It’s a Blog Swap! Today’s topic is How to raise a millionaire – developing your child’s entrepreneurial aptitude. I am very excited to be swapping blogs with Money for College Project, where they recently changed their focus from paying for their own college costs to saving for college for their soon to be child. I hope you enjoy this take on the topic, and don’t forget to hop on over to Money for College Project to see how I handled it.

Apologies to everyone for the lateness of this post. I live in the PNW, and the ice storms yesterday knocked out power to my house. Hopefully we’ll have it back sometime this weekend.

 

How to Raise the Next Warren Buffett

When I was growing up I always got annoyed with my parents because they never seemed to stop. It was not that I was lazy, but rather that my parents never seemed to slow down. We did not have any evenings where we all sat down around the tv to watch our favorite show. Rather, I was out helping my Dad cut grass for his side landscaping business. Rather than take a vacation to a resort, we would take road trips and stop at every antique store and yard sale along the way. All of the items would then be brought back home and re-sold. It annoyed me at the time but looking back, I would not trade this childhood for anything

My parents were serial entrepreneurs. I did not realize this until after I graduated from college, and my now wife pointed this out. Sometimes it takes a fresh third party perspective to give you real insight. But looking back over my childhood, and still to this day, my parents always had their hands in multiple business ventures at one time. Their lifestyle firmly planted the entrepreneur bug in me.

My mom buys and resells on Ebay. My Dad fixes antique furniture and resells on Craigslist. My parents invested in a local restaurant start-up. My parents own two rental homes. My Mom started her own home cleaning business and my Dad is a member of the local town council. Oh, and they both work full-time jobs.

Watching my parents pursue their passions in side hustles over the years has taught me what it means to be an entrepreneur. Bottom line, if you want to help your children develop an entrepreneurial mindset, you have to mirror that in your own life.

 

Are you born with it?

Are people born with the spark to be entrepreneurs? I would say to a certain degree, yes. Some people are simply born with the strong desire to create something out of nothing, and to take complete control over their financial future. Many entrepreneurs however, are pushed into becoming entrepreneurs by their life experiences.

Mainstream media loves stories of children who develop a booming business by their fifth birthday. For the vast majority of us however, that simply does not happen. Learning how to be an entrepreneur is a skill that is cultivated over time.

Parents can help develop this skill and mindset in their children by modeling it in their own lives. You can teach your kids what it means to be an entrepreneur from a young age.

 

Business can be Simple

Becoming an entrepreneur does not have to be difficult. In fact, starting a lemonade stand would qualify you as an entrepreneur. Disclaimer: I am not a parent. However, when I have children I do not plan on sitting them down in front of the tv or video game system and letting them entertain themselves that way for hours on end. Rather, I want to involve them in the business ventures that we, as parents, have started.

You can teach your children what it means to be an entrepreneur by being very open and frank with them about money from a young age. I always knew where my parents stood with money. This allowed me to rejoice with them when they landed a new business venture that took off. It also propelled me to work harder at our family businesses to make them more successful.

Sharing the details of how your business works, and how you make your decisions will teach your child what it takes to start their own business one day.

 

Every Financial Decision is an Investment

One of the best money lessons that I believe you can teach your children is that every financial decision they make is an investment of some sort. If they blow their allowance on a new video game, then they invested in entertainment. If they saved their money for a new bicycle, then that becomes their investment. As children get older, they may save their money for a car, or for college.

Teaching your children to treat every expense they have as an investment will help them to actually think about the opportunity cost and reward of these decisions. This is an invaluable skill as an entrepreneur as they will be faced with the decision of where to invest capital within their business venture.

This simple change in mindset can be taught from a young age, and will pay huge dividends in your child’s entrepreneurial future.

Raising the next Bill Gates or Warren Buffet may not be your goal, but instilling an entrepreneurial mindset in your children is an admirable goal!