Money Lessons From My Father

Any man can become a father, but it takes someone special to be a dad! I was blessed with a wonderful childhood and could learn many financial lessons from my dad.

Since almost 10 years I’m now doing my best to be a dad myself. Being a dad is one of the most important jobs any man can have.

Becoming and being a dad got me thinking a lot about life and money lessons passed down to me so I can “pay it forward” to the next generation. Following one of my older posts about how to raise financially independent children and after quite some jacuzzi beerstorming, I’ve distilled the key lessons from my dad into 25 short but important lessons that lead to this blog post.

What Is The Job Of A Father?

First and foremost, kids should be prepared to stand on their own feet.

Beyond that, I believe good dads should try to give their kids both – roots and wings:

Roots to give them bearing and a sense of belonging.

Wings to help free them from constraints of any kind.

Thirdly, I appreciate that my father truly never told me how to live my life.

He simply lived his life and let me watch him do it.

Some parents worry that their children may not listen to them; I think they should rather worry that they’re always being watched instead!

As a great parent: You got to lead.

Live your life in an inspiring way.

This will set the bar for the next generation.

You’re the benchmark!

My Early Years

What is Money?

Since I can remember, money was always something mythical, powerful and highly interesting to me. As a young kid you watch your surroundings and learn from observing. It was interesting how this thing “money” could help my mum to buy so many groceries. It was interesting to see how we could get food at restaurants or fuel up the car with it.

Most transactions used this magical tool: Money.

To my 4 year old brain the message was crystal clear: I had to figure out how to get some of this magical stuff myself! One day, my dad and I went to the city. It was the early 1980’s and one of the first ATMs got installed. My father brought me there to withdraw cash while holding me on his arms.

All of a sudden, money started coming out of a wall! The bills kept coming one after another back in the days. Finally I figured out where money comes from, from the banks of course! I asked my dad if I could take the next bill. He agreed.

I truly believed it was THAT easy back then. My dad quickly informed me that this is actually just his own money that he deposited at the bank earlier on.

Lesson 1:

Money doesn’t grow on trees: You got to work for it!

Lot’s to learn I still had.

First time in my life with a stock guide.

After having understood this lesson, we – together with my sister and some neighbourhood children – started selling fruits and garden vegetables and more in our neighbourhood.

The level-up was to bring our old toys to flea markets and we started participating church sales as well.

Lesson 2:

Learn how to sell.

Make Money Visible

Have you ever heard a kid say: “I wish I could have a phone, so I could buy stuff.”

I’ve heard this in one form or another, and it triggered me deeply.

Spend money to buy something to spend more money?

Just think of it: Money today is mostly digital.

It’s a virtual thing.

Like coin points in Super Mario Brothers.

How can children learn lessons in this abstract world?

Many young people see money as limitless.

Money doesn’t seem to be really real for them anymore.

This is exactly why I let my kids see and feel money – and its consequences.

If kids are given financially relevant experiences in their life and someone is there to help them learn the lessons from those experiences, they have a higher likelihood of achieving financial success later in their life. They need to have them early and they need to have them often.

Mentor them.

It’s paramount to educate the next generation to make financial decisions. It will give them a head start in a world where money is largely a virtual illusion but has very, very real consequences.

As parents, we owe it to them to set them up for financial success.

How to?

Imagine, my dad once gave me a loan to satisfy my hunger for instant gratification. I was about 8 years young. I borrowed around $50 from my dad to buy a fluffy toy.

Oh boy, the sugar rush lasted less than a week.

We used to receive weekly allowances.

Every week my dad would take out a piece of paper where my negative position was mentioned. He would simply make it slightly “less negative” while my sister kept receiving her allowance.

It took me a few months to pay-off my fluffy-toy-loan.

The lesson stuck!

Lesson 3:

Give kids real money and life experiences. Let them feel the consequences of their decisions.

Papa-Bank

Now I’m the father and instead of allowances, I’m running Papa-Bank.

Papa-Bank

My kids can make deposits and each week they’ll receive a 1% payout.

