Kids Want A New Car? Now This Is A Good Idea..

Robert Kiyosaki’s book Rich Dad, Poor Dad.. has a lot of good information. Without ‘spoiling’ it for everyone, the book centers upon the idea of obtaining ‘Assets’ over ones lifetime instead of ‘Liabilities’.

It makes sense really.. assets make you money, where liabilities make you spend your money.. and usually that money is after-tax money. Things like income real-estate, stocks, certificates, etc. are what he promotes people to buy, and to not be sucked into the money trap or ‘rat race’ which most people get into. You know what I’m talking about, get a paycheck… pay your bills.. try to put away some money after everything is paid… I’m doing this now (sort of) and it sucks.

What he suggests, as do most of the financial books I’ve read, is to pay yourself first. But I found one idea which I thought was BRILLIANT to teach kids on the importance of saving, and investing wisely.

I loved the example given in the book. Basically there was a teenager whom wanted a car. Instead of just giving the child the money (in this case $3000), the father decided to ask the author for advise. After speaking with Robert, the father had a great idea. He went and purchased a subscription to the Wall Street Journal, and gave his son all of his financial books to read, and access to a stock broker, etc. He gave his son $3000, however told him that he could not use the original $3000 to buy the car, he would have to make the $3000 from the original money he gave him.

A lot of people think this is just crazy.. however I totally disagree, can you imagine how much the kid learned?

What ended up happening, is that the kid researched and at first was up money (for our example let’s say he made it to $4000), but then the market turned against him and he was down to $1000. This however, didn’t deter the kid, and although it doesn’t end up saying what ended up happening.. it was at this point that the father thanked the author as the kid now had a HUGE interest in making money instead of just uselessly spending. The teen was more interested in how to earn more money from his $1000 investing than he had interest in getting a new car and tricking it out with new chrome rims and car grilles! The author did ask the Dad if he was worried about the original $3000 that he gave his son, however the Dad simply said.. “better lose it now and learn the lesson then when he’s older”. Very true.

Anyhow after I read this I knew right away that I was going to write about it, it’s ideas such as these that give kids and younger people a different approach to making money. I would certainly recommend reading Rich Dad, Poor Dad if you have the time. I enjoyed it a lot, and am going to read Kiyosaki’s other book as well next.. it’s called The CASHFLOW quadrant : rich dad’s guide to financial freedom.