Preparing one’s children for the responsibilities that come with adulthood is no easy task, especially when it comes to money management and personal finances. There is no doubt that a solid foundation in financial literacy is needed to ensure that our children are equipped to manage a budget, calculate interest and be fiscally responsible. Not to be found in textbooks, however, are some abiding principles that form the bedrock of future financial stability that we believe every child needs to know.
Patience is a virtue
In an age of instant-everything, there is precious little we have to wait for. We are permanently connecting, searching, checking in, adding to our stories and updating statuses. Every action is aimed at the same result: instant gratification. The touch of a button will provide us with answers to almost any question: How do I get there? How much does it cost? Where can I buy it? When will it be delivered? Everything that technology provides us is antithetical to long-term investing and wealth creation – which at its heart is all about delaying gratification. As with anything in life, the ability to delay gratification gets better with practice – although with each technological advancement, the day-to-day opportunities to practice delaying gratification become fewer and fewer. So important is the art of delaying gratification that economists believe the inability to wait for something that you really want is a primary predictor of economic failure in life. In a world of unfettered choice, the art of delayed gratification is a diminishing one. Whether you are saving for your first home, an overseas trip, a music festival or a new pair of shoes, patience and perseverance will get you there. Aristotle was correct when he said that ‘through discipline comes freedom’. Everything worth having is worth waiting for. Be patient.
Handbags, wallets and cars, once symbols of status, have been replaced by social media pictures of our latest experiences – ski lifts in Livigno, sunsets at Afrika Burn, dancing at Secret Sunrise or yoga with goats. Social media is supporting the change from buying ‘things’ to buying ‘experiences’ – endorsing what we have always known: that experiences make us happier than material purchases. In “Happy money: The science of smarter spending”, Elizabeth Dunn and Michael Norton determined that the anticipation of an experience that you intend sharing with others is more pleasurable than the purchase of a material object. Elias Burton Holmes, an American who first coined the term “travelogue”, is famous for saying, “The only things that I own which are still worth what they have cost me are my travel memories; the mind pictures of places which I have been hoarding like a happy miser.” Buy experiences and share them with people you love.
Be a decent human being
A 2008 Harvard Business School study established that giving money to someone else lifted the participant’s happiness more than if they had spent the money on themselves. When people give to others it activates regions of the brain associated with pleasure, social connection and trust, which in turn creates what is called the ‘warm glow’ effect. There is very little you can do for yourself which will have the same effect as doing something good for another person, no matter how seemingly small. Charity really does start at home and it need not be elaborate. You will be surprised at the charitable giving (of time, money or resources) you are able to achieve from where you are currently at. Are you a beauty therapist? Consider giving complimentary treatments at a palliative care facility once a month. A hairdresser? Any old age home would value the offer of complimentary hair cuts for the aged, especially those who cannot afford the luxury. With a little bit of thought, any skill or talent that you have been blessed with can be paid forward to those who are less fortunate. Give freely.
“The more that you read, the more things you will know. The more that you learn, the more places you’ll go,” says Dr Seuss. Never before have we had access to so much information, so quickly and for so little. It is quite incredible to think that all information known to mankind is accessible via one’s smart phone, somewhere between the Kardashians and cat videos. From photographic courses to Xhosa to Calligraphy, there is seemingly no limit to what we can study online. Even universities like Harvard and MIT are offering free online courses, and all you need to commit is your time and some motivation.
A 2017 Social Media Today survey estimates that American teenagers now spend up to nine hours a day on social platforms, with 30% of that time being spent on social media interaction. Furthermore, the average person will spend approximately 116 minutes on social media everyday, which translates to a total of 5 years and 4 months spent over a lifetime. Put to better use, imagine the learning and self-improvement that could be achieved in this period of time. Never stop learning because life never stops teaching
Do what you love
Millennials are bravely challenging traditional belief that it is not possible to make money from following your true passion. While many of us have been raised to believe that there is something noble about setting aside one’s true passion in order to make a respectable living, Millennials are experimenting – and succeeding – with blending passion, purpose and pay cheque. This generation is proving to be adept at finding the hidden value in their unique talent that the world is willing to pay for. You can absolutely make money doing what you love.
Understand money and time
Money today is more intangible than ever before thanks to Snapscan, tap ‘n go and cardless cash withdrawals. With most financial transactions being barely tangible, there is now very little that stands between ‘wanting’ and ‘having’. The danger of a near cashless society lies in the diminishing appreciation for the value of money, especially when it relates to money earned by others. Appreciating the value of money earned by others and exercising stewardship over what one has been blessed with are absolute fundamentals. Until you have traded a day of hard work for a pay cheque, you will never fully appreciate the value of money or time, nor the need for passive income. Be thankful for what you have been given.
The Jones’s are broke
Materialism is a system that forces us to compare our possessions with those of others, and there is no end to the race. If you have three pairs of Jimmy Choos and your friend has four, you are still one pair of heels away from happiness, albeit the superficial type. The Jones’s might have cars, houses and boats on display, but the chances are they are broke and drowning in debt – and there is nothing enviable about their situation. Whether a person is using materialism as a yardstick for success or seeking happiness through the acquisition of material belongings, psychologists agree that the obsession with materialism is socially and personally destructive, and is associated with anxiety, depression and broken relationships. Despite the unrelenting marketing messages we receive, you can absolutely be happy in unbranded gear. Stay out of the race with the Jones’s.
Successful people aren’t gifted. They work hard and then succeed on purpose. It was Robert Louis Stevenson who said, “Life is not a matter of holding good cards, but of playing a poor hand well.” More than qualifications, there is no doubt that hard work, tenacity and resourcefulness are greater indicators of future success. Socially connected, gregarious individuals with a never-say-die attitude to their idea are far more likely to succeed than someone with a string of qualifications who is unwilling to get their hands dirty. Whether seeking employment or pursuing an entrepreneurial idea, it is likely to be your attitude rather than your aptitude that will win people over. Grit and determination are unteachable but highly sought-after skills to any investor or organisation. If you believe in yourself and your idea, be prepared to roll up your sleeves and don some elbow grease.
There is no turn-key solution that can guarantee our children’s future success and happiness. More than just maths, our children need a foundation on which to begin formulating their unique vision of what enduring happiness looks like for them.
Have a super day.
Categories: Financial Planning