How to nurture financially savvy kids

In 1988, financial planner and best-selling author Venita Van Caspel wrote in her bestselling book Financial Dynamics for the 1990s:

“Our educational system continues to send forth our young with so little information about financial matters that they are like time bombs about to destroy their own and their families’ economic futures.  We equip them to earn good incomes and to live the good life, but we fail miserably as a nation to prepare them to know what to do with the money they earn.”

Now, more than three decades later, the implications of Van Caspel’s sobering commentary are more serious than ever before.  With the level of consumer debt skyrocketing and the cost of housing, education, and health care increasing at double digit rates, younger generations are facing unprecedented obstacles to achieving financial security.  In addition to these steadily climbing trends, we must now factor in unanticipated economic challenges brought on by the sudden onset of the COVID-19 Pandemic.  

Therefore, helping the young people we care about to learn effective money management skills, and to adopt good financial habits and attitudes, is more important than ever.  The first and most important step we must take is to examine our own money beliefs and behaviors, and then take action to get our financial lives in order.  Nothing is more effective in guiding the younger generation than providing a consistent and powerful role model.

Next, we must stay alert for teachable moments to share our financial expertise and wisdom. Very few topics affect us on a day-to-day basis like money, so there are endless opportunities to provide mini financial lessons via word and example.  

Lastly, commit to increasing our knowledge and awareness of ways we can encourage and equip the young people in our lives to lay the foundation for a successful and satisfying financial life.  Here are two great resources to help guide us in this mission: 

Make Your Kid a Money Genius (Even if You’re Not):  Best-selling financial author Beth Kobliner provides parents with a well-grounded guide to fostering a wise financial mindset and practical money skills throughout childhood and into young adulthood. 

The Opposite of Spoiled: Raising Kids Who are Grounded, Generous, and Smart about Money:  Author Ron Lieber believes that good parenting includes talking about money—a lot!  “When parents avoid these conversations, they lose a tremendous opportunity—not just to model important financial behaviours, but also to imprint lessons about what their family cares about most.”

Reprinted by permission of Money Quotient, Inc.

How does the stock market work?

The fastest way to lose half of your money is not a stock market crash but a divorce, separation or a poor business decision (so it’s a good idea to make sure you’re on the same page with your partner when it comes to joint finances.)

Many have felt disheartened by the stock market in recent times, especially with the historic GameStop trading fiasco. It’s easy to feel confused and assume the market is rigged against the smaller investors.

However, the small-time investor could have a ton of advantages over the pros. They don’t need to pay attention to short-term performance or benchmarks or made-up risk-adjusted return metrics. They can play the long game and not worry about all the stuff professional investors are forced to obsess over.

In Ben Carlson’s book, Everything You Need To Know About Saving For Retirement, he talks about how the stock market works. This is an edited extract from chapter eight.


After getting engaged my wife and I began having some deeper philosophical conversations about how we would run our joint finances. We were in our mid-to-late 20s at the time so I informed her I would like to put the majority of our retirement savings into the stock market.

My wife, like most normal people, did not know much about the stock market except for what she heard on the news or saw on TV and in the movies. She did not give much thought to investing in stocks. So when I told her we would be saving the bulk of our retirement money in stocks (especially when we were younger) she was initially concerned.

What follows is more or less what I told her (and despite going through this exercise she still agreed to marry me if you can believe it).

The stock market is the only place where anyone can invest in human ingenuity. It is a bet on the future being better than today. Stocks can be thought of as a way to ride the coattails of intelligent people and businesses as they continue to innovate and grow. Short of owning your own business, buying shares in the stock market is the simplest way to own a slice of the business world.

The greatest part about owning shares in the stock market is you can earn money by doing nothing more than holding onto them. When companies pay out dividends to shareholders, you get cold hard cash sent to your brokerage or retirement account which you can choose to either reinvest or spend as you please.

Many people compare the stock market to a casino but in a casino the odds are stacked against you. The longer you play in a casino, the greater the odds you’ll walk away a loser because the house wins based on pure probability. It’s just the opposite in the stock market.

The longer your time horizon, historically, the better your odds are at seeing positive outcomes. Now these positive outcomes don’t guarantee a specific rate of return, even over longer time frames. If the stock market were consistent in the returns it spits out, there would be no risk.

If there were no risk, there would be no wonderful long term returns. And because there is risk involved when owning stocks, your returns can vary widely depending on when you invest in the stock market.

