A father’s letter to his kid: The 9 Money and Life Lessons Most People Learn Too Late In Life
A father’s letter to his kid: The 9 Money and Life Lessons Most People Learn Too Late In Life
Jun 19 2020 By Morgan Housel, Contributor@MORGANHOUSEL
On June 3, 2019, my wife and I welcomed our daughter into the world. She’s barely old enough to walk, so her job (mostly eating and sleeping) hasn’t changed much. But, one day, she’ll need some money and life advice. As a father who has spent much of his career studying and writing about money, behavioral finance and business, this is what I’ll tell her:
1. Don’t underestimate the role of chance in life.
It’s easy to assume that wealth and poverty are caused by the choices we make, but it’s even easier to underestimate the role of chance in life. The families, values, countries and generations we’re born into, as well as the people we happen to meet along the way, all play a bigger role in our outcomes than most people want to admit.
While you should believe in the values and rewards of hard work, it’s also important to understand that not all success is a result of hard work, and that not all poverty is due to laziness. Keep this in mind when forming opinions about others, including yourself.
2. The highest dividend money pays is the ability to control time.
Being able to do what you want, when you want, where you want, with who you want and for as long as you want provides a lasting level of happiness that no amount of “fancy stuff” can ever offer.
The thrill of having fancy stuff wears off quickly. But a job with flexible hours and a short commute will never get old. Having enough savings to give you time and options during an emergency will never get old. Being able to retire when you want to will never get old. Achieving independence is our ultimate goal in life. But independence isn’t an “all-or-nothing” — every dollar you save is like owning a slice of your future that might otherwise be managed by someone else, based on their priorities.
3. Don’t count on getting spoiled.
No one can grasp the value of a dollar without experiencing its scarcity, so while your mother and I will always do our best to support you, we’re not going to spoil you. Learning that you can’t have everything you want is the only way to understand needs versus desires. This in turn will teach you about budgeting, saving, and valuing what you already have.
Knowing how to be frugal — without it hurting you — is an essential life skill that will come in handy during life’s inevitable ups and downs.
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