How do I Teach My Kids To Be Entrepreneurs

How do I Teach My Kids To Be Entrepreneurs

Asked Eric from Oregon

Question:

Hi Ravi, I have three kids and I want to help them learn how to be entrepreneurs so they have more chances to see and take opportunities as they enter the working world.  I am a blue collar worker and don't have the experience to guide them on this.  What would be your advice to help them get this entrepreneurial understanding?  My kids are 15, 13 & 8 years old.

Answer:

Thank you for your question Eric.  It's really a great question and an important one as well, especially for your oldest kids who is probably at the age where college is coming into the picture and that is the time kids start to wonder more seriously about what they want to be when they grow up.

These days parents are realizing more than ever the importance of providing their kids with information about money and business at an early age. In today's economy, we need to raise our kids to be self-reliant. The idea of getting a good job is no longer a guarantee of having financial security like it  was in the past. Employees, even highly skilled ones, face an uncertain future.  Most of times our security as an employee rest in the hands of our boss, the scary part is our boss' security lies in his boss' hands ... at some point you see the promises & commitments made to you are worth less than the paper their written on, and that's even if they're written down. We need to be realistic with our kids. We need to let them know there are no guarantees (except death and taxes - lol), but also we need to let them know how this game of risk and reward is played. Life as an entrepreneur means just that balancing and evaluating the trade of of the under taken risk versus the reward it could produce.  To do this means we need to first open our eyes clearly to what going on. Basically we have to remove the wool that has been pulled over our eyes.

There are what I believe a handful of key concepts that parents should convey to their kids that can reinforce independence, self-motivation and entrepreneurship. Here are a few ideas to start the teaching process of entrepreneurial thinking to your children:

1. Clearly explain basic money facts. The basic ideas about money are simple enough for young children to understand them if we keep it simple. You should cover:

• What is money and why do we use it
• How money is earned
• How money should be spent
• The importance of saving money
• Renting versus buying a home (good for high school age kids and older)
• Assets and Liabilities (good for high school age kids and older)
• Good and bad debt
• Relevant mathematical concepts like percentages for R.O.I. (Return On Investment)

2. Build good money habits. We all teach our kids habits. We teach them to brush their teeth, to clean up after themselves. We also teach them money habits. Good money habits include providing value in exchange for money, living within your income, saving, investing and managing risk.

3. Require your kids to save a portion of their own pocket money or allowance. Kids learn to save by doing it. If they develop the habit of saving their money and watching it grow while they are young, these skills will extend into their adult lives.

4. Encourage your child pursue activities that they enjoy and have a passion for. Although every child will inevitably have to perform work they do not always like, they should also have work that they are passionate about and consider fun. This will help them develop a strong work ethic and a commitment to their future careers.

5. Talk with your child about your work experiences on a regular basis. Explain to them what you do, how you earn money and the importance of developing a career. Share both the positive and negative aspects of work so that they have a realistic idea of what the professional world is like.

6. Encourage your child to start their own businesses as soon as possible. Lemonade stands, babysitting and lawn maintenance are all great entrepreneurial jobs that your child can start at a young age.

7. Embrace technology with your children. Teach them to use computers, software and the internet as soon as they can walk and talk. There are a wealth of opportunities that technology can offer and the sooner your child has an understanding of technology, the better they will be able to compete.

8. Build a can-do attitude. When you're child says "I Can't", get them to replace this phrase with "I need more practice". When your child is faced with a challenging task, do not complete it for them, even if they ultimately fail. Kids are very good at minimizing the effort the invest in projects, and if they realize that complaining will get somebody else to finish they work for them, they will take advantage of this.