4 Money Lessons to Teach Your Child According to Rockefeller.
No matter how much wealth you secure today, it’s not guaranteed that your generation will be as wealthy. It’s a hard truth that hard-working parents need to know.
70% of wealthy families in the US lose their wealth by the second generation, and 90% of them lose it by the third. It means that wealth rarely lasts beyond the grandchildren in the United States. In Nigeria, there’s yet to be a statistic that proves how long generational wealth lasts. But one thing we know is that almost everyone wants to ‘make it’.
Parents who didn’t grow up rich don’t want their children to have financial struggles. So they plan to work very hard to provide, give them a better life, invest, or set up trust funds for them. However, finding the balance in everything is a challenge for many.
“It doesn’t matter how many zeroes are in your bank account. It matters you think through what result you’re trying to achieve with your child and what lessons you can do to illustrate that.” Carol M. Schleif, investment officer for families in the US on CNBC.
So can you ensure that all your wealth will last through your generations– fourth, fifth, to tenth?
Let’s find out what the Rockefellers did.
Brief History of The Rockefellers
John Davison Rockefeller was one of the wealthiest men in American History. He was worth $1.4 billion when he died in 1937, about $24 billion in dollars adjusted to 2018. He was the founder of Standard Oil and a philanthropist. He was born to an average family in the US in 1839 and amassed wealth with an oil refining company.
Besides his wealth, he educated his children about life, business, and money. His son took over his fortune and businesses when he died.
His son, John D. Rockefeller Jr. was an American financier and philanthropist. He was famous for philanthropy and gave over $500 million to societal causes. As the only son of five children, he was heir to the family fortune and received more teachings from his father. He had six children, five of which were boys, and taught them in very practical ways, the value of money.
David Rockefeller was a leading banker and CEO of Chase Manhattan (now JPMorgan Chase). Nelson Rockefeller was the Republican governor of New York and the 41st Vice President of the United States. Winthrop Aldrich Rockefeller was the Republican Governor of Arkansas. Abigail Rockefeller and John D. Rockefeller III became philanthropists.
It’s easy to conclude that they did so much just because of their father’s wealth. But looking back at their childhood, there’s a lot to learn.
4 Money Lessons Rockefeller Jr. Taught His Children
Planning for your child’s future financially is essential. You should start investing for them ahead of time. But, practical lessons about money are as important for them to be able to grow and sustain wealth.
John Jr. gave his children a weekly allowance of 25 cents. They had to save some, give to charity, and account for how they spent the rest of the money. Here are 4 significant lessons to teach your children about money:
Work to Earn
Nelson said that his dad, John Jr., gave them allowances but if they needed more money, they’d have to work for it.
Imagine a child who grows vegetables and rears rabbits to earn money from his parents. That’s exactly what Nelson had to do to earn some more besides the regular allowance.
“Dad, where does money come from?”
You should expect this question as a parent and be ready to answer your child’s curiosity. Instead of saying, “When you grow up, you’ll have to work to earn money,” teach them to work now with the little things.
Either by earning good grades or being productive at something, they can learn how to make money.
Saving is a Must
From 25 cents per week or any other extra they received, they had to save ten percent.
In a typical Nigerian home, the first money a child receives is a gift from a relative. The parents are fond of taking the money and claiming to save it for the child. You may have experienced something similar growing up. When you asked for that money, your parents would say they used it to pay your fees.
One way to advocate and teach a child about saving is to show them how to save. A piggybank never goes out of style in teaching children how to save. It’s easy and fun.
Accountability Breeds Discipline
From 25 cents and some a week, the Rockefellers learned to keep account of how they spent money. They balanced their books monthly and accounted for every penny they received.
Teaching your child to save is one thing but showing them how to track everything they spend is another lesson that parents often neglect.
Is it candy? Is it a pen or a book? Show them to keep account of everything they spend, they will learn how to spend money in the future.
Giving Back is Good
Growing up in a middle-class home, you subconsciously think that money can barely sustain your needs, so giving is hard. This is a poor mindset about money and your children should not grow up thinking the same way.
“We were required to give 10 percent to charity, save 10 percent, and then account for how we spent or saved the other 80 percent.” Nelson Rockefeller said.
The Rockefellers are known for their philanthropic work much more than their businesses and wealth. They learned how to give back to society as children so it’s easy to see why they gave so much.
Conclusion
If your parents knew better, they would have taught you all you needed to know about money from childhood. But that time has passed and you’re here now. You can change your child’s life now.
Make a difference in their lives by:
- Investing for them early: Don’t let them get stranded when they grow up. Open an account for them on Houseriver and start investing in a suitable plan for your child.
- Educate them: Again, it shouldn’t stop at investing. Education is key if they’re going to handle money well and generate more wealth in their time.
