Setting Our Kids Up for a Bright Future: Financial Education and Independence with Andy Tanner

With Andy Tanner

Andy is a renowned paper assets expert, successful business owner and investor known for his ability to teach key techniques for stock options investing. He serves as a coach to Rich Dad’s Stock Success System trainers and as the Rich Dad Advisor for Paper Assets.

As a highly sought after educator, Andy has taught tens of thousands of investors and entrepreneurs around the world. He often speaks to students at the request of Robert Kiyosaki, showing how paper assets fit into the Rich Dad system of investing.

In 2008, Andy was key in helping develop and launch Rich Dad’s Stock Success System, which teaches investors advanced technical trading techniques to profit from bull and bear markets.

Listen to the episode on Spotify here or on your favorite podcast platform and check out the Urban Monk Academy here.

Podcast transcript:

Welcome back urban monk podcast. Dr. Pedram Shojai. There’s a lot of anxiety amongst parents, my age. There’s a lot of people saying it aint in’t worth it anymore. There’s a lot of people saying the colleges have really screwed the pooch, the investment isn’t worth the time, uh, the stress of getting into college, all of it.

Right. And so I have been having a lot of conversations around this with parents. Uh, also, you know, around our own campfire here, just trying to figure out what’s the best move for our children. As a householder, trying to do the right thing. Uh, the thought has come up, that there are two major areas around this one is, well, you want them to have a future, uh, that is comfortable.

You want them to be safe and secure, so you know, money, right? What are you, what are you teaching them about money? Um, precious few of us got financial education from our parents. And so that was the first issue. The second issue is okay, so. Spending all this money spending all this time, spending all this effort. Getting a degree that may or may not. Give you financial security. Uh, has a big gaping hole in, uh, you know, the safety and security of said decision. So I reached out to a detainer.

He was one of the stars of my great heist movie. He and I got to be friends, really enjoyed, uh, his perspective on this. And I remember him. Saying telling me a story about him, training his children, to invest their money and understand money at a very early age and watching how their money was growing.

He gave him a fine. Uh, the real kind of underlying bit to this is that, you know, his whole deal is wall street steals, your compounding power, the assets under management. You know, you let a guy manage your money. They take two, two and a half percent that’s of your compounding power. So if you start looking at charts, Uh, over 30 years, 40 years, 50 years, that is hundreds of thousands of dollars that the middleman. Takes out of your net worth. And so he was teaching his children how to invest directly. Uh, do it safely.

Understand how the markets work and keep their compounding power and boom. Oh my goodness. The difference was astronomical. So I tasked him to come talk about it, but more so you’re going to enjoy this podcast. If any of this is ringing true to you. I more so teach my children. How to understand money, teach my children now. How to invest their money and think about investing their money now instead of the doodad or the cotton candy or whatever they want to spend it on. With the instant gratification, but also help us create a vehicle so that they can take their hard earned money, their allowance, whatever it is, put it into investment. Uh, and also figure out how to do a side hustle. Um, two. Grow their money.

That way you can study what you want. Go to college. Not. And go to college, but at least you’re not worried about money. That’d be nice. Wouldn’t it? So hope you enjoy the podcast and I’ll tell you about the project I’m doing with him. Uh, we’re giving it away for free. So listen to the podcast. And if this relates to you, I’ll tell you how to get the mini course that he’s going to create for parents and their children at the end.

. Andy, it is good to see you, my friend. I’m so happy to be having this conversation because, uh, man, I think the, the weight of the world, uh, is on a parent’s shoulder and, um, I’ve kind of enlisted you to come help with that.

So thank you for being here. Uh, Pedram, I have enjoyed our friendship for so long and it’s, it’s fun because when you and I get together, uh, it’s all about the kids and, uh, it’s funny when people say, you know, what do you do? Most people tie that identity to what, how they earn money in their life. I’m a fireman, I’m a postman, but there’s so many other roles.

Uh, you know, father, husband, uh, son, sister, brother, cousin, friend. It wouldn’t be interesting if, if, if people said, Hey, what do you do? I’m a parent. I’m a father. And, uh, to me, people that know me like you do, uh, and know you like I do, they know we’re, uh, we’re family. We’re pretty passionate, uh, about that responsibility and that opportunity, uh, to be a parent.

It’s not just a duty, it’s an opportunity. So, it’s gonna be fun to chat. It really is, and I like that reframe. I like the way you’re reframing it, because, you know, it’s, it’s a lot of work, but that’s only if you have the wrong, uh, operating system going in. Um, I think that we have an opportunity, you know, to, to mold clay in a way that, uh, you know, is, and this opportunity is going to pass, right?

You’re already on the other side of that bookend. I’m dead back in the sweet spot. Um, and this is where, this is where this conversation is incredibly timely. contextualize how we landed here for our listeners. Uh, and then we’re just going to jump in. So the backdrop is, I know Andy’s story. You don’t yet.

And so he’s going to share it. You might recognize him from The Great Heist, which is a film I did a couple years ago. It’s a great film. See it. Uh, Andy’s one of the experts. But in the making of the film and, you know, the, you know, the baking of the cake, I got to know Andy’s story behind the scenes and how he taught his kids.

How to become financially independent and step out of the rat race by learning how to do this stuff early, like early, early, like, you know, eight, 10 years old. And I was sitting there, you know, remembering scratching my head, thinking to myself, man, my folks never showed me that I wish they had. And so put a pin in that a couple of years go by, my kids are now that age.

And I’m listening to all these parents having conversations around absolute panic about college. the way of the world, the future, you know, whether college is worth it anymore, and all these things that are really existential challenges for parents who are like absolutely terrified about, you know, what am I, you know, what am I doing right?

What am I doing wrong? And it occurred to me that it was time to call Andy and say, look, I’ve got these two kids who, you know, if I were to, you Fortnite bucks and, you know, trading cards and, you know, candy. They need to learn about money now. And simultaneously, what if I created a plan that allowed for them to learn about money and become financially independent by the age of 30, let’s just say, gives them enough time to figure it out and then study whatever they please and enjoy the, the roots of the world and the wisdom of the ancients or the classics or travel, whatever.

Not tied to money. What kind of gift would that be to my kids? And that’s when I called Andy and said, Hey man, I think it’s time to go. So I would love, yeah, I would love your, your story, your backstory on how you did it with your kids, just so people understand like why I’m so excited about this and let’s jump into kind of the idea I have and what we’re going to implement, um, me personally as a dad in the cockpit with the two children.

Oh, geez, how much time do we have? However long you need, my friend. Certain things, you know, you put a nickel in me. I, I, uh, I get a little bit verbose with this, so you’ll forgive me. Um, I don’t want to be like the guy on the airplane that’s showing you pictures of my kids. You know, like how great they are.

That’s not it. I, I would say one thing that’s interesting about that is, uh, my kids have been very fortunate to be in some unique situations that most young people don’t experience. And when people watch some of the stuff they’ve done, they, they, oh, wow, this is amazing. Look at this genius kid and what they don’t realize.

I think it was Mr. Fuller that said, all kids are geniuses. They’re all born geniuses. It’s just they get de geniusized by adults by the time they’re about, you know, 18. And I actually believe there’s a lot of truth to that, that, that what I’ll share with you about my children, I frame it this way, that there’s nothing that they’ve done that’s allowed them to ascend to a great height.

Uh, our strategies was not to push them up higher and further and make them like, You know, the ultra, you know, uber awesome kids. What we wanted to do is take concepts that were kind of high up and bring them down to within the reach of our kids so they can understand them. So I get a little nervous cause you know, I’ll, I’ll show pictures of things they’ve done and talk about stuff.

And they like, what are these whiz kids, you know, prodigies, not at all. They are so normal and, and I make mistakes and they were, were as imperfect as they come. So with that backdrop and disclaimer, I suppose, um, we, we did a few things that, uh, that started outside of money, actually. Um, money just makes you more of what you are, isn’t it?

Doesn’t it just kind of enable you to be more of who you are, whether it’s good or bad. And so it really started with us of how do we want, um, to, to raise, raise our kids. And I, I read a great book. Uh, that had a great impact on me by, uh, uh, uh, a lady named Tally Sherratt. She spends half her time in the UK, half her time in Boston.