This means for $100 in Papa-Bank the interest would be $1 per week. For $200 it’s $2 per week. Each week they can chose if they’d like to take the cash out or reinvest. I’ll hand the interest to them physically and let them decide.

Every. Single. Week.

Yes, it seems like I’m running a ponzi scheme here [potentially] as I can’t pay such high rates sustainably. But no worries, every once in a while, my kids will use some money to buy some things again.

That’s usually when they start to feel the impact of their decision as the weekly payouts shrink along as well. Sibling and rivalry with cousins is doing the rest.

Oh ya, before I forget:

Papa-Bank is only open for business with our family’s next generation blood relatives.

Papa-Bank also extended loans before. But instead of adding interest, I will take interest on that side. My son went through this experience already to until his nice elder cousin bailed him out.

Lesson 4:

Make money visible and talk about it openly.

Teenager Years

Nothing is Forever

In the early 1990’s Switzerland got hit by the real estate crisis. Suddenly home prices dropped 40-50% in value in just a few months. There where foreclosures and mortgage fallouts. Banks got hit. My dad lost his job during that time. Suddenly he was home. With us.

Lesson 5:

Life doesn’t always work out as planned.

When our dad started to be at home more, we initially got scared. I fondly remember how all of a sudden our family started discussing options to move to another city for work.

My sister and I didn’t like the idea of moving away from our home.

Lessons 6:

Include your kids in your life, discuss what you do, how you do it and why you do it.

Shortly thereafter, dad went hiking in the mountains for a few days.

By himself.

When he returned, he had a plan: He’s going independent!

It later turned out this was a blessing and the very best thing he could do – on so many fronts.

Lesson 7:

Take risks, never stop learning or trying new things.

From now on my dad wasn’t just at home in the early morning, late nights and weekend. He was there for us for most of our time. He was here to talk about life, school and more. He also started cooking for us.

Lesson 8:

The best gift and investment you can give your child is your time.

Zig Ziglar once said for kids “LOVE” is spelled T-I-M-E!

Kids will hopefully learn that having time with money is more valuable than having to go to work and spend your time earning money.

Introducing a Budget

We were like most teenagers and suddenly got a taste for fancy sneakers, expensive hoodies and other branded stuff. We were not told off. My sister and me each had a “clothes-envelope” at home.

Each month my father would pay around $50 into the envelope and keep a balance sheet. We were free to use the contents to purchase clothes, shoes or pay for haircuts.

This was our pre-paid necessities budget.

Lesson 9:

Have a budget.

Looking back it’s a great way to make money available and visible without imposing potential arbitrary invisible barriers as to what is good and what is bad to use it on. It was clear: If we saved-up we could purchase the more expensive things. But we had to be patient.

The decision, the marshmallow test and trade-off has all been delegated to us kids.

No more instant gratification.

We had to learn it ourselves.

Lesson 10:

Marshmallow test your kids frequently and in different ways.

Learning to Help Myself

As a 13-year-old, the greatest dream I had was to have my own TV. In my bedroom. When I first mentioned this idea to my parents, my mum was fully against it while my dad simply said: “Yes, why not – but you got to earn it yourself.”

I learned that from age 14 onwards it was possible for me to become a newspaper boy. I applied immediately and got a paper-route with 400 households to serve. When I turned 14 my days changed. No matter the weather, if sunshine, snow, rain, storm, heat or cold, I had to serve my 400 households or face losing my job.

That job earned me $500/ month.

A very decent pocket-money for a 14-year-old in the early 1990’s.

Lesson 11:

Understand your kids motivations and let them go after their dreams.

After three months, I had sufficient cash aside to buy the TV. Once I got paid I rushed to the shop and bought the largest 16:9 TV available back then. It was a monster. I couldn’t transport it back home. That’s why I called my dad and told him what I just bought.

He simply said: “Oh, you actually did it. Wait, I’ll be on my way.”

One of the first 16:9 TVs available in the mid 1990’s.

A few weeks later I was enjoying my TV a lot but started to realize my bank account was almost back to zero once again while my time invested distributing all those newspapers is gone forever.

This is what motivated me to get started saving ultimately.

