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Investing For Kids · She's On The Money

• 0:00
  Speaker 1: Hello.
• 0:01
  Speaker 2: My name's Santasha Nabananga Bamblet. I'm a proud yr the
• 0:05
  Speaker 2: Order Kerni Whoalbury and a waddery woman. And before we
• 0:08
  Speaker 2: get started on She's on the Money podcast, I would
• 0:11
  Speaker 2: like to acknowledge the traditional custodians of the land of
• 0:14
  Speaker 2: which this podcast is recorded on a wondery country, acknowledging
• 0:18
  Speaker 2: the elders, the ancestors and the next generation coming through
• 0:23
  Speaker 2: as this podcast is about connecting, empowering, knowledge sharing and
• 0:27
  Speaker 2: the storytelling of you to make a difference for today
• 0:31
  Speaker 2: and lasting impact for tomorrow.
• 0:33
  Speaker 1: Let's get into it. She's on the Money.
• 0:36
  Speaker 3: She's on the Money.
• 0:57
  Speaker 4: Hello, and welcome to She's on the Money, the podcast
• 1:00
  Speaker 4: for people who want financial freedom for themselves and also their.
• 1:04
  Speaker 1: Tiny teeny time baby.
• 1:08
  Speaker 4: Use My name is beck Side and I'm joined by
• 1:10
  Speaker 4: financial expert and maybe new mom, new mom Victoria divine.
• 1:16
  Speaker 1: Isn't that wild?
• 1:17
  Speaker 4: That is so wild? I feel like this episode will
• 1:19
  Speaker 4: be very useful for you.
• 1:20
  Speaker 1: It's very useful for me. I mean I wrote it.
• 1:23
  Speaker 1: The information is actually entirely from my brain. But I'm
• 1:27
  Speaker 1: very excited to get further into investing for kids and
• 1:30
  Speaker 1: budgeting for kids. And like all of this kid friendly
• 1:33
  Speaker 1: content because up until now, I've always been like, no
• 1:36
  Speaker 1: one wants to hear unsolicited parenting advice from a non parent.
• 1:40
  Speaker 4: Yes, that's so true.
• 1:42
  Speaker 1: Well I think, well, I don't even want unsolicited parenting advice,
• 1:46
  Speaker 1: let alone from someone who's never been a parent. And
• 1:48
  Speaker 1: like beck having a social media following, it's not even
• 1:52
  Speaker 1: that big. People just slide into jams and they're like,
• 1:54
  Speaker 1: by the way, you have to expise it, like get
• 1:57
  Speaker 1: in the bin. But I'm assuming if you've clicked on
• 2:00
  Speaker 1: this episode, you have come for solicited device on how
• 2:04
  Speaker 1: to invest for kids. And I guess it's not going
• 2:07
  Speaker 1: to come as a surprise that it is the front
• 2:09
  Speaker 1: and center of my mind with I guess Mini Divine
• 2:12
  Speaker 1: now in the household and there is just, honestly one
• 2:15
  Speaker 1: so much to get used to as a new parent,
• 2:16
  Speaker 1: and it's very beautiful, but it's a very overwhelming time.
• 2:20
  Speaker 1: But I also love this idea that I'm putting my
• 2:23
  Speaker 1: child first and I am, you know, putting them in
• 2:25
  Speaker 1: the best possible position. And that's been one of my
• 2:28
  Speaker 1: biggest questions, like are you investing for your baby? What
• 2:32
  Speaker 1: is going on? V So I think it's a good
• 2:34
  Speaker 1: time to have this chat, my friend.
• 2:36
  Speaker 4: Absolutely, and I know that it does make sense. It's
• 2:38
  Speaker 4: good to start early, but explain why it's good to
• 2:42
  Speaker 4: start early.
• 2:42
  Speaker 1: Be Well, it obviously helps to set up really good habits.
• 2:46
  Speaker 1: And you know my two favorite words, slay and yet look,
• 2:52
  Speaker 1: slay is very on board. But no, it's actually compound interest. Yes, yes,
• 2:56
  Speaker 1: Warren Buffett calls it the eighth wonder of the world,
• 2:58
  Speaker 1: and that's a slay in itself. But the earlier you start,
• 3:02
  Speaker 1: the more money your money makes. And like, no one
• 3:06
  Speaker 1: is going to say no to free money, right, he said, Hey, Beck,
• 3:09
  Speaker 1: your money can make you more money. Do you want that? Yeah,
• 3:11
  Speaker 1: you're not going to say no. Why would you say no?
• 3:13
  Speaker 1: So compatit interest is my favorite thing in the entire world.
• 3:16
  Speaker 4: Okay, so let's get into investing for kids.
• 3:19
  Speaker 1: You are correct, we should dive straight into talking about
• 3:21
  Speaker 1: investing for kids. So the first thing I want to
• 3:23
  Speaker 1: talk about is teaching your kids about money and not
• 3:26
  Speaker 1: jumping straight in. Right. So, I think that there's this
• 3:29
  Speaker 1: very big misconception that feels really overwhelming when it comes
• 3:33
  Speaker 1: to having children, where you go, well, if I'm teaching
• 3:36
  Speaker 1: my kids about money, do I have to share what
• 3:38
  Speaker 1: we earn and what we spend and what we own
• 3:40
  Speaker 1: and what we owe. What does this look like? How
• 3:41
  Speaker 1: will it pan out? And the reality of the situation
• 3:44
  Speaker 1: is no, Like, you can teach your kids about money
• 3:47
  Speaker 1: with very small amounts, and it's not just very small amounts.
• 3:50
  Speaker 1: That's actually going to be more constructive for them, right,
• 3:53
  Speaker 1: Like I want you to be able to teach your
• 3:56
  Speaker 1: kid what the value of their favorite box of cereal is.
• 3:58
  Speaker 1: How much money is that? What just dinner cost on average?
• 4:02
  Speaker 1: You know, it depends on how old your kid is.
• 4:04
  Speaker 1: Often they start to really conceptualize money. Research tells us
• 4:09
  Speaker 1: this not Victoria divine at the age of seven, so
• 4:12
  Speaker 1: they really start going, oh, you can trade money for
• 4:14
  Speaker 1: goods and services. Wow. Before that, they do understand it,
• 4:17
  Speaker 1: but they don't see it as a thing that can
• 4:20
  Speaker 1: be earned and spent. Before that, they go, oh, mom
• 4:23
  Speaker 1: and dad tap their card and that's the transaction. Right
• 4:26
  Speaker 1: Like you ask any four a five year old for
• 4:28
  Speaker 1: a coffee at their fake cafe, they're gonna be like,
• 4:30
  Speaker 1: that's fifty dollars. Like I remember vividly my Niecks and
• 4:34
  Speaker 1: nephew had just gotten a cubby house for their Christmas present,
• 4:38
  Speaker 1: and my husband and I've probably heard this before, bought
• 4:40
  Speaker 1: them a secondhand kitchen. I remember that I got on
• 4:44
  Speaker 1: arm gum Tree and it was like fifty bucks and
• 4:45
  Speaker 1: it came with all of the bells and whistles and
• 4:48
  Speaker 1: all of the you know, like cups and sauces and
• 4:50
  Speaker 1: like a fake coffee machine from km up. Like it
• 4:52
  Speaker 1: was such a great pickup. Anyway, they put that in
• 4:55
  Speaker 1: their cubby house. And I went to the cubbyhouse one
• 4:57
  Speaker 1: day and they had a little window and they were
• 4:58
  Speaker 1: selling their coffeesh lovely you know whatever fruit that was
• 5:02
  Speaker 1: made of wood. And I said, oh, I'd love a
• 5:04
  Speaker 1: note latte dead pan. Got told we only have SOI
• 5:08
  Speaker 1: and I was like, okay, no worries. I guess I'll
• 5:11
  Speaker 1: have a soy latte. And they were like that will
• 5:14
  Speaker 1: be fifty dollars.
