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Money Minded
#110 How to set your kids up for life
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Join Terry and our new co-host Brooke Dawson, who brings thrilling personal news, as they dive into the vital topic of financial literacy for kids. This episode is crucial for parents eager to set their children on the path to financial independence.
Also in this ep:
- The simple thought experiment that will change the way you help your kids.
- Why teaching kids about money is waste of time.
- How kids can develop a healthy relationship with money while building self esteem.
- How to turn money into a game kids love to play.
Loaded with actionable advice, this episode will transform your approach to financial education, preparing your kids for a prosperous and confident future.
Resources:
- Stockspot - Investing for kids
- Strong Money Australia - Podcast: Investment Bonds Examined
- Book: How Ella Grew and Electric Guitar
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Hello, dear listener. Welcome back to the Wealth Time Freedom podcast. This is your host, Terry Condon, and I'm here with one of our fan favorites, Brooke Dawson. Welcome back.
Brooke:Hello. Good to be here.
Terry:I've been wanting to have you back on the show for a little while. I've mentioned this recently. I mentioned on the last episode, but we've been doing a lot more learning about the audience, what the audience wants, and one of those things is I want to keep in touch with you guys. And so if you don't know about Brooke's story, go back and listen to episode Brooke and John's story. Epic example of what it looks like to really get on the same page, get on the same team when it comes to money and make some big things happen very quickly. Go back and have a listen to that if you want some backstory into this. The other reason I wanted to get you on the show, Brooke, is because Part of that learning process that we've been doing, Mitch has been doing a lot of work with this, is just understanding what our audience wants to see more of as well. And we want a greater representation, a broader reflection of society on the show, and to make sure it's relevant for all types of people at different stages in the process. So I think it's going to be good to have you on the show in this conversation, but we're also going to have you on more often, um, just to talk about some of these topics, to make sure that we're getting both sides of the story, basically. So I appreciate you for that.
Brooke:Yeah. Amazing. I'm so happy to be able to give my perspective, but also just be included and involved in this process. Um, like I said, in the past episode that I was on this journey has really changed my life and John and I's life together. And it's just, yeah, really cool to be able to share that with everyone.
Terry:Awesome. Well, look, let's talk about what we're going to talk about. So we had a conversation maybe a few weeks ago and you've got some news. So the first thing I want to do is do a bit of a quick catch up and that'll kind of lead us into what we are going to be discussing today. So what is your big news?
Brooke:Yeah, well, I guess the biggest news that we have is that I am pregnant.
Terry:Congratulations.
Brooke:Thank you. Thank you. Yeah, we're really excited.
Terry:You know, the irony of this is, you know, the first conversation we had in episode 104, there was this kind of little smirk on your face when I was asking what you guys have been up to and the big things that you'd been doing. I did notice there was this kind of look, and you told me later on, you told me weeks after that you, that was actually the day when we recorded that podcast was the actual day that you'd found out Little One was coming, right?
Brooke:It was a little bit after we had found out that was the day that we put the offer on the house, but it was very close to the time when we were going to start telling people. And I think you said, what are you most excited about in 2024? And John paused and was like, Oh, baby, baby, baby. But we weren't quite ready to announce it. So then we, you know, talked about the house, which is still exciting, but it pales in comparison.
Terry:It was literally bubbling out of his lips. Baby. That's amazing news. It's an awesome time of life as well to be kind of moving into this stage. And just like all these things converging for you, right? Because you had just got signed the contracts to the house, correct?
Brooke:Yep. Yeah. We were in that process.
Terry:Now you've since moved into the house. Is that right?
Brooke:Yes.
Terry:Awesome. How is it?
Brooke:It's amazing. It's crazy how much it aligns with what we had actually put as markers in our life by design a year and a half ago now, just, you know, being further out into the country, having more space for ourselves, but also for our dog, looking out our bedroom window and seeing trees instead of a different house. It's just been so cool. We love it. I feel like we hardly ever leave the house. Cause we're just so happy here. It's amazing. It's on a Hill. We can see the rolling Hills. We can see some cows in the background. We love it.
Terry:That's cool. And I've seen in a bunch of our calls, just what that background looks like and huge backyard. And you're right off the back of a national park, is it?
Brooke:Yeah. Yeah, we are.
Terry:John must be loving that.
Brooke:Oh, it's amazing. Does he get his
Terry:bike out a lot?
Brooke:Well, he just got his bike license. So that's been another thing that's been really exciting. So he's. Gunning for when he can get his open license and can actually go out on his own. But yes.
Terry:There's another thing from that Life by Design that racially materialized as well.
Brooke:Yes. What was
Terry:that?
Brooke:We, bought a Land Cruiser.
Terry:So I remember sitting in this session with dubs like Land Cruiser, Land Cruiser.
Brooke:He had a like fully, I think full explanation. There was a whole part of the Life by Design that was specifically about this Land Cruiser, so. Now we've got it and, traded in the youth for the Prado and, getting ready to have another little person in the back seat and managing that with, the dog and everything else. But yeah, so cool. So we were driving around in it yesterday and both of us were saying, do we steal this? Like, how is this our car? How is this what we're driving around now? Like we just talked about it for so long and now to be in it and to be, yeah, just doing it.
Terry:It's actually a lot about, it's a bit of a vehicle for you guys for memories too, isn't it? Because remembering that conversation, it's more about what you can get up to on the weekends, where you can go, the kind of adventures you could have. So it's really the first step in that direction, isn't it?
Brooke:Absolutely. And also thinking ahead, like with the baby coming and my parents coming to visit, we wanted to have something where we can go on those adventures, but all be able to do it together in the car. And it just wasn't really going to be feasible in the ute anymore. Yeah. So we really pushed for it and made that happen, which is just, yeah, like I said, I'm still in that surreal phase of, I just can't believe it's happening.
Terry:It speaks to the importance of taking it from the world of ideas and putting it into the world of atoms just by writing it down and starting that process to be able to reverse engineer it.
Brooke:Absolutely.
Terry:There's not a straight line to this. Hey, like, it's not like, you know, we expect to do the plan was this, it's actually just like you put it all in. And then you start to kind of move in that direction. Push, push, push. The priorities become clearer. Things start to shift and change. You move with it and these things come along, but you know roughly what these, if it's really important, you're going to be moving toward it and it's going to happen at some stage. It's just really important to be able to have those tools and systems to help you navigate, isn't it?
Brooke:Yeah, that's exactly right. And I think when we first put this onto a piece of paper, the thought was we would have the ute and then we would have a line cruiser. And, you know, in the past year and a half, Through lots of conversations, it just became really clear to both of us, but especially for John. And I didn't want it to feel like it had to be something that he felt like he had to do, but it was his idea to actually trade in the ute and get a cruiser instead. And, um, I think that that really, yeah, highlights how all of our ideas and all the things that we were thinking by getting it onto paper and getting really clear on what that vision actually was. It made it easier to then eventually move to him going. I actually think it's time to get rid of the ute and it's time to move on to the next thing and now it just feels like it was, yeah, absolutely meant to be, but we know that, like you said, we reverse engineered all of it.