When kids are given the opportunity to engage in strategically relevant experiences and given the ability to learn the lessons from these experiences, will have a higher likelihood of success in their life.

Lesson 12:

Don’t just “go” through life, grow through it!

First Investment Experiences

When I was 16 years old I got a special gift for Christmas: My dad prepared an investment account with one share inside for me. Again, instead of telling me what to do and what not to do, he simply said:

“Let me know when you have any questions.”

I was bloody excited and started reading up on investing instantly. It’s amazing how this motivated me to read. Soon thereafter one of my all-time favourite books came to the market: “Rich Dad. Poor Dad.” by Robert Kiyosaki. While it has nothing to do directly with investing in stocks, it kicked-off my money book library in 1997.

The markets where exciting. Soon the new economy boom started going into overdrive. Sure enough I put the largest amount of my portfolio in Dot.com shares. They were on FIRE. By 1999 my portfolio grew nicely. Also in 1999 everyone thought Warren Buffett is too old to still be relevant.

As the markets kept climbing higher, I sold some stocks and bought a fancy second-hand sports car.

I sold more stocks to finance an apartment where I moved in with my girlfriend at 19.

Lesson 13:

Avoid lifestyle inflation.

Soon thereafter the market crashed.

My portfolio was suddenly back to square one again.

In total, it took me 5 years before I took my dad’s offer and went back to him with my first questions!

He laughed and uttered:

“Wow, that took longer than I thought.”

Do I regret going to him earlier?

No. No regrets at all.

Lesson 14:

Making mistakes and learning your lessons early in life is more valuable than just reading books.

This lesson is one of the most valuable in my view.

You see, indirectly my dad encouraged me to take ownership and fail early.

Once I understood this lesson in retrospect, it changed my mindset completely. Failure is NOT the outcome of your immediate actions.

Failure is not even trying.

Failure is standing still.

The biggest failure is not learning your lessons and trying again.

In our schools you might still get punished to make mistakes. That’s why in our society we’re afraid of trying and failing. Hence, many don’t even try anything anymore!

In our family, I’d be disappointed if my kids are not trying and failing at something every once in a while.

Lesson 15:

Whoever can be trusted with very little can also be trusted with much.

Young Adult

When we were in our teenage years, my dad kept telling us two things

1. He’d like us to move out before we reach 25 years of age.

2. We would always be welcome at home – in case we truly need help.

As written above, this motivated me to move out of my parents home at age 19 – I was a University freshman.

It also motivated me to hustle all kind of jobs. I worked part time as a bank teller on Saturdays, delivered pizza and later moved up to manage a pizza delivery business part-time as pizzajolo baking up to 200 pizzas per night regularly. It also brought me to work at the polling office of our community.

Due to all these activities I had a decent $1,500 – $2,000 per month salary as young student.

Lesson 16:

Learn how to stand on your own feet early.

Learn how to fish!

Thanks to my previous mistake of investing in high octane tech stocks only, I reconsidered my approach and started funding a monthly mutual fund savings plan. At first I fed it with about $300 per month but during some frugal months I managed to stash more then $1,000 per month as well.

Thanks to the lessons learnt, the pot started growing again.

Lesson 17:

Make a mistake once and it becomes a lesson. Make a mistake twice and it becomes a choice.

One evening in my most crazy side-hustling days back in 2001, I was watching “Who Want’s to be a Millionaire” on Swiss TV3. It was boring, none of the contestants seemed to make it past some simple questions.

This motivated me to write them a complaint letter.

Read here about how this has turned out for me.

Lesson 18:

Luck is when preparation meets opportunity.

With a six-figure bank account at 21 – I was free to explore the world.

I chose to invest in my skills, learned Spanish and Mandarin Chinese. Ultimately, I ended up in Taiwan where it got really adventurous: I lost my job and working permit in Taiwan due to signing up with the wrong company…

When I called my dad back in 2004 to report to him what happened he answered the phone and replied:

“Welcome to life.”

I enjoyed that reply so much.

We laughed.

It encouraged me to stay the course.

Lesson 19:

A smooth sea never made a skilled sailor.