• 5:16
  Speaker 4: Sounds about right, Yep, no worries.
• 5:18
  Speaker 1: It will take money to pay. Can I also get
• 5:20
  Speaker 1: half of that wooden orange? Yes, that's eighty dollars. Oh, okay,
• 5:24
  Speaker 1: no worries, yep. So like they understand it, but they
• 5:26
  Speaker 1: don't conceptualize it until they're seven and they go, oh, actually,
• 5:30
  Speaker 1: this is what a coffee is worth right, So teaching
• 5:34
  Speaker 1: them small and teaching them young about things like even
• 5:37
  Speaker 1: getting them to interact. So all right, Beck, let's go
• 5:40
  Speaker 1: down to the shop. So let's pretend Beck is like ten.
• 5:43
  Speaker 1: How about you do the transaction. Let's teach you about
• 5:45
  Speaker 1: you know, Okay, we used to use cash, Now we
• 5:48
  Speaker 1: use card, but like, give them your credit card to tap.
• 5:52
  Speaker 1: Teach them that you have to ask for a receipt.
• 5:54
  Speaker 1: Why do we ask for a receipt so we can
• 5:56
  Speaker 1: check that everything's correct, so we can cross check and
• 5:59
  Speaker 1: know what we spend. Oh my gosh, let's look at
• 6:01
  Speaker 1: our family budget. You might have budgeted one hundred dollars
• 6:04
  Speaker 1: for that grocery shop. Well, what does the receipt say? Oh,
• 6:07
  Speaker 1: we spend one hundred and twenty dollars. Let's go through
• 6:09
  Speaker 1: that receipt together and go where did we go over
• 6:12
  Speaker 1: or you know, if it's under talking about that, what
• 6:13
  Speaker 1: are we going to do with the difference in budget.
• 6:16
  Speaker 1: You do not have to teach your kids about money
• 6:18
  Speaker 1: on a massive scale. In fact, introducing it on a
• 6:22
  Speaker 1: smaller scale makes them feel more empowered and more in control.
• 6:25
  Speaker 1: Another thing that I've seen a lot of families do
• 6:27
  Speaker 1: in our community is giving their kids a budget to
• 6:30
  Speaker 1: cook dinner one night. So I might go back, you've
• 6:33
  Speaker 1: got fifteen bucks, all right, you're going to organize dinner.
• 6:36
  Speaker 1: I hope you cook it. If you can't cook it,
• 6:38
  Speaker 1: that's fine, but I want you to go and work
• 6:41
  Speaker 1: out how much this is going to be. So you've
• 6:43
  Speaker 1: got these kids, they're looking up a recipe. They go, Beck,
• 6:46
  Speaker 1: we really want spaghetti bolonnaise, right, all right, so we're
• 6:49
  Speaker 1: gonna have to get past her, maybe some mints, maybe
• 6:51
  Speaker 1: some veggies, and a sauce. What does that look like?
• 6:54
  Speaker 1: We want cheese? Great, we probably want to put cheese
• 6:56
  Speaker 1: on top because obvious, no brainer. Butt dollars for bolonnaise.
• 7:02
  Speaker 1: That's going to cut it fine, right, Like you know
• 7:04
  Speaker 1: how expensive it is to get even just a pack
• 7:06
  Speaker 1: of mints these days, totally, So like they might go, oh,
• 7:09
  Speaker 1: we're feeding six people, all right, well, it's two packs
• 7:12
  Speaker 1: of mints. That's probably going to cost you the fifteen dollars.
• 7:15
  Speaker 1: What can we do instead? And that's where you can
• 7:17
  Speaker 1: teach them about going all right, well, what if we
• 7:19
  Speaker 1: create a zucchini and a carrot and chuck that in
• 7:21
  Speaker 1: there and just use one pack of mints and they go,
• 7:23
  Speaker 1: oh wow, they can conceptualize and see how that changes
• 7:26
  Speaker 1: a budget, and they genuinely start to learn the value
• 7:30
  Speaker 1: of money because they've got a certain amount of money
• 7:32
  Speaker 1: to allocate towards this resource that they are creating, and
• 7:37
  Speaker 1: that will help them in the long term realize how
• 7:39
  Speaker 1: expensive the rest of the world is. Because if you
• 7:41
  Speaker 1: teach them all, right, well a box of cereal is this,
• 7:44
  Speaker 1: you know, having dinner on the table that costs us
• 7:46
  Speaker 1: fifteen dollars. Look how much we got We got like
• 7:48
  Speaker 1: six serves of scadyolinaise. Then when you've got your twelve
• 7:52
  Speaker 1: year old who is a Sephora kid and wants expensive skincare,
• 7:55
  Speaker 1: you go, well, how much is it? And they go, oh,
• 7:57
  Speaker 1: that's seventy five dollars. Well that is a lot of money. Like,
• 8:00
  Speaker 1: you're not talking to these kids about things that are
• 8:03
  Speaker 1: foreign because they've never been introduced to the value of money.
• 8:06
  Speaker 1: And I think that a lot of people assume that
• 8:08
  Speaker 1: you have to teach a child the value of money
• 8:11
  Speaker 1: by hoarding it all away or having lots of it,
• 8:14
  Speaker 1: but in reality, it's them being able to conceptualize what
• 8:18
  Speaker 1: you can exchange for money and what you get back
• 8:20
  Speaker 1: in the value there because you and I both know
• 8:23
  Speaker 1: bottle of water? What to waste money byo water?
• 8:26
  Speaker 4: Exactly.
• 8:27
  Speaker 1: If you're a kid and you rock up to the
• 8:29
  Speaker 1: cafe and money's to you endless because you've never been
• 8:32
  Speaker 1: taught about money, you go, well, I want a bottle
• 8:34
  Speaker 1: of water. You don't go, oh, actually that's not a
• 8:37
  Speaker 1: good value exchange.
• 8:38
  Speaker 4: Yeah.
• 8:39
  Speaker 1: I think it's teaching them that value exchange that is
• 8:41
  Speaker 1: really really important, and teaching them on that smaller scale.
• 8:46
  Speaker 1: And I mean, if you've got the privilege of being
• 8:47
  Speaker 1: in the financial position where you can go on family holidays,
• 8:50
  Speaker 1: maybe that could be a bigger budgeting item that you
• 8:53
  Speaker 1: talk through. Okay, we're going to spend two thousand dollars
• 8:56
  Speaker 1: on this family holiday. How are we going to break
• 8:58
  Speaker 1: it up? You and I both know already transport and
• 9:01
  Speaker 1: accommodation is going to eat most of that, right yeah, yeah,
• 9:04
  Speaker 1: bye bye. So we go Are we driving? And the
• 9:06
  Speaker 1: kids going no, we want to fly? Okay, Well let's
• 9:08
  Speaker 1: have a look at flights. What does that cost? What's
• 9:10
  Speaker 1: the difference between flying and driving? Okay, once we get there,
• 9:13
  Speaker 1: where do we want to stay? Kids are gonna yell
• 9:15
  Speaker 1: out if we go in to Queensland, I stay Movie World, right,
• 9:18
  Speaker 1: m hmm, okay, well how much does Movie World cost?