It has been possible to lose money over decade-long periods in the past. Even 20 to 30 year results can see a big spread between the best and worst outcomes. However, it is worth noting that even the worst annual returns over 30 years in the history of the U.S. stock market would have produced a total return of more than 850%. This is the beauty of compounding. The worst 30 year return for the S&P 500 gave you more than 8x your initial investment.

$10,000 dollars invested in the S&P 500 in the year:

  • 2010 would be worth $37,600 by September 2020
  • 2000 would be worth $34,200 by September 2020
  • 1990 would be worth $182,300 by September 2020
  • 1980 would be worth $918,500 by September 2020
  • 1970 would be worth $1,623,500 by September 2020
  • 1960 would be worth $3,445,000 by September 2020

I’m ignoring the effects of fees, taxes, trading costs, etc. here but the point remains that over the long haul, the stock market is unrivaled when it comes to growing money. And the longer you’re in it the better your chances of compounding.

Having said all of that, there is an unfortunate side-effect of this long term compounding machine. Stocks can rip your heart out over the short term. If there is an ironclad rule in the world of investing, it’s that risk and reward are always and forever attached at the hip. You can’t expect to earn outsized gains if you don’t expose yourself to the possibility of outsized losses. The reason that stocks earn higher returns than bonds or cash over time is because there will be periods of excruciating losses.

The stock market is fueled by differences in opinions, goals, time horizons and personalities over the short term and fundamentals over the long term. At times this means stocks overshoot to the upside and go higher than fundamentals would dictate. Other times stocks overshoot to the downside and go lower than fundamentals would dictate. The biggest reason for this is because people can lose their minds when they come together as a group. As long as markets are made up of human decisions it will always be like this. Think about how crazy fans can get when their team wins, loses or gets screwed over by the refs. These same emotions are at work when money is involved.

How you feel about investing in the stock market should have more to do with your place in the investor’s lifecycle than your feelings about volatility.


Remember, the stock market isn’t the only way to invest money, but it helps us with portfolio diversification, a well-practised strategy for protecting our future wealth.

When the opposite is true

There is a thin veneer over everything. When we are distracted by news streams, overwhelmed by direct messaging and tired from keeping up with the Joneses, it’s easy to create a veneer that allows us to store and process more information without having to delve deeper into what’s actually going on beneath the surface.

It’s here that paradoxes are formed, and we can miss out on value when we aren’t able to dig deeper and find out more. Often, these paradoxes become most apparent in our later years, and we love to wax lyrical about how wisdom is wasted on the old and youth is wasted on the young.

Ultimately – we begin to accept (and awaken to) the opposite of so many things we once believed to be true.

Here are just a few of life’s paradoxes that can help us find more value and fulfilment in life.

Learn More to Know Less

This is also known as the knowledge paradox. That the more we know, the less we can clearly explain. Our inability to explain familiar concepts is a form of cognitive bias wherein experts often overestimate the ability of novices. As Einstein put it – the more I learn, the more I realise how much I don’t know.” 

This should be empowering, not frightening and should encourage us to embrace lifelong learning. Lifelong learners are built, not born. Choosing to keep learning is something we must actively do – it’s not reserved for some non-existent biologically elite.

Slow Down to Speed Up

Our parents and teachers would often say, “Less haste, more speed!”. Apart from being more mindful and present, slowing down gives us the time to be deliberate with our actions. We can focus, gather energy, and deploy our resources more efficiently. It allows you to focus on leverage and maximising returns.

When it comes to markets and investing, budgeting or risk management – this paradox is intrinsic to the sustainability of our planning.

Sprezzatura (“Simple is not simple.”)

The veneer of social acceptance places high praise on those who have the veneer of “having it all together.” The house, the family, the job, the investment portfolio…

Whilst the veneer may be entirely false, we need to remember that we see the end result, not the hard work that goes on behind the scenes. It takes more effort to make something appear effortless. Effortless, elegant performances are often the result of a large volume of effortful, gritty practice. 

Benjamin Franklin once said that when you are finished changing, you are finished. If we want to keep moving forward and thriving in times of hardship, we need to be dynamic and adaptable. Learning to adapt to the opposite of what we once thought true is not easy, but it’s a necessary step to find more value and more meaning in life.

Is anchoring holding you back?

One of the challenges of financial planning is its complexity. Not only is it mathematically layered, but it’s also fraught with bias and emotional influence. For most of us, we only scratch the surface of about seven areas of financial planning and allow experts to make recommendations and decisions that will hopefully create a better financial position for us in the future.

When it comes to investing (just one area in about seven), there are loads of biases that can either help or hinder the protection and growth of our assets. This makes asset management and investment planning a constantly evolving landscape and requires several types of niche specialists.