Terry:Well, that's, I mean, think about that, like, it's you working creatively to make that thing happen, you know, so there's a number of ways you might want it to happen. But how it happens sometimes is the way it needs to happen. And so if it's really important to you, you'll actually kind of figure out, well, this is how we can make it happen. We had that conversation with Mitch last time. So many folks are living in that space of like, when does it make sense to have the crews up? Well, not until we've got this, this, this, this, this, and this all sort of set up. Instead of going, how can we make this thing happen, and what are the conditions under which we can actually make those things true? And that's a very different conversation. So it's exactly the same thing that happened for us too, upgrading, you know, our camper trailer into a caravan, looking at our plan 12 months ahead, going, well, we've got this money in portion for this, we've got this money allocated for this holiday. What if we actually change our priorities a little bit? And then change our savings focus for this period of three months. That thing actually becomes possible. We actually pull that forward like 18 months. Would that be worth it for us? Fuck yeah, let's do that. So it's so much easier to play with money, experiment, move it around, start to think about it differently when you are a little bit more detached from it. And I think that's probably the job that you guys have done over that last 18 months is learning how to work with money to get what you want in that way. So awesome work doing that. Coming to the conversation we're about to have. We have a new want and a new one that's going to drive a new set of experiences and a new set of actions and initiatives that's coming into this. So tell me about this question that you have and what we want to talk about.
Brooke:Yeah. So I guess the big thing here, thinking forward to baby's arrival in the next few months is what are we going to do and how are we going to make sure that we're setting her up and any future kids up to succeed with money? How, what's the best way to do that? What's maybe ways to. Avoid. I don't know. I'd have so many thoughts around what that could look like, what I've experienced versus what maybe other people have experienced. But now looking forward to go, well, I want to make sure I'm doing the best thing for them.
Terry:And what does that
Brooke:actually look like?
Terry:What does it look like? Yeah. So many have this like, I want to make sure my kids are better off than I am. It's shocking to me how much drive and energy we have as parents for something outside of ourselves in this sense. We've got so much energy for it. And we started to have this conversation. I thought, I think this is a really good one to have on the podcast because I feel like there's a bit of coaching, a bit of kind of thinking through this. I've done a little bit of thinking through this myself. I could do a little bit older than yours now, and I'm surprise, surprise approaching it a little bit differently to most. So if you're comfortable, what I'd love to do is just kind of work you through some coaching questions to help you think through how to answer this question. or how to think about the answer to this question. And then we can discuss like different ways of approaching it after that. Is that something you're okay with?
Brooke:Yeah, absolutely. Let's do it.
Terry:Okay, cool. So the first thing I really want to jump into with you is like, what's underneath this? What is the desire that's underneath this desire? Why is this so important to you?
Brooke:When I think about, you know, how much growth I've made in the last 18 months or the last few years, I want that for them. I want to make sure that they're not stressed about money. I want to make sure that they have the choices that they want and they don't feel restricted by finances and that they see money as a tool. That's, I think, one of the big things. And Also just wanting to make sure that they're going to be okay with or without me in the future, of course. And then I guess thinking about them way down the track when they're adults, I want to avoid being in a situation where they feel like they are still dependent on me. I want to be able to pass on these skills that I've acquired so that I can watch them do it even better than what I'm doing it.
Terry:And there's some dead set horror stories. I like kids that are. Pushing 30, still economically relying on their parents, living at home, crazy sort of stuff. And I know that it is harder than it used to be in some ways, but it absolutely does not have to be the case where you're 30 years old and still living at home and can't look after yourself in that way. So I think this is deeply felt on a number of levels and I've felt the same thing. Where did you go first? Like, what have you looked into so far to sort of, to solve for this question of how do I make sure my kids are set up to succeed with money?
Brooke:Well, I think the main place that I've kind of gone and maybe this is where a lot of people are finding they are told to go or should go is looking at, okay, well, what bank accounts should I be opening or what savings should I be starting? How much should I be putting away? Is there a specific bank account? And I think for me, like I grew up in Canada and so the bank accounts are a little bit different. So I've been feeling. I don't know if I'm stressed or worried. Like, what if I don't know the right account to, that's going to have the best interest rate or whatever to be able to save up as much as I can. But then more recently I've been kind of stepping back and going, is that even what I want to do? Is that the best way? So now I'm just confused.
Terry:What do you think pushed you in that direction to looking to bank accounts and savings rates and how much you need to be putting away?
Brooke:I just feel like it's everywhere. I feel like everywhere you turn, there's people either bragging about how much they're putting away for their kids or stressing about how much they're not putting away for their kids. And you know, this whole idea of, you know, you go to school and go to university and the parent is to support the child and being able to go to university. But then also my personal experience, that's what I experienced as a kid. My parents were very diligent with money and started saving. Probably from the day that I was born, putting money aside for me so that I had a very large sum of cash by the time I was entering into the realm of university and what that kind of looked like. So I guess it's natural for me to then think, well, I guess that's what I should be doing too for my kids.
Terry:Let me ask, how'd that play out for you? And like, what happened? What age did you get the money? What was the whole process?
Brooke:Yeah, so I knew about it as I was growing up and also when I started working, whenever my like personal bank account got to a certain amount, they would take a portion of it and invest it, put it into whatever account they had set up for me. And then once I was starting university, I then had access to it. I didn't really need it for my undergrad because I had a few scholarships and other things that just made it easier. Plus, I was still living at home. I didn't really need access to that. But once I moved over here and started my master's degree, I Which is very expensive as an overseas student. That is when they essentially said, here you go, here's the amount that you can kind of use however you want. I mean, obviously they wanted me to use it for my education and that's what I did do, but it was probably when I was around 22, that I got access to. Wasn't
Terry:a small sum, right?
Brooke:No, it was over 50 grand.
Terry:Okay. So you're 22, 23 years old. Never really sort of thought too much about money till that point because it was sort of covered and then you move overseas to Australia and you get this 50 grand lump sum. What's your immediate experience getting that money?
Brooke:Um, stress.
Terry:I
Brooke:was pretty set on using it for education. So it wasn't that I was thinking about how I was going to use it or that kind of thing, but I think the stress more so came for me in terms of having made the right decision using my parents money on this. Like. I mean, because my money, but see, see how I even said like my parents money, billing this pressure to like use it in the best way possible and, you know, taking on this master's degree, was that the right thing? Or should I have done it somewhere else that was cheaper? All of these thoughts around having access to this, where potentially those thoughts wouldn't have happened if that money had not been available to me.
Terry:It would have been just a different stress and pressure, wouldn't it? Yeah, exactly. Do you think the stress and pressure was all about the situation at hand? Or was there anything else for you associated with money, feeling a sense of stress, feeling a sense of pressure?
Brooke:I think probably it's something that has been a pretty common theme like throughout my life. I think I've probably mentioned in the previous episode that my parents were incredible with their money. They were very, very good at saving and very good at using their money specifically for what they valued, which was travel. So growing up, We went on a lot of holidays. We went on some really amazing trips and I grew up seeing, okay, that's what we spend our money on. But I also grew up thinking that we don't spend money on other things. And that wasn't at any fault to my parents. They did an incredible job teaching me how to use my money wisely. But then I think where I got lost is that I didn't realize that potentially I had different values to my parents and that's okay. It's okay that I wanted to go see a live band or that I wanted to go eat out with my friends. And so for me, there was a lot of stress around that. All the time, all the time. I would be stressing about going out or stressing about having dinner with someone because I was like, Oh, that 20, that should be going towards, you know, my next trip. I don't
Terry:know. Savings or travel.