Together with my girlfriend’s – now wife – help we managed to find me a second job in Taiwan. More about this story and how we planned our future together can be found in my guest post for JD Roth’s Get Rich Slowly.

Lesson 20:

Failing to plan is planning to fail.

Middle Age

It was the year 2015: On my 36th birthday, my dad gave me a very memorable phone call. In retrospect I could say this was probably the most valuable birthday gift I’ve ever gotten.

That’s why I’d like to share it here.

In 2015 my dad was 72 years old, I turned 36… he was exactly double my age!

I picked the phone.

My dad started: “Happy Birthday Son! You’re now already half my age!”

He went on: “You’re catching-up!”

And finished with: “Beware, the second half goes faster!”

This call stuck!

Three facts of life served up.

It got me thinking very, very deep in the days, weeks and months to come!

Lesson 21:

Time flies! Winter is Coming!

My thoughts where all about the value of time in life.

Read: Your Money or Your Life!

When you’re young, you got all the time in the world and it seems to be a reasonably fair thing to sell some of your time against some money to make a living. As you grow older, your reservoir of remaining “life-time” shrinks and in turn the remainder of your days keeps going higher in perceived value – to yourself and others. The older you get, the more it hurts if you still must sell your time for money…

Lesson 22:

Everything is about supply and demand. Everything!

During my career as Wealth Manager I was helping millionaires with their investments. Thanks to great guidance and working with inspiring people I’ve learned reasonably well how to invest and make money work for us by age 36. I’m so nerdy that I’ve actually kept a spreadsheet with all our assets, liabilities, income and expenses since the late 1990’s – it got a yearly update!

After listening to my dad’s voice about the speed of time, we started playing through some scenarios in my spreadsheet and identified two key areas for optimization:

  1. Generate passive income to cover our family expenses
  2. Activate “passive” assets and optimize our income/ expenses

Since our 5-year plan was due for discussion in 2016 I’ve added some new dream goals till 2021:

  1. Retire from my 9-5
  2. Start my own blog and business

Yes, one idea was to potentially let go of my job.

My dad used to say that each job is like a three-legged stool.

The three legs are:

  1. What you do
  2. What you get for it
  3. With whom you do it

As long as at least two of these legs are still working out for you. You’ll stay.

Also, everything is subjective. Priorities in life change.

We became parents and where looking for more time flexibility.

And maybe I was also looking for a new challenge.

Lesson 23:

You know that you’re on the right path whenever you feel things stop being easy.

This lesson is very close to my heart. Basically, it’s like if you think of playing Mario Kart on “easy”: You’ll always win. As you advance through life, also adjust the level of difficulty gradually.

After 2015 I started reading more into the FIRE concept and idea!

That’s when I suddenly read Mr. Money Mustache’s “The Shockingly Simple Math Behind Early Retirement“.

However, I’ve had some concerns about the “RE” (retire early) part:

  1. Don’t retire from something, retire TO something.
  2. Have something to do, someone to love and something to look forward to in life.
  3. Instead of being idle, try to find and live your “Ikigai”: Live a purposeful life.

It turned out my “RE” was more a “Retire to Entrepreneurship” – you could also name it “Recreational Employment” if you will.

Another deep concern was the kind of role-model I want to be for my kids.

  • concern of my kids not seeing me work anymore
  • live the life you want your kids to be inspired by

Whatever you plan in your life: Be a role-model for your kids.

Kids don’t quite “listen” and “follow your instructions” about living life – they rather watch how their rolemodels [hopefully their parents, make them chose YOU] live – and learn by watching!

To achieve this, be an inspirational role-model and ensure your lifestyle ticks all the boxes of lessons you want them to learn and absorb. Chase your dreams while they can watch and learn is the best starting point to set them for a happy and successful life.

Lesson 24:

Don’t tell your kids how to live their life, live yours, and let them watch!

Work is not just a 9-5-working-at-something, it can be anything – as long as you work hard towards achieving whatever goal you’ve set yourself.

Let your kids see you succeed AND fail.

This is YOUR chance not to raise “next-gen-rat-racers” or “trust fund babies” that will venture out to live an ordinary life – let them learn from you how to life an extraordinary life instead!

