Warren Buffett Many are familiar with this name, especially among investors, as he is a global billionaire renowned for his investment success and the founder of the famous company Berkshire Hathaway.
Certainly, this 95-year-old grandfather is full of experience that can guide future generations to move forward steadily, especially regarding finance and investment. He has 7 interesting principles that can be practically applied within families.
1. It's never "too early" to learn
One thing Grandpa Buffett often advises is that financial education should start early with children. He once told foreign news outlets, “Sometimes parents wait until their kids are teenagers to start talking about money management, but you can actually start teaching as early as kindergarten.”
Although many know the sooner you teach about money the better, the question is... how do you teach young children about finance? Begin with simple, clear concepts like “money doesn’t grow on trees,” explaining to kids what must be exchanged to earn a baht. You might start by having children help with small household chores and earn extra allowance, or talk about different types of jobs. Creating an environment where children contribute to small tasks encourages responsibility, and starting financial education early helps them understand the value of money.
2. Teach the value of saving
Grandpa Buffett often weaves lessons about saving and interest rates into the cartoon series Secret Millionaires Club. He says, “Consistently saving, even a small amount, yields worthwhile returns.” He gives simple examples, such as instead of spending money on sodas you don't really need, try saving it in an account where it will grow with interest.
This shows how much Warren Buffett values saving and wants children to learn it early. But just teaching through cartoons isn't enough. You can open a savings account for children in their own name or give weekly allowances so they can practice managing their money. Teach them to keep track of income and expenses to see where money goes, while you supervise and advise from a distance.
3. Differentiate between "needs" and "wants"
Buffett famously said, “You can’t get everything you want.” This is a key principle in money management. Children must learn to distinguish between “needs” and “wants.” This can be challenging for both kids and adults, but a simple exercise is to have parents and children list 5-10 desired items, then discuss each to decide if it’s a Need or Want, having children explain their reasoning. Understanding what they truly need versus just desire may help them spend wisely or plan for essential things long term.
Additionally, when it's time to spend money on actual purchases, teach children to compare prices so they see that the same product can cost different amounts at various stores. This helps develop a habit of choosing the best value for their money.
4. Parents must be role models for their children
“My father has been my greatest inspiration and hero since I was six and still is today. The most important thing I learned from him is building the right habits early,” Buffett said. This reflects how parents are often children’s first idols, like blank canvases eager to learn and absorb their parents’ habits unconsciously.
To be a financial hero to your children, you don’t need to be an expert or know everything. You should manage your own and your family’s finances well. For example, before buying something, invite your child to check prices, discuss managing money to avoid debt, and be a good example by handling debts properly.
5. Keep enriching your knowledge
Successful people never stop learning. The cartoon version of Grandpa Buffett said, “Self-development and lifelong learning are important for everyone.”
He constantly emphasizes, “Learn to learn.” He proves this by regularly gathering new information, reading several newspapers daily to maintain a broad perspective. He advises, “Don’t be afraid to learn new things, whether technology or innovations.”
We can instill this habit by encouraging children to pursue activities they like or providing books to read. This thirst for knowledge forms a strong foundation for all aspects of life, including financial skills.
6. Spark the entrepreneurial spirit early
Before founding the world-leading company Berkshire Hathaway, Buffett showed business flair as a child. At six, he started selling chewing gum and devised new profit methods, like buying six-pack Cokes to sell individually. This fun childhood activity built his income skills and became a foundation for his life.
We can adapt this by teaching children to spot business opportunities in everyday life or encourage them to try new things, such as setting up a lemonade stand at home or selling items at school. This helps them learn money management, sales skills, and problem-solving, possibly leading to real business ventures later.
As parents, we might prepare seed money for children or build an investment portfolio by saving small amounts, so when they are ready and mature enough, we can introduce them to investing and growing what they have.
7. Parents should let children read the will before signing
As children grow and live independent lives, parents must consider how to distribute money or arrange inheritance properly. Many have seen news about siblings fighting over wills. To reduce such problems, Warren Buffett advises, “Once our children grow up, let them read the will before we sign it.”
Inheritance disputes usually arise after one passes away. Buffett believes parents should be open and share the will with their children beforehand. The benefit is parents can explain and answer children’s questions, share reasons for decisions, and help children understand their responsibilities when parents are gone.
Another benefit of sharing the will in advance is children can ask questions or even suggest changes, which Buffett recommends parents consider carefully and apply reasonably to prevent questions like, “Why did Mom/Dad do this?” after they’re gone.
These are the 7 life financial lessons drawn from the global investor Warren Buffett that every parent can pass on to their children immediately without needing to be immensely wealthy. Ultimately, the key is guiding children toward good financial habits to secure their future.
Sources: CNBC, Yahoo Finance
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