Brooke:Yeah, exactly. Yeah. That's it. Those were the only two options. Everything else was a waste, a waste of money. So then coming into. This experience of having all of this money that I, you know, still, I guess putting it towards my education is a good thing, but the amount of stress that I felt about 20 was then hugely exasperated by the fact that it was over 50, 000 that I was now trying to manage.
Terry:I really want to acknowledge your parents here because the foresight to do this, the discipline to put that in place, to make sure that that amount of money is, you know, something that was significant enough to give you choices that money, not many folks had at that age is absolutely amazing. But there's always a double edged sword, isn't there? It's always a double edged sword because, and part of it is you growing up and you kind of differentiating and becoming your own version of yourself, realizing that I do have kind of different values and money can be used in different ways. But something else you mentioned to me as well. So, just in passing, really, I don't even think that you think it's a thing, was some of the memories, some of those peak experiences you had around money that you noticed with your parents and, and their way of doing things was around taxes. Can you say a little bit more about what you remember from that period?
Brooke:Yeah. So going up, my parents always did their own taxes. Obviously to save money from not having an accountant or anything like that. But I do have a very distinct memory of tax time equals stressful time. There was always like a little bit more tension in the house. There was always that back and forth, those, you know, sitting at the table, trying to figure out the numbers, looking over all the paperwork. And I just remember always feeling stressed and that never went away. And then as I got older and then I started getting involved in the process. is the same thing. So then I think just the word tax elicits like a visceral response in my body of like, Whoa, I don't really want to talk about this or deal with this.
Terry:I don't think you're alone there.
Brooke:Oh no, definitely not. I don't think there's many people that are like Taxes!
Terry:It's actually the tax system and then the things that you saw as well is a part of it. I really did want to sort of touch on that because I do think it is important when it comes to your own decisions around this stuff and the way you feel about it as well. I had similar experiences, wasn't so much with taxes, more so with bills. Because if you work for a farmer, they never pay any taxes because they don't make any money. Um, so for my parents, it was always paying the bills, right? So the bills came in and look, Here's how it played out for me. I got to adult stage around that 22, 23 and a bill would come in, guess what I would do? This is my logic. If I just don't open it, I don't have to worry about it. Leave them unopened. Just let them pile up and just let that stress compound and compound and compound. That's kind of where I went with it. But I think these things are really important. And the reason why is because we do, you know, we'll talk about this more as we go. And we talk coming back to the question, how do I set my kids up? Here's one of the most important points I'm thinking about. Um, my kids aren't listening to what I'm saying a lot less than what they're watching what I'm doing. I could say, Smith, could you help me out with this till I'm fucking blue in the face. But he will copy me so quickly, so quickly. They're just mimicking machines and that is how they learn. They're not listening, they're watching. And so whatever they're watching is what they're picking up and we pick it up, right? My parents are stressed about bills. Your parents are stressed about tax, that sort of thing. These are almost normal things, but as kids, as you know, we are just so emotionally attuned to our parents. And we are such social learning machines and we learn through those emotions. And we tag those emotions to these experiences and we make simplified stories about money. So here's my observation. And we're going to come back to the question what we're really trying to accomplish here. If you associate money with stress and doing it yourself, doing it with stress, right? If I give you a hundred bucks, does it stress you out that much?
Brooke:Not too bad.
Terry:But it's 50 grand. You're 22. First time you ever dealt with money, I just gave you a big ball of fucking stress, didn't I? Like that. Right? Now, that's not your parents fault at all. That's how we associate with it and what we're doing in this case. So the real key point is like, what are we actually trying to accomplish here? Like if we are trying to put away and save money, what are we actually trying to do? What do you think? What's the most important thing?
Brooke:We want to set them up so that they can do better and do what they want to do with their lives and manage it effectively.
Terry:So here's a hypothetical question for you. If it's about us equipping them and being confident in their future beyond us, which 22 year old would you be more confident in? The 22 year old. He's tried to sort of avoid the money thing up until now and then gets the 50k or the 22 year old who's earned 50k and saved 20 of it by the time they're 22. Which are those?
Brooke:The second one?
Terry:The second. So I guess the point I'm trying to make is, if we really want to invest in our kids and make sure we're in their future, it's not all about the money we're giving them. It's about the skills we're equipping them with, the confidence, and the things we're doing with them in front of them, I think that matter the most. And so that's how I'm thinking about it. Because I actually did the same thing. I'm like, go out and get this investment bond. And then you find out that investment bonds are a bit of a scam. And you read all the reading. If you're in that sort of phase and you want that information, I will give you the links. It's in the description. I'll find you some of the best articles I read around this sort of stuff. You can have at it, but I would encourage you to keep listening to this because it's not enough. It's not enough. And the reason this is so important is because of what I said earlier around how our kids learn and they are social beings. They're observing us. They're mimicking us. And so what we're doing and how we are being with them is the most important thing. The most important thing. So I am actually not at all worried anymore about how much money I have saved for them at all. Not at all. I don't even think I've got an account for them anymore, but I am making aggressive investments in their financial future at the moment.
Brooke:Wait, you don't have an account for them?
Terry:No, I don't have an account for them.
Brooke:How?
Terry:Well, I don't have an account for them, but they have an account.
Brooke:They have an account.
Terry:Yeah.
Brooke:Aren't they like six?
Terry:No, they're five. Sorry, they're five. But they have an account. They have their own account.
Brooke:Okay, we need to talk about this. So
Terry:there's a little bit to this and we can go through it. But what I'm keen to touch on first is, I guess, For me, what I think is probably the step one is like the modeling part of it. So yes, they have their own account. I'm going to talk about how they, how we're kind of working with that in here in a second, but I don't think any of this part that we're going to discuss later here works if we don't do this first part. so for me, I think the most important part of this is like how we're working with money around them. And so, the conversations you observe, the conversations I observe. We're just trying to make sure that we're having these conversations out of the open with these guys. I think it's actually a good thing to do. And it doesn't, by the way, mean that we never fight about money. Doesn't mean that we never disagree about money. But always, always, always, we are making sure that we are making up. We're all making sure that the kids see that everything is actually fine. This is part of the process. It's a cycle of harmony, disharmony, and repair. And that's actually just how normal relationships work. And when it comes to money, it's the competing views that actually makes better decisions. It's those diverse perspectives that matter. So we don't always agree on everything all the time, but it's actually how we get a better sense of what's real, what's true, and what's important to us. And we're always trying to course correct towards our future. If you're never disagreeing about that, you're missing something because your partner's going to have a different view to you and it's important that you hear it. You need to get better at hearing it in a constructive way, but we're having those conversations out in the open. So I love when the kids come in and they're watching us do our money map and they're like, what are you doing? And we're saying, well, this is how we do it. work with money to help you do the things you want to do, like go to swimming lessons, go to gymnastics, go to the dance classes. We are actually allocating, giving our money a job so that you can have these experiences, so that you can learn these skills, so you can build this confidence. And we also have to make sure that we look after, you know, the electricity. And you know what electricity is? It costs about this much. This is when you see the light go on, that costs money. Just teaching them these little things, about how the real world works, right? And just helping them have a relationship with money where they realize money is just like time. It's a resource that we have to manage and allocate effectively to get what we want. And the more they see those constructive conversations happening around money, the better that feeling, the more constructive that feeling is. It's not one of like, Ooh, move me away from money. Money is this bad, stressful thing that I just don't want to think about. It's money is this important thing in life and having important conversations about money is actually part of what you do. That's what growing up looks like. And what do kids want to do more than anything else? Grow up. So that's the most important thing for me, what we're doing, how we're being with them and just showing them what the money can do, you know, we had a little parent win a couple of weeks ago and it was. You know, your parents will love this homebrew, but I grew up in a house where we didn't travel. We didn't go away. I can remember probably two or three holidays, honestly. My dad was a farmer. So what I learned was, you don't, you just work, you just work like a dog, mate. That's what you do. You just work. And, I'm not saying we never went on holidays. I'm just saying that it was predominantly not that. And our kids, we've made a conscious decision to make sure, and the reason we upgraded the caravan, those kind of things, is because we actually want a forcing function for memories. We realize that this period of life, these memories are cheap now and they get more expensive as they get older. And so we bought that so that it's a physical trigger in our environment. It's sitting in the garage, and every time I walk past it I'm like, We should be using that to make more memories. We should be using that to make more memories. And it's sitting there and it's sitting there doing nothing. And I'm like, we've got to go do something. So this weekend it's mother's day. We're just going for one night down to the beach for one night to spend mother's day, take Elise out and spend the night on the beach down there. Really nice place in Anglesey with a campground down there that has really good stuff for kids. The point I'm trying to make though is that the kids are getting this association that we are making these decisions and then we get to have these experiences. And so the little win that I'm talking about, it happened before our last trip and the kids were like, we always go on holidays. I was like, Yes, you do. Yes, you do. You go away on holidays. That's what you do. And so having that conversation with them, well, how and why do we go on holidays? It's because we're doing these things. It's because of the way we work with money. It's because of all these kinds of things. So that to me is the most important thing. All right. And so if we don't have that as a prerequisite, then this next part where the kids have their own accounts, that's all a complete waste of time, I think.