By mid-2017 we’ve set-up sufficient monthly recurring passive income streams from different sources and worked out a plan that allowed me to quit my 9-5.

We FIREd.

Lesson 25:

Live like a role model – work hard to chase your dreams to set an example for kids to inspire them to work hard on achieving their dreams later.

Invest in your dreams!

What advice would you give your younger self?

What lessons did you learn from your family?

“Life” is a gift to you. The way you live your life is your gift to those who come after.

Make it a fantastic one.

Matt

Disclaimer: Please be made aware that the some of the links used above may be affiliate links for which Financial Imagineer could receive a compensation.

Financial Imagineer’s Merry Giftmas List

It’s this time of the year once again, all corporates are out to get some of your hard-earned money and you’re eager to provide for a nice Christmas experience for your loved ones. While it’s beginning to cost a lot like Christmas, why not invest into gifting the key to more freedom, happiness and financial health to your loved ones?

Gift something empowering such as the building blocks of financial literacy. Inspire and provide your kids with the tools and power so they might ultimately be in a position to create the best versions of themselves in the future.

Financial Intelligence is knowing that if you spend your life energy on stuff that brings only passing fulfillment and doesn’t support your values, you end up with less life.


This is the Financial Imagineers Giftmas List, version 2.0 – a Christmas Gift list with ideas for FI people, family and friends! Have fun exploring.

The “joyless career man”? Going for meetings, doing spreadsheets and building wealth for someone else?
The new and only “soul-crushing meeting” game!
The latest NES game “Wall $treet Kid”!!!
Buy more crap this year?

Just kidding, the good stuff is further below!

Please read on:

What Extraordinary People Know: How to Cut the Busy B.S. and Live Your Kick-Ass Life (Ignite Reads) by Anthony Moore

How to be a hero of your own life? What’s the secret to “extraordinary?”

Being stuck in mediocrity sucks. It’s easy to identify the symptoms of this disease in your life: are you chronically bored? Do you wake up knowing today is going to suck? Are you constantly fighting off feelings of emptiness, exhaustion, and knowing you’re wasting your life?

Well, eff that! Every moment of every day, you can choose to be extraordinary. You can choose to become someone you’re incredibly proud to be, who accomplishes amazing goals and achieves greatness. “What Extraordinary People Know” guides you through how to be free of the mediocrity trap: starting with the inspiration, tools, and kick in the ass you need to get your life going in high gear-from behavioral change and personal growth expert Anthony Moore. As someone who took his own life from ordinary to extraordinary, Moore has created a three-step path to breaking free of Mediocrity and becoming the hero of your own life.

Are you ready to win? Click below if yes:

Laughing at Wall Street by Chris Camillo

Chris Camillo is not a stockbroker, financial analyst, or hedge fund manager. And yet in early 2007, in the midst of the worst financial crisis since the Great Depression, he invested $20,000 in the stock market, and grew it to just over $2 million in only three years.

How did he do it? By observing the world around him.

Along with his own keen observations, Chris leverages family, friends, coworkers, and online networks like Facebook and LinkedIn to create what he calls “trend-spotting networks.” These networks – and not the bigwigs of Wall Street – help Chris identify market trends that lead to winning investments. You have a powerful network, too, as well as an innate advantage over those on Wall Street – you just don’t know it yet.

In this entertaining, story-driven, and jargon-free book, Chris proves that you don’t need large sums of money, fancy market data, or endless hours to achieve extraordinary wealth. He shows how the average consumer with zero financial education can outsmart Wall Street’s brightest by learning to identify game-changing information hidden in everyday life while watching TV, reading tabloids, working at the office, shopping at the mall, eating out at restaurants, or driving the carpool to soccer practice. You just need to pay attention to the interests and trends in your own life. It doesn’t matter whether you have $100 or $100,000 to invest – you can become a successful investor and create a secure future for you and your family.

Chris Camillo’s inspirational approach to creating wealth shows that you know more than the suits on Wall Street ―and that knowledge can make you millions.

This is not your standard investment book and it will not cover what most other books do, and that’s exactly why I love it. It’s refreshingly different and a good read for people who have read the common investment books already.

