47:21.020 | But the rest of them, I was stuck.
00:47:24.020 | I went home with my four rabbits and I said, "Man, if I had some cuter bunnies,"
00:47:29.020 | because the white ones are very cute, but they're not nearly as cute as the spotted brown ones are.
00:47:34.020 | And I realized, "Wow, I've done this business totally wrong.
00:47:39.020 | I'm spending as much in food as I'm making selling my final product.
00:47:43.020 | I don't have a distribution system and all of my stock is wrong.
00:47:48.020 | I should be working in this $20 a rabbit space instead of this $5 rabbit space
00:47:52.020 | because even the $5, I have to go through the very unpleasant work of butchering them
00:47:57.020 | and processing them and packaging them versus taking a box of cute little bunnies and selling them for pets."
00:48:02.020 | So, my entire business structure was wrong.
00:48:05.020 | But looking back on it, I learned so much through that process
00:48:08.020 | that now I'm not going to get into a business without carefully researching it,
00:48:12.020 | without considering where are the high margin activities,
00:48:15.020 | without planning ahead, without running the costs, and it all comes from my rabbit business.
00:48:20.020 | So, I think it's important and valuable to string together a series of business failures for young people
00:48:26.020 | because they're not failures, they're learning opportunities.
00:48:28.020 | And if we think about how much I learned in that business
00:48:31.020 | or how much your daughter learned in her bracelet business,
00:48:34.020 | and you compare that to the amount that we pay for their schooling,
00:48:37.020 | and you compare the educational opportunities of that, it's worth the investment.
00:48:42.020 | It's well worth the investment.
00:48:45.020 | And my kids go to private school, so I pay for schooling on top of that.
00:48:49.020 | And I think the life lessons in these types of things are far more valuable
00:48:56.020 | than a lot of the lessons they're going to learn in school itself.
00:49:00.020 | And my daughter learned one of those pricing power decisions as well.
00:49:05.020 | Originally, she said, "Well, who's going to pay more for this bracelet?"
00:49:08.020 | I said, "You'd be surprised. They're not buying the bracelet.
00:49:10.020 | They're buying your story. Raise your price 50%."
00:49:14.020 | And she did, and she's like, "People are paying it."
00:49:16.020 | I'm like, "Of course they are. It's your story. It's not the bracelet."
00:49:21.020 | But then she learns how to do that.
00:49:23.020 | You learn how to tell your story. You learn how to ask and do these types of things.
00:49:29.020 | The biggest frustration she has in dealing with adults is that most adults talk down the kids.
00:49:38.020 | They don't listen to them, and they don't have a good rapport.
00:49:46.020 | It's always like, "I'm in charge, and you don't know anything. You're a kid."
00:49:51.020 | And that's probably why parents have problems with their kids.
00:49:57.020 | If you're not sitting down and just having those heart-to-heart conversations
00:50:01.020 | and listening and being in their world, then you're going to have struggles.
00:50:05.020 | I have a 13-year-old and a 15-year-old, and I don't have the struggles, "Oh, everyone, oh, you know, it's the teenage years."
00:50:13.020 | No, actually, it's not the teenage years. Things are awesome in our house.
00:50:17.020 | Our kids are very respectful. We have a great time. I don't have issues.
00:50:22.020 | We have certain issues, but not anywhere near what I think a lot of other people do.
00:50:27.020 | And you have to be purposeful in how you're going to raise your kids.
00:50:32.020 | You need to think about your outcomes and then work on what are you going to do to get that outcome.
00:50:38.020 | John Taylor Gatta used to talk about that from the schoolteacher's perspective.
00:50:41.020 | I've seen him give that example in talks because other teachers would come to him and say,
00:50:48.020 | "Why don't you have discipline problems? Why don't you have this? Why don't you have that?"
00:50:52.020 | And he would tell them sometimes. Sometimes they wouldn't want to know, truly.
00:50:57.020 | But his answer was that the most unruly kid in school, generally, if you meet them at 2 p.m. on a Saturday afternoon,
00:51:07.020 | they're the kindest, most normal person.
00:51:10.020 | And he said, "It's your system of demeaning them and treating them poorly and sticking them into a prison system,
00:51:20.020 | which ultimately is having this outcome."
00:51:23.020 | He said, "I just treat everybody the same, whether it's the principal, the school superintendent,
00:51:28.020 | or the young men and women who are in my classes, and they respond to that."
00:51:33.020 | And I noticed that when I was in high school.
00:51:35.020 | There was a teacher who had this incredible gift.
