A blog about dividend investing and financial independence for a person supporting a 7 person family on one income. My goal is to be retired at age 55 to pursue other passions in life and rely on a passive income stream generated from dividends.
Thursday, May 26, 2016
Will Dividends Teach My Kids to Work Hard?
After reading an article
about education and learning from Mr. Money Mustache last week I starting
thinking about my kids and their upbringing vs. how I was raised. There was lots of discipline but also a
tremendous amount of freedom. That
combined with loving parents taught me many lessons in life that I believe have
led me to a great career and the joy of raising a large family. The one thing that worries me the most is a
fear that my children do not value gifts or money they receive as much as I did
as a child.
As a child I remember
talking with my sister days before my birthday.
We share the same birthday one year apart. We would spend the time talking excitedly
about what we might get for our birthday.
Gifts were usually only on birthdays or major holidays. Easter baskets filled with candy, or presents
on Christmas or birthdays.
Growing up with one TV
that didn’t get the best reception left us with plenty of time to day dream
about Christmas morning and all the presents we asked Santa for. We were all so pumped that morning we would
race downstairs once our parents gave the ok.
Those memories alone gives me the will power to drop my satellite TV
once my contract runs out next year.
I started working as a
caddy at a country club when I was 12.
Before that I helped my brother with his paper route and we did chores around the house but were not
paid an allowance. Things were tight and
I am pretty sure all of my parents income went to surviving and not
saving. A family of 9 back in the 70's
still incurred costs like a larger home, higher utility and food bills. That first job as a caddy opened my eyes as I
was receiving cash each day for providing the service of carrying around some
rich guys golf clubs.
Each day when I got
home I would tally up the earnings and record them in a pad of paper. Most of the money I would save (unfortunately
not in a savings account) in a hidden location.
Some of the money I would use to buy things or go golfing with my
brothers and friends. If I had an easy
way to buy dividend growth stocks like we do today I would be very well off. It probably was not as easy back then. The weird thing is I was never taught about
accounting so I only tracked my income in that pad and not expenses.
I think I went off on
a tangent there. The point is I valued
the cash I had earned. Sure I was
horrible at managing money and have made many mistakes along the way, but I
have always worked hard and am at a good point in life were I can save a good
chunk of change.
Now it is my kids
turn. They all have savings accounts,
investment accounts and 529 college savings plans. The problem is the money in all of those
accounts came from my hard work or gifts from friends and relatives.
They all have chores
and the older ones do get paid an allowance.
However that allowance they never see because it all goes to paying for
their cell phones. I view them as a want
and not a need so I do not cover that expense for them. When the time comes for the younger kids to
own cell phones I think I will go with ones that only allow talk and text as
that is the main reason any kid should have one.
Some day after I have
enjoyed my retirement I will pass away.
When that happens my wife will take over. I am pretty sure she will outlive me as she
is very active all day long taking care of the kids while I sit at a desk. That will leave them the great dividend
machine I will have spent decades creating.
These dividends are
like free money. The company does all
the work (minus your original seed money) and on top of it they pay you the
shareholder. So as long as I teach my
kids how to manage these stocks the dividends will keep growing. But for them
it will be minimal work and they may not value it like I do.
My oldest son turned
16 this year. I can start with him. Trouble is he has no interest in getting a
job. I keep gently reminding him it might
be a good idea to save for college. Or
it might be a good idea to save for a car and the insurance that comes with
it. He is happy just doing nothing with
At this point I don’t
know what else to write. I could go hard
core and take away all forms of entertainment from him (TV, Phone, Computer,
etc.). I think that may cause resentment. On the other hand being bored out of his mind
may be just what he needs to get motivated to earn money. And more importantly to value what he has
What do you think I should do? Any tips for raising kids in this day and