She’s a neuroscientist. She had a, she has a great book called The Influential Mind, and there’s a line in that book I like to share with everyone. And it goes something like this. It says, when we, when we look at, um, influence, we’ve got to have appreciation for the sensitivity and the delicate nature people have with agency and choice.

And she says, when you. Expand choices. Uh, people intend to brace that experience when you, uh, constrict choices, they tend to battle and fight for their agency. And when I read that, it was one of those moments where you read it and it just kind of hits you like, wow, that’s profound. If I could implement that.

So when I grew up. Uh, my parents, uh, were, were just salt of the earth people, uh, God fearing people would be the best way to describe it. We had a tradition where every Monday night we’d get together as a family and the dad would kind of wave his finger out saying, now these are the dos and these are the don’ts and do this and don’t that.

And as he began to do this, I thought, you know, he, as I rewound it, I used restricting our freedoms. He was doing the opposite of what Tally said. Now, this is against the law, and thou shalt not, and thou shall, and, and, and there was a lot of words like have to, and should, and you better, and all of those things have a, an implication of you better, or else, as if there’s some impending doom.

So, I thought, well, if I need to do the opposite of that, how will I do my family nights? So, I’ll share this with someone, especially if they have kids that are younger. That was a game changer. Uh, we would have a family night if the kids wanted to. And the, the goal was fun, that they’d want to do it. So I’d say, you guys want to have a family night?

Yeah, dad, yeah, let’s have a family night. And there were five. And I’d say, what do you want to teach today as a lesson? And they were the ones that taught. And I’ve often said that a concept taught is a concept bought. In other words, if they’re teaching me, they already believe it. And so they would, I’d say, what do you want to have a lesson on?

They’d say, oh, let’s talk about sharing. And you’ll be amazed at how kids have this sense of morality and goodness built in. of kindness and empathy built in. They’re geniuses. So we’d have a five minute discussion that one of my sons would lead. I’d say, do you guys want to sing a song together? And he’d say, yeah, take me out to the ballgame or something we’d sing.

And then we’d go get a goody or an ice cream or go to the park or whatever. So this idea of having them teach us instead of the parents teach them, that allowed this to expand and we would give choices about, well, how do you want to live? How do you want to do it? Do you want to be wealthy, or do you want to not be?

What do you want? And, and that persuasion of opening up choices for them, uh, made them very, very It cultivated their minds to receive the seeds that we wanted to plant as parents. So I would say the first thing is, is to create a relation. If you want to teach your kids and future proof them, um, expand their choices rather constrict them.

And that has a lot to do actually with the financial education we got into. So that’s kind of where I’d start is that context change of letting them teach dad. solidified what they believed in. And, uh, a content, a concept taught is a concept bought by the teacher and a concept argued for is a concept solidified for the arguer.

Right. So it was great. So to, to, to, to fast forward that what we did is we played a lot of monopoly. We played the cashflow game a lot, and they began to learn about assets and liabilities to learn about money. And they couldn’t add, which was fine because we would draw a cashflow with rather than numbers.

And, uh, we had a very unique opportunity. Some people have read, you mentioned that I’ve done some things with Rich Dad. Many people have read the book Rich Dad, Poor Dad. So my kids grew up Rich Dad. They traveled all over the world with us. I spent 14 years. As they grew up with Robert and they had exposure to the greatest minds and greatest financial teachings of the world.

And it tend to rub off on them a little bit. So we, we trade stock and we participate in business and we help them with real estate. And we just got them really involved and excited about learning this thing that they would never. ever learn about in their formal schooling. And it was, it was quite a ride.

So that’s how we started was just little family home meetings and little lessons and let them choose, Hey, yeah, I would like to learn about money, not just the things taught in school. So one of the things that really struck me in our conversation, I do want to get into, uh, kind of assets under management and how, you know, wall street steals your money and, you know, part of your thesis, which, um, I think fed us into this is that, you know, ask any given day, my son would rather buy a video game or candy or a Lego versus save money for the future, you know, human nature one on one until they see some of the compounding charts that you showed me and say, look, this thousand bucks is either, you know, a doodad and e bike or whatever by this.

Date this thousand bucks is X amount of money. Now, do you want to put another 200 on top of that? This is what happens. And it suddenly transforms their vision into thinking, Oh crap, I could be a millionaire if I don’t buy this crap. And it’s already. instilled behavior change before I’ve even started, I’m seeing some of the repercussions here.

And I think a lot of it to contextualize and go back for a second is understanding the principle of compounding interest and starting early. Uh, it’s something that you showed me in, in charts and graphs. And I think that’s a, that’s a really important piece of this puzzle. Yeah, so you mentioned, uh, kids making choices between candy or video game or an asset or something that’s, uh, gives up immediate gratification for something long.

So that’s the choice. And the, the idea I don’t think is to set rules on what the good choices and the bad choices. I think what you do is you educate them about which choice leads and then you sit back and say, so what do you think? A lot of advantages to that candy. It’s going to taste good now. It’s going to do.

And, and once they choose. Then, then I’d double down and make them fight for what they want, but you mentioned compounding, so one of the activities we had when they got a little older, um, you know, probably around where your daughter is, eight or nine, is we watched an HBO special called Becoming Warren Buffett, and one of the most important parts of that special, um, What’s the story of when he learned about compounding as a very young boy, and he would do, he would do, we’ll do some if you want, but we, we, we could do some right here.

He would do compounding charts and see how long it would take him to have all the money in the world. You know, he was, that’s Buffett, right? And when a kid sees the power of that at an early age, especially before they get filled with too much noise in the world, it has an indelible impact on the, to where they say, you know, I want to start now.

I don’t want to start when I’m 30. And I love that term that I’ve heard you often use about future proofing your kids. Um, my gosh, if, if, if they can learn compounding like Warren Buffett did at age 14, or at age 13 and 15, like my kids began to compound, you’ll see that extra, that had started 10 years before they’re 23, 24.

Um, it allows them to follow their passion, I think, you know, I, uh, you, you, you understand the martial arts world. And I put my kids in jujitsu young because I wanted to learn how to defend themselves, but there’s such a discipline in that. And I love the, those guys that did it because all of the professors.

That their instructors they were doing it because it was their calling not for money and as a result They live very humble and simple lives and beautiful lives but boy if you can take care of the money part as you alluded to earlier if you take care of the money part for Your kids and help them help themselves.

They really are free to find their calling and whatever way they want to serve people and, and, and when you find your calling, there’s joy in that. So if you want to do it, throw a couple of compounding. Let’s do it. Let’s do it. It reminds me of that. Don’t get any, don’t pull it up, pull it up. And for anyone who’s listening, there’s a video, I’ll put a link to the video.

It reminds me of the old, while you’re pulling it up, Uh, Forrest Gump, where he was telling a story about how Captain Dan or whatever it was, invested his money in some fruit company and it was Apple. And he said, well, we don’t, you know, and he said, Oh, we don’t have to worry about money anymore. And, and then, you know, classic Forrest Gump, uh, style is like, well, great, one less thing, right?

Most people are worried about money all the time. So if you could make your, change the stars of your children, so they don’t have to worry about money anymore, what would that do to opening up their freedom? And for me, that is profound and perplexing because it just opens up so much choice. Yep, absolutely.

Let’s see if this worked. I don’t know that my, uh, computer has permissions originally, but there it is. I see it. Yep, move it there. Perfect. Yeah, you, you know, you can Google all these. It really doesn’t matter which one you, you use or go to. So, let’s just, uh, Let’s see. Let’s just do this. Um, let’s type in compound calculator.

And the one that I often go to is from InvestorGov. It’s sponsored by the SEC. So it’s, it’s a government website. And uh, you click on this and it’s got, it’s got a very simple compound calculator. And the first thing I taught my sons is, you know, what’s the value of say 10, 000 over a lifetime. You know, if you, if you have, let’s say you live 85 years.

