E487 | What My Son Taught Me About Money

Today, I am going to tell you all a funny story about my son and what it had to do with financial literacy and inflation. At his school, a current event that they have been talking about is inflation and this is something that most 10-year-olds have a hard time understanding. Enjoy!

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Podcast Transcript

Danny: So I was having a conversation with one of our staff members about documentation and he had come over from a in-network practice that he was working at and he was talking about just how long it would take him to document and click through and the workflow and how, just how time consuming it was and how much easier it's been with the software that we use, which is PT everywhere.

And I know for us, we're very aware. Sort of time leaks within our staff and our own schedules. And it's just one of the worst things you can do is just waste time on things when you could be doing them more efficiently. One thing for us is we have to document. It's something we need to do and you need to do it as efficiently as you possibly can because that's where you're gonna save a lot of your time.

We were seeing our staff members save upwards of an hour a day as far as cleaning up his documentation, making it more efficient. What if you got an hour of your day back just from documentation? What if all of your staff did the same thing? Highly recommend you take a look at PT everywhere.

It's been a huge time saver for us and really has made a big difference in our efficiency of our practice. You can check 'em [email protected]. I think you're gonna really like what they have. So here's the question. How do physical therapists like us who don't wanna see 30 patients a day, who don't wanna work home health and have real student loans create a career and life for ourselves that we've always dreamed about?

This is the question, and this podcast is the answer. My name's Danny Matte, and welcome to the PT Entrepreneur Podcast.

Hey, what's going on guys? Dr. Annie here with the PT Entrepreneur Podcast, and today we're talking about it's, we're talking about financial literacy and children don't stop podcasts just cause I said financial literacy. I know it's a boring topic, but I have a funny story to tell you that re relates to this and it has to do with my son.

And so I was talking to my son about Honestly about in about inflation, it sounds weird to talk to a 10 year old, but they were talking about it at school. So at his school they were talking about they talk about like current events and one of those being inflation. And I think it's hard for a 10 year old to wrap their mind around what inflation is, right?

We started talking about, what makes something. The, intrinsic, things that make something value valuable and really it comes down to that other people like believe that they're valuable. And the only reason that gold has value is because other people say it has value.

We all agree to, to, to some degree that all give you this much money for this shiny rock. And that happened over the course of a very long period of time. But it's there because people. Agree that it has value and that's why it has value. And the less of something that there is typically the more valuable it is, right?

So this is why when we see first edition books that people collect basketball cards or baseball cards, shoes, NFTs, any number of things that are limited. Or scarce they have more value because there's few of them or fewer of them. So scarcity drives up the price of things. So I was having this discussion with my son about inflation and how when we produce more of something, it actually decreases the value.

That, in this case actual dollars of money, right? And buying power in particular because there's more of it. So each dollar has proportionally less value and that requires us to spend more of it to buy things that. Wouldn't have cost as much however many years ago. You hear your grandfather and he's I could buy a nice meal for a dime back in the day or whatever, and now it's okay, so maybe now it's 20 bucks or whatever. And that's because of inflation. The increase in cost of things due to the decrease in buying power of the dollar in our case because there's more of them now and we've.

To have done that consistently over a very long period of time. So as we're talking about this, I started talking to him about his Nintendo Switch. I thought I'd put this into terms that he would understand, and I said, Jack, okay. What if there were only a thousand Nintendo switches in the entire world and you had one.

I said what do you think that would be worth? And he said, probably $10,000. Which is probably the most amount of money that he can perceive that something could possibly be worth, which, is a lot of money for a 10 year old. That's basically like an insane amount of money. So he goes, $10,000.

I said, cool. I said, all right If that switch is worth $10,000, would you sell it for $10,000? And he goes, no way. And it caught me off guard because I thought for sure he was gonna say, absolutely. I'll, I value $10,000 more than I do, than intend to switch. So I thought, okay, maybe he's just like super into the Nintendo Switch and he doesn't wanna sell it for that much.

And what he said next surprised me, but also made me realize that he's gonna be totally fine one day as far as being able to provide for himself because he's fairly financially savvy individual for being a 10. And he goes, you know what I would do? I would rent it out to other. And I said, really?

Why would you do that? And he goes if there's only a thousand in the entire world, I bet you that I could rent it out for a weekend for people to play at like a party or something like that for a thousand bucks. And he goes, if I could do that 10 times, then I would make $10,000, which would basically be the cost of me selling it.

But if I can do it more than 10 times, then I'll make an additional a thousand dollars for each time that I rented out. And he's if I can do that enough times to where I rented out 10 times, then I could buy another switch and I could have one to play and I could rent one out. And I literally thought to.

This is the greatest response that I've ever heard in this context of a 10 year old with us talking about scarce assets, inflation, and what to do with them. And it's like the marshmallow test in some ways. I don't know if you guys are familiar with this, you can tell your kid and say, Hey, I'll give you one marshmallow right now, or if you can wait five minutes, I think it is, maybe 10 minutes.

I'm gonna give you two marshmallow. And then they basically put a marshmallow in front of these kids, close the door, and then they leave and then they come back. And if there's still a marshmallow there, they give 'em another marshmallows. They did this and it found it to be highly correlated to success in these kids as they got older because it just shows they can have, they can delay gratification, they have self-discipline.

And I remember having a conversation with the Tourettes about their kids. And I think it was their younger daughter that they were doing this with, but they were doing it with cookies Instead, they said, Hey, you can have one chocolate chip cookie now, and if you wait for five or whatever it is, 10 minutes, we'll give you two.

And her response was how long do I have to wait to get three? And they thought the same thing. They were like, she's gonna be fine. She's gonna be totally fine. It's ex, that's exactly what you want to hear. And part of it is, I think that people don't talk about money very much with their family.