00:51:39.020 | And so many teachers would try to get into this kind of overwhelming, "I'm the teacher, you're the student," perspective.
00:51:48.020 | And they would be very authoritative.
00:51:53.020 | And I would watch young men and women respond to that in ugly, ugly ways.
00:52:00.020 | But there was one teacher that I had in high school.
00:52:03.020 | Everybody loved him. He never had discipline problems.
00:52:07.020 | And looking back on it, I was finally able to articulate the reason that he doesn't have discipline problems.
00:52:14.020 | Because the students respected him, and they wanted to please him.
00:52:20.020 | And I believe the underlying reason was because he respected them.
00:52:24.020 | He respected the students, and he respected them, and he expected them to act like adults.
00:52:31.020 | He didn't treat them like children. He didn't talk down to them, try to put artificial things.
00:52:36.020 | He treated all of us like adults.
00:52:39.020 | And because we were treated like adults, we wanted to not dishonor, we wanted to not break that expectation.
00:52:46.020 | We wanted to act like adults.
00:52:48.020 | So I see that everywhere as far as the communication style that we have and the way that we treat people.
00:52:55.020 | If we treat young men and women like young men and women instead of like children, it totally changes the dynamic.
00:53:03.020 | It definitely does.
00:53:05.020 | The one biggest "aha" with that is kids don't listen to what you say.
00:53:12.020 | They listen to what you do.
00:53:14.020 | And so if your actions aren't in line with your words, your words don't matter,
00:53:21.020 | they are the great-- innately, even at the youngest age, they can pull out hypocrisy in a second.
00:53:29.020 | And they also can learn how to play parents against each other.
00:53:34.020 | So if you're-- as parents, if you're not on the same page with the same thing, a 4-year-old can figure that out.
00:53:41.020 | Right.
00:53:42.020 | So that's an important thing is setting that tone, treating them with respect.
00:53:49.020 | I think that the easiest way I say this is I'm not raising great children.
00:53:54.020 | I'm raising great adults.
00:53:56.020 | And so it's a slight mindset.
00:53:59.020 | You've got to show them respect and they will step up.
00:54:04.020 | I coach a lot.
00:54:06.020 | I can't stand sitting on a sideline and watching a sports game because I would be bored out of my mind.
00:54:12.020 | So I ended up just coaching always because then at least I'm busy.
00:54:18.020 | And at that point, I can model for my kids how to be a great leader.
00:54:24.020 | Right.
00:54:25.020 | And it's a lot of fun.
00:54:26.020 | And so you are-- depending on where I'm coaching, I could get any stack of kids and they come in and, you know, kids come from all different backgrounds, all different levels, and all different types of personalities.
00:54:39.020 | But we-- over the year, I put together literally a system based on the way kids would act to set a baseline, to set that attitude and to do those things so that I wouldn't have to fight with my kids.
00:54:55.020 | Right.
00:54:56.020 | And I would get the results that we wanted.
00:54:58.020 | And they actually helped me come up with a way to do it.
00:55:03.020 | You know, you put a bunch of 12-year-old boys in a car and you got to go drive an hour for a soccer game.
00:55:08.020 | They start picking on each other.
00:55:10.020 | You know, they start grading on each other.
00:55:12.020 | And, you know, as adults, sometimes we even do that.
00:55:14.020 | You know, we'll be like, "Grr," you know, getting uptight.
00:55:17.020 | Yeah.
00:55:18.020 | So we put words to that.
00:55:20.020 | And so the GRRR, the first word is grace.
00:55:24.020 | And literally, I would sit down and I would teach them what grace means.
00:55:28.020 | Grace means when I pull you off the field, you don't yell at me because I took you out.
00:55:33.020 | You say, "Thank you, coach, that my friend gets to play."
00:55:36.020 | That's grace.
00:55:39.020 | Grace is when you're sitting there next to that other 12-year-old kid and he's annoying you to no end, you learn to forgive him.
00:55:48.020 | The second word is R.
00:55:50.020 | It's respect.
00:55:51.020 | Learn respect for the adults.
00:55:53.020 | Learn respect for the field.
00:55:55.020 | Learn respect for the other team.
00:55:57.020 | Learn respect for the referees.
00:55:59.020 | Again, you can't, as a coach, say, "Be respectful," and sit on the sidelines and yell at the referee.
00:56:05.020 | So your actions have to follow those words.
00:56:09.020 | The next word was responsibility.
00:56:10.020 | It's your responsibility to be here with the things you need, not your mother's.