• 9:20
  Speaker 4: Oh?
• 9:21
  Speaker 1: We could only stay there two nights and not go
• 9:23
  Speaker 1: into the theme park.
• 9:24
  Speaker 4: Yeah.
• 9:24
  Speaker 1: Like, I think it's teaching them the value of money
• 9:27
  Speaker 1: by I guess, allowing them to have some level of
• 9:31
  Speaker 1: control how something is spent. But you don't have to
• 9:34
  Speaker 1: open up and be like mama earns x amount? Do
• 9:37
  Speaker 1: you know how hard she works for that? Because I
• 9:39
  Speaker 1: think we really need to move away from this idea
• 9:41
  Speaker 1: of forcing children to be grateful. Gratefulness is something that
• 9:44
  Speaker 1: I foster a lot, and I hope that my baby
• 9:47
  Speaker 1: is so grateful, like for you know everything in life.
• 9:51
  Speaker 4: But what do you do as a child If I
• 9:54
  Speaker 4: tell you to do one thing beck well, depends on
• 9:56
  Speaker 4: my mood, usually the opposite.
• 9:58
  Speaker 1: Right, So if you start telling a kid you have
• 10:00
  Speaker 1: to be grateful, Mum and dad work so hard for
• 10:02
  Speaker 1: their money, they're going to go great. I go to school,
• 10:05
  Speaker 1: I work hard doesn't make sense to take sense yet.
• 10:08
  Speaker 1: And also it just makes them feel guilty about actually
• 10:11
  Speaker 1: spending money and thinking about it, where in reality, it
• 10:13
  Speaker 1: should be liberating, it should be semi exciting, it should
• 10:16
  Speaker 1: be empowering, like, oh my gosh, dinner's going to be
• 10:19
  Speaker 1: fifteen bucks? What are we doing with that? How can
• 10:22
  Speaker 1: we do it? Like, you know, get the kids involved
• 10:24
  Speaker 1: to a point where you're, well, what if we changed
• 10:26
  Speaker 1: the dinner, Like what if we actually did dahl Like
• 10:29
  Speaker 1: you know, Beck, you and I love a cheap doll exactly,
• 10:33
  Speaker 1: but that might mean we can get dessert. They can
• 10:36
  Speaker 1: spend their budget however they want, because they're the ones
• 10:38
  Speaker 1: creating the meal plan, but really teaching them that exchange
• 10:41
  Speaker 1: between the money that they have to hand over and
• 10:43
  Speaker 1: what they get back for it from a young age
• 10:45
  Speaker 1: is going to be one of the most constructive things ever.
• 10:48
  Speaker 1: I love that bee, and so that's what I'm hoping
• 10:51
  Speaker 1: my children will do it. I'm also hoping that they
• 10:53
  Speaker 1: will step up and actually cook the food, Like how
• 10:55
  Speaker 1: good would that be? Like little slave labors wouldn't hurt,
• 10:58
  Speaker 1: not bad, not bad. I guess when I'm talking about that,
• 11:02
  Speaker 1: it's just this idea of being able to conceptualize money.
• 11:05
  Speaker 1: So we live in a society where everything's basically on
• 11:09
  Speaker 1: our phones nowadays. Like you're a cash girl, aren't you? You
• 11:13
  Speaker 1: like getting cash out?
• 11:15
  Speaker 4: My preferred way to have money is cash because it
• 11:18
  Speaker 4: does feel free, and I know that's girl does feel free.
• 11:21
  Speaker 4: It's not free back free.
• 11:22
  Speaker 1: Well, I was about to teach you this concept and
• 11:24
  Speaker 1: introduce this concept of like you and I right, go
• 11:28
  Speaker 1: down to the shops. Let's say we're buying a top
• 11:31
  Speaker 1: and it's fifty bucks yep, and you put it on
• 11:33
  Speaker 1: your card. Where's the pain? Like you tab your card
• 11:36
  Speaker 1: and you've got the top, and you're like, well, mam maam,
• 11:38
  Speaker 1: thank you, ma'am. I'll just ignore my bank account. Sure,
• 11:40
  Speaker 1: I'll give you a crisp little pineapple. Yeah, fifty dollars.
• 11:44
  Speaker 1: I see what you mean. I say to you, right,
• 11:45
  Speaker 1: here's your fifty bucks back, put in your wilet. We're
• 11:47
  Speaker 1: going to go shopping. And then you see a top
• 11:49
  Speaker 1: and it's fifty dollars. Are you going to have a
• 11:53
  Speaker 1: harder time exchanging that physical cash or the card?
• 11:57
  Speaker 4: Okay, when you put it like that, I do probably
• 12:00
  Speaker 4: have to have a little set because.
• 12:02
  Speaker 1: I want to give a fifty dollar Crispy to somebody
• 12:05
  Speaker 1: train with a kid and five dollars. So I think
• 12:08
  Speaker 1: that even though we live in this world where everything
• 12:11
  Speaker 1: is online and they definitely think we should be teaching
• 12:13
  Speaker 1: that and just helping kids understand that, yeah, that's how
• 12:16
  Speaker 1: we transact with money. I think we need to be
• 12:18
  Speaker 1: pulling money out as well and giving it to kids,
• 12:21
  Speaker 1: not necessarily as pocket money. That's a whole other concept
• 12:24
  Speaker 1: that we will talk about at some point. But you know,
• 12:27
  Speaker 1: back to our dinner example, I think they should be
• 12:29
  Speaker 1: given the fifteen dollars in cash so they have to
• 12:31
  Speaker 1: part with it, so they have to sit down and go, well,
• 12:33
  Speaker 1: this is physically what I have and this is physically
• 12:35
  Speaker 1: what I will get, because that is what's going to
• 12:38
  Speaker 1: help them conceptualize how we should be spending money because
• 12:42
  Speaker 1: the pain is involved in the transaction. You are actually
• 12:46
  Speaker 1: physically losing something when we exchange it for those products.
• 12:50
  Speaker 1: And I think that kids need to inherently understand that
• 12:53
  Speaker 1: because otherwise credit Card's still there, Tappy Tabby endless to
• 12:58
  Speaker 1: them because they don't have a bigger concept of the
• 13:01
  Speaker 1: family budget or the family spending. So I think that
• 13:03
  Speaker 1: when we are doing these things, we need to introduce
• 13:06
  Speaker 1: this idea of loss, like this feeling of you're going
• 13:09
  Speaker 1: to miss something because, like beck, if you had to
• 13:11
  Speaker 1: spend twenty bucks on something but you only had a
• 13:13
  Speaker 1: fifty dollar note. If you're anything like me, you really
• 13:15
  Speaker 1: don't want to spend the twenty bucks because I don't
• 13:16
  Speaker 1: want to break it.
• 13:17
  Speaker 4: I don't like that, That's very true.
• 13:19
  Speaker 1: I don't like it. Sids don't like that either. They
• 13:21
  Speaker 1: don't get it less back.
• 13:23
  Speaker 4: Get two notes instead of one, So that is kind
• 13:26
  Speaker 4: of fine.
• 13:26
  Speaker 1: Okay. Yeah, that's why they have to be over seven.
• 13:28
  Speaker 1: Because have you seen the marshmallow experiment?
• 13:31
  Speaker 2: Yes?
• 13:31
  Speaker 4: I think so.
• 13:32
  Speaker 2: Yeah.
