4 Lessons to Raising Wealthy Kids

A large inheritance doesn’t guarantee rich or successful kids. It takes something more. These 4 things define every successful and wealthy person I know. Any wealth I am able to share with my 5 kids, or advantage I can give to them will only make a lasting impact if they learn these lessons. So we start teaching our kids young in this house.

4 lessons I am trying to teach my kids:

1.Work Hard. It all starts here. Work hard. At every job, put in real effort and strive for excellence. When they feel discouraged or want to quit, they need to finish well. (They need about 4 attempts at cleaning the toilet before it’s acceptable: hey, I have to sit on it too!) Honestly, helping my kids learn how to work and complete chores is a TON of work for me (and an exercise in patience!) It takes at least twice as much of my time to help them through a task then to do it myself. BUT. It’s one of the most important lessons I can teach them, so it’s worth my time and effort. They value their money SO much more if they worked to earn it.

Literally the only way I know to gets kids excited about working hard, is to make them buy all the things they ask for. Last year I had this talk with my kids: “I have some really exciting news for you all! I am going to give you even more ways to make money, and you will get to spend money on even more things!” “Yippie!” they shouted. Ha, ha, ha. How is that for a positive spin?! What did that really mean? “You are going to work more because you are going to be paying for more of your own stuff!”

I know a lot of kids who have no desire to work hard, because they don’t really care about earning money. Almost everything they could want is given to them. Sometimes as parents we want nice things for our kids even more than the kids really want those things. “Oh, no!” you might say, “they whine and cry and bemoan how desperately they want that newest gadget, and how their life will be ruined it they can’t have it!” Then kids should be thrilled that we will give them the opportunity to work every day to earn money! In just 3-4 months they will have enough saved!  True? If that is not the case, but we still buy them those things they so desperately desire, here is what actually happened: I was willing to work and save for an ipad that my kid didn’t care enough about to do the same for. If as a parent, I am spending the money either way (via chore payouts, or just buying it), why not help my kids learn to work hard in the process?

The best opportunities in life often show up as hard work.

But knowing how to work hard isn’t a given in our society. It is something that has to be learned. Some people learn it through school, sports, clubs, or household chores. And some never learn it.

My boys were doing some shoddy work one day in the yard while I had a friend over. I called them over and said, “What happens when you don’t do a good job at your work?” They both looked at me sheepishly and said, “You get fired.” Yup. My friend doubled over trying to suppress laughter.

But it’s true! I love my kids, and want to give them a heads up on this important information. I bet a lot of the folks I have had to fire over the years wish their parents would have clued them in on this secret!


2.Spend wisely. Once they have worked hard to earn money, they have to figure our how to spend it wisely. Our family version of frugal isn’t always buying the cheapest, or avoid all spending, but spending on things that provide the most value. It’s about figuring out what we want the end result to be, then reaching that goal with the least amount of money.  We give our kids lots of opportunities to make money. And lots of opportunity to spend their own money. They buy their own soda from the gas station, tablets, gum, and pokemon cards.

And all of a sudden they care. They care if the soda is $1 for 32 oz, or $1.59 for 24 oz. They “get” that the 25 cent ice cream cone takes MUCH less work than the $2.50 cone. We talk about how much time they will actually play with a $10 toy vs. how many hours it took to earn that $10. They have started focusing on toys that get played with for months vs. hours.

At the end of the day, we all spend money. But do we consider what value it adds to our lives? Everyone has to figure that out for themselves. Is a soda every day during our 6 week road trip better than a tablet? I don’t know. My 8 year old needs to weigh that out for himself. He knows how much work went into earning that $50. So he really thinks about it.

It’s a lesson more adults could benefit from. Really thinking about how much value the things we buy add to our life. We will all make mistakes as we figure it out. I just think it’s better to make those when you are 4, 7, and 8. So they have lots of opportunity to fail or make choices they still feel good about months later.


3. Investing is working smart. Absolutely the first lesson is to work hard. But investing is working smart.  Compound interest is like magic. And my 8 year old loves magic! After feeling the pain of working hard, we learn about this magic of working smart. Stocks, index funds, compound interest, real estate. He plays with compound interest calculators, and looks over 10 year stock performance charts. We look at what would happen to $50 if you add $2 a week and invest it over the next 10 years at 8%. $1735! He has never seen anything past $80 in his piggy bank. $645 would be just from the compound growth! $645 that required no physical effort on his part. To an 8 year old, that is magic folks! We talk about how hard Mr. Mt and I worked to invest. And how those investments are working hard for us now… while we travel, hike, play at the lake, pick cherries. Kids love magic. There is no cooler magic than compound interest.


4. Generosity. I think there is a huge temptation in our culture to put generosity off till later. Till we are older. Till we have more invested. Till all our debt is paid off. Till we have a few nice things for ourselves. Till we are FI. Till we catch up with our peers. Till we are 100% sure that we will never need anything from anyone. I get it. And I respectfully disagree. So this is what I teach our kids instead.

