How to Teach Your Kids About Investing In Property

According to Robert T. Kiyosaki, a famous investor, and author, there are a few ways to legally make a living. The first one is by working for someone, which is how most people make money. Those are employees. The second way is by starting a business and being self-employed. Those are lawyers, doctors who own clinics, and other people. The third way to make money is by being a business owner. This way, you own a system that works for you. And the fourth and the most efficient way is by being an investor. That way, you can make money work for you. People who want to make their children rich, or at least financially stable, have to teach their kids how to invest. So, if you want to teach your kids about investing in property, you’ve come to the right place!

Last time we explored how to get your toddler dressed without a tantrum, today we are going to focus on a “less complicated” problem – property investment!

Money changes, but the value of the property doesn’t

Most adults do not fully understand inflation, let alone children. However, it would be best if you introduced your children to this concept early on. That way, they will have an advantage once they have to learn it properly.

Sure, this is not entirely true. The property does change in value over time, whether it jumps or it falls. However, in general, the property value changes more slowly than the value of money, especially when there is inflation or deflation.

However, teaching children terms like inflation and deflation isn’t as easy as it seems. First of all, you have to know what those terms are yourself.

To put it bluntly, contrary to common knowledge, inflation isn’t caused by the rise of prices but by more money being printed without an increase in production to back it up. It is a significant difference.

So, you have to find a way in which you can teach just that. Ask your children what they would prefer. Would they rather give away their only toy, or would they give away one toy if they have ten of them? The same is true for money.

But what does the property have to do with this?

In short, it is better to put your money into something that hardly changes the real value than to save money in money. We have no control over how much the government is going to print money, but we can control how we are going to spend that money.

Real estate, gold, silver, stocks of a stable company are far better money-savers than money itself, especially when money isn’t backed by anything.

What can you do with your newly acquired property?

Now the question is – what can one do with a property?

The most obvious answer is to use it. When you buy a home, it is only natural to use it as a living space, right? While that is undoubtedly correct, you can use real estate in many different ways.

If you want to teach your kids about investing in property correctly, you have to teach them about the possibility of renting said property.

The second most obvious answer is renting it. That way, you can get a steady and stable income monthly. That can cover most or all of the costs you had when you bought a home. Many people live off purchasing and renting properties, and it’s always good to have some passive income.

Also, you can buy a property at a particular price and sell it later at a higher price. In some parts of the country, now is the right time to purchase a property. Texas, for example, seems to have many new immigrants coming from the West Coast mainly, making the average price of a home jump. People who recognized that trend early are celebrating with their newly acquired income now.

So, what can your kids do with a newly acquired property in the future? Your kid can rent the property, having a stable and steady income on which they can rely. The price of rent depends on many factors, from the location to whether it has a pool.

So, let’s talk about homes with something extra. We have mentioned pools, so we are going to stick with them, just as an example. If you want to purchase, rent, or move into a house with a pool, you have to know that pools have their pros and cons, and most people only find that out once they move to a home with one. Pools can be expensive to maintain, increasing your monthly costs, whether you live in a house with one or renting it. However, when you rent a home, the addition of a pool can significantly increase the property value. So, make sure that your child understands that concept. Everything costs!

Also, your child can buy a property and resell it at a higher price. Once again, the addition of things like pools can significantly affect the price.

When you live in a home, make sure to live well, but don’t go over your capabilities

The current debt crisis in the western world has partially been created by people wanting to have larger and better homes.

Now, while it is fantastic if you could afford to live in a villa, there is nothing worse than having to worry about how you are going to pay your debts.

Benjamin Franklin was an intelligent guy.

Your child has to understand that spending is not always good. You have to teach your kids about saving. Benjamin Franklin said that the penny saved is a penny earned, and this is true.

There is nothing wrong with living on what you can afford and not spending more than you can afford. Often, people pay more so they can show off. However, if your mind is stable, you won’t need to prove yourself to anyone. Do you really need that better car if you only drive in a city?

We hope that our suggestions on how to teach your kids about investing in property will be helpful not only to your children but also to you!


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