• 13:32
  Speaker 1: The little kids are put in a room. It's the
• 13:33
  Speaker 1: Stanford Marshmallow TESTEP and they're put in a room and
• 13:37
  Speaker 1: you know, marshmallow is put in front of them, and
• 13:40
  Speaker 1: I'm just going to pretend it's to you for a
• 13:41
  Speaker 1: hot second, Beck, I'm going to put a marshmallow in
• 13:44
  Speaker 1: front of you, but you can't eat it. You've got
• 13:45
  Speaker 1: to wait. And if you wait, I'm going to go
• 13:48
  Speaker 1: out of the room for ten minutes, so I've just
• 13:49
  Speaker 1: got something to do. When I get back, if it's
• 13:52
  Speaker 1: still here and you haven't eaten it, I'll give you
• 13:54
  Speaker 1: another one, So double or nothing. Rush. I think it's
• 13:58
  Speaker 1: like sixty percent of kids full fail that test because
• 14:01
  Speaker 1: they do not have the ability to conceptualize delayed gratification.
• 14:05
  Speaker 1: They literally go unneath the marginalo thoughs just not gone out. Then,
• 14:11
  Speaker 1: like I think it's only twelve percent of total kids,
• 14:13
  Speaker 1: if tested numerous times, will actually wait for the delayed gratification.
• 14:18
  Speaker 1: It's like us as human beings, like we want it
• 14:20
  Speaker 1: and we want it right now, it doesn't matter if
• 14:23
  Speaker 1: we're adults. But in that vein there is also this
• 14:26
  Speaker 1: concept of I believe it's called conservation, and it's by
• 14:30
  Speaker 1: a guy called p I did it at Uni and
• 14:32
  Speaker 1: there is essentially seven conservation tasks that pia Jens test for,
• 14:39
  Speaker 1: but generally they are acquired in a certain order. So
• 14:43
  Speaker 1: it's like numbers, length, liquid mass, area, weight, and then
• 14:47
  Speaker 1: volume and you should acquire these kind of like tasks
• 14:51
  Speaker 1: or abilities in your brain by the age of ten,
• 14:54
  Speaker 1: and most of them happen between the age of six
• 14:56
  Speaker 1: and ten, which is why I believe that we actually
• 14:59
  Speaker 1: for mal money story at seven. So often. This idea
• 15:03
  Speaker 1: of conservation is kids can't conceptualize volume, a mass, and
• 15:08
  Speaker 1: what's fair and what's not, and so a lot of
• 15:10
  Speaker 1: these tests are about you know, you have a kid
• 15:13
  Speaker 1: and you give them two cookies and then the kid
• 15:15
  Speaker 1: beside them gets one cookie, and they go is that fair?
• 15:18
  Speaker 1: And they say no, it's not fair because he has
• 15:20
  Speaker 1: two cookies and that kid only has one cookie. And
• 15:23
  Speaker 1: then they break the kid's cookie here only has one
• 15:26
  Speaker 1: cookie in half, and then puts two bits down and
• 15:28
  Speaker 1: says is that fair now, yes, because they have two
• 15:31
  Speaker 1: cookies each, Like there's not this idea that two cookies
• 15:37
  Speaker 1: are different volumes and you've got two full cookies and
• 15:39
  Speaker 1: that kid's got two half cookies, like they don't understand it.
• 15:43
  Speaker 1: And there's also this other test about liquid where you
• 15:46
  Speaker 1: sit with a kid and you give them a glass
• 15:48
  Speaker 1: of water, and then you also give them a short
• 15:51
  Speaker 1: glass and a taller skinnier glass, and you say, pour
• 15:54
  Speaker 1: it into each, and it fits in both. But then
• 15:56
  Speaker 1: you ask them which has more. Obviously the answer, because
• 15:59
  Speaker 1: it came from the same cup, is none of them.
• 16:02
  Speaker 1: But the kid will always look at the taller skinnier
• 16:04
  Speaker 1: glass because it's taller and say, well, that one has
• 16:06
  Speaker 1: the most in it, right, And so kids just lack
• 16:09
  Speaker 1: this ability to conceptualize it right. And that goes back
• 16:13
  Speaker 1: to what you just said about like, oh, but if
• 16:15
  Speaker 1: I break the note, then I have two notes. When
• 16:17
  Speaker 1: you were little that made sense right, Like genuinely, there
• 16:20
  Speaker 1: are tests where you say this is fifty dollars to
• 16:23
  Speaker 1: a five year old, or this is fifteen dollars. So
• 16:27
  Speaker 1: it's a fifty dollar note, a ten dollar note, and
• 16:29
  Speaker 1: a five dollar note, and the kid will always pick
• 16:31
  Speaker 1: the one that has more more notes, more notes, So
• 16:34
  Speaker 1: they want fifteen dollars because they get two, but that's
• 16:37
  Speaker 1: more than fifty to them in their brains, so they're
• 16:39
  Speaker 1: not able to conceptualize it. Whereas when you get to
• 16:42
  Speaker 1: that developmental age of between seven and ten, that starts
• 16:46
  Speaker 1: to change. So they start to see that family budget
• 16:49
  Speaker 1: and go all right, well, I've been given fifteen dollars
• 16:52
  Speaker 1: for dinner, and if I spend seven dollars on this,
• 16:55
  Speaker 1: I'm going to have eight dollars left over and I
• 16:57
  Speaker 1: can use it for other things before that be exactly
• 17:01
  Speaker 1: like what you're explaining, more notes, hah, and I get
• 17:04
  Speaker 1: some coins Like that is helpful because they're starting to
• 17:08
  Speaker 1: utilize money and they're starting to touch it and feel
• 17:10
  Speaker 1: it and become really confident with it, like it's not
• 17:12
  Speaker 1: something that scares them. But you are not teaching them
• 17:16
  Speaker 1: the actual skills that they need to manage money as adults.
• 17:19
  Speaker 1: So I think it's important to understand that and what
• 17:22
  Speaker 1: that actually means and teaching them the value of money.
• 17:24
  Speaker 1: But understanding that teaching them the value of money can
• 17:27
  Speaker 1: only start once they have this idea of conservation in
• 17:30
  Speaker 1: their head. Sure does that make sense because otherwise they
• 17:32
  Speaker 1: will just swap you two five dollar notes for a
• 17:35
  Speaker 1: fifty You can jib any two or three year old,
• 17:38
  Speaker 1: Or what if I gave you two cookies you break
• 17:41
  Speaker 1: one in half? They're like, thanks so much, mum.
• 17:43
  Speaker 4: God, it's easy to take it.
• 17:44
  Speaker 1: Keep girl boss. Yeah, Like that's my way of parenting.
• 17:48
  Speaker 1: And then I think that's when you start to introduce
• 17:50
  Speaker 1: this idea of investing. Right, If your child has an
• 17:54
  Speaker 1: understanding of conservation, they are going to start to understand
• 17:58
  Speaker 1: and maybe even dapple in this delayed gratification thing. Right.
• 18:01
  Speaker 1: So that's why I wanted to bring in the marshmallow
• 18:03
  Speaker 1: experiment because smaller kids are less likely to be able
• 18:07
  Speaker 1: to wait. They get so antsy they need the marshmallow.
• 18:10
  Speaker 1: Now they know that they're going to be saut on
• 18:11
  Speaker 1: wood later. But like it doesn't really matter because I
• 18:14
  Speaker 1: have no.
• 18:14
  Speaker 4: Level of self conservation totally. But it doesn't have the
• 18:17
  Speaker 4: concept of time either.
• 18:18
  Speaker 1: None, but that's okay. We just need to understand their development.
