3730: How To Teach Your Kids To Be Entrepreneurs by Kalen Bruce of Freedom Sprout on Teaching Kids About Money

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[00:00:54] This is Optimal Finance Daily, how to teach your kids to be entrepreneurs by Kalen Bruce of freedomsprout.com and I'm Justin Malek. Welcome back to our Sunday bonus episode where we hear an episode from a different podcast in our network and today's is coming from Optimal Relationships Daily. So without further ado, here's Greg with the post and his commentary as we optimize your life.

[00:01:22] How to teach your kids to be entrepreneurs by Kalen Bruce of freedomsprout.com. If you listen to the Dave Ramsey show, you may have heard the 14-year-old who called in and told his story about being $21,000 in debt. His debt was mostly to his brother with $1,500 to his father.

[00:01:46] An entrepreneurial mindset at 14 is awesome, but I don't think it's a good idea to let your teen go into over $20,000 of debt to his sibling. Maybe the intentions were there, but that's an expensive lesson for a teen. I believe we should raise entrepreneurial kids. Cameron Herold makes some great points about this in his TED Talk, Let's Raise Kids to Be Entrepreneurs. But we should also be providing a safe place for our kids to fail.

[00:02:15] We shouldn't be allowing them to go into adulthood with loads of business debt, or any debt for that matter. But we can teach our kids to be entrepreneurs without the debt. Why teach your kids to be entrepreneurs? Entrepreneurship isn't for everyone. Some kids want to be professionals or trade workers, and there's nothing wrong with either of those. But an entrepreneurial mindset is helpful for everyone.

[00:02:40] Even if your kids decide to go to medical school, law school, or trade school, they can benefit from the basics of entrepreneurship. Here are four reasons we should instill an entrepreneur mindset. Work Ethic When kids learn how to think like an entrepreneur, they learn work ethic by default. They see how their level of hard work directly relates to their level of success. Where money comes from

[00:03:08] Money doesn't just come from work, but that is a primary means. Entrepreneurship teaches kids how money is generated in many ways and how to make it exponential. An out-of-the-box mindset Entrepreneurs think differently, which is a good thing. Whether your kids want to go into business or learn a trade, thinking outside the box helps them create new and better ways of doing things. Life Skills

[00:03:35] Everything you learn by being an entrepreneur can be used in the rest of your life. Things like goal setting, habit building, taking action, investing, time management techniques. I can go on all day listing the skills entrepreneurs learn and need to know. Those are four of many reasons kids will benefit from this type of mindset and this way of thinking. Entrepreneurship teaches life lessons. A lot of life lessons. Types of Businesses

[00:04:02] One of the best ways to teach your kids to become entrepreneurs is to let them start their own business. Again, we're providing a safe place to fail here. So I don't mean taking out a business loan and opening a retail store. I'm talking about business on their level. Start by teaching your kids how businesses make money. This includes but isn't limited to the following. Products The most simple business is a business that buys products at wholesale and sells them at retail.

[00:04:31] Kids understand this easily by going to your local Walmart, grocery stores, or furniture stores. Teach them about markup. Walmart, for example, has very little markup, but they get their money from the volume of sales. Jewelry stores' markup ranges from 40% to 500%. Used furniture stores have a high markup as well. But the space needed for jewelry is significantly less than furniture stores need.

[00:04:57] These are all concepts your kids can visually understand by simply going to these stores. A lemonade stand demonstrates product sales on your kids' level. Services You provide a service. You get paid. Services are also easy for your kids to understand because it's a simple concept. Lawn care is a perfect example and a perfect way for your kids to get into providing a service for a fee. Subscriptions Magazines are the classic example.

