Make them aware of the full range of life options. I told my sons of a remote beach in NW Australia where the climate is magnificent and you can pull lobsters out of the surf two at a time. Build a grass shack. Find a good woman. You’re set. At the other end, how did that guy build his love of crafting musical instruments into a $100M business? Take the mystery out of the steps it takes. The world abounds with opportunity to lead whatever life you want, but you have to demystify, demystify, demystify for them to be able to see what makes go businesses go. Big money is in simplification. If you see an obstical, it only really counts if you see a way around it.
Do NOT send them to public school NOR to the prep schools that are just our public schools on steroids. If you want conventional minds, get them a conventional education. Our oldest started working professionally at age 12. He skipped high school to work. He worked at a corporate branding company in SF Media Gulch. He did at least one project a year with an itinerant filmmaker. He traveled the Maya for several months assisting a woman writing a book, lived with Maya families and interviewed children in Spanish on their beliefs about different plants and animals and the Quiche (or Yucatec or Mam) name for them. He spent two winters in Luzern captaining a dive boat mapping wrecks in the lake. He shot a documentary film in Cuba. (This was not a rich dad buying opportunities for his sons–it was opportunities they earned.) I don’t quite understand the point of this one. The educational system is perfect for billionaires-to-be who see through the shenanigans and realize that its full-service childcare that trains the global workforce. Obviously, there are students that make the most of it and advance, and there are those that make none of it and become perpetually oppressed… but learning true success takes an internal compass to determine what is important… but that’s if you ask me.
Teach a love of work. After you get rich you can coast some. Getting rich takes work. They will need to excel at physical work and have stamina. They will especially need to excel at mental work and be both flexible and tough. I would say, “teach them to redefine work.” Frankly, work sucks. see below… but work is whatever it takes to get what you want.
Teach a love of people. The only way you get rich is by serving the real needs of others. You must have an affinity for others. My household was famous for all the people who came trooping through. People I met stranded at the airport. Japanese Homestay girls. Aux pairs. Local homeless guys dropping by for a shower and a meal. Chinese physicists and Eritrean guerillas had meals with us. Our sons’ friends were welcome at any time without prior arrangement. Make sure they understand that they are not above or below anyone else. I’m not entirely certain that this is what I want to be doing, but do what you want, and status is bullshit… and if you have the capacity to identify ways to put people to work for you then people with excess time and capacity (as those mentioned) are great to have around!
Teach generosity. Those who would receive much must be able to give much. My middle son (11 or so at the time) and I walked across Embarcadero from my office to look at SF Bay. There was one sole figure there, a man in his late 40s with one entire seam of his jeans ripped open. He was playing the spoons and playing them well. We got to chatting. He’d just been let out of San Quentin Prison that morning. I told him time to celebrate. We took him up to my office for a shower, out to buy some clothes and to dinner and gave him money for a room for the night. On the way home, I pointed out to my son that the money I gave the guy was nothing compared with the time we gave him. The only real wealth is the time you have, and whenever you have a chance to use your time well for others, do it and do it fully. Giving money without time can be a way of creating distance. I think that this is more about controlled spending. The section should be, “teach the value of time and how it is superior to money.”
Teach the mental nexus. Here falls the shadow. Rational people do not become entrepreneurs. Like combat officers, one is constantly making critical decisions on partial information. One has to take steps without being able to see if there is support there. One must taste failure time and again and be inspired by it. One must be armed with a variety of rationalizations for continuing on despite doubt, buffeting, adverse opinion. Every successful new business gores someone’s ox, and those people react in nasty ways. The faces you see each day are now depending on you to make payroll which is why we recommend to use a secure payroll management system. Pediatric oncologists must be mentally tough to deal with the suffering of others; entrepreneurs must be superhuman to deal with the tragedies they themselves can be the authors of. Trick is, you can’t teach that mental nexus if you have not lived it yourself. If you haven’t, then apprentice them to someone who has. This is absolutely key.
Lie, cheat and steal. I was shocked at my mother’s funeral when a brother flatly stated that he’d had a difficult time in life because he’d just assumed everyone was as wonderful as she was. The world is full of assholes and swindlers and your kids will need a radar for it, and they need to suffer the consequences so that they develop an arsenal of techniques for dealing with it. They need to be superb judges of character. You can’t teach good behavior by isolating them from bad behavior. There’s no satisfactory example here; let’s just say that April Fools was big in our house, and not just once a year. I think that the concept here is that you need to teach your children by experience that there are people who operate an existence of dishonor. This is fair. I’ve had to learn the hard way. I don’t believe that the author here is condoning lying cheating or stealing, just recommending that you put your children into situations where it is in front of them and they learn how to get through it.
