Giving Kids Freedom to Learn – Episode 611

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[00:01] Welcome to the Prosperity Podcast. Prosperity thinkers, welcome to the podcast. Today, we are going to be diving into a parent and child topic. This is a big one because your book that’s coming out will tailor into that. So are you ready for the topic, Kim? And I’m going to surprise you with a couple of things. Awesome. I’m always ready. Okay, cool. So this is actually coming from one of my favorite business leaders who we’ve talked about on the podcast, Naval Ravikant. And he approaches business in an unconventional way. He approaches parenting in an unconventional way. I want to get your prosperity thinker perspective on it. So as far as letting his kids on an iPad for nine hours a day, he does it.

[00:55] As far as letting his kids just go play in the mud all day, he lets that happen. But there’s two rules. So the two rules are one hour of math and programming a day, two hours of reading a day. And then after that’s done, complete freedom. What do you think? I love it. There is such a fun saying in the Norwegian school system that there’s no bad weather. There’s just bad clothing. And the Norwegian school system lets the kids out in the mud and the rain and the snow and it’s cold there all the time. And it is so amazing what a couple concepts you’ve brought up can do for our child rearing. So the first is the concept of trade. So I love that he’s trading. He’s saying, this is important to me, the reading, for example.

[01:54] And so I know this is important to you, whatever it is, outside play, sports, screen time, you name it. And so this is the trade that we’re going to have. And it just takes away so much of the contention and frustration that is out there. And then also just the idea that you set priorities, right? Adults have to do it too. I actually, just this morning, I called my mother-in-law who has been working and living her life. She’s in her mid-80s and she really wasn’t getting enough physical activity. And I go for a pretty serious walk every Monday morning. And so I said, why don’t you come out? And I mean, her definitional walk needed to be because she’s had some issues she’s dealt with recently, about 100 feet.

[02:45] And so I said, you know, why don’t you come out with me and we’ll do a practice walk. And so the priority setting is the point of that. And so she was talking to me like, oh, you know, so awesome that you walk all the time. How do you do it? Well, I make sure that it’s one of the first things I do in the morning. I have spiritual time either first or at the same time. And then really that’s where you get results, right? It’s prioritizing things. It’s also setting very specific guidelines for yourself or in this case for your children because we want to raise competent adults. We’re not raising children. We’re raising competent adults. Absolutely. I love that. You talk about the trade in there.

[03:29] And another layer that he explains in this thread is that he explains the consequences. So when you’re let’s say let’s take this perspective because we’re going, you know, parents to children. We can also take this and go expert to people learning you when you’re teaching people finances or whatever. So you must teach that there’s going to be a trade in there. How do you talk also about consequences in a way that is going to be something where people learn, not get offended and grow? What does that look like? Well, the consequences being matched to the issue at hand is where the deal is at. So I remember my dad was an elementary school principal. The bulk of his career, he taught first, but the bulk of his time, elementary school principal always not only for the children in the school, but also for me and my sister, Tammy, attaching consequences, outcomes, if you will, to the task at hand.

[04:34] So the space in a child situation, I can think of all kinds of farming examples, but I’ll try to not use those because they’re not helpful when people live in town. But the space of dealing with child situations and or with money is a challenge because there’s not always immediate consequences. So let’s take a child that wants to eat candy, right? Like one piece of candy, no big deal. Short term, no real immediate consequences. And they might have a little sugar high and be a little more energetic, but basically no real short term consequences. Well, let’s take an adult that doesn’t have a good savings habit. No real short term consequences. Yeah, they might not be able to put tires on the car or something that’s needed.

[05:24] But when we’re in such a today’s society, it’s difficult for us to get our head up and look at those long term consequences that occur if we candy every day or if we don’t have a good savings habit every single day. So you got to do whatever it takes, you know, for the kid. Maybe it’s going to the local fill in the blank store and looking around at some of the people and the various shapes that human beings come in. I saw a funny quote the other day. Very well shaped. Being careful of my language here. Guy was talking to a very round guy and the in shape guy said, don’t you want to be in shape? And the round guy says round is a shape. So I know that kind of funny. Maybe we need to take our children to look at round people so they can make the connection.

[06:25] And then in the financial world, it’s really the same thing. Like look around you. Look at people in your life that have good savings habits and the life that they lead because of it. The problems that they’re able to solve, the emergencies that they have money to handle and the opportunities that they get to spend. I heard somebody the other day say, oh, my gosh, you know, this friend of mine, they get a go on trips all the time. Well, it’s because they were both in similar incomes and high incomes, but one spent all their money on clothes and food. And the other one, no, I’m not going to the bar tonight. Nope, I’m not buying that clothes or maybe I’ll come with you, but I’m drinking water.