Generosity is about gratitude. It’s about seeing all the good things in our life, and being overwhelmed with thankfulness. It’s about finding joy right where we are. It’s about fighting against always needing “more,” and never quite arriving.  When we can be generous with little, maybe we can be trusted with more.

And it matters. I think sometimes people miss that fact. If my kids work hard to earn and save $21, they can buy 3 ducks for a family around the world. That family will be able to eat and sell duck eggs just like our kids do.  They will have more income to buy school supplies, Christmas gifts, and clothes for their kids.  It matters.  My kids can use their hard work to have a powerful impact in someone else’s life.

So we teach both to our kids. We are so blessed, and can be a blessing to others. And it matters.  My kids are able to effect change in some one’s life. And someone else’s gratitude and thankfulness is credited directly to their actions.

Practicing gratitude, and learning kids are powerful enough to make a difference. It starts young in our house.

4 little lessons to master. 4 lessons that will help them live rich lives. What if we had all learned these before we were 10, or 20 or 50? Imagine the trajectory it would have set us on!


What lessons are you trying to teach your kids? When did you learn these lessons? Which ones are still a work in progress? What do you think is most lacking in our culture?

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10 thoughts on “4 Lessons to Raising Wealthy Kids

  1. Completely agree with this list! I don’t have kids yet but I think young people who are resourceful have a huge leg up on their peers. I don’t want to over instruct my kids so that they can’t go out and figure out challenges on their own.

    • I think childhood is the perfect time to practice (and fail) in every area of personal finance. I really want all my kids to start investing before they move out so they can make any silly mistakes while the $ amount is still small.

  2. My girl is 6, and we’ve been working on smart spending, saving, and giving. (not so much the hard work…work around the house is expected because she’s part of the family but she doesn’t get extra allowance for it.)

    Little Bit set and met some impressive savings milestones with her allowance, like buying a $90 robot unicorn with savings and birthday money, but lately she’s been frittering her money away at the school store 75 cents at a time. We do give her a simple interest payment when she doesn’t spend her money for more than a week, but lately the little expenses mean she isn’t getting any extra. I’m hoping eventually she’ll see the difference.

    • I love the idea of paying interest on her savings! I am hoping to start an IRA in the next few years for my older boys, and will do a match. But I might have to try the interest. One of my boys loves to buy ice cream at school on Fridays. =/

    • Thanks for stopping by! When ours were 2 we had them do jobs like wiping the coffee table with a baby wipe. We had a little prize-treat box they could pick from if they did a few “jobs”. It’s easier to start when they are young! (And adorable!) Our 3 year old sometimes works for money, but mostly she works for gum: her new favorite thing in the world.

  3. JuggerBaby is under 2 so ze works for praise and when ze helps me unload the groceries, zir pay is a Chobani yogurt cup 😀 Unloading groceries is a very important job y’know.

    Growing up, we didn’t have a structured chore or jobs list because, as immigrants, our parents wanted us to focus on school as our jobs. I understand but in hindsight I think it wasn’t a good thing for my sibling who had some entrepreneurial leanings but zero work ethic. He wanted everything to come to him easily and he didn’t want to have to work hard for it. That turned out about as well as you might imagine.

    • Sometimes school can help enforce strong work ethic. But I knew a few kids who were very smart, so put in almost no effort into school. I think it depends on the kid. Hopefully your brother will/did figure it out later in life.

  4. Hi I really like the advice and especially #1 and #2 in conjunction. But I have to ask because this Is​ still something we are working with.

    How does this dynamic work when they want something you don’t approve of.

    Maybe we have too many restrictions on our kids but I am from the mindset that I don’t want my kids in front of a tablet all day so I am not going to condone buying one. Even with his own money. Plus then there’s this weird realm of it’s mine I bought it so I can do what I want.

    We reserve the power to veto stuff but that means he doesn’t have so many opportunities to spend money.

    Have you had this situation come up and how do you handle it. Or do you have some pre set ground rules.

    • Plus then there’s this weird realm of it’s mine I bought it so I can do what I want. Well, this is not true in our house. So I think that is the first point. All rules still apply. So we give our older kids 20 minutes of screen time in the morning, and everything after that they have to earn. It makes no difference if they buy a tablet, new video game or movie. 20 minutes.

      That being said, we do put a few restrictions. Like if something isn’t appropriate or they aren’t ready for it yet. (Games rated Mature or Teen)

      Mostly we talk about if something is a good value, how they liked past purchases, if they think they will still like it in a year, if it’s hard to keep clean. Or if it’s something that has rules around it, will they still be happy spending that much money if they only get to use it 20 minutes a day?

      I don’t worry so much about them making mistakes. Because I know that is how they will learn to find value. I would rather them mess up now instead of at 25 years old. =)