00:56:15.020 | It's your responsibility to be where you are on the field when you're supposed to be there.
00:56:20.020 | And then the last word was--we're at Christian schools where we do reverence to God, but you can do reverence to something bigger than yourself.
00:56:27.020 | So you're not here playing for your glory.
00:56:30.020 | You're playing for a larger glory.
00:56:32.020 | And the nice thing with that is when I have kids, they're going to have their good days and their bad days, but I can just look at someone and say, "I don't have my shin guards."
00:56:44.020 | What's that R word? Responsibility.
00:56:46.020 | Figure it out.
00:56:47.020 | I don't have to yell at them.
00:56:49.020 | If they're being rude, I can just look at them and say, "Are you showing respect?"
00:56:54.020 | I don't have to yell at them.
00:56:55.020 | I don't have to have a confrontation.
00:56:57.020 | I just say that, and they sit there, and they'll think for a second, and they're like, "No, I'm not."
00:57:06.020 | But when you set that tone like you talked about, you give them that framework, and you model it, then the kids step up.
00:57:14.020 | I've never had issues with any of the kids that I've had to coach.
00:57:17.020 | They're all awesome.
00:57:19.020 | Because we set the framework, we walk the walk, and then they step up, and they do great.
00:57:26.020 | It's been a lot of fun raising kids, and I have fun too with it as well.
00:57:31.020 | But you've got to be intentional.
00:57:33.020 | Whatever you do--and I know you're one of those people that I see that's super intentional.
00:57:37.020 | You look at something, you figure it out, you look at it--I'll use the word "radical" because most people aren't looking at things from that other viewpoint.
00:57:46.020 | And that's what you've got to do in every part of your life, whether it's your money, your family, whatever it is.
00:57:53.020 | Spend the time to figure out, "What's my outcome? What steps can I do to make that happen?"
00:58:00.020 | Put the systems in place and just let them go, and it works out well.
00:58:06.020 | Last question, Rocky. I always like to ask rich people as many questions as I can, and this is one of my favorites.
00:58:12.020 | So I'm going to ask you this one.
00:58:14.020 | What is the best investment that you have ever made?
00:58:27.020 | My best investment is spending time with my kids.
00:58:31.020 | It's not a money thing, but I think that's the best investment is in their education and their time.
00:58:40.020 | I'm raising great kids, and so in some senses I'm never going to have a liability later in life.
00:58:47.020 | When they go to college, I don't have to worry that I've got to write checks for hundreds of thousands of dollars.
00:58:53.020 | When they get out in life, I don't have to worry. I hear parents are sending their kids.
00:58:58.020 | I don't have to worry about those things because I spent the time and the money to invest in them.
00:59:04.020 | It just makes for a happier life.
00:59:07.020 | At the end of the day, I think it's more important than money.
00:59:10.020 | You say to yourself, "If you gave someone a choice, you have a choice today.
00:59:13.020 | You're going to lose three out of four of these things, your kids, your house, your job, your investment account.
00:59:20.020 | Which one are you going to pick?" Hopefully, you're picking your kids.
00:59:24.020 | If that's your greatest thing and that's your largest asset, my largest asset is my kids,
00:59:30.020 | then that's where I put my greatest investment into it. That's what I would say.
00:59:34.020 | Beyond that, from a money standpoint, real estate.
00:59:39.020 | Real estate is a great way to make money, and you can make a lot of it tax-free.
00:59:46.020 | That's probably the second side of it.
00:59:49.020 | It's been awesome. I appreciate you coming on. I love having conversations like this.
00:59:54.020 | Somehow, I find that every listener I meet is a cut above the general population.
01:00:00.020 | You'd have to be, I guess, to get through a show like mine.
01:00:04.020 | Tell us about your blog. I know you just started blogging and you are building a financial coaching business on the side.
01:00:11.020 | As you continue to change and enhance your career, tell us where people can find more about you,
01:00:18.020 | your coaching services, things like that.
01:00:20.020 | I'm on Richersoul.com. My blog and my coaching are literally about being intentional,
01:00:29.020 | figuring out what do I want to do with my life, how do I put a financial plan in place
01:00:34.020 | to be able to do what I want with my life, and then going out and executing it.
01:00:39.020 | There's a ton of information out there. Most of what I talk about is probably very similar to what everybody else talks about.
01:00:46.020 | But one thing I find, and I see this with being with kids, because I only started real estate a few years ago.
01:00:53.020 | When you go out and you do something the first time, it's scary.
01:00:57.020 | If it's scary, we might not do it.
