Teaching Children Wealth Building
Have your children know and understand the following concepts and you’ll give them a great start on their road to financial freedom.
What Wealth Is and What It is Not
Wealth is not what you own or size of your salary. Wealth is having one or more passive income streams that can ensure your standard of living; the bigger the stream, the greater the wealth.
What Money is and What It Is Not
In a free market economy, money is freely exchanged for goods or services. This may be obvious, but needs to be emphasized. Money does not bring love or fulfillment. These things come from a healthy inner self. Be clear on which brings what into ones life.
How Money Enters Ones Life
People earn money by providing products or services that have value to others. This is the same as the previous principle, but looked at from the other side of the coin.. Most people exchange their time for money. Wealthy people exchange goods or services for money. This teaches children that money exchange goes both ways, and that it must be earned.
The Law of Supply and Demand
The more sought after a given product or service is, the more people are willing to pay for it. To create a higher income, one can either produce goods that are in high-demand or provide services that are in high demand.
The Fastest Path to Great Income
Building a business is the fastest path to building a huge income, and developing a massive net-worth.
Know Standard Wealth Building Vocabulary
Knowing the following definitions provides a foundation for all other wealth-building training.
- Asset - Anything owned that has a cash value. This includes property, goods, savings or investments
- Liability – Indebtedness; an obligation to pay money to someone else
- Net worth - The value of all assets, including cash, minus total liabilities
Adapted from the writings of Joshua Kennon
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