EPISODE 50

Money Miniseries 7: How I Talk to My Kids About Money

Episode Transcript

Dr. Randy Lehman [0:00 - 0:30]: Welcome back to The Rural American Surgeon. I'm your host, Dr. Randy Lehman. We are talking in our Money Mini-Series today about how to talk to your kids about money. Kids aren't born knowing how to work or how to manage money. They learn by watching, just like learning anything you don't know anything you haven't been taught.

Dr. Randy Lehman [0:30 - 1:01]: Generational wealth is not about dollars, John, about giving dollars for kids. It's definitely not that. It's more about the pass-through of wisdom. And so I'm going to talk today about some things that I do with my kids now at their age-appropriate levels and some worries that I have for the future, and how other people in my similar situation are also worried about it and how we can really. So, first, what we're up against. Okay, so The New York Times,

Dr. Randy Lehman [1:01 - 1:31]: I read an article a while back, and I have not been able to find it, but I read an article where a survey was asked what is the most likely way you will get rich? And so, I thought about that. I was like, most common ways, probably hard work, investing, and maybe invent something. That's what I came up with, but the top three answers were: number one, inherit it; number two,

Dr. Randy Lehman [1:31 - 2:02]: win the lottery. Actually, not in this order. I don't think the top three ways would be inherit it, win the lottery, or sue somebody. That's what we're up against. What we have is a, what I propose as a better way is, a somewhat countercultural goal. My proposition would be work, save, invest, and buy your own freedom. Trying to teach kids how to do, my kids, you know, how to do

Dr. Randy Lehman [2:02 - 2:32]: that is probably my primary goal much more than giving them a bunch of money. And if I can't teach them those things, then giving them money will actually possibly create a lot of problems for them. You know, Warren Buffett says if you don't learn to make money while you sleep, you'll work until you're dead. Right? But there's a lot of people that aren't working. And so, I've got my kids, you know, Charlotte's selling eggs at age 8 and Jack does odd chores at age 6. And I raise my

Dr. Randy Lehman [2:32 - 3:02]: kids on a farm, which easily teaches the value of work and it teaches how to watch things grow right before your eyes. Next thing that I want to talk about is that we don't do allowance. So we pay for value; we don't pay for existence. And I think that's a nobody says I'm going to get rich by existing on welfare. Right? But core concept about what the government, you know, what's a right? Okay, so is

Dr. Randy Lehman [3:02 - 3:33]: healthcare a right? I don't think it is because I don't think that a right is a good or a service that has to be taken from somebody else in order for you to have it. I believe that rights are things like the freedom from search and seizure, the freedom from having to quarter soldiers in your home, the right to bear arms, the right to meet in a group without being hassled, the freedom to choose your religion, the freedom of speech. Those are

Dr. Randy Lehman [3:33 - 4:03]: rights. They're not a good or a service to ask to be taken from somebody else. You can say, well, once a country or a society gets rich enough, shouldn't we, you know, shouldn't we do this good thing? So shouldn't we make sure that everybody has a certain base amount of money to live? Shouldn't we provide everybody with a basic level of education or a basic level of healthcare, or are things of that nature? And I think it's a slippery slope

Dr. Randy Lehman [4:03 - 4:35]: because I guess I kind of feel like the answer to that should be no, because they're goods and services that have to be taken from somebody else. And I just don't think that it's the government's right or government's place to do that, because what it leads to, you know, in the state of Indiana right now, what's happening is the governor just introduced a bill that says. Bit of a tangent, but sorry about this. It says that the Medicaid dollars for hospitals are going to be decreased if the

Dr. Randy Lehman [4:35 - 5:07]: bills that the hospitals send out are not decreased. And so if the bills are higher than average, because there was something in national news about how the bills from Indiana hospitals are like the highest in the nation. Okay? But it doesn't. The people that are writing that may not understand. It doesn't really matter what you bill. What matters is what you collect. So you

Dr. Randy Lehman [5:07 - 5:38]: can send a $4000 bill for something and get paid 600, or you could send a $3000 bill for something and get paid 600. It doesn't change what you get from Medicare for how much you bill. Right. That may be a bit of an oversimplification. There may be complicated things in certain hospital billing, things that I'm not accounting for, but for the most part, what I just said is true. Anyway, the governor is basically flexing Medicaid dollars and threatening to drop Medicaid dollars if bills for commercial payers aren't decreased. And there's

Dr. Randy Lehman [5:38 - 6:09]: things being said, like that same governor supposedly quoted that no healthcare system should ever have greater than a 3% profit margin. How is that a viable, you know, long-term business? This is a politician getting way too involved in a good and a service. Right. And they say ridiculous things that aren't true. What I'm going to teach my kids is to understand the difference between rights and understand what goods and services are. I got on this big long tangent because I said

