By Paul McCoy, CIMA®, AIF®
Passing along sound financial advice is just one of the many ways dads show they care. In honor of Father’s Day, we wanted to share some of the wonderful words of wisdom dads have bestowed upon their children.
Here are some of our favorite financial lessons from famous dads.
Make Your Money Work for You
Robert Kiyosaki, the author of Rich Dad, Poor Dad, is arguably everyone’s father figure because of how much wisdom he shares with his readers. He explains the important lesson that rich people stay rich by making their money work for them, while broke people stay broke by spending all their money, and middle-class people stay middle class by saving all of their money.
There are many ways you can have your money work for you, including investing in stocks, bonds, real estate, and businesses. This lesson touches on the importance of investing your money wisely and making money while you sleep—or as you’re going about your daily life.
Teach Yourself Financial Literacy
We had to include one more lesson from father figure Kiyosaki. In his book, he also coined the popular quote, “money without financial literacy is no money.” You could make millions of dollars, but if you don’t have good money habits, you’ll quickly spend it all away. As Kiyosaki explains, “Making money and keeping money are two separate things.”
Avoid Debt & Save Whenever Possible
Rob Riggle, a popular actor and commentator, learned critical financial lessons from his father at an early age. Even when they would play Monopoly together, his father would tell him to avoid debt whenever possible, save as much as you can, and invest early, often, and consistently.1 These are all great lessons that complement each other well. Even if you have only $50 to your name, you can still invest some of it and watch it grow over time. Plus, avoiding debt is always a good tip if you want to grow your net worth.
Stick to a Budget
Ariana Rockefeller likely learned countless financial lessons as a child, but the one that stuck with her was to keep track of every dollar she spent. She learned this from her father and great-great-grandfather, John D. Rockefeller, Sr., who wrote down everything he spent in a ledger. She was given her first ledger by her father, and she began tracking her input and output from her allowance money. To this day, she still maintains the same habit, although now her budget is kept in an Excel spreadsheet.
This is an important lesson in knowing how much money is coming in and how much money is coming out, as well as how to stick to a budget. My dad liked to say, "Live within your means".
Focus on the Long-Term Strategy
Warren Buffet is known for his many pieces of financial wisdom. As one of the world’s most successful investors, we have to include him in our list of famous financial fathers. There are so many lessons to choose from, but one of his best lessons is to focus on the long-term game. He famously said, “Someone is sitting in the shade today because someone planted a tree a long time ago.”2
This is a good illustration of the long-term goal of financial planning. Planting and nurturing the seeds of financial success today can lead to shade to enjoy later in life. By having a multi-decade horizon, you can work with your advisor to create a long-term plan based on your goals.
Fathers and father-like figures are an important part of growing up and gaining the knowledge we need to succeed. What important financial lessons did your parents pass down to you?
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