- 7 weeks ago
For many parents, providing for their children goes far beyond daily expenses; it’s about building a foundation for the future. We talked to parents about how they built wealth from scratch to give their kids financial security and the lessons they learned along the way.
(Sponsored by Edward Jones)
(Sponsored by Edward Jones)
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FunTranscript
00:00Okay.
00:01Underside?
00:03This is fine, sinking down.
00:05Okay.
00:06Make sure I don't have my big belly sticking out, no.
00:09My reason for saving and investing so much
00:11is so that my children can have opportunities
00:14that I didn't have.
00:15Kids are expensive.
00:16Yeah, kids are really expensive.
00:17Starting your children off right
00:19leads to generational wealth.
00:21If the amount of money you're saving each month,
00:24each year doesn't hurt, you're not saving enough.
00:26We didn't have a car, I rode a bike everywhere.
00:28We didn't go out to eat.
00:30For two years, we didn't go on vacation.
00:31We're actually saving something like 70, 80% of income.
00:36I said no for two years so I can say yes
00:38for the rest of my life.
00:39It's simple, not necessarily easy.
00:42Make sure you have reasons, clear reasons
00:45for why you are saving and investing so much.
00:48Once you have a reason, there's nothing you can't do.
00:51And I want my children to do better than me.
00:53That is the goal.
00:58I grew up in a trailer home, right, about the poorest housing
01:03that you can find in the United States.
01:06You can picture growing up in Minnesota, the middle of winter,
01:11and your parents are struggling to pay the heating bill.
01:13My earliest memories are deprivation.
01:17I grew up in Taiwan, and my parents had to send us to an, like,
01:25orphanage.
01:26They couldn't afford to feed us to get us a place to live.
01:32My parents grew up, you know, not having a lot of money.
01:35My mother had eight other siblings living in Statesville, North Carolina.
01:40We had everything that we needed, you know, but our middle class,
01:44as an African-American family, is different than the American middle class.
01:49My parents were always very frugal, and they didn't give me any money.
01:53So I decided, maybe I'll go to McDonald's,
01:55and I'll try to get a job at McDonald's for $4.25 an hour,
01:59while also being able to eat as much free apple pie as possible.
02:02Within the African-American community, a lot of them grew up not trusting banks,
02:06because a lot of times they couldn't put their money in banks.
02:08So they carry a lot of cash, and you'll find a lot of older
02:11African-Americans carrying cash all the time now.
02:14I am afraid of spending money.
02:16And then I met him, he has the same mindset.
02:19So we were like, oh, we're like, perfect match.
02:21We don't want to spend money.
02:23I remember being embarrassed, sadly, when I saw my classmates.
02:27And I look back upon that with a little bit of shame,
02:30because why would it be embarrassing to be a 14, 15-year-old boy,
02:34trying to make your own money and be more free?
02:37I was the first person to go to college and graduate,
02:43so I'm a first-generation college student.
02:45I went to South Carolina State University on a full-ride tennis scholarship.
02:50If I didn't get that tennis scholarship, I would have had to take out a lot of loans.
02:53I chose to attend the College of William & Mary,
02:55because at the time, the tuition was only $2,800 a year.
02:59Other private schools were about $20,000 a year.
03:01I remember when I was in college, like, many times I don't have enough money for food.
03:07Like, sometimes I'll just have a hard-boiled egg for lunch.
03:10Just call it enough.
03:12Yes, it was pretty tough.
03:14A lot of my college experience was, I have to get good grades,
03:19because I have these massive student loans.
03:22And if I'm unable to pay them, then it's back to poverty.
03:27I became largely a workaholic.
03:29I ended up doing 55 interviews total to finally land my job at Goldman Sachs.
03:36The base salary was $40,000.
03:38And $40,000 living in Manhattan, even back then, didn't go very far.
03:43The job when I was laid off in 2008 was pharmaceutical sales.
03:47I put so many hours in, I've worked so many years, and just like that, it's done.
03:52It just felt like the world started crashing.
03:55I was laid off, and it really sunk in that I need to be prepared for that point in time,
04:02where I'll be able to take care of myself, whether the work's there or not.
04:06Very quickly, when I started working, I realized I couldn't last at this job.
04:10I was getting in at 5.30 a.m., leaving after 7 p.m., and so I decided, okay,
04:16in order for me to escape this job one day, I needed a certain amount of money to cover my lifestyle and expenses.
04:23I didn't even realize that we were $50,000 in debt.
04:27And then I looked at, oh, your student loan is $25,000.
04:31This car that we just bought a year ago is $25,000.
04:35And so I started to think about, what do we need to be doing?