Dr. Randy Lehman [6:09 - 6:39]: we're not going to do allowance. So we pay for value and not for existence. And the problem is you start to pay somebody just for existing, it doesn't give them anything to be proud of. It devalues kind of a lot of things for them and it takes away a lot of their own self-determining authority and self-worth. And I think there's, you know, in the FFA creed says I believe in less need for charity and more of it when needed. And that sums up my opinion about

Dr. Randy Lehman [6:39 - 7:10]: that. And I think that the state-run charity stuff, it's not just the charity stuff, it's the state-run administration of goods and services is generally something to avoid. The role of the government should be to regulate and there should be protection of the little guy from the government. Right. Laws to regulate and ensure that things are done right and to, and to follow up on that and ensure justice and order in the society to provide certain common good kind of things. But common goods, how I feel common goods

Dr. Randy Lehman [7:10 - 7:40]: should be defined is if it's a one-on-one good or service given to an individual, much less of the state's place than something like, for example, a road. And you know, then there's these in-between things like education. Fortunately, I'm not in charge and ultimately I'm just living here and I do have a big influence on my kids and what I tell them about money but I don't have that much influence on the national or state level. So I guess I would encourage you to, you know, think about these things for

Dr. Randy Lehman [7:40 - 8:12]: yourself. But in our family, we, what we say is we don't pay for being part of the family, but we do pay for work and for value. And so we find opportunities with even our little kids to start kind of letting them make a little bit of money by work that they do. So, like Charlotte sells eggs and Jack does odd jobs and they get paid. And we haven't really yet at their age started to broach the concept of delayed gratification and daily responsibility. But, but we talk daily responsibility.

Dr. Randy Lehman [8:12 - 8:42]: We do because they do have like certain chores, and the joy of producing and when they do something, you know, trying to make them feel proud of the work that they have done.

I read so much to my kids, and one of the things that I read, I thought summed up. I'm like, this is how I want to talk to my kids about money. And so I'd like to just read it to you. We've been working our way through Laura Ingalls Wilder's Little House on the Prairie series. And if you haven't read it, read it with your kids, because it's awesome. It's a picture, a snapshot in time that was preserved from a little girl whose sister went blind. She described things in great detail to her sister. I think that she was naturally an observer. She had naturally a good memory. But I think the fact that her sister went blind and she then had to describe the sunset to her sister and describe everything that was around her, it caused her to be more keenly aware of what was around her. And then she provides this beautiful picture of life. I'm not sure when it was, but maybe 150, maybe more years ago, in essentially the prairie that was being settled for the first time.

Her eventual spouse was written into the story. The first book is Little House in the Big Woods, which is her childhood home in Wisconsin, which was real little. Then the third book is Little House on the Prairie, so they moved. But the second book is Farmer Boy, and that is my favorite book, and that is Almanzo, her future spouse's childhood story. There was a time where they were having, I think, a Fourth of July celebration, and they're in the town. Normally, Almanzo lived out in the countryside on the farm that he grew up on. Almanzo's at the square in town on this patriotic day. And it says, there was a lemonade stand by the Hitching Posts. A man sold pink lemonade, a nickel a glass, and a crowd of the town boys were standing around him. Cousin Frank was there. Almanzo had a drink at the town pump, but Frank said he was going to buy lemonade. He had a nickel. He walked up to the stand and bought a glass of the pink lemonade and drank it slowly. He smacked his lips and rubbed his stomach and said, mmm, why don't you buy some? Where'd you get the nickel? Almanzo asked. He had never had a nickel. Father gave him a penny every Sunday to put in the collections box in church, and he never had any other money.

"My father gave it to me," Frank bragged. "My father gives me a nickel every time I ask him." "Well, so would my father if I asked him," said Almanzo. "Well, why don't you ask him?" Frank did not believe that Father would give Almanzo a nickel. Almanzo did not know whether Father would or not. "Because I don't want to." "He said he wouldn't give you a nickel," Frank said. "He would too." "I dare you to ask him," Frank said. The other boys were listening. Almanzo put his hands in his pockets and said, "I'd just as like to ask him if I wanted to." "Yeah, you're scared," Frank jeered. "Double dare. Double dare." Father was a little way down the street talking to Mr. Paddock, the wagon maker. Almanzo walked slowly toward him. He was faint-hearted, but he had to go. The nearer he got, the more he dreaded asking for a nickel. He had never before thought of doing such a thing. He was sure Father would not give it to him. He waited until Father stopped talking and looked at him. "Or what is it, son?" Father asked. Almanzo was scared. "Father," he said. "Well, son?" "Father," Almanzo said, "would you give me a nickel?" He stood there while Father and Mr. Paddock looked at him, and he wished he could get away.