And you didn’t have any financial education at all. Uh, what’s the power of 10, 000 over a person’s life? Without even adding to it, it’s pretty significant. So if I put in, say, 10, 000 here, and let’s not even contribute anything to it. Let’s just start it there. And let’s say that a person starts when they’re, uh, 20.

My son is 10. Oh, 10. Oh, we’re getting more fun now. Oh, okay. You’ll go with an adult and then we’ll go to 10. Just show the magnitude. We can use any number one. So, 10 to 85. That’s 75 years. That’s going to be pretty big. It’s going to be a big amount. But if you start when he’s 10. Actually, you know what, then?

Let’s go 35 to 85. So, 50 years. And then let’s look at what it looks like for an 8 or 10 year old. Yeah, I mean, it depends. Well, it’s scary. Cause let’s do this. Some of the people come to me, there’ll be like 55 trying to get this done. Right. And so maybe they’ve got, you know, 30 years left of compounding powers all well, the, the market, you know, investments, real estate, whatever, you know, the market gives you 8%.

You know, that’s what the S& P has done, 8 to 10. And this is what’s interesting. Let’s say I’m 2. 5 percent smarter than the other guy. You know, let’s say I can compound 2. 5 percent better or worse for variance. And there you have it. Well, you calculate this. I have no idea what it’s going to be, but it says, okay, in 30 years, That 10, 000 will turn into a hundred thousand if they just put it in the market from age, you know, 55 to 65 and 30 years.

And that’s, and where people don’t understand compound, that’s basically let it, let it ride. Right. Yeah. Just throw it out. Whatever money gets added, it’s added and stays on. Yeah. Yeah. Up, down, sideways. That’s what that 10, 000 can do in 30 years. Now, if a person isn’t as smart as the average bear, you know, And they’re only compounding at 5.

5. This is really interesting. That goes to 49, 000. So it cuts in half. So the lesson for, for my kids was, you know, if you do 2 percent worse than the average person, you’ll actually have, you know, half that money in 30 years. And that’s really something to think about in terms of fees. You know, if, if I’m going to give my money, you mentioned you wanted to touch on assets under management.

If I gave my money to wall street. There’s a great example by John Bogle, where some are more, some are less, some are only a half percent. But the one John Bogle, the founder of Vanguard used, with all the hidden fees added in, was 2. 5. So if you’re compounding in the market at 8, But you’re giving 2. 5 percent to Wall Street, that takes your 100, 000 down to 49, 000.

But if you were to, to get a little education, maybe say, I think I can do 2, 2. 5 percent better. Look at that, it doubles to 199, 000. Isn’t that interesting? 199, 000, uh, down to 40, 000. The sweet spot in the middle is 100, 000. Well, that’s all fine and good. And maybe a person who’s, who’s, uh, hopefully if a person’s 55.

Uh, they have more than 10, 000 to compound because, uh, no one can live on 100, 000 very well over, over their retirement. Now watch this. Let’s say we take, uh, someone who’s age 20 and they’re going to go to age, uh, maybe 65 or, or maybe they die at 85 and they want to have a, uh, a legacy. So that’d be 65 years of compounding, right?

If you calculate that, um, you know, in 65 years, that turns into a million dollars for that person, right? If you compound at that time, that’s not too bad. But here’s, what’s really crazy. If a person, uh, was compounding just 2 percent better than that, it goes to 6 million. And if they give their money to wall street and pay that that amount of fees, it goes to 300.

I mean, the lessons of this compounding where you have a range with just two and a half percent, one way or the other, a variance, just two and a half percent variance, you’re either going to wind up with 6 million or 300, 000 over your life with that 10. And, and that was a profound lesson for my kids. So the, the myth of Wall Street being any better at this than you is where I think a lot of people are like, well, I don’t know what I’m doing.

And so, you know, you give your money, you’re guaranteed to lose that two and a half percent because that’s guaranteed. That’s the deal you make with them. And so you are putting yourself on the bottom rung regardless. So we’ll talk about like getting good at this game, but the idea that, you know, Someone starting at 20 can make a million and a half with 10, 000.

Um, it’s, you know, it’s nice. Uh, it’s not what we’re talking about here though. So I want to talk about putting in real money as you go and all that kind of stuff as well. Let’s just say that 20 year old puts in 10, 000, but then is able to contribute 500 a month, right? Like that, that’s where all of a sudden this gets very interesting for a parent.

I’ll tell you what got interesting. You and I’ve talked before in the law, it just gets better and better. This is probably because of inflation and things, but we had, uh, you know, my, my accountant sat me down and said, Andy. You know, are your kids, are they willing to work? Are they willing to do things to help the families?

Of course they are, especially in my business. And as I educated them financially, uh, we had a really interesting thing happen in the eighth grade. In fact, I, I should probably share this with you. Um, I think people might find this as interesting. You don’t have to do it this way. But, uh, when my son finished the eighth grade, Uh, he was kind of skinny and scrawny and, and he wanted to play basketball and I thought, you know, it’d be nice to have another year before we started high school and he had to try out for a team.

And I had a good friend of mine who said, you know, Andy, take a look at a gap here. His name’s Jimmy. And he said, You know, in, in the state that I live in, the laws are pretty cool. You can pull your son out of public school and you don’t have to teach him geography, you don’t have to teach him math, you don’t have to teach him all the stuff you don’t know.

You can actually teach him whatever you wanted to for a year. And then you could put him back in the school system if you, if you trust it at that point. I said, really? He says, you know what I did with my son, Andy is I’m a, you know, he’s a real estate developer. He said, I had my son in the, in between eighth and ninth grade, just take a year.

And he shouted me in my business. You should do the same and teach him what you know. So I presented this to my older son, Zach. I said, son, do you want to go out of school and just have dad teach you one on one for a year? And we will teach stocks, trading options, trading real estate, investing taxes.

Business, sales, uh, you can shadow me in what I do. Does that, you want to go to work with dad for a year and learn? And he says, yeah, man, that’d be awesome. And I’ll tell you, first of all, these kids are brilliant. I mean, these kids at this age are, they’ve been in, they’ve had their iPads and their iPhones.

They know how to find out what’s real and not. They’re smart kids. And so, uh, we, we, we did this and my accountant said, well, if he works with you and for you, you can pay him 12, 000 a year without paying him. without paying taxes on that. And, uh, I said, really, now I don’t know, everyone have to talk to their own accountant.

I mean, I’ve seen that grow from, from what I’ve heard and read. But, that’s 1, 000 a month. Now that’s an interesting thing. That’s 1, 000 a month. What does that do compounding? And if you develop the habit, Uh, putting in 500 or 1, 000 a month, uh, what would that look like in a compounding calculator? So we actually did that and we’ve done this for many, many years now, um, where we’ve done that and you could put in whatever numbers that you feel is right for you on this type of stuff.

But let’s just say someone at the end of the year, you know, maybe he’s got his first 12, 000. Maybe he’s got that in there, 12. And if you add a, we could do 500, we could do a thousand, you get to play with it on your own. Yeah. Cool. But if you add that thousand dollars, that 12 and do the same thing over time, and he develops this habit, right?

And I really feel, I really feel strongly, Pedram, that that habit of having a weekly meeting with my son saying, Hey, where’s our money at? What are you paying attention to your balance? Is it growing? I think that when they get to college or when they have a business of their own or when they have even a career, that thousand dollar a month habit just might stick.

You know, because when you’re making a hundred grand or 80 grand, you know, you might be able to put a lot more than a thousand in, uh, that way. But if you look at this, And, and we decide to calculate this, um, just in the market, you know, just without even adding an intelligence. Now you’re 23, 24 million, right?

That’ll get a kid’s attention and that’s middle of the road. That’s a middle, that’s just throwing it in the S and P hoping it does what it’s done in the past for the last hundred years, right? 8 percent or so. But with financial education. If they can go from eight to say ten and a half, which, which I, I can show you some very interesting, uh, ways that we strive for a goal like that with my kids, um, that, that reaches up to 83 million.

Now, I don’t know that everyone makes 83 million, but if you can land in the ballpark, uh, by starting young. By taking advantage of those taxes, these numbers start to get kids attention. And, and if you have a weekly meeting and you, you start to track it, uh, they, they care about it a lot and it’s so fun, Pedram, because, you know, my, my son now is 18, so he gets to have his own account, you know, but before that it was custodial, meaning that I could set my kids up brokerage accounts.