Anchoring is a cognitive bias that often comes into play when we are trying to establish the value of something.

This doesn’t only apply to investing – it applies to commodities and services across the board. Every day, we rely on the anchoring bias to help us form a perception of value, from standing in the fresh foods aisle to standing in a second-hand car lot or calling around to find a plumber to fix a leak.

“People make estimates by starting from an initial value that is adjusted to yield the final answer,” explained Amos Tversky and Daniel Kahneman in a 1974 paper. “The initial value, or starting point, may be suggested by the formulation of the problem, or it may be the result of a partial computation. In either case, adjustments are typically insufficient. That is, different starting points yield different estimates, which are biased toward the initial values.”

This means that we tend to rely too heavily on the very first piece of information we learn, which can seriously impact the decision we end up making. And, living in a world where we have far more access to information than ever before, complicates our decision-making exponentially.

So – can we avoid it? Well, according to Investopedia, not entirely. Here are some ideas they offer to manage our anchoring bias.

Studies have shown that some factors can mitigate anchoring. Still, it is difficult to avoid altogether, even when we are aware of the bias and deliberately try to avoid it. In experimental studies, telling people about anchoring, cautioning them that it can bias their judgment, and even offering them monetary incentives to avoid anchoring can reduce, but not eliminate, the effect of anchoring.

If you are selling something or negotiating a salary, you can start with a higher price than you expect to get as it will set an anchor that will tend to pull the final price up. If you are buying something or a hiring manager, you would instead start with a lowball level to induce the anchoring effect lower.

Ultimately, if we can’t avoid anchoring, we should at least try to use it to our advantage. In financial planning, we have a process called due diligence. This helps us obtain as much relevant information as possible to a specific decision to help us create a close-to-accurate anchor.

The miracle of Meraki

In every culture and creed, there are traditions and philosophies about how to experience the best that life has in store for us, whilst overcoming trials and tragedies. From mindfulness to healthy eating, from exercise to stress management – we are often reminded that what we put in is what we get out.

Somewhere, in all of these pragmatic approaches, we can lose sight of the meaning of what we’re putting in, and become focused on the output. This is especially true when it comes to our money.

It’s not often that we attach meaning to money, and when we do, it’s attached to the money we have right now. We like to plan for the money we hope to have, but we are easily detached from the relevance and meaning because it’s a future goal.

This is where the Greek’s concept of Meraki is really helpful!

Meraki refers to the soul, creativity, or love that we put into our work, family, and other activities. It is the essence of yourself that you put into your work. It helps us find meaning in our money before we’ve earned it – not just for a future event.

There is a well-known quote by Kahlil Gibran – he said that “work is love made visible”. Meraki is all about a choice that we can make right now, today; a choice to find meaning in what we’re doing. When we love what we’re doing, or appreciate how it’s helping others (because some tasks will always be boring…), we will experience value and likely become considerably better at what we’re doing.

It doesn’t only help us enrich the day ahead; we can also start to include it in our planning. We can start to look for work and activity that we will truly find meaningful. When we pour our soul (blood, sweat and tears) into a project, we value the journey, not just the outcome. The whole experience becomes more purposeful and significant, allowing us to find fulfilment and be more creative.

Passion is a wonderful stimulant for maintaining positive mental health. Whenever we deal with people who truly love what they’re doing, whether they’re a barista or bookkeeper, an artist or an attorney, a teacher or a turner-and-fitter – people who are passionate are a pleasure to be around.

Remember, when it comes to making and managing your money, it’s not just about the meaning you get out – it’s about the meaning you put in.

Sandwich generation

The sandwich generation refers to working-age individuals who are in the precarious position of looking after their growing children and caring for elderly parents. 

They are effectively “sandwiched” between the responsibilities of caring for their children, who require financial, physical, and emotional support, and caring for their ageing parents, who may be unwell, incapable of performing certain activities, or in need of financial assistance.

Increasing lifespans and having children at an older age have contributed to the sandwich generation phenomenon, as it has more societal acceptance for adult children to live at home. With the added pressures of managing one’s own career and personal issues and the need to contribute to one’s own retirement, the individuals of the sandwich generation are under significant financial and emotional stress. 

In some cases, this generation has to postpone their own retirement planning because of the added financial obligations. There are some steps that members of the sandwich generation can take to lessen the burden. 

The first step is to have a financial discussion with all parties involved. For ageing parents, the expectation is that a lifetime of work has provided them with a pension or a nest egg that will help them cover part of elderly-care costs. If this is not the case, you should get assistance as soon as possible.