04:38Reality started setting in, and I was like, what are we going to do?
04:41Really important is to make sure you have reasons, clear reasons for why you are saving and investing so much.
04:53Once you have a reason, there's nothing you can't do.
04:57I wrote out something called a dream sheet, and it was our short-term, intermediate, and long-term dreams,
05:03because I said to myself, we're not going to be able to do this if we don't have anything in front of us to look forward to.
05:11My child was two years old at the time when I wrote this.
05:15I said to myself, my first child was born to debt and my second child would not be.
05:19I put together like a 50-page business plan about how I could go from having a net worth of roughly zero
05:26at that point to having enough where savings and investments would cover my normal cost of living.
05:36He presented me his 40 pages of research.
05:39He said, you know what? There's a thing called a financial independent.
05:43We can work together on this project.
05:47I said, okay, it's convincing. Maybe we can try.
05:50So I did pretty simple back-of-the-envelope calculations in an Excel spreadsheet
05:55on how much I needed to be happy and comfortable and maybe to raise a family,
05:59and I felt $3 million would be it.
06:01I needed to save at least 50% of my income. Within six months of finishing the business plan,
06:09I had sold my house, sold my car. I rented a room in somebody else's home, and I replaced my car with a bicycle.
06:17I needed all of my money to go towards paying off $50,000 a day. I was selling TVs, selling a microwave I found in the closet.
06:26I wanted to be free. That's the way my mindset was each and every day.
06:30We didn't go out to eat for two years. We didn't go on vacation for two years.
06:34Nobody got a gift. Not Valentine's Day, not anniversary, not Christmas. Nobody.
06:40That's why the $50,000 of debt got paid off in two years.
06:43Over like the 12, 13 years or so, we were going from a point where those last few years,
06:49we were actually saving something like 70, 80% of income.
06:54And so I started with about 20% saving rate, and then I slowly ramped it up, all saving 70 to 80%.
07:02If the amount of money you're saving each month, each year doesn't hurt, you're not saving enough.
07:07We write down every single expenses, even just $1. When we spend them, we will just write it down to
07:14calculate it. Because we both grew up in poverty, so we are used to have no money.
07:21So we are okay to accept that kind of lifestyle.
07:24Once the debt was gone, the investing kicked back up. I was still in corporate America,
07:29so I was investing into my 401k. I had a Roth IRA.
07:33What I try to do is have a diversified portfolio of about 30% in public equities,
07:3930 to 40% in real estate and private real estate, about 20% in alternatives,
07:45and the rest in low risk or risk-free assets like treasury bonds and cash.
07:50Our overall investments are fairly simple. Everything we own is just in index funds.
07:57There's zero management. I don't have to pay attention to anything.
08:00I was a little sad we didn't invest in Bitcoin 10 years ago.
08:03Right? Yeah.
08:05We missed our chance.
08:06Yeah.
08:10My reason for saving and investing so much is so that my children can have opportunities
08:14that I didn't have, that my parents didn't have. Once I had children, oh my gosh,
08:18I really rethought about how much risk I should take because, okay, I can't be that cavalier with my
08:25investments anymore because if I lost it all, then my family would be suffering.
08:32To have a child is really, I need to be ready to spend, you know, a couple hundred thousand dollars
08:37over the next 18 years plus college and just coming to terms with that in advance.
08:45My son is 17. He'll be graduating in 2027.
08:48You know, just all the accomplishments and stuff over here.
08:51My daughter plays tennis and she's 13. I want my children to do better than me. That is the goal.
08:57My daughter is five. My son is eight. And I really, really try to make them focus on work
09:03and earning what they deserve and earning what they want.
09:06Our kids, one is 10, one is five. We have a mommy and daddy bank. So we will track all the
09:14allowance that people give him on his birthday or Christmas or put them in that book. And then
09:20we will give him some interest and then he can spend half of his interest on the thing he really
09:26wants. But we also told him if he doesn't spend them and keep putting into the bank, he will have
09:33more. It's kind of giving him an idea of investment. Both of my children have Roth IRAs themselves.
09:38They don't really know that, but they have them and I put money into them as well. And then of course
09:45they have their own savings account that they are able to feed into as well. They have small Roth IRAs
09:50and they have small 529s and everything else will just be, uh, when we die though. Don't tell them
09:57that. Yeah, don't tell them that. They definitely are going to find out now.
