It becomes some kind of a challenge talking to the kids of successful parents. The old ‘tricks’ – if you may allow me to call it – will not work.

Let me take a case. There is a 23 year old girl who is about to finish her MbA from a top school and take up a job in a big consultant. Her mother wanted me to talk about the virtues of saving and investing (typically the parents wanted her to have ‘middle class’ values). I burst out laughing, saying ‘she is NOT middle class’ by any stretch of imagination!

Girl is a only grandchild – ON EITHER SIDE. So for a start she inherits gold from both grandmothers, and 2 palatial houses – one in south India and one in amchi Mumbai. Father has bought a house too (near his parents house) and that will be her 3rd house assuming she buys nothing. To save Income tax her mother has also bought a house in Pune, and that will be her 4th house. WITHOUT BUYING, I repeat.

Her father has ESOP worth Rs. 20 crores and her mother has ESOP worth Rs. 7 crores – one in a bank and one in a technology firm. She inherits a nice portfolio from her grand parent and some bank fixed deposits from her maternal grand parents.

NOW I have to go to this kid and say “If you do not save/invest, you will not be able to buy a house, and you will not be able to retire”. THAT will be the biggest insult to this kid and her intelligence. I told the parent, I will talk to her, but about something else.

I made her listen to ‘You are 16….’ for those who do not know…here are the lyrics

You wait, little girl, on an empty stage
For fate to turn the light on
Your life, little girl, is an empty page
That men will want to write on
To write on
You are sixteen going on seventeen
Baby, it’s time to think
Better beware, be canny and careful
Baby, you’re on the brink
You are sixteen going on seventeen
Fellows will fall in line
Eager young lads and rogues and cads
Will offer you food and wine
Totally unprepared are you
To face a world of men
Timid and shy and scared are you
Of things beyond your kin
You need someone older and wiser
Telling you what to do….
My take was this girl had completely different types of risk to worry about – NOT THE NORMAL risks of a middle class person. My quick count said she HAD Rs. 50 crores at the age of 23 – and not a rupee of it had been earned. She ran the risk of :
  • Marrying wrong – and losing the money to a bad / abusive marriage
  • Getting too lazy and not wanting to work
  • Getting into bad habits which big money MAY bring
  • She could take up any profession – she was financially free with her inheritance
  • More than money EARNING skills she needed money MANAGEMENT skills
  • She could simplify her life by just indexing 80% of her portfolio and leaving 2 rental properties

It is not as though this girl did not have money problems – it was a different kind, that is all. So I sabotaged the bank’s plan to sell her a big ulip – she did not need life insurance for sure. I sabotaged another bank pushing a Rs. 50 lakh medical cover for this kid!

Her hobbies too were not very expensive – though she was adding mountaineering to it now and had aspirations of adding the Everest to her kitty. Yes, that was expensive – costs about 3 years preparation – and about Rs. 4 million.

Other than that she was a typical kid – used to surfing the net, voracious reader – kindle addict, …etc.

I just could not ask her to do a SIP from her first income. Thanks to the media and the home atmosphere..she called me to ask ‘where should I do my sip – should i continue what dad has started for me or should I do a new one’.

I laughed out loud, called the mom and said “the apple does not fall far from the tree’.

I remember another 33 year old tell her father in law….”dad my father is still earning money and saving it, you are earning money and investing it…let me earn money and spend it..somebody has to do that also no?”.

 

Once your kids have your genes, culture, education, do not worry about their finances, these kids will do the right things.

 

 

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  1. No cad risk I think. Kids today are pretty sharp.

    The issue here is to find a suitable carrot to lead one on.

    She might want to look at KMY as well. Tough

  2. Well, it depends upon how the kids are brought up. If they are brought up like normal kids instead of making everything available to them. They will understand the important of money on their own. If parents follow this from their child’s early stage only, then they do not need anyone’s advice to how to use their money or earn it,

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