Even if finances are not currently an issue, they will become one unless you put proper attention into estate planning. If one family member is shouldering the majority of the burden of caring for an ageing parent, the estate should be discussed in that light. Although the sibling may not want to be financially compensated for their care, failing to confront the issue will almost certainly lead to bitterness among the family when parents pass away.

The goal for adult children is to encourage them to contribute financially to household costs and responsibilities, and move towards independence. There are several methods to promote this, but the simplest is to set the expectation that they will pay near-market rates for room and board. This eliminates the “mom and dad discount,” which permits them to live a more lavish lifestyle than their resources can sustain in the long run.

Many of those in the sandwich generation do not want to put their children in the same situation as they are. If you don’t want to rely on your children to care for you in the future, you should consider how you would pay for your own care. With the expense of care continuing to rise, it’s critical to start thinking about how you’ll pay for it now.

At the end of the day, there are no wrong or right ways, only paths of least resistance and greatest joy. Through communication, patience and understanding, you can make almost any situation work out for the best.

The nourishment of nature

A breath of fresh air, the sun on our faces, bare feet in the sand. Spending time outside can provide many small pleasures, which all leave us feeling revitalised. Whether it’s sipping ice-cold lemonade in our backyard or hiking up a mountain, spending time in nature has numerous benefits beyond the obvious. 

There have been many studies outlining the positive mental effects of being immersed in nature. For example, the University of Michigan conducted a study that revealed students who regularly went for a nature walk had improved short term memory. Or consider this Stanford study, which found that walking outside reduces stress. Even if it’s just for five minutes a day, being outside has a calming effect on our brains.

Let’s take a look at some of the other benefits of being in nature.

Improved Sleep

Our body can better regulate sleep patterns when we spend time in natural light. When the sun sets, our brains release the proper amount of melatonin to aid in a restful night’s sleep. (Which is also why staring into a backlit cellphone screen before bed keeps our brain wired and makes it harder to sleep!)

Strengthened Immune System

Going outside and getting adequate sunlight has been demonstrated in studies to help enhance the immune system. Make time to go for a walk outside or have some fun in the sun to help you battle sickness and stay healthy.

Inspired Creativity

Spending time outside allows you to find inspiration in the beautiful sights, smells, and sounds of nature. Science backs this up as well, demonstrating that spending time outside can boost our ability to think more creatively.

A walk does not have to be solely for the purpose of walking. You could, for example, conduct your next one-on-one meeting while meandering through a park or walking to a coffee shop, thereby killing two birds with one stone.

If you don’t believe you have time, it’s possibly because you consider something as simple as a stroll around the park to be a chore or not income-generating. Or you regard it as a waste of time and effort that you simply cannot afford. 

Investing time in nature does not have to be complicated or costly. If anything – consider it an investment that you can’t afford to pass up!

Crypto can be taxing

One of the early appeals for cryptocurrencies was that they would not be taxed as they are not fiat currencies (yet), in that they are not owned by a country or used for trade inside of geographical tender regulations.

However, as these platforms grow and develop, we are seeing that this is most likely not the case. According to several governments, cryptocurrencies, such as Bitcoin, are classified as “intangible assets” – as opposed to, say, property or currency. 

These definitions differ slightly in different regions, but for the most part, gains or losses related to cryptocurrencies can be classified into three categories or scenarios, each of which could result in different tax consequences:

  1. A cryptocurrency can be acquired through so-called “mining”. Mining is conducted by the verification of transactions in a computer-generated public ledger, achieved through the solving of complex computer algorithms. The “miner” is rewarded with ownership of new coins by verifying these transactions, which become part of the networked ledger. This gives rise to an immediate accrual or receipt on successful mining of the cryptocurrency. This means that until the newly acquired cryptocurrency is sold or exchanged for cash, it is held as trading stock, which can be realised through either a normal cash or barter transaction.

  2. Investors can exchange local currency for a cryptocurrency (or vice versa) by using cryptocurrency exchanges, which are essentially markets for cryptocurrencies, or through private transactions.

  3. Goods or services can be exchanged for cryptocurrencies. This transaction is regarded as a barter transaction. Therefore the regional barter transaction rules apply. 

While the initial receipt of cryptocurrency from mining is classified as income for tax purposes, revenue services may apply a distinct set of tax rules to the cryptocurrency’s subsequent disposition. Short-term trading to generate daily wages is considered income for tax purposes, but long-term investments (usually exceeding three years) are subject to capital gains tax. 

