Changing Your Family Tree

We're going to talk a little bit about changing your family tree. Imagine those of you out there who are like me, who had some sort of contract with the military or contract with an MD, PhD, or Indian Health Services or, or whatever, or those of you who borrowed 200, 300, 400, $500,000 to go to med school. Imagine your kids want to be docs, your kids want to be, you know, dentists. They want whatever they want to do. Imagine them being able to come out debt free. How much different would their life start if not only they started a net worth of zero, but maybe they start with a 20s fund too. Maybe they start with, you know, an HSA that you funded for them for a few years there. You know, just imagine how that changes going forward. Now when their kids come along, they're financially literate because you taught them right. Their kids come along, they're not starting out in debt, they're starting out with a few assets. You know, how big of a difference a few assets can make in your 20s, you know, when you really can use some money. We're talking about changing family trees for two generations, three generations, four generations. You know, it's not just about, you know, leaving legacy wealth, you know, generational wealth. It's also what you're teaching them, not only through your example, but, you know, deliberately. I sit down with my kids all the time and we talk money. This year during our giving meeting, we didn't get around to doing it until the first week of January. In fact, we barely got the money into the daf, still in, in December, but they sat on it for a week or two. And so we couldn't distribute it. And then we got busy through the holidays. And so we actually had a giving meeting the first week of January this year. But as part of that, I did a couple of things. One, I read a letter, some information that one of my aunts put together about her upbringing, my mother's upbringing. They grew up on this little tiny farm, 12 kids and some basically a two room house on a farm. The boys slept out in the barn year round. It was the way it worked out. And comparing and contrasting their lives with the life of my mother and my aunt was pretty dramatic contrast. And so we read that before. We talked about who we were gonna give to this year, which charities we were gonna support. And I think that put them into the right mindset to realize that the advantages they have with their twenties funds, with their 529 saved up with their Roth IRAs that are funded with every dollar they've ever made as teenagers. You know, the advantages they have, the advantages I had. You know, my father was the first one in his family to ever go to college, became an engineer, and then most of their kids have advanced degrees. And so you're changing your family trees as the years go on. The other thing we did is we read together the blog post that I ran on the first of the year. I think it was called Investing that Thing Rich People Do. And it talks a lot about the basics. And a bunch of comments on it said, oh, I'm going to share this with my kids. And I'm like, I haven't even shared this with my kids, so I thought I better share it with my kids. The idea being that my kids are never going to be able to claim that they weren't financially literate when they left home. They've been taught about retirement accounts. They've been taught about index funds. They've been taught about how real estate investing works. They've been taught about the importance of budgeting and insurance and those sorts of things. And do they know everything? No. Do they still have lots of questions? Yes, but it's something we talk about regularly in our house. Not only do we lead by example, we actually try to sit down and teach them something about it from time to time. Right. My kids have done their own tax returns, for instance. There's no reason that your kids should be leaving home financially illiterate. Right? Don't handicap them that way. Help them to be successful, even more successful than you were. Now, maybe they won't have your income. Maybe they're not a urologist making $800,000 a year. That's okay. With the start you give them in financial literacy, they're still going to be successful, you know, unless they make deliberate decisions not to be. There's nothing you can do about that. But you can make sure they're financially literate when they leave. And I think you'll be glad you did.

The hosts of the White Coat Investor are not licensed accountants, attorneys, or financial advisors. This podcast is for your entertainment and information only. It should not be considered professional or personalized financial advice. You should consult the appropriate professional for specific advice relating to your situation.