• 18:22
  Speaker 1: But that's where at seven to ten, like at that
• 18:24
  Speaker 1: really pivotal age where they're starting to understand it. Why
• 18:28
  Speaker 1: aren't we introducing Okay, well, if we put this money away,
• 18:30
  Speaker 1: this money would grow to this and do you know
• 18:32
  Speaker 1: you can get a lot more for that? And they go, oh,
• 18:35
  Speaker 1: that's interesting. And so I think the introducing investing at
• 18:38
  Speaker 1: that point and being active with it, and again we're
• 18:41
  Speaker 1: not being overwhelming. We're finding a platform that just makes
• 18:44
  Speaker 1: sense for them is going to be really helpful because
• 18:48
  Speaker 1: not only is it going to increase their financial literacy
• 18:50
  Speaker 1: and their confidence with money, but they're going to get
• 18:52
  Speaker 1: wealthy and we want that right, Like I want my
• 18:55
  Speaker 1: kid to be set up so that they are successful,
• 18:58
  Speaker 1: but I also want them to know that they had
• 19:00
  Speaker 1: to work for that, and they had to compromise for that,
• 19:02
  Speaker 1: and they had to sacrifice. You know, if they get
• 19:05
  Speaker 1: given money for birthdays, we will be sitting down and going, well,
• 19:09
  Speaker 1: how are we going to spend this? Like is there
• 19:10
  Speaker 1: a toy you want? And they might go yeah, yeah,
• 19:12
  Speaker 1: and I go, well, do you want the toy now?
• 19:15
  Speaker 1: Or do we want to split it? Do we want
• 19:16
  Speaker 1: to save up for the toy and put some of
• 19:18
  Speaker 1: this money away And we get that later and talk
• 19:21
  Speaker 1: about investing, and I mean, I'll let them make their
• 19:23
  Speaker 1: own decision, but at least I have given them a
• 19:26
  Speaker 1: level of financial literacy so that they make a decision.
• 19:29
  Speaker 1: Because I'm telling you right now, I know that they'll
• 19:31
  Speaker 1: come back and be like, oh, I want to do
• 19:32
  Speaker 1: this now and be like I'm so sorry. You already
• 19:34
  Speaker 1: spent your money, Like you already made a decision. Decisions
• 19:38
  Speaker 1: have consequences. So I think that that is to me,
• 19:41
  Speaker 1: really really important.
• 19:42
  Speaker 4: When it comes to investing for kids and stuff like that.
• 19:44
  Speaker 4: Have you started investing for your tiny baby?
• 19:46
  Speaker 3: Yeah?
• 19:47
  Speaker 1: They came out of the room and I was like, right,
• 19:48
  Speaker 1: sit down, we are investing for the future. So before
• 19:52
  Speaker 1: they were born and I knew who they were, beck,
• 19:54
  Speaker 1: I had already started to think about this because investing
• 19:57
  Speaker 1: is obviously really really important to me. But we also
• 20:01
  Speaker 1: need to take into consideration and we'll talk about this
• 20:03
  Speaker 1: later in the show, like child tax rates and the
• 20:05
  Speaker 1: implications of investing for a kid. So if you're investing
• 20:08
  Speaker 1: for a child, their tax rate can be absolutely astronomical.
• 20:12
  Speaker 1: If they're getting investment returns and money into their account
• 20:16
  Speaker 1: that they're not working for Oh okay, so obviously this
• 20:19
  Speaker 1: isn't going to apply to them if they're you know,
• 20:21
  Speaker 1: working their first job at MACS. But if they have
• 20:23
  Speaker 1: investment income, they basically get taxed at a very very
• 20:27
  Speaker 1: high rate to make sure that wealthy families aren't laundering
• 20:30
  Speaker 1: money through their kids. If that makes sense, that makes sense.
• 20:33
  Speaker 1: So for Steve and I, we sat down and we
• 20:35
  Speaker 1: were like, all right, well, this is a long term thing.
• 20:36
  Speaker 1: We actually want to set them up to hopefully by
• 20:39
  Speaker 1: the age of twenty one, because I'm not giving an
• 20:40
  Speaker 1: eighteen year old access to this money. Right. Hopefully, by
• 20:43
  Speaker 1: the age of twenty one they have you know, some
• 20:45
  Speaker 1: money set aside for them so that they could invest
• 20:48
  Speaker 1: or they could you know, maybe buy a first home,
• 20:50
  Speaker 1: or you know, contribute towards the first time because property
• 20:53
  Speaker 1: is going to be insane by the time that they're
• 20:54
  Speaker 1: twenty one, or you know, help them along the way
• 20:57
  Speaker 1: to be more financially secure. But I didn't want that
• 21:00
  Speaker 1: to be at the I guess compromise of our finances.
• 21:05
  Speaker 1: I also know that it couldn't go straight in their name,
• 21:07
  Speaker 1: so for me, an investment bond made the most sense
• 21:10
  Speaker 1: because it was tax effective and I do have full
• 21:12
  Speaker 1: control of it. And you know, wealth transfer is a
• 21:15
  Speaker 1: lot easier, and you know, you can set savings goals
• 21:18
  Speaker 1: and plans that they can be involved in and actually
• 21:21
  Speaker 1: create wealth with. And I mean, at the end of
• 21:23
  Speaker 1: the day, the barrier to entry for the product that
• 21:25
  Speaker 1: we picked was one thousand dollars, but you can contribute
• 21:28
  Speaker 1: whatever you want after that, sure, and you can like
• 21:30
  Speaker 1: invest a single amount or consistent amounts over the years.
• 21:33
  Speaker 1: So the plan is if they ever get like birthday
• 21:36
  Speaker 1: money or Christmas money, hopefully it goes towards that, because
• 21:39
  Speaker 1: I want financial literacy to be an ongoing conversation and
• 21:42
  Speaker 1: something that they look forward to and something that they
• 21:44
  Speaker 1: can actually access. But yeah, that's where I'm at. And
• 21:47
  Speaker 1: I can tell you a lot more about children's tax
• 21:49
  Speaker 1: rates on the flip side, But yeah, that's what I've done.
• 21:53
  Speaker 4: If that helps, definitely, And I'm not shocked at all,
• 21:55
  Speaker 4: vieit it's very you and I'm very impressed.
• 21:57
  Speaker 1: Sorry, No, it's just I am a person. The second
• 22:00
  Speaker 1: I found out I was like pregnant. I was like okay,
• 22:02
  Speaker 1: but like, what are we doing for their financial future.
• 22:05
  Speaker 1: It's really important.
• 22:06
  Speaker 4: Your tiny baby's gonna be very grateful, the better be.
• 22:08
  Speaker 1: Let's not I'm keeping the money. Can I have some
• 22:11
  Speaker 1: of Yeah, yeah, sure, NEPO baby, but adopted.
• 22:16
  Speaker 4: My only hope. Okay, V let's go for a really
• 22:18
  Speaker 4: quick break. And on the flip side, I'd love to
• 22:20
  Speaker 4: hear more about tax and all this kind of exciting stuff. Okay,
• 22:27
  Speaker 4: welcome back. It is time to talk child tax rates.
• 22:31
  Speaker 4: I never thought I'd ever say those three words together,
• 22:35
  Speaker 4: you know what I mean.