We are already reading reports of treasuries extending their cryptocurrency audit and detection services by many global media outlets. In addition, some have publicly listed employment opportunities geared explicitly towards cryptocurrency tracking.

According to recommendations, taxpayers who treat cryptocurrency transactions in a way that is inconsistent with their respective tax laws may face penalties. As a result, you must stay up to date on the newest developments in crypto tax legislation if you own crypto.

Dualistic Thinking

Dualistic thinking assumes a universe where there are only two opposing, mutually incompatible options or realities. This type of thinking is either/or, good/bad, negative/positive, and has a significant impact on our beliefs and behaviours.

Our development is stymied by dualistic thinking. The sooner we can break free from this either/or mindset, the sooner we can nurture greater success in the workplace and in our personal lives.

This either/or mentality contributes to our fears and concerns by presuming the false restriction that no other choices exist. We might feel confined, perceiving little freedom when we think in this way.

We may feel trapped or powerless in a circumstance when our options, choices, and determination appear to be limited. We tend to react emotionally in such cases, sometimes not even aware of the reasons why. 

Dualistic thinking hinders our personal and professional progress because we rarely allow for a range of options. We rate the situations and people around us on a binary scale. We reduce our capacity to see alternative possibilities by limiting ourselves to only two options.

Our psychological bias is a significant hazard of dualistic thinking. The “snake bite” effect, for example, occurs when an investor has a bad experience with an investment that causes them to be more cautious in future investment decisions, lowering their return potential.

The fear of regret and feeling like we have made a decision that is inherently ‘wrong’ leads to this bias. One way to counter this effect is to adopt a strategy that closely adheres to predetermined investing criteria and eliminates most of the decision-making process on what to purchase, when to purchase, and how much to purchase.

Using rules-based trading techniques decreases the likelihood of an investor making a discretionary decision based on previous investment success.

We create unrealistic expectations when we consider simply “good” and “bad”. Whatever decision you make will have implications, some of which will be unexpected.

Those implications may appear to be a choice between what you leave behind against what you get, or there may be aspects of both that you appreciate. It’s crucial to recognise that it’s often impractical to expect our actions to only have two possible outcomes; we should always look for a third outcome to help balance our expectations.

Once we have realised this, we can concentrate on what appears to be the best course of action for our personal circumstances.

Things don’t get easier – we become more resilient

Life is uncharted. Maps can only be made from where we’ve been – not where we have yet to go.

The only certainty is uncertainty, and we can experience potentially life-altering choices on a daily basis. Each nebulous choice we make brings with it a unique flood of thoughts and emotions. Yet, we generally adapt well, over time, to life-changing situations. This is, in part, thanks to resilience.

Psychologists define resilience as the process of adapting well in the face of adversity. As much as resilience involves endurance against difficult experiences, it also empowers us to grow and improve along the way.

Resilience is learned; it involves behaviours, thoughts, and actions that we can all develop. Improving resilience takes time and intentional effort, much like building a muscle.

To increase your capacity for resilience, here are four core components on which to focus: connection, wellness, healthy thinking, and meaning.


In the middle of challenges, connecting with empathic and understanding people may remind you that you are not alone. Concentrate on locating trustworthy and sympathetic people who can validate (or empathise with) your feelings, as this can help you develop resilience.


Self-care may be a trendy buzzphrase, but it’s also a proven strategy for improving mental health and resilience. This is because stress is both physical and emotional. Positive lifestyle variables such as a healthy diet, adequate sleep, plenty of water, and regular exercise can help your body adapt to stress and lessen the impact of negative emotions like anxiety and sadness.

Healthy Thinking

How you think has a significant impact on how you feel and how resilient you are when confronted with challenges. Identify areas of illogical thinking, such as a tendency to catastrophise problems or a belief that the universe is conspiring against you, and replace them with more balanced and realistic thinking habits.

For example, if you’re feeling powerless in the face of difficulty, tell yourself that what occurred to you isn’t a predictor of what will happen in the future. You may not be able to affect the outcome of a highly stressful situation, but you can control how you understand and react to it. Remember, we can map out the past with amazing accuracy, but what happens in the next moment will always hold the potential for something radically new.


You can gain a sense of purpose, promote self-worth, connect with people, and tangibly help others by volunteering at a local homeless shelter or just supporting a friend in need, all of which can empower you to build your own resilience.

Resilience is present in any aspect of our lives where we are facing adversity. Be it personal, financial or elsewhere. But the underlying principles of forging resilience are the same. Build a network of strong connections, focus on personal wellness, keep a healthy mindset, and find your meaning.