Brooke:Yeah, that makes a ton of sense. And obviously the kids are still young, but do you find that they're pretty responsive to, you know, getting involved in the money map or when you guys are talking about things, do they ask questions? Are they interested to kind of know more about it? Or is it more just at this stage, just. Making sure that when you're having those conversations, they're around and through osmosis, they're, they're learning and picking stuff up. They're
Terry:only five. So they'll be turning six in July. So they're still quite young. The main thing we're building is a healthy association. It's the feeling. That they're getting associated in this concept of money. That's what we're working on right now. I just want them to go money, money equals conversations, money equals things we get to do, money equals fun, money equals experiences, money equals memories. That's really all we're trying to build right now. As they get older, we're going to be involving them in more of these decisions. They're going to have more of a say in, you know, where we want to go and how much that's going to cost and what are we going to do for that and this sort of thing. But that's all we're doing right now. Just making sure we're having those conversations out in the open, in a constructive way, wherever possible. The second part, this is where the, you know, their accounts come into play. This is where we start to sort of, you know, I talked about making aggressive investments in their sort of financial situation. This is where I'm being really deliberate about how we teach them and show them the skills they need to alleviate the stress that can come from money.
Brooke:Before we move on, I just want to come back to something that you said that really caught my attention. you mentioned something around, we're still going to have fights or arguments about money. But that you guys are making a really intentional effort to make up in front of the kids. Why is that? Is there a particular reason why that specifically is something that you guys are doing?
Terry:Yeah, it is. there is a really specific reason, actually. We didn't, I don't think anything really prepares you for being a parent, but there was one little bit of insight. I think he's a neurobiologist. His name is John Medina, and he wrote a book called Brain Rules, and he also wrote another book called Brain Rules for Baby, and in this book he talked about I guess how the brain builds itself, it's building itself right now, and each of our kids is building their own world view as the brain builds itself, an idea of how the world works and what it's like, and so it is really important this period of time to make sure that you are very deliberate about what you expose them to. You can ruin a kid's life at this age. And you can absolutely ruin their outlook on life. By the same token, you can absolutely set them up to succeed. And everybody thinks that it's all about making sure they can read quicker and faster and earlier and sooner, but actually what the research shows, it's about the character skills that they develop. During this period of time and their ability to be resilient and their outlook, their optimism, their curiosity, their ability to collaborate, work with teams and those kind of things. And you need really healthy modeling when it comes to that. And so the big insight John Medina kind of put across. in that book is, you know, all these parents are like, how do I get my kids to go to Harvard? And he says, the most important thing you can do is like, forget all your extracurricular stuff. He's like, you just love your partner. And they're like, well, wait, what? And he's like, the reason why that's so important is because your kid's sense of psychological safety is highly dependent on your relationship as a couple. And if your kids perceive in any way that there is discord, stress, tension, anxiety, that is unresolved, then their sympathetic nervous system just keeps running on autopilot. And the thing about a brain is, a stressed brain doesn't learn. And so their brain stays stressed. And so no matter what you teach them, they're not taking it in anywhere near what they could. And so you have to make sure that they are existing in a healthy environment for learning. And the way that you do that is you want to make sure that when, not if you fight, because when you have kids, you have more fights. It's just the case. You've got more relationships to manage, there's more moving parts. These fights aren't a problem. That's actually just a part of how the relationship works. But if you are having a disagreement and it becomes not as constructive as you'd like, you need to make sure that you make up in front of the kids. Because that is what switches off that sympathetic nervous system, allows them to drop back into parasympathetic nervous system so they can actually keep developing their brain at the same rate. Basically. Otherwise, just get stuck there, and you'll see kids like this, you see kids, most of these kids are juvenile delinquents, unfortunately, you can trace it all back to this age, seen, heard, felt. Or seen, heard, and felt there. That develops that whole world view. So that's the only thing we make sure we absolutely do, if we are, and this is money or no money, whatever it is. Just. try to make up in front of the kids. Does that make sense?
Brooke:Yeah, that makes sense. And I think it's a, a really powerful insight to think about, obviously in general as a parent, but when we're thinking about the financial stuff, you know, my whole thought process so far has been set up the account, make sure it's the right account, make sure I'm getting the most, like, bang for my buck in terms of interest. But in reality, there is such a exciting, I guess, thing around thinking that the way that John and I interact and the way that we. work through this stage and work through these big financial or small financial decisions or anything that's happening to be able to model that we are coming together, you know, resolving that conflict, whatever that looks like is so powerful and you don't need to have. any sort of money to be able to do this, like anybody could do that if they just understand what that actually means and the impact that it can have on the kid. It's so cool. That is, wow, that is really cool that that's where it starts. I love that.
Terry:What's different about you guys is that you've invested in yourself first.
Brooke:That's true.
Terry:And so you now have The skills and the confidence you can show. And I do talk to a lot of parents who will say these two things in the same sentence. I'm a basket case with money, but you've got to make sure you look after my kids. Let's just make sure you're in schools and make sure you do it. I'm like, what, what are you talking about? Sort your own thing out first, you know, cause you could tell them till you're blue in the face, that money's important. Don't do what I did. Guess what they're going to do exactly what you did. Cuz that's what they do what they saw. Yeah. So I think you guys have put yourself in a really good position to be able to do this, which is a good thing to realize. When you do do, and because you have done that, you actually have given your kid a gift that isn't even born yet. It's true. It'll be the case.