• 22:36
  Speaker 1: I think they're important though, because I think we all
• 22:39
  Speaker 1: have this grandiose idea in our head that will have kids,
• 22:42
  Speaker 1: or we have kids and you're just going to open
• 22:44
  Speaker 1: an investment account in their names, and that's really nice
• 22:47
  Speaker 1: and it's really romanticized. But I think we need to
• 22:49
  Speaker 1: preface investing options by I guess, just laying it out
• 22:53
  Speaker 1: on the table and letting you know what tax implications
• 22:55
  Speaker 1: are involved, because at the end of the day, I
• 22:58
  Speaker 1: think that investing trump's savings, of course, but we need
• 23:03
  Speaker 1: to get the ball rolling. And while investing for your child,
• 23:06
  Speaker 1: especially while they are still little, it means that they
• 23:09
  Speaker 1: have so much time on their side. They can create wealth.
• 23:12
  Speaker 1: And we know that the longer you are exposed in
• 23:15
  Speaker 1: the investment market, the more compound interest comes into play.
• 23:18
  Speaker 1: And we know that's the eighth wonder of the world.
• 23:19
  Speaker 1: And that's like to me, very sexy Beck. There are
• 23:22
  Speaker 1: tax implications that we need to consider, and I guess
• 23:26
  Speaker 1: the default assumption for a lot of people is let's
• 23:29
  Speaker 1: just directly invest in our kids' name. That makes sense,
• 23:32
  Speaker 1: but it can be quite problematic. So miners can only
• 23:37
  Speaker 1: earn up to four hundred and sixteen dollars annually on
• 23:41
  Speaker 1: investment income before a tax rate as high as sixty
• 23:45
  Speaker 1: six percent comes into Oh my god, So that seems wild.
• 23:50
  Speaker 1: And I said on the flip side of the show,
• 23:52
  Speaker 1: the top end, that it's actually to deter really high
• 23:55
  Speaker 1: income families and parents from attempting to lower their own
• 23:59
  Speaker 1: individual pay tax rates by distributing some of their income
• 24:03
  Speaker 1: and assets to their children. And historically that was allowed,
• 24:07
  Speaker 1: that was available, and that meant they would skip out
• 24:10
  Speaker 1: on a large chunk of tax because they'd be like,
• 24:12
  Speaker 1: all right, well, my new daughter back, she's getting you know,
• 24:16
  Speaker 1: eighteen thousand dollars into her account this year, I'll take
• 24:19
  Speaker 1: it off her once it comes through because it's my money.
• 24:21
  Speaker 1: I'm just using the fact that she is a minor,
• 24:24
  Speaker 1: but I don't have to pay tax on that. And
• 24:26
  Speaker 1: it's not fair for a number of reasons. One, if
• 24:28
  Speaker 1: you are distributing to a child, that should be their income,
• 24:31
  Speaker 1: full stop, end of story, Like that to me is
• 24:32
  Speaker 1: an abuse of power. Different conversation for a different time.
• 24:36
  Speaker 1: But also you're skipping out on paying tax, like you're
• 24:40
  Speaker 1: literally tax evading. Now that doesn't sit right with me,
• 24:43
  Speaker 1: But I guess the other question here is like why
• 24:47
  Speaker 1: would we bother? So it does not apply to if
• 24:50
  Speaker 1: your kid goes out at fourteen years and nine months
• 24:52
  Speaker 1: and gets their first job, general tax rates apply. It's
• 24:55
  Speaker 1: investment income that that applies to. So don't get the
• 24:58
  Speaker 1: too confused, like obviously a lot of us. We'll look
• 25:01
  Speaker 1: at it and go the simple outcome here is to
• 25:04
  Speaker 1: just save for them. Just put some money in a
• 25:06
  Speaker 1: savings account each year for a single month, like you know,
• 25:09
  Speaker 1: whatever you can. It's much simpler, Like you could just
• 25:11
  Speaker 1: stash away, you know, twenty bucks a week for eighteen years.
• 25:13
  Speaker 1: Over that time, you'd accumulate what eighteen seven hundred and
• 25:16
  Speaker 1: twenty dollars back.
• 25:18
  Speaker 4: So like, let's say you're putting money into investment account.
• 25:22
  Speaker 4: You're only being taxed on the amount that you make
• 25:25
  Speaker 4: from that investment, of course, so it's still kind of
• 25:27
  Speaker 4: worth it.
• 25:28
  Speaker 1: Well, yeah, if you are stashing away twenty bucks a
• 25:30
  Speaker 1: week for the next eighteen years back, as I said,
• 25:33
  Speaker 1: that's eighteen thy, seven hundred and twenty dollars. That's a
• 25:36
  Speaker 1: nice amount of money.
• 25:37
  Speaker 4: That's nice.
• 25:37
  Speaker 1: Wouldn't you like to get that if you turned eighteen?
• 25:39
  Speaker 1: Wouldn't hate it if your parents had invested it, even
• 25:42
  Speaker 1: with like a conservative rate of return of five percent,
• 25:45
  Speaker 1: because as you know, I like to underpromise over deliver. Yeap,
• 25:48
  Speaker 1: that actually would look more like twenty nine thy three
• 25:51
  Speaker 1: hundred okay after eighteen years for the same amount of money.
• 25:55
  Speaker 4: Yeah right.
• 25:56
  Speaker 1: I guess the magic ingredient is now compound interest. Sure,
• 26:00
  Speaker 1: and the money that your money is making is now
• 26:01
  Speaker 1: making money. And to me, that's the financial equivalent of
• 26:04
  Speaker 1: sliced bread. And I think that that is life changing
• 26:06
  Speaker 1: because you're nearly doubling your money. It goes from eighteen
• 26:10
  Speaker 1: thy to thirty basically, So I guess it really depends
• 26:13
  Speaker 1: on the path that you're going to choose and I
• 26:15
  Speaker 1: guess your time horizon and the purpose of the investment.
• 26:18
  Speaker 1: I mean, if you're playing the long game and you
• 26:20
  Speaker 1: have ten plus years or eighteen years to play with,
• 26:23
  Speaker 1: you could go and can sit out an investment bond
• 26:26
  Speaker 1: like I have. Again, not a recommendation, and I have
• 26:29
  Speaker 1: to reiterate that a million times because that was just
• 26:31
  Speaker 1: something that worked for our financial situation. And I know
• 26:34
  Speaker 1: you will want to know because I get so many
• 26:37
  Speaker 1: dms like how are you investing? For many like iky
• 26:39
  Speaker 1: sit down, But I guess these things like investment bonds
• 26:43
  Speaker 1: are designed to be tax effective investment solutions that can
• 26:46
  Speaker 1: actually build future wealth without hurting me. And I mean
• 26:49
  Speaker 1: it's often overlooked because it feels like a managed investment
• 26:54
  Speaker 1: like that sounds a little bit more complex, but they're
• 26:56
  Speaker 1: usually really easy to get into if you've got less time,
• 27:00
  Speaker 1: Like let's say that your kids are a bit older and
• 27:02
  Speaker 1: we're starting to invest their income that they're earning fourteen
• 27:05
  Speaker 1: years nine months. Let's say we've got like a timeframe
• 27:07
  Speaker 1: of around five years to invest. Maybe going and looking
• 27:10
  Speaker 1: at an ETF on the share market is a better
• 27:13
  Speaker 1: idea because over the long term, an investment bond does
• 27:17
  Speaker 1: have a few caveats, like you have to be in
• 27:19
  Speaker 1: it for a minimum of ten years sometimes to actually
• 27:21
  Speaker 1: get that tax effectiveness, which is so fine, but you
• 27:24
  Speaker 1: need to know the terms and conditions of each option.