Make them teen outcasts. Correlating highly with successful entrepreneurs is unfulfilled teen years. Basically, those who are dialed in by 18 stay comfortably dialed in. This is another reason to keep them out of high school. Another high correlation is Fs. Entrepreneurs are highly results-oriented and have little patience with those as process-oriented as teachers. I’ve talked with VCs who confessed to being a little disappointed if they don’t see an F or two on a possible CEO’s college transcript. I know I had ’em. I also practically failed out of MBA school because I was making six figures on the side…. but I can’t say that making your children outcasts is a good thing. I would have preferred to have a more explosive existence during those years.
Teach numeracy. Anyone who can’t do math in his head on the fly is going to have a difficult time being an entrepreneur and putting deals together. Schools don’t teach this; it’s a special, long-term effort. I don’t have this, and watch me.. if you can
No allowances. No “Joe” jobs. Nobody ever got rich working for a living. Trading your time for money is a loser’s game. An allowance just teaches a kid to lack resourcefulness–same for teen jobs. My wife and I played VC to our kids. They could ask for any amount of money they wanted but what’s the plan? what’s your purpose? what are alternatives? etc. etc. They learned to recognize opportunities and pitch them. [Add: If you are going to help them get job jobs, make it in sales–they won’t get far without the power to persuade.] Yeah, i agree with this. this is awesome. sales is key. business runs on sales, it is all that matters. the rest can be bought. Trading time for money is definately a loser’s game, but that’s not very nice to the 90% of people that do it that have titles that amount to employee or whatever.. and being an employee isn’t a bad thing, i think it’s stupid as hell to look down on it… i mean, i’ve been an employee. i’ve worked all kinds of jobs. i didn’t have parents that i could ask for any amount of money from, so… haha.. but wouldn’t that have been nice? for those of you who cant provide your children with this “i’ll give you as much as you want” situation, you can still play this game and if they actually do come up with anything that makes money you can fund them and keep the proceeds, thereby giving you good experience employing others, even if they are your children — the perk is you can pay them less than minimum wage … haha.. and teach them how to think.
Get a grubstake. Fortunately, my kids went to school with the children of an immigrant couple who left the kids with relatives two straight summers while they went to live in a tent in Alaska and can salmon. They each cleared $80K each summer, and after two years they had a third of a million with which to get into the start-up world. They found some scientists with a bright idea (one that everyone reading this is impacted by many times daily), started the company, got backing and they are billionaires. No grubstake. No billionaires. You can’t be a capitalist without capital and the willingness to put it all at risk. uh…. disagree. this is bullshit. all you need to do is start telling other people what to do and sell their time for more than you pay them… it takes next to nothing except the right attitude to start with this.. all you need to do is be OCD (obsessive compulsive) about buying things at less than liquidation value. this includes your employee’s time… if you can sell them for $10 an hour, offer them $8 all-in so to speak. keep the difference. my friend E has increased his net worth to 8 figures from nothing in the past 3 years doing just this… “what’s in it for me?” — well he was the one driving it all… that said, yes…. you do have to put yourself at risk to do this, but when your risk is backed by the mentality that everything you own has been bought at less than you can fire-sale it for, there really isn’t any risk… and if this sounds impossible to you, you should open your eyes… because every single business that is in business that you patronize sells things to you for more than they paid for them, their employee’s time included… or they wouldn’t be in business.
Worthy. Finally, the most important thing is they must be worthy. No backing comes to those who lack abundant evident character. I have found the best way to fine-tune morality is to put it entirely on them. Each time a moral decision is called for, it’s “Search your heart, son. You have to build your life around what is important to you. The only way I can help you is to tell you how I screwed up sometimes. But the sooner you learn to get in touch with your own feelings of what is right and what is wrong, the better.” (But be sure to model right over wrong like crazy to them.)
There is only one path to getting wealthy: exploit opportunity. The whole purpose of what I’ve stated above is to equip your children with the tools to spot and build on an opportunity to add value to the world.
How will you know you’re on the right track? The vast majority of people you meet are inert. One in ten or twelve has scalar energy–they liven up the event. One in a thousand or so has vector energy–the ability to channel effort to a purpose and pull others in their wake. The only way a human being begins to become a vector force is to Find and Embrace His or Her Passion, and that can be a bit quirky. For example, our youngest has long been the butt of family jokes for his inability to tell a story. What did his passion turn out to be? Turns out his head was too crammed full of details for each story. Once he learned to animate, his stories were incredible!
You should be getting glimpses of that talent to pursue purpose with passion all along, but it doesn’t mature until adult years. It is such a rare thing that schools are not at all equipped to teach it. Even the best MBA programs teach you how to go to work for that guy rather than be that guy. So, if you can pull it off, you will not only have enriched your children, you will have enriched the world. haha, work for a guy instead of be that guy.. so true.
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ATTENTION: My youngest son, Keaton, to my surprise and delight, has commented below. His words add a nice perspective. 2/20