I did the same thing with his younger brother, David. And whenever they make a trade and they do it a hundred percent on their own, that it’s more exhilarating as a parent, right? I don’t really care what their balance is. You know, they’re not millionaires yet, right? They’re they’re 18 and 16, but when I, I don’t even care that their balance grows.

What I care about is that they don’t need daddy’s help anymore. And and as my son makes the trade and and my phone dings and I see what he just did I’m like you little stinker. That’s pretty good. And and so they they are You Very vigilant and obsessed with saying, how’s my account? What am I doing? And around the dinner table, they could kind of boast a little bit or be moan and learn how to make a mistake as well.

Uh, and wouldn’t you want to make those mistakes when you’re 16, rather than when you’re, you know, 18. 40. And so it’s, it’s, it’s, so it, you’ve mentioned this compounding that really is where it starts as we watched Warren Buffett and what’s this magic of compounding? How’d he get, you know, how is Berkshire Hathaway now a trillion dollar market cap, right?

A trillion dollars. Here’s a guy that started it and he’s 14. He’s at a trillion. In his market cap now, uh, just astounding what the compounding can do. So those are some fun stories. I’ll tell you what my wish for this would be, and maybe we could reverse engineer it. And this is just me and just say, Hey, maybe this is impossible, but if I were to say, start my kids at eight and 10.

figure out what these numbers are. Put some money down, put in a grand a month. Um, I just looked it up. It was for 2024, it’s 18, 000 a year per kid. So, you can put 1, 500 a month. Now, that’s assuming you have an extra 1, 500 per kid to, to shell away. Uh, but make them work for it. And I actually have a plan to spin up a business for them so that they can, you know, hustle more and grow.

But I would love to see, okay, what does that look like So that when they hit maybe 25 or 30, they can pull out a necessary chunk to invest in a business or something, or let it ride and give them options, right? It’s kind of like how the life insurance guys say, well, this is how much you got now. And you know, stored value.

This is how much you’ll be worth if you don’t touch it. So that they have this kind of nexus of decision making that allows for them to be careful with that nest egg, right? You know, it’s, it’s just shy of a million. Um, Um, you know, we, we can do, that’s, what’s fun to have a little family evening and play with just a basic compound calculator is, you know, if, if they start with about 12 grand and they start adding to that year after year, and they do that from age 15 to, you know, to 30 or 40, whatever it is, um, you know, that’s about a million bucks after that first 25 years.

So they’re still young and, uh, that’s, if they’re doing the market, if they’re doing a little better. You’re at 1. 4 million, uh, after the first 20 years or so of compounding. So it really does add up. Uh, it’s not going to add up for in the first year, first five years, you know, it’s, it’s not significant.

Right. Compounding is the hockey stick, uh, when it goes and you add a little financial education that people say, Andy, can you guarantee me that I’m going to make, you know, X percent? I don’t guarantee anything, you know, comic it is tomorrow, but we can set really realistic goals. for averages that do really well.

I can give you an example of, of what my kids do, please. Uh, the other day, my, my son learned how to read financial statements in that year that he spent with me at home. And I just put him in, you know, people know I’m an educator and I’ve got all kinds of classes and resources and videos and stuff, and I would teach him things like sales personally, and taxes.

My account would have had a course that helped him, but when it came to, to, uh, Uh, stocks and options. I wanted to do an experiment. I said, what if I put him in the same class as I put adults in? I say, go watch the videos, get on the website, do what my whole student body does, how would it work on, you know, on a 15 year old kid.

Because I try to teach it about the level I understand, which is about 15 language that a 15 year old guy that’s older, you can understand. So a hundred percent of that, uh, you know, options, trading, everything. I just put them on the computer and said, you do what all the students do. So he learned how to read a financial statement.

He learned how to run searches for criteria. And he, he decided he was going to buy a bank called the city group. And Citigroup probably pays about a 4 percent dividend. So let’s say you get the growth at 8 percent on average, you know, I don’t know what it grows, but you know, you just ravage that out. You had another foreign dividend, you’re at 12, but then I taught him how to, uh, how to trade an option on it in a way that is so conservative and safe that he could do it in a custodial account.

In other words, You know, the, the, the, the government isn’t going to allow a fortunate old kid to do crazy nutty stuff like dad does, but that actually adds that little option, simple strategy, and it’s about 90 percent effective. That means nine out of 10 trades he wins on, right? Nine out of 10. And on the one that doesn’t work out, well, that’s where you have that risk management where we tweak it.

Uh, but nine out of 10 times, he doesn’t have to tweak it. And that gives him another 4%. So he’s getting 8%. Without even counting the stock growth you catch that he’s getting if you just take the dividend He gets in one hand and the option premiums on the hand. He’s at 8 percent without the stock moving like in it like it’s the opposite of 401ks where they’re going to pull that money no matter what.

He’s going to make that money. And, and that 8 percent compounding is regardless of where the market, you know, the market, the stock goes, as long as that dividend is maintained, as long as that option premium is maintained. And people say option premium dividends, that’s jargon. Well, it’s, it’s easy enough.

A 15 year old can learn it. I think a lot of people don’t want to hear it because, you know, it’s la, la, la, la, la, right? Like I don’t want, it’s financial talk and people are also. Telling me that they can’t sleep at night because they’re so stressed about money. So, you know, what’s it going to be? You know, to me, there’s a big psychological barrier, um, on financial education and saying, well, I, you know, this is too much for me.

So let me get this straight. You’re not given the two and a half percent to wall street. You got eight percent from Learning stuff and, and, and, you know, hustling. Cashflow. That’s what we just call it. Cashflow. And then the other 8%, um, is really kind of tied to the historical average of say the S& P 500 or the index.

Like 8 percent is kind of the number that’s always been historically. Around there. And good years, bad years. And what’s cool is it’s a foundation. You know, when you talk about future proofing, it was really interesting. Um, without getting too emotional about it, my wife and I were driving yesterday, uh, into out to a property we just bought.

And we were talking about my son turning 18 and we have, as you do, you know, a tremendous, um, you know, infrastructure of trusts and accounts and, and, uh, You know, things for legacy and asset protection. And at this point, I’ve always had different people who are executors of that trust. You know, we’ve always been the beneficiaries.

And my wife said, you know, it’s time to change that over to Zach. If something were to happen to me and my wife, you know, we die in a plane crash or whatever. Um, we looked at each other and we said, who, who is the best prepared to manage this estate? Uh, that we know and, uh, we realized our son at 18 is ready.

He’s ready to do that. That’s huge. And so everything, we haven’t changed it yet, but I says, you know what, we’ve got to make the appointment with our attorney, our asset protection attorney, and we’re actually going to put every single thing, if we get hit by a cement truck, he will be the person in charge of that trust.

Now, granted, do I have great friends that I think he could consult with? Absolutely. But he will have the final say because he knows how to handle it. He really, really does. And, and that doesn’t speak to, let me say this again, that does not speak to his genius. It speaks to the simplicity of how to, how asset management really can be.

It doesn’t need to be complex. If you don’t understand income statement, if you understand balance sheet, if you understand statement of cash flows, you can, and a kid knows how to track that money, what a good decision looks like, they’re going to be absolutely fine. The problem you and I have. Is that we didn’t start when we were 14.

Right. And the problem anyone listening to this is that they didn’t start when they were 14 mm-Hmm. . But the gift you can give your child of that first 10 years that, that you pull 10 years off of compounding calculus, life changing if you can get ’em going at teenagers when they are, they do have the aptitude your children are doing.

Algebra, your kids are doing diagramming sentences in school. They’re doing things that are hard for adults to do, right? Can you really help your kid with your own homework? And yet they have the capacity to learn basic investing skills. And I can’t imagine when they, when they get into the real compounding that adults can do where my sons might be.