Brooke:Well, thank you for saying that. That's really sweet. But I think it's also like for anybody that's listening to this, that there is So much that you can do, you know, by putting in that time, by putting in, you know, investing yourself, whether that's through a program or whether that's just consciously making an effort and a decision to make this part of how you're going to raise your child in this whole financial kind of space. And also in general, but really thinking about, I guess, for the topic of this podcast being around our money and showing and modeling that money is a tool and money is not something to be scared of and it's something to be. used effectively. That makes me really excited to think about how I can, yeah, use that more intentionally as we walk into this next phase of our lives. That's awesome. Okay. So first thing, got to get that modeling happening, but Terry, you mentioned that your five year olds have accounts. So what the heck is happening there and what's the next phase of this? How are you, how are you helping them get set up with this?
Terry:So the investment that I'm aggressively making in them is a time investment right now. And so it's just, just my view, you might be a parenting expert, you might have strong opinions on this. That's okay. Do it your way. This is what I believe. If, if you are old enough to want something. You are old enough to understand and start to learn about money. So the moment my kids started walking through toy stores or saying, can we go to the toy shop or saying, can we get this or saying, can we get that? I'm like, absolutely you can. Let's talk about how you can get that. Let's talk about how you can get it. And they're like, what do you mean? And I'm like, so there's a thing called money. You've seen us using it. You know, sometimes you come in and we talk about this money mapping process. That's how we get this stuff. Do you want to know how to get it so that you can have these things? Yeah, I want to learn how to do it. I want to understand it, right. Cause I want to be more like an adult. And so. Um, what all the research shows is that money is a really good, really good motivator when it comes to discreet, simple tasks. Very discreet, simple tasks. Now they're five and a half, six years old. What is the five and a half, six year old parent's biggest fucking nightmare? Getting ready for school. A hundred percent it is Brooke, a hundred percent it is. Getting ready for school. Cause you want to get your kids to a point where they become self reliant and you're not having to put their socks on, you're not having to chase them up for all this sort of stuff. Yeah. Yeah. Yeah. And so when they ask me for something, I'll say, let's talk about how you can get it. And then I'll say, you know, if you do these things in the morning to look after yourself, to get yourself ready for school, to put your clothes on, to make yourself breakfast, to make yourself lunch. No, I'm not making themselves, not making them make themselves lunch just yet. Coming, Brooke, it's coming, but really basic stuff, right? Like very basic stuff. Now I can chase you around the house doing that. If we really want to play that game, we can do it, but also you could do it. And if you do, I'll pay you 50 cents every time you do it. So you've got a chance every morning to earn another 50 cents. And at night there's another five simple tasks, like put your bag where it needs to be, put your lunchbox up where it needs to be, brush your teeth again, make sure you get yourself ready for bed and make sure you close it out the next morning to make it easy for yourself to get up and go. All right. So it's very simple stuff, but every time they do it themselves, without me having to chase them up, I just pay money and I've got fake money, right? I've actually got the actual plastic money that, replicates what the actual money is, and I put that money in their account. And then I keep it as a ledger on my phone, so I count it up. At the end of every week, I count it up, and I say, Miss Smith, you've got 10, Indy, you've got 5. So next time you ask me for something you want, I'll say, let's have a look. Can we get it? It's 20. You've got 10. Okay. So if you want this toy, you probably need 10. Yeah. So, I'm not saying no, I'm saying here's how you can get it. Yeah. And now, and I don't know, but I think not saying no, you can't have it, you don't need it. That is the kind of conditioning I think that really does hold us back. And I've had to work myself through this a lot. Because if you don't have a better answer, you just say no, you don't need it. Duh. Right? And so you get to the idea that like, this money is all about what you need. It's actually not. It's what you want. Why are we even having this conversation? Because you want to set your kids up, right? Exactly. Wealth is what you want. And so when we're having those conversations saying, no, no, no, we don't need this. We're training our kids to live really small.
Brooke:I experienced that for sure. Not intentionally by my parents at all, but, definitely, that's how I would see my, and then I think Terry, we're very similar in that it's like spending money is bad.
Terry:I don't care. Like that's my conditioning. My conditioning is to say, what the fuck? We don't need that. It's the 20th toy you talk. We've got so many toys. Do you need the toy? It's not about that. I'm trying to set up a different relationship. So I'm coaching myself in the moment. To say, don't say no, just help them figure out how, because the value to me to have them self reliant is actually quite high. It gives me back about half an hour each morning. It's very high. So that's the first layer. I just want them to become self reliant and I'm going to incentivize them to do that because they're small, simple, discrete tasks. Great. I've actually just got a checklist and they just come to me and say, check, check, check. I'll go, here's your money. Check it, check it, check it. The end of every week, just tabulate the money and say, cool. Now I've got a ledger in my phone that tells you how much money you have. So if you ask me for something and you have the money, I'll find a way to get it for you.
Brooke:Yep. How are they going with that? Like, are they responding pretty well to that or?
Terry:Yeah, so early days, all over it. Early days, like, love it. Right? Amazing, like, give me this, and then, like, the money's going in the jar and that stuff like that. And then this is where, you know, extrinsic rewards, it gets to be interesting, because then you start to crowd out the internal, you know, The intrinsic sort of motivation. And we've gone through this dip where they've kind of, I don't want to do this stuff anymore. I don't want the money or whatever. I'm like, no worries. You don't have to do any of this stuff. This is not, I'm not making you do anything, but if you do want that thing, then you are going to need money to do it. And the way to get the money is to do those things. So. It's really just a choice. So there are a bunch of mornings still where I have to chase these guys around, but I'm like, you're going to slowly get the message over time that this is how you have what you want. Cause you're going to come to me and say, I want some money for the canteen. I go, no worries. How much have you got? Oh, you got nothing. You're going to need to start looking after yourself the way that I've taught you. Yes. Because like, I don't, I want them to understand. Money has a value, right? There is a proof of work that has to go into money. It has to, you have to have done something to get it, not just like, oh, here you go. And I want to be really clear about this as well for the parent focused people here. So these are the things that I say explicitly. These are the things you're entitled to as my kid, that you will always have. You will always have my unconditional love. You'll always have access to the best education that I can get you. And if it's not good enough, I'll make sure I bend over backwards to make sure that it is. I'll also make sure you have great food. You'll have. shelter, and you'll always have a place to be. Everything beyond that you are not entitled to. Everything beyond that is a privilege. And if you want those privileges, then you need to earn them. And the way that you earn them is by doing the things that get you the thing called money. And that's the same way that life works. So I want my kids to understand that is the game of life before they leave the home. I want them to get it before I get it.
Brooke:I love that. And I love the change in language pattern, especially, obviously from going, like saying no to be, to be saying, how are we going to do that? How are we going to afford that? But I also love that you're essentially teaching them that their values are their own values and that's okay. And because like I mentioned earlier in this episode, I feel like that's where I kind of got lost as I grew up was conflating my values with my parents values. And, I feel like this way gives them an opportunity to go, well, you might think this toy is stupid, but I think it's the best thing I've ever seen in my whole life. And then they can have that, and then, you know, that's, they own that, they own that decision, they own that they've put in the time and the work to make that happen by, you know, showing those skills, being self reliant. And then they've been able to make a decision about how they want to spend their money and use it as a tool. But then they're also getting a chance to practice that spending trade off that we talk about so much in the program of they get to decide what, what is it that I'm going to use my money towards and I'm going to use it for this toy or I'm going to use it for I don't know, whatever else. I think it's probably a lot of toys right now as a five year old. But like, that's the foundation, right? And then they can build on that as they get a little bit older. A
Terry:hundred percent. As the
Brooke:decisions might get a little bit bigger, but they've already flexed that muscle. They've already built that muscle so that when it comes time to make those bigger decisions, they're not starting from zero. I think that is so powerful.