10:01But here's the tricky thing. If you have all this money at 25 years old,
10:06you might not try as hard. You might not work as hard and you might not appreciate the things you
10:11have. You might not want to make something of yourself. I do think that they, you know,
10:15may feel like, Oh, money is just everywhere. They think that with, with me as well as their father,
10:21and we have to put them back in their place. But I think what ends up helping is that a lot of times
10:27for things that they want, they pay for it. Mommy, can you buy this for me? I said,
10:30sure, with your money. He said, Oh no, it's okay.
10:33So in terms of talking about money with my children, our children, it's that look,
10:38money doesn't grow on trees. You have to earn everything. You cannot develop an entitled
10:43mentality where, Hey, life is so easy. Life is so good because life is hard.
10:47Kids mostly learn, um, like their parents values and things by observation versus like direct lesson.
10:55What I've done is try to get my children involved in the act of maintaining rental properties,
11:05for example. So I bring them along. I get them to do a lot of the landscaping. When they see their
11:12parents getting down and dirty and doing the work, hopefully that builds that work ethic and that
11:17appreciation of money in the future. For me, I think I will have my kids prepared for,
11:24like well prepared for their own independent financial path. So they don't need to depend on us.
11:32What are we doing as parents, you know, financially or morally or anything like that,
11:36if we're not teaching them to be better? And then they should teach their children,
11:40if they decide to have them to be better than them. Some of the life lessons that I took from
11:48my mom about money is just knowing what you're doing with it and, you know, not just using it
11:53whenever you feel like it because it's not unlimited. I would rather live the one where people get me
11:58stuff by me stuff. And that's the difference between the two of them. This is Julian. He is 10 years
12:05old. He's a fifth grader now. And over here, this one. Come here, baby. This one is Jayden. He's five
12:12years old. I just feel like I don't want to do this.
12:22No filter at all. I love it. When I got like 15, when I could actually start like working and stuff,
12:27I brought my game system down there and my dad and my mom was just like, they was waiting too long to
12:32pay for the game. And I was like, I'm just going to pay for it myself. And that money left the bank.
12:37That was definitely a hit. It was definitely a week or two where I didn't spend any money.
12:43We have starting money and at the end of every month, we get 5% of the money that we have and
12:49added to it. And like all the money that we get, we can use half of it to spend. And the other half,
12:55you just can't do anything with it. I would want to have my own business because my mom has her own
13:00business. Like I would want to have my own business, like where I sell stuff and actually
13:03be successful in it. I love to help people like with tennis and stuff like that. And I just want
13:08money in 20 years. I hope I would be a millionaire. I'm trying to work towards it, but I would just be
13:15glad having a great financial situation where I could provide for my family. And hopefully I was,
13:20I was thinking about this the other day, retire my parents. In 20 years, I see them where they see
13:25themselves. And so I would definitely just support them in what, whatever they will be wanting to do.
13:34I was able to achieve financial freedom at the age of 34 and become a stay-at-home dad and author.
13:40I am retired.
13:43I have a full-time job taking care of two kids and a husband.
13:48The fear that drove me a lot in my twenties is completely gone. My day feels like it really
13:54begins when school gets out because I'm a coach on our son's baseball team. So we have, we have
13:59baseball practice and soccer practice going on. Mystery pitch.
14:05We do a lot of moving kids around to and from sports before, before dinner and then getting ready
14:11for bed. I describe myself as a mompreneur. I pretty much tailor my business around being a mom. And
14:19that's how I've built it over the last 15 years. I've been traveling all around the world, sharing my
14:25story of how I paid off the 50 grand a day in two years. And five years, I plan on being a millionaire.
14:32Money is essential for living a comfortable life. But once you have enough, please think about the other
14:39more important things in life. Money means to me, it's just a tool. It's nothing else other than
14:48that. It is, it's to make sure the lights stay on and make sure that we have a roof over our head,
14:53that we eat because that's just the way the world is. Like most tools, they're good for one thing,
14:59right? You're not going to use a hammer to fix a window, right? But if you apply it towards the
15:02right things, it can be very, very useful. I think everybody can have financial freedom and time
15:09freedom at different levels. You don't actually have to be a millionaire. You're going to have
15:13$100,000 in the bank. You have $40,000 in the bank. If you're able, as a parent, to be able to go to
15:19any event that they have freely without worrying about getting fired or worrying about your money
15:24being taken, that is financial freedom. That is millionaire status. I really don't know how
15:31we could fit jobs into our schedule. Yeah, I used to work from a.m. to a.p.m. even longer.
15:40Now I cannot imagine that life.
15:45I'll buy a mansion, a Lamborghini, a helicopter, a private jet. I'll get and I'll give the rest of it to my mom.
16:08Oh, I don't think there'll be any rest.
16:16You end up having lots of credit card debt. I want all those things too.
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