[07:11] I mean, it was so important to them that they go on trips, that they saved money from other things in their life so that they could have the money to go on the trips. These are the things that we need to do to get that long term perspective in our heads. And it’s not easy as a human being. No, it’s not. And you type it back, which is really well said. And again, I want to go back to Neval’s first comments, which is an hour a day of math and programming and two hours a day of reading. And for you, I want to dissect why it’s maybe the reading and the math. And then dissect what it is on the financial side. Like these are the elements. We know the emergency opportunity fund, but there’s got to be something that will put that puzzle together.

[07:57] Yeah, that is an interesting connection to make. So I know that, for example, inside strategic coach, you’re dealing with entrepreneurs. Many of them come in and they haven’t read a book since college. And I remember one of them said, you know, people used to tell me what I had to learn. And now I tell myself what I have to learn. But I better do it. I need to be learning. And so I know a lot of adults inside strategic coach who hadn’t done any reading for years are now all of a sudden doing reading. And maybe they’re doing listening. But as a child, I think that the skill of readings very necessary increases vocabulary. I mean, we know all the good that it does. So if it’s necessary to substitute that word listening, it’s fine.

[08:48] What the key is you’re getting through books because books enable you to develop a thought process out more thoroughly than any type of article, blog post, song, you know, other mediums of information sharing. And so that’s making me think that’s where the connection is to the savings ability, because savings is a verb and then storing savings is a noun, neither of which most financial people want to talk about. Most human beings don’t want to talk about. It’s the very boring elements of finances are what get the results. And if you look at information consumption, it’s the very boring element of reading that can get the results because of that thoroughness and that depth. So that emergency fund is the beginning stages of reading.

[09:48] If you want to liken those two, the opportunity fund is the longer stages like the fact that a book gets to develop a thought out further because it’s a book with pages. The opportunity fund gets to develop that capacity out further because of time. And so that is how I’m tying those two together. I’d be curious how you try those two together. You know, as you were saying that and I really make an I make it intentional to listen to every word you’re saying. And then I think of a few things like, oh, OK, I’m tying this in. So I’m going to tie a couple of pieces. One, you grew up and have a habit of voracious reading. You teach. A habit of voracious saving. OK, yes. Yes. So those two are together.

[10:43] Nice. There’s one other piece. So I’m going to go with the opportunity. So when you write a book, there are speed bumps in place, meaning a blog post, a podcast. Those things are great. A blog post is easier because you can write it and it goes out there. A podcast has to get edited and it’s got some speed bumps. A book has more speed bumps. An investment, but the opportunity fund has speed bumps. And if the investment has no speed bumps, it can be impulsive, so much faster to go through. The speed bumps are what actually make it as valuable. And so you’ve the voracious habit of saving, voracious habit of the opportunity fund with the speed bumps in place. I love it. And the speed bumps are what is enabling the results.

[11:41] And it’s stretching that work out over time, which is such a difficult thing for people to get their arms around. You were asking before we started recording about my husband, Todd, who does the Truth Concepts suite of calculators. And he’s constantly running into calculations that do not include time. And the time value of money is the economic term that’s associated with it. I mean, people just forget it. They were taught it in high school or college accounting, econ, those types of classes. But holy cow, is it easy to just, for example, add up all the interest. So people say, oh, my gosh, I pay so much interest for my mortgage. Well, then they want to add it up, right? Just like year one, year two, add it up and total it.

[12:28] I mean, it’s a fun fact. It’s mathematically correct. But it’s nothing to do with their lives because there has been no time value of money associated with that cumulative year one plus year two cost of interest. And so what needs to happen is you have to apply all that to a time value of money, adding an interest rate. This will be very difficult for people to grasp verbally, but that they’re in compounds instead of cumulates that interest. And we know it’s deductible and there’s a whole effectiveness, et cetera, et cetera. So if you’re curious about that space, let’s go find a book where it is more thoroughly elucidated, which is my Busting the Interest Rate Lies book. I named it that and I probably should have just called it like the whole truth about mortgages.

[13:16] But nevertheless, the Busting the Interest Rate Lies book goes over exactly what I was just talking about. If you’re struggling with this, oh, my gosh, I pay so much interest on my mortgage and I’m helping you realize that’s just a fun fact and has nothing to do with the actual overall cost of creating a home over a 30 year period of time. But look at all the pieces that we just went and took the effort to write the book of that. Todd took the effort to create the calculation of that. This is a library of wealth of knowledge. So this was a good episode. Thank you for sharing for any of your listeners that do have additional questions. Maybe you’re looking for some guidelines, some bumpers of what it is with your kids or maybe it is something in figuring out the emergency or the opportunity.

[14:08] Send an email to hello at Prosperity Thinkers dot com. Thank you for listening to the Prosperity Podcast. To take control of your money and have it work for you, visit Prosperity Thinkers dot com.