#62 - Ron Lieber - “We're Not Having the Right Kinds of Conversations with Our Kids About (Money)"

60 minutes

In Episode 62, we welcome journalist and author, Ron Lieber.

Meb begins by congratulating Ron, as it was Meb's pregnant wife who read Ron's book about how parents should discuss financial matters with their kids, and promptly told Meb he needed to read it and get Ron on the podcast.

Turning attention to Ron's book, "The Opposite of Spoiled," Meb begins by asking about Ron's motivation for writing it. Ron tells us there were three factors: one, a pointed question from his three-year-old ("Daddy, why don't we have a summer home?"); two, the focus of Ron's writing at work (young people who borrow vast sums of money to pay the huge college tuition bills); and three, his own situation as a teen, having seen the collegiate financial aid application process thanks to his mother. All of this together led Ron to the conclusion that "we're not having the right kinds of conversations with our kids about this stuff."

Meb mentions how it's a shame that they don't teach personal finance in high school, which makes it all the more important that parents have these discussions with their kids. Unfortunately, many parents are reluctant. Meb asks Ron why this is so.

Ron points toward shame. Perhaps parents are ashamed they don't know the answers to the questions (maybe they don't have a firm grip on finances themselves), or maybe they're ashamed at how much (or little) they earn, or at how they earn their money.

The conversation drifts toward a piece of advice in Ron's book; it's the suggestion that when facing a question from a child, the parent might ask "Why do you ask that?" The reason this is helpful is that many times, the stated question isn't really want the child wants to know. Questions like "how much do you make?" are rooted in fundamental questions such as "Mom/Dad, are we okay here? Is our family normal?"

Meb brings up the four things spoiled kids have in common from Ron's book and asks for some commentary. Ron tells us that, ironically, these spoiling factors have almost nothing to do with actual money. They are: one, not having any rules for kids; two, if there are rules, not enforcing them or having consequences; three, smoothing out the path in front of kids and making sure they never face any challenges; and four, allowing kids to grow up without any context for how lucky they are for their opportunities – no gratitude, and instead, an attitude of entitlement.

This dovetails into a great conversation about chores, which points toward allowances. Ron suggests dividing allowances into three buckets: savings, spending, and giving. The specific allocations will likely reflect the values the parent is looking to instill (for instance, if a parent wants to focus on giving, the allowance amount can reflect what the parent believes is an appropriate amount the child should skim off the top for "giving").

There's way more in this episode, and if you're the parent or grandparent of a young child, you don't want to miss this one. You'll hear more about the conditions that lead toward materialistic kids and how to avoid them... Unique ways to deal with things like a visit from The Tooth Fairy... How to handle kids wanting cell phones (do you know how long Bill Gates made his kids wait before buying them a cell phone? You'll find out)... And how to use a great tool called "The Fun Ratio" to help your kids make better spending decisions.

What is it and how does it work? Find out in Episode 62.

More episodes from The Meb Faber Show

#191 - Simon Hallett - Wherever We Can, We’ve Added Something That’s Based Upon Behavioral Finance

In episode 191, we welcome our guest, Simon Hallett. Simon and Meb start off the conversation with a run-down of Simon’s firm, Harding Loevner, cover its quality growth investment approach …

#190 - Radio Show: Buying Stocks At All Time Highs…Fund Manager Sentiment…Year End Questions for Advisors and Brokers

Episode 190 has a radio show format. We cover a variety of topics, including:

  • Buying stocks at all-time highs
  • 2010 Fund Manager of the Decade
  • Jim …

#189 - John Parise - 70% Of Wealth Is Lost In The 3rd Generation

In Episode 189 we welcome our guest, John Parise. John and Meb kick off the conversation with the idea of the family CFO and wealth planning. As John gained experience in financial …

The Best Investment Writing Volume 3: Ray Micaletti – The Smart Money Indicator: A New Risk Management Tool

Last year when we published The Best Investment Writing Volume 2, we offered authors the opportunity to record an audio version of their chapter to …

#188 - Andreas Clenow - Trend Following Is…About Taking A Lot of Bets On A Very Large Number Of Markets

In episode 188 we welcome our guest, Andreas Clenow. Meb and Andreas start the conversation with a  hat on what hooked Andreas on trend following, …

The Best Investment Writing Volume 3: Jack Forehand – The Case Against Value Stocks

Last year when we published The Best Investment Writing Volume 2, we offered authors the opportunity to record an audio version of their chapter to …

How you can listen to this podcast

You can listen to episodes right here on the website, or if you prefer, in a podcast app. Listening in an app makes it easier to keep track of what you’ve already heard, listen without using your data plan and many other conveniences.

Recommended apps
Start listening to #125 - Tom Barton - The Biggest Problem Investors Have is Things Change...and They Don't Change
1:24:56
Start listening to #125 - Tom Barton - The Biggest Problem Investors Have is Things Change...and They Don't Change
1:24:56