It’s, it’s pretty exciting. What’s a safe place to start? I mean, for an eight and a ten year old, like, are there, you know, like, don’t do the puts, don’t, you know what I mean? Like, how do you tiptoe into this so that you’re safe, they’re learning, and it’s a positive experience? So I can give you two, two really good, that’s actually a great question.

And I can give you two, a piece of advice for that. Number one is, uh, you, you can start in a practice account. In other words, they have virtual accounts that look real, act real, they trade real. But you start, you start with like two hundred thousand dollars in there, right? Or a thousand or whatever you want.

And you can actually practice that for a time. And that makes a lot of sense. You know, my, before we had the first recital, my kids practiced the piano. And before we had the first game, we went to practice for the first jujitsu match. We went to practice. And this is the same thing. The difference is this type of practice, it’s unbelievably fun.

Uh, because they can see the results, you know, really fast as things start happening. So that’s the first thing is starting a Pratt’s account, the risk on that is zero, the reward zero other than the learning. The other way that is really helpful is realize that we’re not dealing with millions of dollars share with children.

We’re dealing with usually thousands. And that means that my, my sons, when they do an option, they’re doing one. I’m not doing 20 contracts. They’re doing one and my son might make 15 or 16, you know, 20, you know, off of a trade, 20 bucks. That stuff adds up with compounding. So that’s called scalability. In other words, we can scale down the trades and scale down the investments to where in any one given place, they don’t have to put, you know, a hundred thousand dollars or, or a large amount of money.

So I’d say the two ways to be safe. Is number one, practice, number two, start with very small amounts of money to learn and make a mistake, and number three, take advantage of doing this together. You know, dad and mom can learn this and, and if, if you learn things as a family, the, uh, The togetherness of shutting off the iPad and getting off the screen time and, and it’s okay.

It doesn’t need to be, I’m the teacher, son, you’re the student. Often my son and I’ll take on projects and we’ll neither of us know how to put this together. Let’s figure it out together. And when you, when you bring together a family where you can figure it out together, huge rewards even beyond money, it’s awesome.

So that’s what I’d say about being safe. Okay. I think that the style of parenting that resonates the most with me is the roll up your sleeves and do everything with them style of parenting. I mean, it’s kind of like a homeschooling mentality. I mean, my kids go to school, but you know, I train martial arts with them.

Like we do stuff together all the time. And so this falls very much in line with saying, let’s sit down and learn this. And, you know, my kids probably know more about. Counting and math playing cards with the grandparents than they do from being forced to do the homework, right? Like it’s in the play in what you’re doing where the math becomes relevant So I would assume that their math skills improve I would assume a lot of their skills improve while doing this kind of thing Well, I’ll tell you, Warren Buffett’s right.

He’s the guy I’ve studied more than anyone else. It makes sense. And you know what he says? He says, yeah, you gotta have a little bit of smart, not overly smart, but investing is, and I think when I say this, people will feel this ring true. So just pay attention when I say this and see if it rings true to you.

Uh, it’s not just about learning the numbers and how to trade and how to push the right button. Uh, temperament, the investors have a certain temperament about them and investors have a certain discipline about them and investors have a certain consistency about them. And those things aren’t taught, maybe in school, they might be taught by going to some school, but the biggest thing that, that we tried to instill in the boys as, as they were growing up in this environment was, how do you, Um, I have a saying that I, I gave him in one of the first lessons.

I said, son, you can be whatever you want. One choice you can make is to always be bigger than your money. And what does it mean to always be bigger than your money? Well, I’ve, I’ve introduced him to a lot of rich friends of mine. And I’ll say now, This guy has, you know, so many millions, or this guy has so many tens of millions, this guy has so many hundreds of millions, or this guy is a billion dollars under management.

We look at all these guys and I go, which one of these guys were able to stay bigger than their money? And he’ll pick, and I’ll say, well, he did, but he didn’t. I’ll say, well, you get to choose. And I said, son, if you’re going to be, if you’re going to be a billionaire, You got to be a pretty big person if you’re going to stay bigger than your money, don’t you?

Because when people lie, cheat, steal, they, they’re not bigger than the money. The money’s, the, the tail’s wagging the dog a little bit, or when they get obsessed with money and they’ve lost control of it. And that dollar bill, you know, you can’t look down at George Washington and say, Hey, you work for me instead of me working for you.

And so I, I always tell the boys, be bigger than their money. Temperament, discipline, consistency, that’s as important as knowing what button to push. And those are lessons that are learned, just my opinion, in the home with parents and kids together as a family. I love that. So I’m in, like, I, I really want to do this.

What I’ll do is, you know, we’ll give them jobs for, for me and my company, you know, so if you see shaky, you know, video footage of the urban monk, it’s cause, you know, there’s a kid holding the camera. Right? Like, that’s it. But you know, I’ll, I’ll find a way for us to contribute to them and then have them work for it, right.

To know the value. And I’m also, um, helping them spin up a shop like, you know, Shopify store with print and ships for, you know, beach towels and sweatshirts on the designs that they make, because I also want to teach them how to be entrepreneurs, teach them that, you know, what the, the top line and the bottom line are different and how, you know, business works.

And I figure what I can do is create that as a vehicle for them to then see how they, you know, if I put in an extra five grand this year at the age of 12, what does that do? To the fancy chart that you were just showing, right? Um, and I think that these lessons are priceless. And if I start doing it, I’m, I’m going to invite all the parents or the grandparents, frankly, that are watching this to ride along with me.

Grab a kid. I don’t care if they’re 16 or 8. Grab a kid who doesn’t have this going on and give them the gift of The financial education and the knowledge and the wisdom. And also quite frankly, you know, the 23 million by the time the party’s over to, you know, add to their, their top line. Right. And maybe we can play with those numbers.

I don’t know. I don’t know what the best way to play with this is without maybe being speculative, but it’s a very fun exercise. No, I’m, I’m pretty excited about this. We should do this together because you know, what is the, what is, if lesson number one for kids is compounding, right? If that’s it, that magic, if that’s really the future proof is that consistency to get that hockey stick all another, you know, that’s a complicated word for kids compounding, you know, what does that even mean?

So all it really means is reinvestment. So, if you have a goose that laid a golden egg, And it gives you that golden egg. You need to go buy a video game. You can buy another goose, right? So I’ll tell you what we should do, but it’d be fun. You can start having to start a business. Our kids did a lemonade stand.

I mean, they were, I mean, they were tiny. They were like five and, and we did a lemonade stand where they learned the simple inequality of capitalism. Capitalism is not equal. You always have to give more than what you take or people won’t give you the money. In other words, that glass of lemonade has to be bigger, better, and more valuable than a dollar or people won’t make the trade.

And they said, well, dad, if we’re always going to give more than we receive, how are we ever to get ahead? If we’re always giving more than we receive, it’s the same, you make it up in volume, you serve more people and the more people you serve, the more effective you’ll become. Well, look at this. So they, they, they would, they knew.

They knew that the biggest day of the year for selling lemonade was 4th of July. People were out and about, they’re looking. So they create a Facebook page and they build up, you know, through the year, the community is on there and they know, and the lemonade’s incredible. They had a little help from an intern named mom who makes this incredible recipe.

It, it may or may not have a little margarita mix in there. We’re not going to talk about it, but, but, uh, they would launch a campaign on Facebook and they’d say, okay, guys, 9 00 AM. We’re going to be selling when it’s gone, it’s gone. And my kids would throw themselves in from a moving bus to sell 50 cent glass of lemonade, but those lessons were amazing.

So the big lesson is they got all this money now, right? People tipping, people having fun. What are you going to do with this money? You reinvest it. You re, and don’t spend it, don’t spend it, reinvest it. So then what we would do is we’d buy like Disney stock. And so we went to Disneyland and we’d bond as a family standing in line.

You know, everyone’s standing in line, bond as a family. They were thrilled. Like they walked in like they owned the place because they did. So what we’ll do is start, start those, start that business with your kids. And like the first money they make, the first time they get what we call a return on ad spend or whatever, the first money they make, let’s do this.

Let’s take it. We’ll buy a hundred shares of stock and we’ll do an option trade. I’ll do the same one and you’ll get the same. I got a picture of my kids that I’ll send to you. Uh, if they’re for, I took, you know, people take pictures of their kids, first steps of first day of school. I take pictures of their first trade.