Terry:Yeah. I always think about. Michael Jordan, coaches always ask him, how do I make my kid like Jordan? And he's like, teach him to love the game. Teach him to love the game. The more I'm trying to impose my values, my adult values on a kid who just wants a toy, do you reckon they're going to love the game? If I'm just always like, you don't need that thing. You're like, no, you're setting up a relationship where money is this restrictive fucking overlord that allows you to have or not have the things that you want, money's in charge, right? And so I'm kind of like. My conditioning is, do we really need that extra toy? But I'm also parenting myself saying, no, no, this is not about you. You're trying to set up a different relationship and you're trying to teach them to fall in love with the game because money is a game. And so I want them to have all the fricking toys they want if they earn them. I would love to have that, like a Lego technical thing, but also talk about the journey. You know, the three months that you were diligent to get there so that you really value what you're doing. That effort, that reward. And was it worth it? Did you like it? Or I, I fell out of love with it. Maybe we could sell it. You could have been raised some money and then you could do something else. You know? So now I'm teaching them how to think about money differently. It's not this kind of like, yes, yes, no restrictive kind of toxic relationship. So I think this is the key part of it. So you asked, the question was like, how have they gone with it? I reckon they're in that, they're sort of coming out of that dip where they're sort of like, Oh, who cares? But the wants don't go away. Okay. When the ones come back, it's easy. I just go, no worries. You know, you got 5, you need another 10. So here's how you can get it. So now I'm starting to notice them starting to put two and two together and go, ah, okay, I get it. I get it. And it's magic. Hey, like it's worked a few times where they're like, boom, boom, boom, boom, done. I'm like, amazing job. Uh, here you go, happy to give you the money. Right. But that's only the first level, Brooke. So like, it's just, if you're self reliant, I'll get you some money so that you can have the fun things, maybe it'd be candy, maybe your toys, whatever it is. I want you to have fun, right? If you want some bigger things, now we're talking about making more of a contribution around the home. You're not just looking after yourself. You're making a more of a contribution around the home. So 50 cents for the little things, but if you start making a contribution, I'm going to pay you more money. I'm going to pay you more, like three to 5 for a task. And so, you know, those kinds of things is like clean up the kitchen, clean up the bathroom, you know, clean up the table, wash the dishes, simple things like that. That once I teach them to you, you can do them if you want to. You don't have, you absolutely don't have to, but you can. And that's how you fast track your big Lego technical set. So if you want the bigger things, you make more of a contribution. So there's a list of things we have around the home, you know, you can They're just kind of bigger. I'm just going to have a quick look for you now. So clean the shower, clean the bathtub, wash the dishes. Eventually, if you make your own lunch, if I teach you to make your own lunch and you make it, I'll pay you more. And as they get older, it'll be things like wash the car, wash and hang clothes, make dinner for everybody. And so I want them to do different things because maybe if you enjoy cooking, that's amazing. You're now doing the thing that you enjoy, making extra money to do it. 100 percent I'm going to pay you for that. So it's just like a menu of things that they can do. I'm not forcing them to do anything. I'm not even forcing them to play the game. I'm just saying, if this is the thing that you want, here's how you can get it. So that's kind of like the second level, right? We've gone beyond self reliance. We're now moving to contribution, but there's another level as well. Do you want to know about that one?
Brooke:Yeah. I mean, this is really cool. Interesting to think about how they can go from that lower level of that self reliance to. To going up into those higher levels, but still not framing it as something that you have to do. I mean, I guess when we get to adult life, you know, we do have to do it, but I think this way, setting it up when they are really young that it's like, you're showing them what the game is. You're showing them how they can get involved. And then it's up to them to, you know, decide how involved they want to be. And not only just linking it back to their wants, but showing them that their wants are important and that there's a way to get to what they want. And you know, here's this list and you choose, you choose. And like you said, there might be certain things that they find easier or harder. And so they can lean into those things but then still feel like they're number one contributing, but then also getting something out of it.
Terry:We're giving them self esteem, right? Yeah,
Brooke:exactly.
Terry:They're giving them confidence. We're giving them a sense of agency. Cause they are choosing whether they want to do it and think about what it teaches you to go through. I'm going to just focus on doing these things. I'm going to learn this new skill called washing the dishes. All right. And then now look what I'm able to get because of it. And by the way, like, it's not that we never buy them anything. There are times where we go, Oh, look, you know, here's this little thing or whatever, but that is the exception. And it's a surprise. It is not an expectation. And I think that's where we get out of that kind of like creating that entitlement where it's like, because we're here, I get this all the time. Like I was down in Torquay last week, and with Smith, I took him down the beach and we walked across the road and I heard this five year old girl saying, I don't want this ice cream. I want Norton Fine. And I'm like, how the fuck does a five year old know what the brand of ice cream is, and he's demanding that saying this is not good enough. And I'm like, that's a kid Hasn't understood that there's this thing called money that sits behind this whole thing. Yeah. And the longer that that goes on, the harder life's going to be for that kid. These are the first two levels, right? Just self reliance first, contribution second. And these are all ways to earn money. We want to teach them how to make money as well. And I want to sort of just quickly dig into the difference between those two. Because I remember we sort of had this conversation about it. And it's something that you were asking about. So do you want to talk about that?
Brooke:Yeah, definitely. I think it's a, it's an important one to differentiate because I feel like we don't really learn about how that one word makes a complete difference in how we're actually using and earning money.
Terry:Yeah. So this is where I think money gets to become really interesting because earning money is predictable input, predictable output. I'm going to do the thing you said to get the thing you promised. I do this to get that. That's earning money. So you think about it like an employee relationship is earning money. I spend this hour doing the thing here for you, which means I get this much per the hour. That's earning money. Making money is a very different thing. That is where you actually start to learn the skills of wealth. And that is where you're making investments. to do something, to actually solve a problem, to sort of create value somewhere, and then be able to capitalize on some of that value. And so this is where I'm starting to teach them a bit of an intuition for helping other people do the things that they want to do better. And so the way I sort of explain this, and I haven't done this by the way, this probably won't come in for another year or two, I don't think. Just once we've got through these first couple levels and they're sort of showing like we've got this stuff, I'm going to show them right now there's a way to make money. And the thing about making money is there is no It's only the value is received in the eye of the beholder. So there is actually no limit to what you can make if you understand this. And that's what I really want them to understand. So I wish somebody sat me down and said, Hey, there's a difference between these two earning and making.
Brooke:Sam.
