This is frankly depressing.
> As my eldest son’s birthday was approaching, we suggested that instead of asking for physical gifts, he ask for their equivalent in money. That way, he gathered a decent amount of capital for his first investment adventure.
Yes, why would you want a toy or a book? Why waste time having fun or learning? You could instead watch a number go up slowly while you do nothing. Fun for the whole family, seconds at a time!
> Each day, as they watch their small fund grow, they grasp the magic of compound interest — and that, more than any gift, is a lesson I hope will stay with them for life.
This feels like raising finance dude bros and gambling addicts. There is no “magic” to compound interest, no one should have “watch money accumulate” as a life goal.
Okay thank goodness I’m not the only one who finds this incredibly sad. Especially as someone who is trying to make money less important in my life.
In what way are you doing that? Not that I disagree just curious how
All I mean by that is having an honest job I don’t totally dread, not getting a high-paying job that wrecks my mental health solely because it pays a lot, buying only what I need with minimal wants, trying to live simply without extravagance. I do in fact track budgeting very consistently and have a 401K, among other things, so that I avoid homelessness and stuff. But I do not think about how to make more and more money constantly.
The simple way would be to not "manage" your finances, don't build an investment portfolio. Have an honest work, live happily within your means and save whatever's left in cash.
Sadly, honest work is a dying value.
I don't think you understand. In the US you have to invest, or you simply won't retire before you die.
By earning more.
Kids used to be encouraged to work hard and to learn. Every day I realize that some kids are not raised with this idea. Why work hard when others can, and you'll get even richer? Learning schmearning
He's teaching them the most important lesson of living in a capitalist system: wealth comes from having money, not from earning money.
If he's not able to also provide them with a sizeable initial capital, this lesson is also completely irrelevant. No one becomes really wealthy by investing savings off their modest salary.
You can, however, get wealthy by investing savings off a good salary.
I mean you can literally do that. And get wealthly. It'll just be a meagre existence up and until retirement.
It's better to invest in assets though than just the stock market. The wealthy build wealth by borrowing and buying assets like real estate. This ways makes it easier to avoid income taxes and capital gains taxes and you also get massive tax deductions for asset deprecation that you can use to offset most or all of what income it does provide.
Kids are 7 and 10 , this is a mini "Marshmallow Test" and they can use their money whenever they want if they find a book or toy they like while they learn how investments work.
Or they could work for money when they are old enough to
agreed - he doesn't say the age of the kids but I imagine they're both under 10? Done right this could set them up for life and make them millionaires with virtually no effort by the age of 30 and still give them a childhood filled with toys and fun. But removing birthday gifts entirely from a young child... woah. Kids need physical items and tangible hobbies to share and bond with friends, even if it's just a cool looking stick. Is a child's brain developed enough to understand, enjoy and share a lot of these concepts, could it maybe lead to them becoming isolated?
>Done right this could set them up for life and make them millionaires with virtually no effort by the age of 30
This seems hyperbolic. Given that money doubles in roughly 10 years at a 10% rate of return, if kiddos are 10 years old they get two doublings by 30. To be a millionaire by 30 requires a present value investment of $250k per child.
You should take inflation into consideration, so the million in 20 years won't be the same as now.
It’s been my experience that when people are talking about some future sum of money without specifying real or nominal they are referring to a real sum, based on their current day concept of monetary value.
How is teaching your kids to invest some portion of their money "raising finance due bros and gambling addicts"? Just because modern culture has incentivized these kinds of people doesn't suddenly make investing bad. This is such a wild take.
> How is teaching your kids to invest some portion of their money
That’s not what the article says. I explicitly quoted the relevant part. It’s not “a portion of their money”, this is not money they had lying around in an envelope that grandma gave them. This father is incentivising the kids to not get what they want for their birthday and instead ask for money with which they’ll do nothing but unrealistically watch grow for a period of time. That’s not a good core memory, no one looks fondly on “that birthday I had as a kid where I got nothing but a number on an app stated growing at a snail pace”.
> doesn't suddenly make investing bad.
That’s not the argument. Nowhere in my comment does it say investing is bad.
> This is such a wild take.
Any take is wild when you blatantly misrepresent it. Don’t straw man.
Kids are 7 and 10 , this is a mini "Marshmallow Test" and they can use their money whenever they want if they find a book or toy they like while they learn how investments work.
Seems more like a "mega" Marshmallow Test. Instead of putting off a snack for 15 minutes they're giving up an entire year of birthday gifts for a reward years into the future.
I dunno, while they didn’t tell me to ask for cash, my parents basically made me invest any cash I got as gifts, plus everything I earned at summer jobs. I think that this kind of “investing by default” mindset (plus getting my own desktop computer for Christmas at age 11) extremely significantly impacted my current life in a positive way.
Also, learning to use Excel by playing fantasy stocks during the dot-com bubble, and having a Lycos homepage “Portfolio” widget just like my mom did is a fond memory for me, and zero people on Earth would call me a finance bro today.
The major difference is that in all your examples you were already getting cash. In the article, the poster is incentivising their kids to get cash instead of something else specific. From the article:
> we suggested that instead of asking for physical gifts, he ask for their equivalent in money.
For their equivalent. In other words, the kid has to decide something they want then deliberately choose to not get it so they can “invest” it and see line go up.
It would’ve been different if this had instead been a case of “grandma just gave you an envelope with cash; if you don’t have plans for it, how about investing?”. Which works on many levels, they could’ve also spent some portion of the money on something they wanted then invested the surplus, or a myriad other options.
Investing isn't bad? Sure we all do it but how isn't it bad?
> Why waste time having fun or learning?
yeah definitely no learning happening here
> You could instead watch a number go up slowly while you do nothing.
and then...spend it on something nice?
> This feels like raising finance dude bros and gambling addicts.
This is a super reactive take speaking from no experience whatsoever. My own parents did something like this for us when we were in elementary/middle school and it taught me restraint in spending, not the opposite.
> This is a super reactive take speaking from no experience whatsoever.
You have no idea what my experience is, please don’t assume.
> My own parents did something like this for us when we were in elementary/middle school and it taught me restraint in spending, not the opposite.
I’m glad it worked out for you. Truly. But don’t assume your experience is universal, because I unfortunately know for a fact it’s not. Also, the argument isn’t that it causes unrestrained spending, that’s not what financial dude bros are about. Excessive restraint in spending can also lead to unhappiness and an unhealthy attachment to money.