Finally, Father asked, "What for?" Almanzo looked down at his moccasins and muttered, "Frank had a nickel. He bought pink lemonade." "Well," Father said slowly, "if Frank treated you, it's only right you should treat him." Father put his hand in his pocket. Then he stopped and asked, "Did Frank treat you to lemonade?" Almanzo wanted so badly to get the nickel that he nodded. Then he squirmed and said, "No, Father." Father looked at him a long time and then he took out his wallet and opened it, and slowly he took out a round, big silver half dollar. He asked Almanzo, "Do you know what this is?" "Half a dollar?" Almanzo answered. "Yes, but do you know what half a dollar is?" Almanzo didn't know it was anything but half a dollar. "It's work, son," Father said. "That's what money is. It's hard work." Mr. Paddock chuckled. "The boy's too young, Wilder," he said. "You can't make a youngster understand that."

"Almanzo's smarter than you think," said Father. Almanzo didn't understand at all. He wished he could get away. But Mr. Paddock was looking at Father just as Frank looked at Almanzo when he double dared him. And Father had said Almanzo was smart, so Almanzo tried to look like a smart boy. Father asked, "You know how to raise up potatoes, Almanzo?" "Yes," Almanzo said. "Say you have a seed potato in the spring. What do you do with it?" "You cut it up," Almanzo said. "Go on, son." "Then you harrow. First you manure the field and plow it. Then you harrow. You mark the ground and plant potatoes and plow them and hoe them. You plow and hoe them twice." "That's right, son. And then?" "Then you dig them and put them down cellar." "Yes. Then you pick them over all winter. You throw out all the little ones and the rotten ones. Come spring, you load them up and you haul them here to Malone and you sell them. And if you get a good price, son, how much do you get to show for all that work? How much do you get for half a bushel of potatoes?" "Half a dollar," Almanzo said. "Yes," said Father. "That's what's in this half dollar, Almanzo. The work that raised half a bushel of potatoes is in it." Almanzo looked at the round piece of money that Father held up. It looked small compared with all that hard work. "You can have it, Almanzo," Father said. Almanzo could hardly believe his ears. Father gave him the heavy half dollar.

"It's yours," said Father. "You could buy a sucking pig with it if you want to. You could raise it and it would raise a litter of pigs worth four, five dollars apiece. Or you could trade that half dollar for lemonade and drink it up. You do as you want. It's your money." Almanzo forgot to say thank you. He held the half dollar a minute, then put his hand in his pocket and went back to the boys by the lemonade stand. The man was calling out, "Step this way, step this way. Ice cold lemonade. Pink lemonade. Only 5 cents a glass, only half a dime. Pink lemonade. It's the 20th part of a dollar." Frank asked Almanzo, "Where's the nickel?" "He didn't give me a nickel," said Almanzo. And Frank yelled, "Yeah, yeah. I told you he wouldn't. I told you so." "He gave me half a dollar," said Almanzo. The boys wouldn't believe it until he showed them. Then they crowded around waiting for him to spend it. He showed it to them all and put it back in his pocket. "I'm going to look around," he said, "and buy me a good little sucking pig."

Why, that story puts tears in my eyes, I would say. Has a lot to do with why I'm here talking to you and putting together at my expense in terms of cost and time, a money miniseries. Because it's a moral issue and it's worth talking about and doing responsibly. And I think there's more in that story that I honestly could teach my kids than if I tried to tell it myself. It includes working, it includes saving, it includes investing. And ultimately that means freedom. If somebody asks you what's the most likely way you'll get rich, I hope you're not in the New York Times survey camp, because there's a better way. And I think that ultimately when you've done well for yourself, what becomes important next is how do I transition this?

You know, the Bible says that a good man leaves an inheritance for his children. And that's the man or woman of the Bible. The problem is that you have no doubt seen issues that come into families when inheritance can tend to ruin or spoil kids. I was at church one time and my kids were there, and I don't know how we were talking about it, but an older guy from church says, well, you know, if they're not listening by like 3 years old, then good luck getting them to listen later or something.

So, like, the point is the kids are smarter at a younger age than we probably give them credit for. I try not to coddle my kids. I try to love them unconditionally as best as I can and give them responsibility as early as I can. And I've been saying a house of nine-year-olds should be able to run itself for quite some time, and my kids can. They're driving a go kart on the farm. They know how to be safe on the farm. I talk to them about autonomy, but I also talk to them about safety. I encourage them to be able to do things, but then, at some point, they need to really be successful on their own, ideally. Then they need to prove themselves and then give them more.