• 27:27
  Speaker 1: ETFs they're exchange traded funds, but they are obviously a
• 27:30
  Speaker 1: quite simple way to diversify your investments. Beg you've talked
• 27:34
  Speaker 1: about on the pod, how you're like, hmm, I think
• 27:35
  Speaker 1: that might be something that I'm interested in, right correct,
• 27:38
  Speaker 1: And then obviously as time goes on and you look
• 27:42
  Speaker 1: at it and go, well, actually, I've only got two
• 27:44
  Speaker 1: or three years, Like maybe a high interest savings account
• 27:47
  Speaker 1: is for you. Like I do not want people taking
• 27:50
  Speaker 1: on more risk than they need to, like if you
• 27:52
  Speaker 1: have a very limited time frame. The share market basically
• 27:56
  Speaker 1: flips every seven years, so if you don't have time
• 27:59
  Speaker 1: on your slife, sometimes it's not worth taking the risk,
• 28:03
  Speaker 1: especially if you're like, oh, well, I've got two or
• 28:05
  Speaker 1: three years to you know, build a house deposit, or
• 28:07
  Speaker 1: do this or do that, or you know you've got
• 28:08
  Speaker 1: some money aside, and you're like, should I invest it
• 28:10
  Speaker 1: because my kids go into UNI in two years. I
• 28:13
  Speaker 1: would probably err more on the side of caution because
• 28:15
  Speaker 1: you just don't have enough time for the market to work.
• 28:18
  Speaker 1: It's magic, and compound interest doesn't kick in until seven
• 28:21
  Speaker 1: to ten years. Sure, so it's kind of like compound interest. Yeah,
• 28:24
  Speaker 1: I'll give you sim dribs and drubs there, but you
• 28:26
  Speaker 1: can't predict the market.
• 28:27
  Speaker 4: Yeah, I've said it before.
• 28:28
  Speaker 1: I'd be so rich Beck if I could, I'd be
• 28:31
  Speaker 1: the next Warren Buffett. But I'm not, though, So I
• 28:34
  Speaker 1: think that we need to be I guess a little
• 28:37
  Speaker 1: bit more conservative.
• 28:38
  Speaker 4: Sure, I know they can't recommend anything, But if I
• 28:42
  Speaker 4: was a parent, where would I go?
• 28:43
  Speaker 1: Like?
• 28:43
  Speaker 4: How do I start? So?
• 28:44
  Speaker 1: Beck probably just googling it and seeing what options are
• 28:47
  Speaker 1: out there that work for you, having a think about, well,
• 28:49
  Speaker 1: is an investment bond for me? For some people they
• 28:52
  Speaker 1: might go absolutely not, because it's actually quite a locked
• 28:54
  Speaker 1: in option, Like there's not a lot of flexibility of
• 28:57
  Speaker 1: pulling it out early. If you're going to work with
• 28:59
  Speaker 1: your trial and get into the share market directly and
• 29:01
  Speaker 1: buy direct shares or ETFs or index funds, that could
• 29:05
  Speaker 1: be a really good way of investing. But getting your
• 29:07
  Speaker 1: kid active in it, because you know, if they get
• 29:09
  Speaker 1: another fifty dollars at Christmas time, let's talk to them
• 29:13
  Speaker 1: about what they're buying, Like what are they interested in
• 29:16
  Speaker 1: at the moment, Like, maybe we could find an ETF
• 29:18
  Speaker 1: that has their favorite company in it, Like do you
• 29:21
  Speaker 1: know how many times people like that? Kids will find
• 29:23
  Speaker 1: it boring? And I go, but let's reframe this. Does
• 29:27
  Speaker 1: your kid like Disney? Do you know that Disney's on
• 29:30
  Speaker 1: the share market? Do you know your kids could own
• 29:33
  Speaker 1: some of Disney. We could find an ETF that had
• 29:36
  Speaker 1: Disney in it and a few other colorful things that
• 29:38
  Speaker 1: they might be really engaged in, and go, Wow, you
• 29:40
  Speaker 1: own a part of Disney. And that means when Disneyland
• 29:43
  Speaker 1: does really well and lots of people visit, we actually
• 29:47
  Speaker 1: get paid. Isn't that kind of cool? They've had a
• 29:50
  Speaker 1: really good year, the weather was really great, all the
• 29:52
  Speaker 1: rides were opened, so they made lots of money that year.
• 29:55
  Speaker 1: They're gonna then divide that money up between everybody who
• 29:58
  Speaker 1: owns a piece of that company, and you're one of them.
• 30:00
  Speaker 4: Yeah, that is actually quite cool.
• 30:02
  Speaker 1: Kids are gonna love that, and especially if you can
• 30:04
  Speaker 1: make it make sense to their life, make it make
• 30:07
  Speaker 1: sense to their interests, not like well, actually your grandfather
• 30:11
  Speaker 1: invested and it's very important that you pay attent. They're
• 30:13
  Speaker 1: not going to pay attention, no, but how are you
• 30:15
  Speaker 1: going to engage them in that journey? That actually makes
• 30:18
  Speaker 1: sense for your family as well, because I can always
• 30:21
  Speaker 1: guarantee that you're not as excited about it as I am.
• 30:23
  Speaker 1: I'll be like, all right, Saturday morning, let's make pancakes. Also,
• 30:26
  Speaker 1: do you want to have a look at the share market?
• 30:28
  Speaker 1: And I can give you a little five minute ted
• 30:30
  Speaker 1: talk on what happened, right, So you're not going to
• 30:33
  Speaker 1: enjoy that, But my kids for failure. The other thing
• 30:38
  Speaker 1: I think when we're talking about investing and kids and
• 30:40
  Speaker 1: money is talking about pocket money. Yes, and pocket money
• 30:44
  Speaker 1: is a privilege. Not every kid should be getting pocket money.
• 30:47
  Speaker 1: And I'm a bit spicy on this. Oh I'm going
• 30:49
  Speaker 1: to get in trouble for this, but I don't care.
• 30:51
  Speaker 4: I'm good.
• 30:52
  Speaker 1: I don't think kids should be paid pocket money to
• 30:54
  Speaker 1: do chores.
• 30:55
  Speaker 4: I tend to agree with that.
• 30:56
  Speaker 1: You live in the house too, You contribute to the house.
• 31:00
  Speaker 1: I go to work every day and I come home
• 31:02
  Speaker 1: and I still have to do stuff at home. Your
• 31:04
  Speaker 1: job is to go to school every day and come
• 31:06
  Speaker 1: home and look after the household. As a whole. I
• 31:09
  Speaker 1: do not want kids who assume that I'm the one
• 31:12
  Speaker 1: that has to empty the dishwasher or my husband is
• 31:14
  Speaker 1: the one that does these things. And I'm sure as
• 31:16
  Speaker 1: hell not going to pay them to do something that
• 31:19
  Speaker 1: is just what is for the greater good and for
• 31:22
  Speaker 1: the greater household. I will pay them pocket money. And
• 31:25
  Speaker 1: this is obviously TBC. I might eat my words one day.
• 31:28
  Speaker 1: But you go to school and you work really hard,
• 31:31
  Speaker 1: and I give you some pocket money so that you
• 31:33
  Speaker 1: have some financial freedom on the weekend to make decisions
• 31:37
  Speaker 1: of what you want to get up to without having
• 31:39
  Speaker 1: to ask my permission. Yes, so that you can save
• 31:42
  Speaker 1: up for things that you want to purchase, so that
• 31:44
  Speaker 1: you can do X, Y and Z. But I think
• 31:47
  Speaker 1: it's really important to talk about what those rules mean.