Terry:This one here is predictive and linear and it's great. But if you start to build skills over here in this one, you will never worry about money in your life. when we talk about this and when I do have this conversation with them, I'm going to say, this is where you use skills and technology to give people what they want. Because. I'll go back to season one, episode one, the way to get what you want is to help other people get what they want. And that is how the world works. And so it's that now move outside of yourself. You want the thing, great. You want this thing, you want your first car. Amazing. What are you going to give the world to get it? What are you going to give the world to get it? And so I'm breaking it down for him based on these things. If you think about these as like, I guess, filters to think through, how do I make money? Well, you do it in these ways. You can give people their time back to make their lives easier. That's a way. You can help them improve and accomplish something that's important to them. You can help people make money and live more comfortably. You can help people avoid loneliness and ill health so they can live happier and longer. You can help people have fun, be entertained, and you can give people a sense of high purpose and connectedness. That's a way to make money. Church is pretty good at it. You can help protect and provide, help them protect and provide for the people they love. That's insurance. Or there's heaps of things you could do underneath it. Or the last one is help them improve their social standing and influence. If you solve those problems for people, help them get the thing they want, there are a myriad of ways you can do it. So the example I always give is my son Smith, he's got a flair for the dramatic and he's like, he's always telling stories and he's always been a superhero and I'm like, you should be an actor. And so I'm going to say to him, you're falling into the bucket here of help people have fun and be entertained. That's the kind of skill you should look into because people pay for that. And people. Pay good money for that if you're good at it. Well, how do you be good at it? Well, you gotta practice. So at the lowest level, the way that he might start with this skill is he loves stories and storytelling, right? So maybe he's going to put on a movie night for us at home and he's going to pick the movie. He's going to do a bit of a preview for us. He's going to sell us the movie. He's going to, you know, make the popcorn. He's going to make the tickets. He's going to create the whole experience. He's going to charge us money to come and show up to his theater. So you can see how I'm linking the thing, like he values this, like fun, entertaining, this kind of, this sort of space. He's starting to play with how do I help other people with the thing that I like doing anyway? And how do I create value there? Now he's going to have to learn the skills of packaging that offer, promoting it, and then selling it. And then delivering on it as well. And so I'll be able to talk him through all that stuff as well. How much do you want to sell the tickets for? Well, how much does a Lego technical set cost me? It's 200 bucks. Tickets are 200 bucks. Yeah. Not sure about the market for 200 tickets for a home movie, son. And he's going to learn about that supply demand type thing. So I'm really looking forward to this part of it because this is where we get to have heaps of fun. This is where we get to play and experiment and learn different ways of making money. And I want them to get that. I want them to get that, like, have that kind of like wow moment before they leave home. That money isn't limited. It's actually unlimited. It is unlimited by your imagination and how much value you can create for somebody else to get what you want. Because I'll be very confident by the time they leave home. They're not going to have a problem with money after that.
Brooke:Absolutely. You know what I think is really cool there, Terry, as well, is I feel like this age 10 and under, or even, you know, 14 and under, kids have these amazing ideas. They have these amazing interests, but they haven't had the experience of being, having that drummed out of them and, you know, having that self doubt and all that kind of stuff that comes into it as we get older. Later on into adolescence and adulthood. So being able to tap into those interests while they are so fresh and real and. just everything for the kids and being able to go, look, not only can you do this thing that you love, but you can also monetize it and sell it and help people solve problems, but do it in a way that feels really good for you and is tapping into that drive into that internal passion. So then going from, you know, what we kind of talked about in those lower levels of it being potentially more externally driven, right? Like I want the toy, I want this, I want that. Whereas now it's like, I love telling jokes or I love. theater or I love dancing and then being able to then do something about that and create and do that without having the pressure of being an adult and being told by every second person that you're not going to be able to do it because they're a kid. They don't have that thought yet. They just have like, this is awesome and I'm going to do it. There's no doubt there. Right. And so being able to lean into that and show them those skills as well at the same time, that is so cool. I'm so excited about this because I think about. When I was a kid and how many performances I forced my family to sit through. Sorry guys. But to think I could have gotten paid to do that. Like, come on.
Terry:Yeah. So that's really cool to think about. It is so important. I like it because if you grow up in that world of needs, you go, Oh, I don't really have a need for that. Or, or, or. I see a lot of smart kids get tracked into careers because it kind of makes sense, right? That happened to me. Yeah, you're a smart kid that gets tracked and you're like, this makes sense, it's a profession and people need it, so you should do that. But there are literally millions of people who make money doing the exact thing you want to be doing. And to me, that's one of the things I'm personally, I'm proudest of, and I'm really happy my dad was restrained because he told me later on that when I wanted to work in sport and I wanted to do that whole thing, he kind of harbored sort of a lot of doubt. He said, I walked away. When I dropped you off at uni and I was like, the fuck's he thinking, he's never going to make any money doing that. And for some reason I did manage to go after the thing that I wanted and earn money doing what I want. I want my kids to know that is absolutely, that's what I want you to do. I want you to make money doing the thing you want to do. The only reason you'll know it's worthwhile is because you're creating enough value doing it. You're good enough at it. You're good enough at it for the kind of people that want it and need it. You'll never have a problem making money. I got a lot from my dad and one of the things I did get was work ethic and focus and really kind of going after something, not doing it half assed. You know, we've been joking about, you know, starting a YouTube channel. We'll talk about that more, but like I've become a power user of YouTube because I'm like, I'm not fucking around. Like if we're going to do it, we're going to do it properly, you know? And I got that from him, but learning early, early days that you could go after something that you really wanted. That was a first for my family. That was a, I think it was a breakthrough for my family in that generation. They're looking at me like, hang on, what? He gets to go around and kick a footy. He gets paid to kick a footy. He gets paid to be in the gym. He gets paid to run around. And dad's like, how do you, how have you done this? You know? And I think there's always someone in every family at some point that kind of like bust through some sort of threshold. That was the one that I busted through that I'm proud of. And I want to give that experience to my kids before they leave home as well.
Brooke:Yeah. Well, if they're starting this by, you know, at seven, that means by the time they leave home, they've already had over 10 years of learning how to do this and doing it in a way that, you know, they're building up their confidence, they're failing, but then they're getting a chance to iterate, iterate again. And so by the time they're 18, they're like, bring it on.
Terry:Yeah. I'm actually glad you brought that up as well, because I really want to counteract the school systems. mentality of like testing you for passing or failing and I want to counteract that with like, I need, like you need to speed up your rate of failure to learn fast enough to know that what you're doing is valued. You've got to speed it up as much as you possibly can and counteracting that so, so quickly. It's actually really hard. I'm watching them fall into it now. Like, Oh, I didn't get the right answer or whatever. I'm like, that's totally fine. The, that's not actually the thing. The thing is you pick yourself up, go again to figure out what that answer is. Keep going. The way to win is to lose a lot. If you follow anyone that's had big wins, it's because they've had a lot of losses. But you'll never win big if you don't have a lot of losses to stack up the learning for the big win. You just follow backwards in the careers of like Andre Agassi, Roger Federer, anyone in the sports space, just go back and look at their win loss record. They do a lot of fucking losing before they win. A lot.
Brooke:Yeah. That's a pretty powerful lesson to be able to teach. I feel that comes back a little bit to step one in terms of modeling and even just modeling that, modeling the failures, modeling. Oh, we made the wrong decision with our money this time. And that's okay. This is what we're going to do differently next time.
Terry:Yeah.
Brooke:is huge. I think, especially when, you know, we have kids in the school system where it's not set up that way. And so someone like me who was designed like perfectly fit into the box of school, is now trying to unlearn some of those things and push myself to fail, which feels so counterintuitive. But thinking about my kids, I want them to be. Yeah. Like be like, let's fail now. Let's give it a go. Let's give it a try and, let's fuck it up and then let's do it again.