01:01:00.020 | What I'm literally doing is coming alongside people who might be overwhelmed with all the information
01:01:07.020 | and just standing there and saying, "Here's what the choices are. Let's make them together.
01:01:13.020 | Let me hold your hand and walk you through the process of putting together a financial plan
01:01:18.020 | so that you can live the life you want to live."
01:01:21.020 | As we wrap up, we're sitting here in the lobby at FinCon, and the sessions are about to start
01:01:28.020 | for the last day on Sunday morning.
01:01:30.020 | I encourage people, get involved in your industry. Go to the conferences in your industry.
01:01:37.020 | As you build this financial coaching business and financial blogging, you signed up and you spent money
01:01:44.020 | and you took a weekend away from your family to be here at the conference.
01:01:46.020 | What's been the impact so far as far as what's been your experience has been worth it?
01:01:52.020 | Oh, it's absolutely worth it. I'm meeting a ton of people who are doing a lot of the same types of things that I'm doing.
01:01:59.020 | I'm also seeing that they have a lot of the same emotions that I have and a lot of the same fears and struggles
01:02:07.020 | and all those types of things. So it's nice to know that you're not alone.
01:02:11.020 | The process that I'm going through and the steps I'm taking, everyone else went through them as well.
01:02:18.020 | And that you have to go through these things to learn the different things so you can become greater.
01:02:24.020 | So it's just been awesome being here. I'm meeting a lot of amazing people and I'm looking forward to going back
01:02:31.020 | and just taking that next step.
01:02:33.020 | Sweet. Thanks for coming on, Rocky.
01:02:35.020 | Thanks for having me.
01:02:36.020 | Hope you enjoyed the interview. I always love to have members of the audience on.
01:02:40.020 | So many of you guys are awesome. And if you, by the way, if any of you want to be on the show,
01:02:46.020 | feel free to email me about that. Put in a note through the contact form.
01:02:49.020 | Sketch out what you think would be interesting and useful about your story.
01:02:52.020 | I love to have members of the audience on.
01:02:54.020 | Builds more of the community feel that I want to maintain with the show.
01:02:59.020 | Not just all expert, expert, expert all the time or always having something to sell or something to pitch.
01:03:03.020 | But it keeps the community feel that's important to me to maintain here with the show.
01:03:07.020 | On the subject of parenting and how to teach your children financial concepts,
01:03:12.020 | I would ask you this. I'll be doing many more shows on the topic.
01:03:15.020 | I have resources that I have found.
01:03:17.020 | But a special request for audience interaction here.
01:03:20.020 | If you have a book that you love or if you have a resource that you have used with your kids,
01:03:27.020 | a specific approach, a specific way that you've taught them,
01:03:30.020 | whether you did the three piggy bank method or something like that,
01:03:33.020 | I'd love to know about some of the things that you all have done and have found effective.
01:03:37.020 | The best way to do that, if you'd like to do it publicly,
01:03:39.020 | feel free to comment on the blog post for today's episode or email me, Joshua@radicalpersonalfinance.com.
01:03:45.020 | And I'll check out some of those resources and include them in the future.
01:03:49.020 | But I'm, among other things, going to be constructing shows on ideas and frameworks.
01:03:55.020 | Well, constructing for myself and then also constructing it for shows as well.
01:04:00.020 | So that's it for today's show. Thank you so much to each and every one of you who listens.
01:04:04.020 | Special thanks to the patrons of the show.
01:04:06.020 | The show and all the changes and hopefully improvements that you've seen over past months would not be possible without your support.
01:04:12.020 | The patronage is fundamental to everything that I'm doing.
01:04:17.020 | Thank you to each of you who supports the show.
01:04:20.020 | I'm going to be making some changes, hopefully positive changes, trying to improve things around here.
01:04:25.020 | Well, continually, you know, continually getting better.
01:04:28.020 | But if you gain value out of the content of today's show and you'd like to support the show,
01:04:33.020 | please go to radicalpersonalfinance.com/patron.
01:04:35.020 | Sign up to support the show there, radicalpersonalfinance.com/patron.
01:04:40.020 | More shows coming next week.
01:04:42.020 | Man, I'm excited. The future is bright.
01:04:45.020 | I feel like a weight of thousands of pounds was lifted off my back with the sale of the house this morning.
01:04:51.020 | And so it's going to make a dramatic difference in my life.
01:04:54.020 | And I hope because it's making a dramatic difference in my life, it can help you all as well.
01:04:58.020 | Have a great weekend, everybody. Be with you soon.
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