An author and podcast host shared advice he planned on telling his child to help her learn earlier in life than others.
What Happened: Several years ago, author Morgan Housel revealed a letter that he was going to give to his child that explained nine money and life lessons that he thought people learned too late in life.
The advice is different than your typical get-rich advice for young people.
Housel, who is an author and podcast host, said in the article at the time that as someone who studied and wrote about money for a living, he had discovered many things that could be offered as advice.
Here are the nine money and life lessons:
1. Don’t underestimate the role of chance in life: Housel said that many people assume wealth and poverty are impacted by choices made by people, but often times it can be due to “the role of chance in life.” The role of families and generations that people are born into along with their home country has played an important role for wealth and poverty.
“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,” Housel said.
2. The highest dividend money pays is the ability to control time: A lasting level of happiness can be had if one is able to do what they want, when they want, where they want with who they want for as long as they want. This is far greater than what “fancy stuff” can offer, the author wrote, saying that fancy stuff wears off quickly. Items like a good job with flexible hours and having money in savings are more important.
“Being able to retire when you want will never get old.”
3. Don’t count on getting spoiled: An author who writes about money for a living gives this advice to his child saying that parents would provide support always, but not spoil their child.
“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.”
4. Success doesn’t always come from big actions: The author writes that the key to managing money isn’t doing amazing things but instead consistently not screwing up over a long period of time.
“Avoiding catastrophic mistakes is more powerful than any financial tip.”
5. Live below your means: Housel calls the ability to live below financial means one of the “most powerful financial levers.” Doing so can help provide more control over income and investment returns.
“How much you make doesn’t determine how much you have, and how much you have doesn’t determine how much you need.”
6. It’s okay to change your mind: The author said that almost everyone changes their mind on education focus or careers with most people not knowing what their life has planned before the age of 18.
“It’s okay to admit that your values and goals have evolved. Forgiving yourself for changing your mind is a superpower, especially when you’re young.”
7. Everything has a price: While not just monetary, the author writes that the price in some cases can be time away from family and friends. Sometimes the price of items is hidden, which could make time and relationships more valuable as this is realized.
“They’re sometimes worth paying for, but you should never ignore their true costs.”
8. Money is not the greatest measure of success: Housel quotes legendary Warren Buffett for his eighth point with Buffett saying true success in life is “when the number of people you want to have love you actually do love you.” Housel said money can’t provide love and also won’t help with character, honesty and empathy.
“Money won’t provide the thing that you (and almost everyone else) want most. This is the most important financial advice I can give you.”
9. Don’t blindly accept any advice you’re given: While the father shared advice he hoped his child would listen to, he also encouraged his daughter to be open to rejecting advice including the nine items listed here.
“Your world will be different from mine, just as mine is different from my parents. No one is exactly the same, and no one has all the right answers.”
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