There you go. That’s not nerdy at all. No, I’ll guarantee you it’s called clicking it paid. And I, and I had those kids, they act, my kids actually got paid each a hundred bucks to buy the market, paid them to buy their first, uh, stocks. And so we’ll take, we’ll take some of your money. We’ll set it up and say, okay, we’re gonna, we’re gonna buy some stock, but we’re going to get paid to do it.

We’ll get a camera out and when they click the button, you’ll get, you’ll capture that moment and the smile it’s ear to ear. We’ll do it. We’ll do it together. For sure. Guaranteed. I don’t make guarantees very often. That one I’ll guarantee. Guaranteed. No question. Love it. Love it. My kids are stoked. They, um, listen, the thing is you could reach for roadblocks or you could reach to check your stocks.

Um, what is the reason you’re reaching for your device? You want connectivity? You want to expand? Do you want to expand in a fake alt universe or do you want to expand your net worth and your choices and your freedom in the real universe? in a way that’s meaningful, right? And so what I’m trying to do, you know, I’ve read all these books on conscious parenting and attention and focus is to say, look, you cannot take away their desire to be expansive and to explore and to learn.

How do you direct it in a meaningfully positive way as a parent, uh, by giving them more choices, not clipping their wings, but giving them the tools to make better choices. Because if not, there’s plenty of bad choices waiting for them on the internet. You know, that’s a great question. You know, I would hate to position myself of having the answer to everything, because my kids are still growing up.

I’m almost there. I’m almost there. So far, so good. Uh, and I think all parents, we gotta find our own answers, but I would give some suggestions to that, in terms of giving them choices. Um, you know, there’s principles that seem to be true in all cases. And one of the fun games we play is can we, can we test something against the principle and see where it would go, where it would go.

So when I give them a choice, uh, for example, we have a principle of risk called more control, uh, less risk, less control, more risk. And that’s a game we play in our family. That’s a principle. The more control, the less risk, the less control, more risk. So when they talk about going on an activity or they talk about even a life decision in a car, when they get driver’s license, we say, well, let’s test that against what we know for sure.

about risk management. And those principles for investing go into their lives and they’re better risk managers as a result. So one of the things I try to do to help them when I give them all these choices, what makes a person have great choices? Well, knowledge and wisdom, knowledge to know what to do and wisdom to bring our behavior and congruent with the knowledge.

And for me, I, I, I’m not really knowledgeable either. There’s a big gap. Between what I know and what I feel I’d like to, but the one that frustrates me is the gap between what I know and my behavior, the unwise things. So I think things like that help when you have those family discussions. And I’ll tell you another thing that’s vital, I think more than, you know, as a parent, I think we’re so worried about our, you know, it’s, It’s natural.

We worry about our kids and their path, but I think the fun factor, uh, in my, in my academy, we have three values, fun, simple, real, and fun is number one, learning and choosing and growing and expanding and focusing all work better when it’s fun to do. When you get in that focus zone that some people call flow, that’s fun.

It’s, you know, video game is fun because they’re in flow. They’re, they’re doing something challenging and yet they’re equal to the task. Video games produce flow. It’s fun. Well, what if you could produce flow in other ways? And so time together, if it was different, my dad was solid earth, but you know, dinnertime we’re having dinner, dinner as a family and I’m sitting there wanting to be with my friends.

When you can flip that and make it fun, where they want to be there and they want to do it and they want to have their own free will and choice, they’re going to make some good decisions because they want to, not because they have to. Yeah, well, and, and they feel empowered instead of being stopped. For sure, because they are.

I love this idea of, you know, giving them work so that that money rolls into this. I, I think a certain percentage, I mean, I think half is probably too much. Maybe what. 30, 30 cents on the dollar goes to do dads. I mean, they’re still going to want crap. Right. Um, and you know, the, the question is, what is this buying this thing take away from, you know, my, my net worth in 30, 40 years, I would love to, you know, create some sort of look windows into that to help them make those choices.

I would like to comment on that because the truth of the matter is, you know, A person has, if you don’t enjoy the journey, you know, self, self denial and delayed gratification are huge, but if you never have any gratification, if it’s always a delayed gratification, you’re always saving for a day that, you know, we’ll come, but then you, well, I got to save more.

And Warren Buffett had a problem with this. His first wife, Susie sat him down and said, Warren, you won’t spend a dime because every dime you spend or give away, uh, you picture it, you know, it’s not a dollar to you. It’s a million dollars. 20 years from now, she says, you’ve got to give some away. Now there’s people that are hurting.

Now you don’t need to give it all away, but you need to strike a better balance between building this compounding empire. And he’s, he’s pledged half his fortune to give it away. Uh, but my kids get a lot of satisfaction. In that part of that money they earned gets to go to doodads, which are great doodads.

For example, how do you think my kids feel when they can pay for their own basketball trainer? How do you think they feel when they can pay for their own basketball shoes or their own tournament fee? Instead of having, you know, daddy there all the time. Now, daddy helps a lot. Let’s not, let’s not discount that daddy gives them an advantage.

But the idea that some of their account can go to doodads that doodads aren’t a bad thing. There’s no good or bad. It’s a balance and it’s prudence and it’s, it’s smart. So I don’t really say, you know, assets are good, liabilities are bad. I say, what is the proper yin and yang of assets, doodads, expenses, fun.

You know, if you haven’t, if you never have any cotton candy at the fair ever, you’re missing a really good fair. But if that’s all you ever eat at the fair, You have diabetes not going to be healthy, so well, I don’t think the world that we live in has too many problems with the latter half of that equation, right?

Yeah, the economy is designed to extract every cent out of your pocket and just, you know, have you blow it all. And, you know, leave the casino with your empty, you know, with your empty pockets, you know, dragging out. So, I think the Which, I’ll tell you what people, I’ll tell you what the, sorry to interrupt you, but I’ll tell you what that looks like.

Like, probably the worst loan in the universe. Is a student loan because I mean, think about this, remember in the subprime meltdown where you had a zero down stated income, no doc loan, like the guy had no money, no job, no collateral, none of that. And at least the house preside, the collateral, a student loan has nothing.

They have no job. They have no, and so when you’re talking about. Designing with credit cards and consumer debt, designing something to extract money, not just the money they have in their pocket, but their future earnings before they even earn it. So I just, I just bought in there cause I couldn’t agree more.

Yeah. I, you know, and I think there’s, you know, they, I, my first credit card, I think I got a slinky for it. Right. Like they just give you. To say, please sign up for debt. Right. And if you don’t know any better, you just do all that crap. Right. You don’t know you’re just a kid. And so, you know, teaching them the other side of this, like the value of saving, it sounds so boring.

It sounds so great depression. Right. But the people that I know that have built nest eggs and have built futures for themselves and their children are all playing this game. Right? And so I think that’s been a big part of what’s been missing, um, amongst a lot. And look, I hang out with doctors and lawyers and lots of professionals.

I’d say a precious small percentage of the people in my professional circles. You, you’re in a finance circle. It’s different, right? But in my professional circuit, people that were said, go to college, get a job, make money, precious. Few of these people, you know, to throw some love to Robert Kiyosaki are having that conversation around assets and compounding and letting money work for you.

Most of them are working for money. Most of them just have nicer cars and the same amount of stress. You know, you mentioned, um, the idea that, you know, Oh, savings and money and boring. It feels like organic chemistry just worse. Right. And I remember one time I was down, uh, visiting Robert and Phoenix and he really was Kim as well.

Just sweet to my boys. They, they didn’t have children. So they sort of adopted mine at times, you know, when they were around and we’re down there in the Rich Dad office and you know, the cashflow game and all of this. And Robert says, you guys want to learn something? My boys like, yeah, yeah. He says, Yeah.

Come out here. So we go out of the office and, you know, Robert’s got, he’s a car guy. He’s getting Lamborghinis and Bentleys and, you know, he’s got his Ferrari outside. So he says, get in. So he’s got these two little kids, can’t even see over the steering wheel. He goes, I’m going to teach you about, um, investing and assets.