Gift a refreshing approach to finding the right investment ideas!

If you like the content of this book, you’ll love the Youtube Channel “Dumb Money” by Chris and his friends.

I Teach You to Be Rich by Ramit Sethi

Personal finance expert Ramit Sethi has been called a “wealth wizard” by Forbes and the “new guru on the block” by Fortune. Now he’s updated and expanded his modern money classic for a new age, delivering a simple, powerful, no-BS 6-week program that just works.

The book will start with ideas and ways about how to crush your debt and student loans, continue to teach how to set up above average high yield accounts and then slowly goes into how to automate your finances to gear your for success.

Opposing the many frugalists and people suggesting to cut down on your wants, Ramit is more a supporter of earning more in order live a richer life. Instead of the usual cut your daily latte or skip on avocado toast, he’ll teach you how to make your money reach further.

In the later part of the book he’ll explore how to set a dead simple investment strategy that is buit to last, how to handle big ticket purchases such as a car or a house, covering a wedding or having children – stress free.

Meeting Ramit during Fincon 2019 in Washington D.C.

Also, since this is the 10th year anniversary edition, it features over 80 new pages including new tools, new insights on money and psychology and some amazing stories of how previous readers used the book to create their richer lives.

Live rich!

The Sassy Investor – Investment Workbook by Michelle Hung

Michelle Hung is the founder of The Sassy Investor. An advocate for financial literacy, she is on a mission to spread the word on the importance of financial independence and how to achieve it.

A beginner’s guide to step-by-step investing for all the sassy females who’ve ever wanted to take control of their finances! From penny-pinchers to free-(spirited!) spenders, this fun and engaging activity workbook allows women from all educational backgrounds to learn more about money and how to build a secure financial future.

Too often, women rely on others to manage their finances. Whether it is their spouse or financial advisors, many find themselves in a complacent spot with their money. Worse, when money is sitting on the sidelines not earning anything, women are short-changing themselves on the potential to earn thousands over a lifetime.

From education to execution, this colourful activity workbook takes women of all ages and life stages through the necessary steps to financial literacy and independence. It is meant to put the power back in the hands of all hardworking women, inspiring all to take a more active role in managing and saving their money.

Gain confidence through education. Investing does not have to be intimidating.

Stock Market Pie… Grandma Helps Emily Make A Million by J.M. Seymour

Stock Market Pie: Grandma Helps Emily Make A Million is a great starter book for anyone interested in learning basic saving and investment concepts.

The story line features young Emily who receives a gift of stock from her grandmother. Emily learns to appreciate the value of the gift as she discusses saving and investing with her grandmother while they two make pies.

Emily develops a clever pie-making metaphor to illustrate investment concepts.

Stock Market Pie features detailed informational sidebars and glossary, making it a great reference book. This well-researched and colorfully illustrated book is a great learning tool for anyone interested in getting a “piece of the stock market pie.”

Entrepreneur Extraordinaire Grandpa Helps Emily Build a Business by J.M. Seymour

Entrepreneur Extraordinaire begins with Emily being disappointed when her favorite cookies were sold out…again.

When Emily shows an entrepreneurial spark, Grandpa enters the picture to help turn her idea and energy into a cookie business. Entrepreneur Extraordinaire is an entertaining story packed with tasty morsels to bring out the entrepreneur in everyone.

This book explains the entrepreneurial thought process behind a business venture. It s a great resource for any budding entrepreneur. Ample sidebar explanations, detailed appendix and glossary make it a must-have reference book.

This is a book tailored to young readers that describes opportunities in entrepreneurship in a fun, thorough and understandable way. Parents and kids alike will enjoy learning how to identify their entrepreneurial skills and utilize them to get busy about creating their own paychecks!

Winning at Money T-Shirt

Are you ready to win at money?

Here also a version for women.

Hereby I wish you a stress-free gift shopping experience and hope this list may have given you some new ideas about what to gift your loved ones.

Two years ago I made a similar post here.

Have a wonderful Christmas!

Matt

Disclaimer: Please be made aware that the product links used above are affiliate links for which Financial Imagineer will receive a compensation.