Terry:There's another part of this. It's not another level, but it's another, it's another unlock that happens in this last phase. So I don't know how deep you want to go here, but this is all about taxes and investment.
Brooke:Oh my goodness. Okay. I didn't even realize this was part of it. I mean, it makes sense.
Terry:So here's the thing at this point, at this point, They should have been looking after themselves, they like, that should, these should all be habits, right? And so that self reliance stuff and just look after themselves, I'm just going to expect that that's done. And I'm going to impose a tax on them so that basically the first 10 they make from those chores, those self reliance ones, is actually a tax. And anything beyond that is what they keep, right? So now I'm basically saying,
Brooke:Okay, what's your rationale for that?
Terry:I want to create a demand for the currency. I want to make sure there's still a demand. And that's exactly what the Australian government does to us. You wouldn't work for a piece of worthless people's paper unless you had to pay your tax in it. So that's number one, but I also want them to understand that there is a hurdle they have to leap when they do start to, to earn money as well, that it's not a hundred percent always going to be theirs. And I want them to start to ask questions about the taxation system, why it exists, what it actually does, those kinds of things. So this, I don't anticipate this happening until probably like a mid teens, I don't think, or I don't know, somewhere between 12 and 14, something like that. And who knows how it's going to go, by the way, this could fall on its face. I do want to be like, look, you're doing these things, that first 10 that you would have earned, goes to the taxman and anything beyond that is just you creating a contribution or actually, you know, helping me solve problems or solving problems around the home. So I want them to be asking questions about that and understanding it. But the other side of it is investing as well. So let's say for example, Indie wants to Help me in the business, edit video. One of the hardest things, one of the most time expensive things, but she actually enjoys the process of editing video, right? She needs to buy the gear. If she wants to do it, she can be doing it earning money beyond me. In the real world, she can be doing it from whatever age she wants to be doing it, but she's going to need the software. So if she wants to do that, she wants to have her own software to be able to do it, I will invest with her. So let's say the software is 100 for the year or whatever it is, I'll say I'll give you 50 for the software, you come up with the other 50. Now, it would be easy for me to give her the whole hundred dollars, but I do want her to have the experience of I saved up the money to buy an asset that helped me make more money, right? So there's the investment side of it and I want to encourage and reward them for investing in themselves in that case So here's my enterprise. Here's my endeavor at what i'm doing I'm going to need to save up some money to get this next bit of technology to make it easier for me to do the Thing to keep going because that's how Capitalism and wealth he's actually created. So I don't want to take that away from her and say, I bought you the software. I want her to understand. Cool. So you're going to be doing it at this level for a little bit. You don't have this, but if you save up, you'll be able to get this, your productivity will go up, you'll get rewarded from that, and then you kind of move up and you level up. So that's kind of the first part of investing. For any money that they save, I will give them a 10%. interest rate on small sums and it'll be a sliding scale. Once I get beyond thousands of dollars, I'll be moving it more towards normal rates. But I want to reward them a lot for keeping money and I want to reward them even more for investing in themselves. If she does want to have like a portfolio of savings or whatever, I'm going to create that for her and I'll show them how that works. But the most important thing I want them to get is that investing in yourself is the most important thing. So whatever skills you're doing, just keep moving that direction, investing more and more and more. It doesn't matter to me if they have a 10, 000 portfolio at 18. It'd be great if they had both, they can have both if they want to, but that's totally up to them. I'm not so concerned about how much they have at 18, I'm concerned about how they feel, how confident they are, and the skills they have at that point.
Brooke:Absolutely. What a difference in perspective as well. The whole concept of investing in yourself, I think, is, Really, really changed my life. And that's something that you guys introduced really early on in the podcast that just blew me away. I didn't really understand what it meant at first. but now thinking about how, you know, there's so many different ways that you can do it, but how important it is and the, that the payoff or the return on that is going to be so much higher than any other investment that you can make. So instilling that understanding and that belief in your kids is so important.
Terry:Yes. Massive.
Brooke:Is there anything else? Like, is that where you guys are up to? I mean, obviously that kind of stuff is going to be coming down the track in 10 years, but is there anything else you guys are thinking about or doing in terms of setting them up with money?
Terry:It's more about how we kind of interact as a family as well, and think about it as a team sport too. So when we do introduce the tax thing, what I'm going to say is if you're Every time your tax is paid, and you've looked after it, and everybody's paid their tax, so you've done the things, looked after yourself, you've done your things, looked after yourself. Anytime you've both done that, then we'll make a contribution to a family kitty, and that family kitty will grow, and we'll decide what kind of experience we want to invest in as a family together. Flip side of that is, Go against the family value, break a family rule, and we can take money out of that kitty. And that's just something I'm kind of playing with at the moment as well. So I want to think about, you know, helping them make decisions about how we're going to be investing our time together as well. And so that's how we're going to sort of start involving you in those decisions as we get to that point where it's like, cool, we've got, you know, three or four or five hundred dollars saved up in the family kitty. Now, where do you guys want to go? What do you want to do? And, and let them to sort of have a bit of a say in that as well, basically. So that's probably the next layer as well, and it probably comes in when we do the tax stuff, I reckon.
Brooke:That's really cool. Again, giving them opportunities to, to play a part in how money is moving through your guys life as a family. Getting them involved in that decision making process, potentially having some failures in the decisions that they're making, but then reinforcing that that's, that's part of it. And that's how you, that's how you flex the muscle. That's how you get good at this is by actually doing it. Okay. I have some thoughts now, different ideas of how I might set this up. That is not going to involve just opening an account.
Terry:Look, I acknowledge that I think I'm a lot more weird and eccentric than most, and I think it's probably way further than most people will go, but I just thought it might be worth throwing some of that stuff out there just to, it's really coming back to that insight, right? What do we really want them to have? Is it money? Or is it the skill and the confidence that they need to handle money?
Brooke:Yeah, that's the point,
Terry:right?
Brooke:That is the point.
Terry:Yeah. That
Brooke:is the point. Potentially, if you do still have the capacity to Save as well. Like if that's something that you decide to do, then when they do become 22, like I was, and they get that lump sum, they know what to do now. And, they're not going to feel stressed. They're going to feel maybe just calm, excited, ready to, you know, invest in themselves or do whatever that looks like for them. And then you also are going to have that confidence that not only are they going to be okay. With that sum, but they're also going to be able to go well beyond that because they've had all of those years of seeing us do it as the parents getting involved, getting that practice, getting all those failures and reps and iterations in. so that, that by the time they are 18. Or whatever age, you know, that kind of is that they end up going out on their own. They're ready to take on those challenges and just have us kind of in the back. Back to kind of chat to, but they don't really need us for any of those financial things. They've got it. They've got it covered. That's the goal.
Terry:Exactly right. Exactly right. Hopefully this has been helpful. And hopefully it sparks some ideas for you. You can lift all of it, just do whatever you want. But, that's my encouragement. My thing is like invest time to teach them the skills before saving money. Help them learn how to save in their own accounts rather than keep on for them. That's my recommendation anyway.
Brooke:Amazing. Well, thank you so much for sharing all that with me. It was super awesome just to kind of work through together and chat about different ways that I could go about this. John and I can go about this. And. Hopefully other people get some value from it too.
Terry:Good stuff. All right. Thanks for coming along and I'm looking forward to seeing you more on the podcast too.
Brooke:Yeah, me too.
Terry:All right. See ya.
Brooke:Bye.