You know, that’s a little bit different experience sitting in a Ferrari rather than a schoolroom desk. I don’t know. I think, I think the smell of that leather did something to him because they were paying attention. All of a sudden, learning about money became pretty fun. He says, see this car? That’s what happens when you buy assets.

And from then on, it’s like, dad, we’re buying assets. That’s amazing. He didn’t fidget once in that chair. No, they’re listening pretty careful to Uncle Robert when he’s teaching about assets in his Ferrari. It’s pretty funny. I’m a truck guy because Robert’s terrible because he’ll say, Andy, why don’t you hop in?

Because he knows I’m so big I can’t even close the door. So it’s kind of fun. Yeah. Aren’t you, you’re really tall and your kids, what, six, nine, you said? Yeah, you know, I, I topped out at six, eight and uh, we went, we, when Zach was born, we knew he’d be big, but, but Zach just turned 18, he’s six, nine and, and, and, you know, you mentioned college, you know, college used to be so freaking cool.

I mean, I went to college, I didn’t, I didn’t learn. The things that, uh, that I use now in college, but my gosh, playing hoop in college, you know, how much fun that was and what I learned about competition and dating girls and, and the social problem is that that used to be an awesome experience, you know, go to your frat parties and just growing up and making mistakes, but you know what, now it’s, now it’s 300, 000 to do that.

You know, that’s the problem is college would be awesome. Uh, but man it You know two three hundred thousand dollars in student loans to have that great experience. It’s it’s too bad. It’s too bad well, and and this is the problem that you know kind of that we started the top of the call with which is I am speaking with a lot of Very concerned parents who are now looking down the barrel of this going, man, it doesn’t pencil.

You know, if you become a neurosurgeon, maybe yes. If you go become an electrical engineer and get hired out of Google, maybe yes, you get enough money to justify the expense and all that. Or if you, you know, if, if the parents have enough money to throw around or invested it for the college fund anyways, then fine, go drink the beer and date and call it an education.

But if you’re going to invest pound for pound. for the betterment of your life and your future financially, it’s a real challenging proposition now. It is. And, you know, parents, it’s tough on them because I, I’ve been really grateful. I, I had two little feathers in my cap. Um, you know, a really, a bestselling author asked me to write a chapter about, you know, teaching kids and raising kids and a book on parenting.

I just was recently asked to write a forward for a book on, on the same topic. So, uh, I’m great for my kids and made the dad look good. And they say, what’s the secret to great kids? I go, Marcy, my wife, that’s the secret. But, but I will tell you that, that when you look at. At the idea of being a father in that duty, in that opportunity, I’d like to revisit that loop if I could for a minute because our society seems to be leaning more and more on, on institutions and governments to shape who we are.

As opposed to that, I mean, I don’t know how long humankind’s been around, maybe 200, 000 years we evolve or whatever it is or whatever you believe, but, but whatever you believe, I know this, the family, certain things happen really well at certain levels in an organization. Sometimes you got to have a company conference where the once a year, the whole company’s together.

Sometimes you gotta have a division meeting. Sometimes you have a board meeting. And so certain things happen well at different levels with different groups. And I will tell you, there are so many things. That can happen at the family level, that there, that, that other places don’t have the horsepower to compete with that.

And so when you look at yourself as a parent, you know, when people use the word duty and responsibility, that sounds burdensome. This is the, the, the, the wellspring of happiness and the reservoir of joy that can be tapped by, by doing these things together and really becoming not the parent, but also the teacher and the mentor.

Um, you know, I picture how it must have been, you know, in anciently, you know, pick up a stick, sharpen it, take your son out and stab the fish, go home, cook it and sit around the fire. The parents taught him how to live. And now the world’s become more complex. The parents don’t know how to do that. They don’t know what, they don’t know how to teach the kid to make money and stab a fish.

So what do they do? They put school in charge of that. And I just refuse to let them take my place. That’s not their right. That’s my right. And I’m grateful they can teach them history and math and, and the stuff I don’t know about, but really when that’s my job to be their teacher. So, you know, Robert, you mentioned my mentor, Robert, he just goes out for the school system and teachers and all this.

I tend to go after parents a little bit because, you know, you say, Oh, the teachers aren’t worth it. There’s a lot of parents. that are missing the opportunity to empower themselves so they can empower their children. And learning financial education or any other, any education together, uh, the, the, the, the closeness and the tightness and the trust and the experiences, um, Boy, that’s, that’s, that’s as big as the money will ever be for you right there.

And you’ll, and your kids will have confidence as they go forward. So it’s, you know, this abstraction of stabbing the fish. I think I want to stay on for a second because it’s a really pertinent point. Like my dad, The way he stabbed the fish was civil engineering. You know, he’d build bridges for, you know, governments and stuff.

And he’s like, well, that’s not, you know, you, you go stab fish by doctoring. And, you know, I don’t know a single doctor who recommends medicine to their, their children anymore. Right? Like it just keeps changing. And so because. We have absolved ourselves of knowing, you know, what the future brings. We forget that the, at the end of the day, the kid’s got to eat a fish or, you know, we’ll hope you’re not a vegetarian, but you know, the kid’s going to need to generate some revenue to pay for their food, shelter, their life, and so.

The thing that really excites me about this conversation is I’m not telling my kids, Oh, here’s how you go generate your revenue. I’m saying, go figure out something that you enjoy to generate the revenue as a vehicle to then feed the money into a system that then Takes care of money for you for life.

And that to me is a novel approach as a parent to saying, I just want you to learn how money grows because I wasn’t taught that. And then I don’t care if you’re selling lemonade or, you know, doing art pieces or, you know, how selling insurance, make money, put it in. And when you’re done, you’re done. Right.

Then, you know, when you, when you’ve broken free of the rat race, then I’m not worried about you stabbing fish, then enjoy your life, bring me some grandchildren. God, you know, you just opened my eyes to something. Every time, you do this every time, man. Every time we talk, I go home, I go to Marcia, I go, God, you shared what Pedram said.

You know, what? And then there’s a whole conversation. You just blew my mind. So I, I, I was, As you were talking about your father’s an engineer, you should be a doctor, and the doctor says, no, don’t be a doctor, and it’s almost like no parents has followed my path, almost none, right? And I think of all the crappy jobs, you know, I was, uh, like the guy on Dirty Jobs, growing up, man, I, I, when I was doing some nasty jobs when I was young, nasty stuff, I wouldn’t recommend them.

And he, and when you said that, I thought of all the assets I have, if my son came to me and said, dad, you’ve bought some stocks. Should I do the same earlier and faster? Son do it, do it faster and do it sooner than I did. Dad, should I go into debt and buy some real estate and get some renters and build a real estate as soon as you can, son, as fast as you can.

And it just kind of blew my mind when you said that right there, because. Every type of active income, uh, that a person makes, if it’s outside of their passion, it’s probably lousy. Like if you want to, if you want to, you know, coach kids basketball, it’s not going to pay a lot, but if you love it, then awesome.

It seems like if you’re going to work for money, if you don’t do what you love, you’re dead and doing what you love often art, you know, I’m going to be an artist painter that might not pay that much at first, you know? But in every instance I can think of. I’m trying to try, I’m trying to play the game of exception here.

I can’t think of one source of passive income I receive right now that I wouldn’t recommend my kids to push harder, sooner, and faster, and try to do it earlier than I did. Now isn’t that something? That the parent says, don’t do what I do. But by what I bought in terms of assets, that’s a mind blower. The, the only exception I could think of is if your passive income is from having, you know, kids selling drugs on the corner of the hood and then you’re like, all right, I’m not making a good source of revenue, right?

It’s not, it’s not right. Livelihood. Anything outside of that. If you are making passive income, and I, and I think we should throw a little love to Robert Kiyosaki here because his entire thing is look, if you get to the place where your passive income exceeds your monthly bills. You’re free. So if your bills are 3, 500 a month and you have 3, 800 a month coming in from your stocks, your investments, your this, your that, you don’t need to work anymore.

