Today I Learn… I make a point of learning something new everyday. This is what I learn each day

1, Jan 16, 2009

What A Mom Wants To Give to Her Children Part 3

Filed under: Mother — admin @ 9:32 am

It is true that very often money, in whatever form it may take, is the focus of what is desired by the children and what shall be passed on to the children, if there are some. For me, the teaching of money and life is one of the most valuable gifts that I would like to give to my children, priceless though the cheapest one.

There are tons of stuffs written on money, that money being a good servant but bad master, etc. Or money is not everything but nothing can be done without it. Money cannot make you happy but you won’t be happy without it. It is even mentioned in bible, “For the love of money is a root of all kinds of evil.”

I want my children to be aware of the relationship between money and their lives. While our life energy and time is limited, money is unlimited. There is no end of human desire for more and more because there are indeed more and more money and wealth if you strive for it, the more you make, the more you spend. But can you strive for more and more time and energy out of your limited span of life? No. Have you heard this, “Our span on earth is short.”

When we have to work for money, well, to make a living if you don’t have a large inheritance, we are in essence doing nothing short of exchanging our life energy and time for money, a limited for an unlimited and an unbalanced exchange, which we want to terminate as soon as possible so that we can enjoy our limited life by doing whatever we enjoy. Ideally retire at age 40.

Such a nice dream or perfect plan! Too bad not many of us can afford it! I remember a friend of mine told me, “When I was young, I wanted to retire at age 50 and start enjoying life …” Well, he is just like an Energizer Bunny, not that cute though, forever running, no where near retirement. Some friends of mine started having children after age 40 and will have to work their heads off to fulfill their financial responsibility for the youngsters.

Now what, after we know this relationship? Well, my advice for my children is like this. No paycheck, no matter where it comes from, can make you rich quickly and allows you to retire that early.

One of the legal ways to get rich this quick is investment — invest wisely and do it as early as possible, better starting it from your first paycheck. Yes, you got to leave some extra each month to invest. Saving needs self-discipline. You need to discipline yourself to put aside at least 15% of your income and invest wisely.

e.g. if your average annual investment is $15,000, after 25 years, with average 9% annual interest rate, interests compound monthly, the future value is about $1.4 million. If you start working right after college and can retire after 25 years, living comfortably with this saving. Of course, the more you make and invest, the less time it will take to reach your financial goal and then retire.

I told my children, “You will never have money for investment if you are like average Americans, living from paycheck to paycheck by spending every penny they make, when still not enough, start borrowing and finding themselves in heavy debt for the rest of their lives and finally never have a second to enjoy the most precious life on this earth!” I have learned many of my co-workers don’t even have money left for their company-matching retirement savings. Many of them started working in their teens and have to work till they drop dead!

A sad yet heavy lesson that I hope my children will learn as early in their lives as possible — get rich quick and enjoy life early. You cannot enjoy life if you are rich in money but poor in time.

One last thing — retirement does not mean stop working or doing nothing. It only means doing whatever we enjoy without having to worry about paycheck.

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