Step 5: Teach them how to leverage what they have.
I almost titled this one “teach them not to fear debt”, but it is not just about that.
Leveraging what you have could be something as simple as using a credit card that offers rewards and using it as a debit card (meaning you have the cash in your account and pay it off before the statement date so you do not accrue interest) to something as big as financing an apartment complex.
The thing is, when you can pay someone else little or nothing and get something greater in return, you are leveraging what you have. This could be cash in your account or your good credit.
For example, when you use a rewards credit card that you never pay interest on, the rewards are truly free. You could use them to finance a party, trip, or anything else you want.
Or, instead of paying off a 3% on a loan, invest in something with a 6% rate of return and you net a 3% profit.
Another great one is to purchase a 2-4 unit house, live in one unit and rent out the others. Your tenants will pay your mortgage, insurance, taxes, maintenance, and you will get some great tax deductions. Plus you build equity on the property.
So, what is the big takeaway from this week? Take all the things you say you wish you had learned in school- from balancing a checkbook to investing to doing your own taxes- and make sure your children know them before they turn 18. You will all be richer for it.