You could go ahead and coach basketball or do acrylic painting. And if you want a bigger footprint, you want a bigger life and go generate some more money. But you don’t have to be worth 20 million to say, okay, I’ve arrived. I’m done. And that to me was kind of a, a mind blowing understanding. Cause I come from, you know, a world in California where it’s like everyone’s racing for the big B and all this kind of crap, all these success metrics that don’t matter.

They’re not tied to happiness at all. Yeah, in fact, you made a great comment on cash flow versus net worth. One of the lessons we taught, first, was the difference between an income state and a balance sheet. Income statement’s about cash flow, balance sheet’s about net worth. And people chase net worth thinking they got millions and millions, where really, freedom’s a function of your balance sheet.

Isn’t that interesting with 401ks? That when people had pensions, that was lifetime income of cashflow. It didn’t matter what their net worth was. And when they switched from pensions to 401ks, they changed this from cashflow to net worth. So when I say, how’s your retirement? People say, Oh, I got X amount in my 401k.

What does that mean? How long am I going to last? But if you say, Hey, how’s your retirement? Oh, I have a passive income above my expenses with this much extra forever. Now you’re there. So that’s what we teach. It’s freedom. A great comment by Robert on that. Yeah. Yeah, I think, I think he is, you know, um, he’s a quirky guy.

He’s a lovely guy. Um, but you know, it’s, he tells it like it is. And I think he has really contributed to this field in a very meaningful way. I have a lot of respect for him and look, I’m, I’m in, this is, you know, I’ve been kind of waiting to get them, you know, past that kind of critical threshold where now we can gamify this.

And so what I’m going to do is with Andy’s help, I’m going to get them up. I’ll just do the course with them and I’ll study along. We’ll do it. We’ll start them on their kind of training wheels account. Then I’ll get them a custodial account. And what I’ll do is I’ll kind of film it along the way. And I’ll, you know, uh, spin up their business and spin up whatever it takes for them to get a side hustle.

Cause I don’t want it to all rely on dad. I don’t want this to be like, Oh, well, Pedram, you can afford to do that. Um, no, I want, I want to show how I’m going to make my kids hustle. to change their own stars, right? Um, and I want to make this egalitarian. If you say, Oh, I can’t put a thousand dollars a month.

I can maybe put a hundred dollars a month. Great. So then this is what the kid has to do to get to this number. I want to make this accessible to everybody. You got to promise me when, when they, you know, they’re going to start their store, their business of somehow, which is, you know, business, real estate, stocks, commodities, you know, all these asset classes will give them exposure to, but you got to promise me that before they buy that first stock, you got to let me be there because I promise you there’s this moment that they’re going to be ready to buy their stock.

And instead of, You know, just spending money to get the stock, we’re going to click one button a single time and they’re actually going to get paid. Like there’ll be positive second one, they’ll get paid to make that, uh, to make that decision to own stock. And listen, um, you’re, you’re on the ride. It’s a, yeah, it, I, you know, I had it with my kids and the more you see people, it’s even fun to see adults to it, frankly, but, but yeah, uh, you got to let me along in this ride with you, man.

It’s going to be fun. Love it. I appreciate your mentorship on this. I appreciate the work that you’ve done. I’m going to do the course. I invite anyone who is listening and wants to do it alongside to just, I’ll put a link to the course, get the course, do it with the kids, whether you’re a parent or a grandparent, um, whether you’re, you know, in your fifties or in your thirties, I wish I would have learned this a lot sooner in life.

Um, but the best time to plant a tree was 20 years ago. The next best time is right now. Right. And so for my kids, I’m nailing it. Right. Like I want to make sure I don’t fail my kids, you know, eight and 10. Great start. Right. Um, and I will, I will ride along. I want to show, I want to college proof their future because in 10 years from now, if college doesn’t make sense.

I’m not gonna stress about it. I’ll, I’ll, you know, I’ll let him travel the world. No question. Well, , Pedram, I’m so grateful for our friendship. Every time I, I speak with you, I feel like I’m with a kindred spirit and so fun to align with people that have similar values. And, uh, I do know for sure that when it comes to, uh, your role as father, you’re certainly a great example to me.

So thank you. Thank you, my friend. I’m certainly trying my best. That’s all we can do really appreciate you really appreciate Marcy sharing you with me. I know that you know, you have a very, uh, you know, you have a very, very good family life and you have a very good marriage and that doesn’t come from not putting the, you know, putting the effort in to keep it.

That way, right? Like I really appreciate the amount of effort that’s gone into the curation of the life that you’ve built. And that’s part of it, right? It’s like, we’re all farmers, we’re all tending these crops. And I want to make sure I have, I have these guys for 10 more years before they’re off somewhere.

This is it. This is my contribution as a householder, as a dad. And I want to make sure I give them the best foot forward. Fantastic stuff. Thanks for having me, man. Really fun. Thank you, Andy.

Well, I hope you enjoyed that as much as I did. Andy’s a great guy. Indie is going to be instrumental in future-proofing. Um, the future for my children. Uh, and going forward, here’s how we’re thinking about it. I’m going to take their allowance. Uh, make them work for it. They can spend 50% of that on whatever kids spend money on that is, you know, sanctioned obviously, uh, at 50% has to go back into this investment fund, which they’re going to watch and grow. Uh, we will see this is a live experiment, so we will see. How the growth of said money in the future influences the way they spend their 50% or maybe they’ll bring some of it back into their investment.

This is again, we will see how this works. The rules are 50 50. They might want to put in more. Uh, but what we’re also doing is my kids have about four or five, maybe six designs in total, each. That they’re going to create a website, uh, where they’re going to have hats shirts, beach towels, mugs. Things that they’re going to sell, uh, to their friends, other kids and other parents as part of their business and what I’m teaching them there. Is, you know, how costs work, how overhead works, what the top line and the bottom line is in their own online business. And as they make profits there, it’s going to fall back into that matrix of the 50 50 now. A work in progress is also like, okay, are we going to take 10% and have them give it to charity now?

Or are we going to train all this? So this is all work in progress. We’re going to figure out what those percentages are. So don’t hold me to it. But at least half of that goes back into their investment fund because what we want to do with Andy’s help and his tool is show. Visualize how a little bit of extra effort and a few bucks put into their investments here, say they’re going to be, you know, based on what we’re doing here, millionaires by the age of 40. And if they were to put in an extra few hundred bucks a month, Does that move it to 30?

What does that do to the overall numbers and how can we influence them? Thinking about the future and future proofing against college now? So the way we’re going to do this and, um, we’re all, all the details will be on the podcast. So go to the urban monk.com/podcast. Look for this podcast. I’ll put all the details there, cause I don’t know where you’re listening or watching.

This is. I’m going to set it up so that we can turn this into a live experiment so that all you need to do to get this free course that, uh, we’re filming with, uh, Andy, for parents to train their children, how to do this is by one thing for my kids store so that we can stoke the fire. And bring in top line revenue, teach them, and we’re going to videotape and show the whole thing, teach them how top-line isn’t bottom line and how what’s left over, goes into this investment and show how this then feeds into the whole deal.

So what I’m trying to do is create, uh, a weather system, right? Where the water drips in steams up to the top drips back down, and by me working with Andy to create a system. To help parents help their children future-proof against college and do all this stuff. We also drop a couple of bucks into the living breathing example, which is my kids store. So that then that money generates more story and more lessons for all of us.

So I hope you understand and appreciate that. Bye hat by a towel by whatever, right. Um, Um, and as you support that one time, then you get the course and you get to ride along and hopefully do this with your children or your grandchildren along side of us. And so I want to create a virtuous upward spiral. Of content and commerce that helps teach all of our children how to do this step out of this idiotic consumption economy and teach them how to grow money for safety. And security in their future.

So they’re not making stupid decisions and they’re also not stressed out about the bills all the time. Hope this resonates. If this resonates with you again, go to the urban monk.com/podcast. Find this podcast. And I will put all of the kind of go-forward notes there. I’ll put links to my kid’s store once we’ve got it all fully up and operational.

And then from there, I’ll help bird dog, you know, over to where that content is going to drip on a, on a kind of steady basis and allow you to be a part. Of this wonderful experiment with me. Hope you enjoyed this.