• 31:50
  Speaker 1: And I already know, and I've said this on the
• 31:52
  Speaker 1: podcast before, my kids will have pocket money. But then
• 31:56
  Speaker 1: of that pocket money, there will be an expectation that
• 31:59
  Speaker 1: they break it up. So there will be an expectation
• 32:01
  Speaker 1: that they choose, and it will be up to them.
• 32:04
  Speaker 1: How much are you investing, how much you're saving, like
• 32:06
  Speaker 1: as into an emergency fund, how much are you saving
• 32:10
  Speaker 1: into a fund for all the fun stuff that you
• 32:12
  Speaker 1: want to do. And also we pay family tax in
• 32:15
  Speaker 1: this house.
• 32:16
  Speaker 4: Oh I see, And.
• 32:17
  Speaker 1: So for me, family tax is this concept that I've
• 32:20
  Speaker 1: seen work for a lot of my clients historically, where
• 32:24
  Speaker 1: you sit kids down and go, all right, well, you
• 32:26
  Speaker 1: have to pay twenty percent family tax. And so of
• 32:28
  Speaker 1: their ten dollars that they get every week, they pay
• 32:30
  Speaker 1: two dollars to family tax and that just goes into
• 32:32
  Speaker 1: a jar on the bench yep. And then every quarter
• 32:36
  Speaker 1: or every couple of months, as a family, we sit
• 32:39
  Speaker 1: down and we count how much money is in the
• 32:41
  Speaker 1: family tax jar. Mum and dad they also pay family tax.
• 32:44
  Speaker 1: No one gets out of this, yes, And then we
• 32:46
  Speaker 1: make a group decision about the money.
• 32:48
  Speaker 4: That's kind of cute.
• 32:49
  Speaker 1: How are we allocating this fund? It might be fifty dollars,
• 32:52
  Speaker 1: It might be one hundred dollars, it might be twenty dollars.
• 32:54
  Speaker 1: It doesn't matter what it is. But we now have
• 32:56
  Speaker 1: a pot of money that the family needs to make
• 32:58
  Speaker 1: a family decision. And I think that introducing tax for
• 33:02
  Speaker 1: kids really young sets them up for success because at
• 33:06
  Speaker 1: fourteen years nine months, when they go and get their
• 33:08
  Speaker 1: first job, they're going to be paying tax and I
• 33:11
  Speaker 1: don't want it to be this foreign concept where they go,
• 33:13
  Speaker 1: I'm just missing a heap of my money. What the
• 33:15
  Speaker 1: hell I want them to go? Ah, I've always paid tax,
• 33:20
  Speaker 1: I've paid family tax, and now I pay essentially big
• 33:24
  Speaker 1: girl tax. And that tax gives us a really beautiful
• 33:28
  Speaker 1: infrastructure system, a really beautiful hospital system. It gives us
• 33:31
  Speaker 1: our roads, it gives us the privilege that we have.
• 33:34
  Speaker 1: But I want them to inherently understand that those decisions
• 33:37
  Speaker 1: are made for groups. So, like, you know, the kids
• 33:40
  Speaker 1: might go really want to go to the water park
• 33:41
  Speaker 1: with the money. Okay, we've got X amount, let's go
• 33:44
  Speaker 1: to the water park and spend that as a family.
• 33:46
  Speaker 1: But that money has to benefit everyone. Yeah, mom and
• 33:50
  Speaker 1: dad don't like the water park? What are you going
• 33:51
  Speaker 1: to do about it? Do you know what I mean?
• 33:52
  Speaker 1: Like getting them to negotiate and understand money and the
• 33:56
  Speaker 1: value of money early. I think that's a really good
• 33:59
  Speaker 1: way that can actually help the kids understand. Okay, well
• 34:03
  Speaker 1: we now get to make a group decision. They might
• 34:05
  Speaker 1: go and have little subcommittee meetings. I know they will
• 34:08
  Speaker 1: like if this was me and my sister when we
• 34:10
  Speaker 1: were younger, I would have like sat my sister down
• 34:12
  Speaker 1: and be like, all right, we're having family tax meeting.
• 34:13
  Speaker 1: What do you want? Yeah, let's be on the same page.
• 34:16
  Speaker 1: So when we pitch it to mom and dad, they
• 34:17
  Speaker 1: have to take our idea. But I want them to
• 34:20
  Speaker 1: be thinking about how this works because it plays out
• 34:22
  Speaker 1: in the real world. Politics, tax, everything's intertwined, and I
• 34:26
  Speaker 1: think that that can be a really, really important learning tool.
• 34:30
  Speaker 1: I don't know how it's gonna work out in our family,
• 34:32
  Speaker 1: but as I said, I have seen it work for
• 34:34
  Speaker 1: a lot of our clients, and it really helps kids
• 34:36
  Speaker 1: understand the value of money because they will say a
• 34:39
  Speaker 1: family activity like, oh, family tax, let's go on a holiday.
• 34:42
  Speaker 1: We have fifty dollars. That is not going to take
• 34:45
  Speaker 1: us on a family holiday. That might take us out
• 34:47
  Speaker 1: for family brunch. Yeah, you know, Mom and dad might say, oh, well, actually,
• 34:51
  Speaker 1: if you wanted to do a family brunch, we might
• 34:53
  Speaker 1: put in an extra X, Y Z, and then we
• 34:55
  Speaker 1: can do that as a family, and then it becomes
• 34:57
  Speaker 1: an activity that everyone benefits from. Sure, or you might
• 35:00
  Speaker 1: be negotiating whole family really likes video games and you
• 35:04
  Speaker 1: all want to buy a brand new video game that
• 35:06
  Speaker 1: you all share like. It doesn't matter what it is,
• 35:08
  Speaker 1: but it is a group decision. Yeah, and I think
• 35:10
  Speaker 1: that that's important that they understand that that's how money
• 35:13
  Speaker 1: is allocated. And as I've said on this podcast six
• 35:16
  Speaker 1: million times, I think it is a privilege to pay tax.
• 35:18
  Speaker 1: We live in a world where we are so supported
• 35:20
  Speaker 1: and the more tax you pay, bab, the more money
• 35:22
  Speaker 1: you're making. That is not a bad thing.
• 35:24
  Speaker 4: Your child has a very bright future ahead, hope.
• 35:26
  Speaker 1: So I think so, because personality wise, they're going to
• 35:29
  Speaker 1: be in a lot of trouble.
• 35:29
  Speaker 4: With me, I highly doubt that. I think this is
• 35:33
  Speaker 4: a really good place to leave it for now.
• 35:35
  Speaker 1: Yeah, I'm Do you feel satisfied? I think that's it.
• 35:37
  Speaker 1: If you think that I'm done on kid content, You're wrong.
• 35:39
  Speaker 1: So tuned in for the next episode of you know,
• 35:42
  Speaker 1: investing for Kids or Savings for Kids or tax for
• 35:44
  Speaker 1: kids or whatever. It is like, I'm obsessed, and I
• 35:47
  Speaker 1: feel like the more I'm learning and the more stuff
• 35:50
  Speaker 1: that I want to implement, the more i want to share.
• 35:52
  Speaker 1: Souch my gms about your kid friendly money advice.
• 35:55
  Speaker 4: Yep, she's just getting started.
• 35:57
  Speaker 1: See you on Friday, guys.
• 35:58
  Speaker 4: Bye guys.
• 36:06
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• 36:09
  Speaker 5: in nature and does not consider your individual circumstances. She's
• 36:12
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• 36:16
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