Nothing on this earth is more important to me than my family, my wife, and three children, who are six years of age and younger.
The joy of fatherhood is greater than anything I could have imagined. There are many nights as I lay down with them in bed, where I would be happy to relive that day forever.
I thoroughly enjoy being a dad, which is why my biggest fear now is that something would happen to me that would shorten my life and leave my kids without me as their father.
A close friend once asked me why that was my biggest fear, and my answer, without hesitation, is that I would never want them to grow up to be normal. Normal, to me, is wrong. It's where passionate ignorance meets fear, and I would never wish that on anyone – especially my children.
Teaching my children about money will be one of the most valued assets I can give them, because money can have a lot to do with the amount of freedom you have in your own life.
It’s a tool to be used, and absolutely a life skill they will need to fully appreciate.
Here are the lessons I will teach to my children; the financial codes to live by.
If used as a guide, I have no doubt as to the success and freedom one will experience in their lives.
Financial Life Code 1:
Never borrow from anyone. There are two types of people: those who earn interest and those who pay it.
Do not find yourself in the latter. The only exception to this rule is if you are using other people's money to purchase a cash-flowing investment that will not only service the debt payments, but will give you an immediate profit as well.
Financial Life Code 2:
Only buy assets that cash-flow. This is so powerful, it is something I wish I would have applied in my own life. I think about all the speculative losses and dead money that I killed trying to swing for the fences with capital appreciation. Buy assets that produce income. Nothing more... nothing less. Just keep it simple; if it doesn't generate a yield, then don't consider it an investment.
Financial Life Code 3:
Start your own business. Providing solutions to others is a real public service, and one that will make you rich. Business ownership offers up everything retirement promises, only in your much younger and healthier days.
Financial Life Code 4:
Give. Reward those who work for you, tip those who service you, and develop ways to help other people.
"A rising tide lifts all boats." I often say this to anyone who works with me.
Financial Life Code 5:
Save 1/5th of all you earn. Half should go to a long-term store of value, like gold, which will be your financial insurance. The other half will need to be placed into something that will compound your savings. Save 20% of all you earn and you will happily learn to live on the 80%, knowing that you will never become financially poor.
Financial Life Code 6:
"Be greedy when others are fearful, and fearful when others are greedy." – Warren Buffet
There are many ways to put this, but I think Mr. Buffet said it best, so I'll just leave it at that. When the value of an asset is dropping due to fear, this is the exact time when you want to research the fundamentals and go in big.
Think about the profits that were made in the stock market in late 2001 or early 2009. Just as everyone else was panicking, the smart money was buying, because, remember that any time someone sells or buys a stock, there is someone else on the other side of that trade. Extreme changes in the value of any asset should get your attention.
Seeing a chart that goes up shouldn't excite you or give you comfort.
Financial Life Code 7:
Invest in yourself. This will always be your best investment. This means going to seminars, buying books, taking online classes, and meeting with wealthy people who have gone down the road you want to travel. Never be afraid to believe in yourself – what one man can do, another can.
I find it "normal" that people earn money and then want to re-allocate it to someone else to manage. This type of thinking is flawed, and kind of depressing when you think about it. Have a little confidence in your own abilities. Spend some money on your own ideas, build your own reality, and choose your own destiny.
What I will teach my children may be different from what you are thinking, and that's perfectly fine. Just remember that if you don't teach your child and raise them with intent, then someone else will. Right now, millions of our senior citizens in the U.S. are becoming wards of the state, completely dependent on the government, and it is because they had no financial education.
To me, normal is the worst-case scenario, which is why I wrote this very letter today. It is something that my children will always have, a set of financial codes to live by that, if applied, will guarantee them the freedom that I believe everyone deserves.