My parents and grandparents have invested in me so much and in my success, and I feel so grateful to them for lessons that have been passed down. The lessons contain more value than any money that can be passed on. I'm in a mastermind group, and in that group, we talked again about legacy. There was a financial advisor that specializes in family offices and essentially wealth generational wealth transfer for ultra-rich families. He said, you know, in talking to these families, he tries to dive into more of a counseling session ahead of time about what is actually important to them. Because they meet with him thinking that they want to figure out a fair way or legally best way to divide their assets. Maybe they're trying to minimize the tax burden as much as possible. But when you dive into it, what really matters is that their kids have a relationship with each other later, that their kids don't get ruined by the things that they're given, right? That they raise emotionally mature, sound adults. If you keep looking and keep searching.

I think the main way to do that is just the painful truth of communicating and time. It just takes so much time and energy. But that's some of the best time that you can have, to pass on your values about the things that you care about to your children. This is a money mini-series, and that's why we talked about money. That's basically it. That's all I have to share with you about that. But it's also relevant to other topics. The topics that you're not supposed to talk about at a bar are money, sex, politics, and religion. Because you have another adult that disagrees with you and you can get into some pretty hairy conversations, all right? But these are some of the most important things to talk about, and they're very important things that you should talk about with your kids. Recently, I was on the committee steering the handbook for my kids' small private school, and we were in there. It says something we discourage—talks about boyfriend and girlfriend, all right? But yet. And so it says this in the handbook. That's great, but yet I'm hearing my 6-year-old come home and just talk about, like, oh, so and so's crush or my crush or this.

And it wasn't really explicitly discussed with me. I ended up with some bad overall ideas that I kind of came up with myself while in the process of rejecting some of the core, fundamental beliefs that my parents would have taught me, right? Then I asked the group, I said, how do you guys talk to your kids about this topic? Because the way I've chosen to talk about that is I tell them God has somebody for you. Anytime that you give emotionally, or physically of yourself to somebody else—even if it's a little kid having a crush or having a boyfriend or girlfriend—it's baggage that is ultimately just hurting yourself and that person in the future for basically what God has planned with you.

Now, the hard part about that is some people don't get married. So you say that, but I think if they don't, you can address that as an adult. What needs addressed as a kid is understanding why not to essentially awaken love before it's ready. Another parent said serial dating is a setup for serial divorce, which I thought was another nice, thoughtful way to do it. Another parent said I over communicate with them essentially. She said I have some discussions that my husband has to step out of the room for because he's a little uncomfortable. But ultimately, I want my kids to come to me with questions rather than going to Google. I tell them that because you don't want your kids Googling their questions.

So you've got money, sex, politics, religion. I'd spend a little bit of time talking about rights versus what should we do, and those types of political concepts I will talk to my kids about. We do have some things like Tuttle Twins. Tuttle Twins is a book series that's essentially political, stuff that our kids love reading. That's already been introduced at ages 6 and 8. Religion—we take our kids to church. We're very involved, and I have a stronger faith than I've ever had before. But I'm going to talk to them about the why, you know, and I do. I talk to them about it regularly, and I continue to do that about the why. I believe not just this is what we believe because there's a compelling argument in terms of a case for Jesus Christ, and I want them to know the thought that I've personally put into it as well.

Ultimately, you cannot decide that decision for your kids along with many other decisions. So from really little, I've been telling them we're not trying to raise obedient kids; we're trying to raise adults that are capable and kind. As I pray with them every night, that they choose faith as well. That is more than just how I talk to my kids about money, but very much how I talk to them about money at this age. As time goes on, I'll encourage their entrepreneurial pursuits and encourage the longer-term thinking. You know, because as you know, kids, when they're young, do not understand the concept of time. Finally, my kids are getting there, which makes life a lot easier. We'll be introducing more age-appropriate things as well.

I hope this was helpful to you, and this has been how to talk to your kids about money. In our Money mini-series, we have one episode remaining, a bring-it-together episode about when the dream doesn't go as planned, how to think about managing your resources. When it seems like things are going in one direction, you're preparing for something, and life throws you a curveball, that will be it for our money manager series. I really appreciate all of you just for being here and for listening. Podcasting is a very intimate, like I've said before, one-on-one thing. It's just me and you, and you've got your headphones on or you're driving in your car or whatever, and you're listening.

I can't believe that there is somebody that wants to listen to this, but the statistics on my Podbean are showing me that you are actually listening primarily on a Thursday when the episodes are released. So anyway, I appreciate you and the emails and people that have reached out.

It has been a lot of fun over the past year to produce this podcast, and this money mini-series has been an opportunity for me personally to share with you some of my much more tightly held beliefs. It's not really about surgery, but it is something that I have put a lot of thought into, and I felt like the things that I've spent this much time thinking about, probably I should share, you know, to essentially my people.

Thanks again for joining us on this episode of The Rural American Surgeon, and I will see you on the next episode of the show.