Especially with their kids, because I think the perception is that they don't understand it or maybe they can't understand it, or maybe you don't understand it and you don't really know what to tell them or not to tell them. Maybe you have a really bad relationship with money and you just view it as this thing you never have enough of, or this thing you just use to buy shit that you want.

Or you grew up in a family that just didn't talk about it. I think it's very important for us to talk to our children about money and to demystify. And just have them have the healthy respect for what it is, but also what it provides them, which is essentially it is your livelihood and like you pay for things in life with money for the most part.

So whether we like it or not, we have to have it. And the people that understand it tend to have more freedom with that because what money allows us to do is to have. It'll, it lets us to have ha lets us have freedom of choice in many ways of what we do when we do it and who we do it with. And if you can have a strong sort of like fiscal discipline understanding of how to pay for your life livelihood and not let it get out of hand and, get golden handcuffs on, cuz you're living this in extreme life and spending every dollar.

But if you can live, in a comfortable, modest way. And still do the things that you like to do, but you make more money than what you bring in. And you always have a surplus. And then that surplus goes into things that generate more money effectively. And then that leads to passive income, which leads to freedom in what you can do and not do.

We call it no thank you money. Some people will say oh, if you have X amount of money, you have fuck you money. You just tell people to go fuck off. You don't need that in life. You need no thank you money. Just say, no, no thanks. I think I'm gonna do this instead. You don't need to have Jeff Bezos money.

You need to have enough money and enough money coming in and strong enough understanding of it to be able to say no thank you to the things you don't want to do, and not feel like you have to do those things in order to get by in life, which most people do. Frankly, most people are just con they're just trying to make it, they're just trying to like, make ends meet.

And I really, I feel like obviously my kids I think, are gonna have somewhat of an advantage just from the fact that we're having these conversations, but also that they're born, they're lucky, they're not born into our household. And we are fairly financially independent in terms of, what we've been able to do through, throughout our life, through frankly, living incredibly cheaply for years.

And then eventually getting past that and understanding. How to have a healthy relationship with money, but also just putting ourself in a better place with business and taking a chance on ourself and having success with that outside of a traditional career. I think in a lot of ways they're gonna be fortunate.

But, having these conversations I think is one of the most important things you can do, at least in my limited parenting experience. And by no means an expert. I have two kids but you. I only, my oldest is 10 and who knows, I think he's gonna turn out to be pretty awesome and my daughter as well.

But it's hard to tell, I don't know. I hope I'm doing a good job. I do think that this one area, though is an area that a lot of people struggle with. And when they go off and they're young adults, they don't understand what the hell they're doing and they get themselves into really bad financial positions and a lot of debt.

And the more they can understand what money is, how to use it effectively and how to not use it, probably more importantly, I think the better. Your people are gonna be there's a couple books where they reference this that I think are really good for younger kids. One is actually the Warrior Kids books that Jocko Wiling wrote.

There are I think there's three in the Warrior Kid Series and then there's a field manual, which is interesting, the Warrior Kid Field Manual. But the, in the three books, he doesn't always talk about money. It's just a little lesson that he learns cuz he ends up starting like a business in one of the books with his friends, like pulling weeds.

And they talk about like how much money should go to savings and then how much should go, to where they can spend money with those or with that percentage. And just getting a better idea of oh, okay, saving and saving money. Big part of what I'm doing. The other book, and this is something that it's definitely, I think they need to be a little bit older and probably eight to 10 to even understand some of the concepts of this.

But the richest Man in Babylon is actually a great book I've read with my son. And he references it. To this day it's told in like a parable. It's a little bit difficult, I think for an eight to 10 year old to understand, but we basically listened to it and read it together at the same time.

So just like reading the book while listening to an audio book. And then we talk about a chapter afterward and just answer questions on that. And I really think that helped him quite a bit as far as like being able to have an intelligent conversation with me about his Nintendo switch in this example and having a.

A really good response for a 10 year old. It's a, it's a, it's a funny example in some ways, but for me I was just so honestly happy to hear his response for what he said to me and not what I was expecting that I felt I would share with you guys and give you some ideas of what you can do to have some of these conversations with your kids if you have them.

And even if you're not, if you don't have kids, the richest man in Babylon is a pretty damn good book for an adult to read That just wants some basic core principles when it comes to personal finance. That's the. I guess the simplest way to look at it with that book is, it's good for everybody, but definitely something that a younger kid can understand.

And I think if you can start to change these habits and build this financial information, because let's face it, they ain't getting this shit in school, not happening, they're not learning this stuff in school because. Most of the people that teach them don't understand this either. The only people that tend to understand this are people that are really heavily involved in finance, personal finance, business, and a lot of it's because that's what they do at a necessity.

It's not like their teachers are gonna do this. This is not something you can outsource. You might be able to outsource reading. I can't teach. I suck at reading. If I'm the one teaching my kids how to read, they're in trouble. But this stuff, I'm not outsourcing. This is something that they're gonna need to learn from me.

And if they don't learn from me, they're not gonna learn from anybody. And then they're gonna end up in a really bad spot one day as an adult because they do not understand what the hell money is, how to make it, how to keep it, how to get it to work for them, and how to have a healthy respect for it, and not have an unhealthy relationship with money where they're constantly just spending it like it's nothing.

Or they're afraid to do anything with it because they feel like they're never gonna have enough of it. And finding that happy balance. I think it's part of the foundation for everybody in terms of just having a successful life. No matter whether you work for yourself or you, you are, employed by somebody else, whatever it is, like whether you like it or not, money is something we have to use so you better understand it and there's no better sort of place to start, in my opinion, than teaching your kids about him.

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