On... Dad Chat Part 1

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I have started a weekly money lesson with my son at the age of 8.


Is 8 too young? It might be. Im not sure, but Buffett started investing at the age of 10. I figured, I would give my son about two years to learn the basics about money and should he wish to invest, by the age of 10, he would have the fundamental knowledge to do so.


So far, I have covered 6 lessons with him. I will update the blog roughly every time we cross the 5 lessons milestone. It will be a short summary of the topic we covered. Who knows, we might compile it into a book of sorts in the future.


Lesson 1 - What is Money? Money has three intrinsic properties. It is a medium of exchange; a unit of account; and a store of Value. We talked about the importance of money in our lives.


Lesson 2 - Maslows Hierarchy of Needs. Maslows have a classification of Human Needs. With the most important to the least important in the following order:- 1. Basic Needs (Food, Water, Shelter), 2. Psychological Needs (Intimate relationships, Friends), 3. Self-Fulfillment Needs (Achieving one's full potential). We also talked about some of the ways you can earn money, whether by using your time/skills or using Capital.


Lesson 3 - Money Management. We learned how to manage our money by classifying money into Incoming (Earnings) and Outgoing (Expenditures). Also briefly touched on how to split our monthly Earnings..i.e....1) Save 50%, 2) Spend 20%, 3) Invest 20% 4) Donate 10%.


Lesson 4 - Compound Interest. According to Albert Einstein - Compound Interest is the 8th Wonder of the World. He who understands it, Earns it. He who doesn't, Pays it. 


Lesson 5 - Purchasing Power. Purchasing Power is the amount of goods and services you can buy with one unit of money. Basically, the power to buy things.


Lesson 6 - Inflation. Inflation is the Loss of Purchasing Power. Basically, inflation is the price of things going up. And Deflation, which is the opposite, is the price of things going down. We compared the inflation rate between a few countries in 2023.


That is all for Now, Till Next Time!     

Comments

  1. AnonymousNovember 11, 2023 at 5:02 PM

    Wow. These are pretty impressive topics you covered. You may have already, but I think the practical side of it is important too. Like showing how compound interest works in his bank account

    ReplyDelete

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