My oldest son (who is just about to turn 15) and I were out running errands this weekend, and typically when I’m one on one with one of my children I use the time to check in with them to see how things are going. I also like to try to plant some financial seeds in when I can. We talked about a wide variety of things. At almost 15 he has many interest sports (football and lacrosse), video games, computer games, surfing, airsoft, friends, and electronic gadgets. He’s a good student and maintains an A average in his Honors classes. He’s gravitating towards computer science studies in school, although only a freshman in High School. His love for gaming has attracted him towards that area of study.
He has the flappy birds app downloaded on his phone and I explained to him the story about the developer pulling it. He knew all about it and explained to me about a number of copycat games they were available and showed me a few he had already downloaded to his phone. He wasn’t aware of the amount money the app was making per day on adverting. I explained the difference between linear and residual income. That an app is something you develop once and it continues to make you money over time and is a form a residual income. My regular job is a form of linear income; if I don’t go to work I don’t get paid. He understood but was quick to point out that typically you’d have to update the app along the way.
Investing in your Future
We also discussed that course selection for next school year would be beginning soon and he reinforced his desire to stay on the computer science track. He did tell me about a good friend who wants to join him in the computer classes but didn’t have room in his schedule due to orchestra classes. The orchestra classes were not his choice, but his parents. My son explained that his friend didn’t have the ability to make his own choices. I clarified for him. I except that his friend’s parents intentions are to have a well-rounded student. Although he may not see the benefit of orchestra classes today, he may look back on it later in life and be thankful. I explained that colleges after looking at SAT and grades look at extracurricular activates like sports and orchestra to help deficient candidates for admission. He understood but still wanted his friend to join him in computer classes. His friend’s argument was that he had a better chance of making a living with a computer science background then an orchestra background. Needless to say, orchestra will be on the schedule for my son’s friend next year.
I used this bit of the conversation to introduce my son to the early retirement concept. Generally, I explained that there are some people who are living the traditional, get out of high school, get out of college and work for the next 30 years until retirement. Others are saving 30 to 50% of their income early on and accumulating a big nest egg to be able to retire in 12-15 years. They are free to pursue other things they are interested in. Tying back in the first financial seed I planted they can further help this if they have built-in any residual or passive income streams along the way. He liked the idea of not having to work for 30 years, after that he went back to playing flappy birds, but I was content with our conversation. As far as I could tell all was well in my son’s world and I was able to feed him a little financial knowledge. I felt my job was done for at least this weekend.
How do you try to teach you children about finance? How about friends or family? Do you find it difficult to bring up in conversation?