The mere mention of money, income, bills, and investments can make some people cringe. The complexities of financial management can be overwhelming, especially for those who didn't have the advantage of early financial education. Many adults still struggle to understand these concepts, often wishing they had learned them earlier in life. So, why let your children go through the same struggle? This is the story of Hillary Adams, a former white-collar worker who decided to teach her son about passive income at a young age.
Hillary Adams often found herself in a predicament when her son asked for an advance on his allowance. Despite her attempts to explain the importance of careful spending and financial management, her words seemed to fall on deaf ears. She realized that she needed a practical way to demonstrate these concepts to her son.
Around the same time she left her job to start her own business, Hillary began researching financial strategies. She stumbled upon the concept of 'passive income' and was intrigued. Passive income, contrary to what the name might suggest, doesn't just 'sit there'. It's income generated without continuous active involvement. In other words, once the initial work is done, passive income continues to flow in, even while you're doing other things.
After understanding the concept of passive income, Hillary saw the potential benefits it could bring. She decided to make a small investment on behalf of her son, with a significant shift in mindset in mind. She purchased a small tabletop game machine and presented it to her son, Aaron. She explained that the machine was his, and so was any money it made. However, she also told him that he would need to repay the $227 she had spent on the machine. This was Aaron's first step into the world of business.
Aaron was initially unsure if he could handle the responsibility, but with his mother's support, he agreed to take on the challenge. As they set up the machine and waited for their first cash pick-up day, Hillary noticed a change in Aaron's attitude. He had transitioned from a 'give me' mentality to an 'I can do it myself' mindset. After repaying his mother for the game machine, Aaron began to think like a responsible business person. He was no longer stuck in a mindset of financial scarcity. Instead, he had the confidence and self-esteem to invest the surplus from his machine into his own college fund.
This story illustrates the power of financial education at a young age. A small change like this can significantly impact a child's life. Aaron, at just 12 years old, is already on his way to becoming a successful business owner. This story serves as a reminder that it's never too early to start teaching children about money and investments. For more information on passive income, check out Investopedia's comprehensive guide. For tips on teaching children about money, this article from Forbes is a great resource.
