Author Steve Siebold studied 14 lessons self-made millionaires teach their kids.
How do you teach your kids about being self-made?
In case you were wondering, Steve Siebold, author and self-made millionaire, interviewed more than 1,200 millionaires and billionaires over the past 30 years and learned how these ultra-wealthy people teach their kids about financial success.
Through his most recent book, he makes a list of everything he has learned:
1. Success isn’t free
It takes a lot of hard word to become successful.
Becoming financially independent is not a walk in the park, in fact, there won’t be much time for relaxation. If you want to be rich, you must be prepared to sacrifice your time, energy and leisure to build something great.
2. Get rich solving problems
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The top earners know that money flows from ideas and problem solving. “If you want to be rich, solve a problem,” writes Siebold. “If you want to be very wealthy, solve a bigger problem.”
Henry Ford who amassed one of the world’s largest fortunes, said to his kids: If you solve big problems you will receive big rewards, if you solve little problems, then you will receive little rewards.
3. Expect to make it
Most self-made people expected to become rich. The wealthiest people set high expectations. “Almost every self-made I’ve interviewed over the past 30+ years has told me he expected to be rich,” writes Siebold.
The rich teach their children to expect to become rich at t young age, in their 20s or 30s. The point is that this kind of expectation quickens the process and keep you on track, says Siebold.
4. Surround yourself with successful people
People you hang out with has an effect on you. To become wealthy, you must learn from wealthy people.
The wealthy teach their children to cultivate relationships with successful people, to learn from them by reading their books, attending their events, donating to their charities.
5. Fall in love with work
Work affects every aspect of your life, takes up a large slice of your time, so you need to choose your career path carefully.
As Siebold says: “It’s difficult to invest the necessary time and energy into a profession that bores you or that has little meaning beyond money. Waking up every day with excitement for going to work is a formula for financial abundance, emotional fulfillment, and life satisfaction.”
6. Kids: money solves most problems
The rich understand the value of money. They realize that money won’t make you happy, but they also acknowledge that money will solve most of life’s problems.
“Make your money by solving problems, and you’ll get rich enough to purchase your own problems away,” Siebold writes.
Wealthy people are investors before they are spenders: “They invest their money today, so they’ll have more tomorrow.”
Siebold advises to invest in what you already know: “If you like to play guitars, you might study the vintage guitar market. If you’re a baseball fan, look into investing in rare baseball cards. If you like dissecting stocks, you could study the stock market.”
8. Spend smart
The rich teach their children to not overextend themselves by spending unnecessarily. No matter how big your paycheck is, you won’t become rich unless you’re disciplined about how much you spend.
“Excessive spending can ruin you,” warns Siebold. “It happens every day to people with millions of dollars at their disposal.”
9. You deserve to make it
The wealthy are comfortable with being rich, being convince that they deserve to be rich, while most other people think getting rich is reserved for a lucky few.
This idea they instill in their children as well. Siebold explains that in a free market economy, if you serve enough people and solve enough problems, you deserve to be rich.
10. Money and opportunity are limitless
Rich people have a unique relationship with money. They see money as abundant whereas the rest of the population sees it as something that is scarce.
After all, “If earning money is based on solving problems, and the number of problems is infinite, then your ability to earn money is infinite,” Siebold observes.
11. Choose prosperity over entertainment
One of the biggest differences between the rich and the rest of us, is our relationship to time. According to Siebold most of us spend our time while the rich invest in it.
“Spend your time basking in entertainment, and you will struggle your entire life financially. Invest your time creating solutions to people’s problems, and you’ll never lose a minutes sleep worrying about how to pay the mortgage.”
12. Focus on earning
The wealthy focus on earning rather than money. If you focus on money, you might do anything to get it, but focusing on how to earn it, changes the picture completely.
It’s the best to figure out how your skills and interest can be applied to solve one of society’s problems. In this way you will find personal fulfilment while earning an income.
13. Rich people are not always smarter
Popular belief has it that rich people are smarter than the rest of us. Not so, says Siebold. They have the same average intelligence as the average person, the difference is in their focus on accumulating wealth.
14. Wealth creates freedom
The wealthy are well aware that being rich won’t make them happy, but what they also realize is that wealth buys you freedom. It allows you to live anywhere you want, do anything you want, and be anything you want to be.
“Wealth gives you the power to make your own rules, as long as they don’t break any laws or hurt any people. It may not make you any happier, but it will certainly give you the freedom you deserve.”