[00:05:27] But now with companies like Netflix, YouTube, and other streaming services, your kids see this daily. Membership This simply means your clients pay a membership fee and get access to something you offer worthy of the membership cost. Everything from your local gym to a web-based membership service. The main thing for kids to understand here is that you need to have something valuable enough to get people to pay for it. Advertising and Affiliates

[00:05:56] This is one of the less common ways, but it's still an option. Newspapers and television were the classic examples. But in today's world, this happens through web traffic and uploaded videos. You can always teach your kids to start their own blog, and they'll begin to see how they can make money from advertisers and affiliates. Figure out what your kids are interested in and focus on that. If they're not interested, they're not going to retain what you're teaching them. Starting their own business

[00:06:24] Take any example from what I just listed and help your kids start their own business. If they open a lemonade stand, they may not need to go through the actual legal process for real, but go through it with them as if they were actually doing it. Determine Interest First, you'll need to figure out what they are most interested in. Then you can start working the plan. The most important lesson here is to do something they love in the first place. Survey the Market

[00:06:52] Teach your kids how to figure out who their market will be, based on the type of business they choose. A little internet research goes a long way. The most important lesson here is to know their market so they know how to target said market. Create a Business Plan There are plenty of free tools online to create a business plan. The most important lesson here is that you must start with a plan. Form a Legal Business

[00:07:20] In the real world, would this business be an S-Corporation, C-Corporation, LLC, partnership, or sole proprietorship? Help your kids figure out which one would be best for their businesses. This is also when they would decide on a name for the business. They'll like that part. The most important lesson here is that the type of business you form is based on the type of business you choose. Hire Employees Once the business is set, it's time to hire help.

[00:07:50] Your kids can literally do this with younger siblings, or they can theoretically do this on paper. The most important lesson here is to learn delegation, because we only have so much time in our own life. Becoming an entrepreneur isn't just about starting your own business. It's about a mindset. That's why it makes sense to teach these skills to any child, even if they don't plan to start their own business. You just listened to the post titled,

[00:08:20] How to Teach Your Kids to Be Entrepreneurs, by Kalen Bruce of freedomsprout.com Back in 2010, I started tracking every penny coming in and going out, in a spreadsheet. Back then, I wanted to know where my money went. These days, I'm thinking more about where I'm headed. Monarch makes that easier by putting my accounts, investments, spending, and savings goals in one place. I still care about every penny.

[00:08:48] I just don't want keeping track of them to become a second job. I like that it doesn't just show what I've spent, it helps me plan bigger purchases, and see whether I'm on track while there's still time to adjust. And the AI Weekly Recap flags spending spikes and upcoming expenses. It's like having a financial advisor in my pocket. A heads up, instead of another spreadsheet to manage. Write your own money story with Monarch.

[00:09:14] Use code OPTIMAL at Monarch.com to get your first year of Monarch Core half off at just $50. That's 50% off your first year at Monarch.com with code OPTIMAL. This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome? That's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks.

[00:09:44] Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required compatibility and availability varies 18+. Another really wonderful post from Kalen. He's got such a knack for simplifying difficult concepts for kids, or kids at heart like myself, to understand. Yeah, that's me trying to be cute about how I struggle with concepts that most people have no problem with. And, you know, he's so right about how knowledge of these types of things,

[00:10:14] like money and business and entrepreneurship, is nothing but helpful to kids, no matter what path they follow as adults. The key really for parents is to make these ideas both simple and fun. Doing so is possible, and it prepares children for the real world in such a way that they enjoy. So don't make the mistake of thinking that teaching them about these things somehow takes away from their youth or rushes them into adulthood.

[00:10:40] It's on you as the parent to break any big and important ideas down to make them manageable and enjoyable for kids. And Kalen is one of the best authors around for helping to do that. So make it your goal to learn about new strategies to introduce big concepts to kids the right way, rather than to avoid them if you're tricking yourself into thinking that they're too young for such things. And with that, it is time to wrap things up here on this Friday show.

[00:11:09] Thanks a lot for listening, parents and non-parents, and I sure hope you have a wonderful rest of your day before the weekend. But, you know, I'll be with you this weekend as we are now seven days a week, so that means I will see you tomorrow for another Q&A edition of ORD. That's where your optimal life awaits.