Robert Kiyosaki, famously known for his book “Rich Dad Poor Dad” points out that kids need to be given a financial education and that they are unlikely to get a financial education from school!
Kiyosaki emphasises that by teaching kids to understand balance sheets, you are giving them the basis of a financial education. Balance sheets have two columns, Assets and Liabilities. Kids need to know the difference between Assets and Liabilities.
Kiyosaki’s simple definition of an asset is something that puts cash into your pocket and a liability is something that takes cash out of your pocket! Examples of assets are stocks, investment property, bonds, gold, businesses and valuable antiques. Examples of liabilities are cars, boats, houses, clothes, holidays, TVs and if you are a kid, toys.
Rich people start out by taking the money they earn from salary to buy assets. These assets put cash into their pockets. They take some of that cash to then buy liabilities. They also use some of the cash to buy more assets. Eventually their assets provide enough cash flow that they no longer need a “job”.
On the other hand, the poor and middle-class earn a salary, which they spend on liabilities with little or nothing left over to buy assets. As they go through life they buy more and more liabilities and have to work harder to earn more money to pay for them. Many will borrow money to buy more things.
When kids understand a balance sheet, they can then be encouraged to develop the habit of putting some of the money they get into buying assets before spending it all on liabilities. This habit will be the basis to them creating wealth as they grow up.
I had a good conversation with Flynn a while back. He has made a large sum of money from his Honey Enterprise and has already spent some of it on his goal, which was to buy an iPod.
Flynn has some mates who are mad keen on riding motorbikes and Flynn now has his sights set on buying one.
I explained that he could buy one, but first he must understand that a motorbike is a liability and will take money from his pocket (devalue, repairs, fuel, safety equipment etc). I then explained what Robert Kiyosaki teaches about balance sheets. Flynn took what I explained on board and as a result of our chat he now keeps three jars of money. One for gifting, one for his liability (the motorbike) and one for buying assets!
So what assets can a kid buy?
Chart showing Silver's value over the past 5 years
Well cash could be considered an asset (however, over time currencies generally devalue, so maybe it isn’t a true asset unless it is gaining a good interest from the bank!). Kids can buy collectables or small amounts of gold and silver. With their parents help they could also buy shares in companies, or put their cash into building their enterprise… as in Flynn’s case, more wholesale honey or even a bee hive of his own!
Flynn decided that he wants to buy silver. Currently its market value is about $30 an ounce and can be bought from the Perth Mint. Five years ago silver was only $9 an ounce. That’s a pretty good gain considering that the GFC was during this time! In fact, at one stage silver reached as high as $47 early last year!
Flynn is getting a Financial Education.
This conversation about silver is very relevant to my next guest I am about to introduce to you. Andrew Smith is an expert in Silver and Gold. He is a qualified mining engineer, who is involved with a company (www.orica-miningchemicals.com) selling chemicals to gold mines. He has been involved with Gold and Silver mining for many years and has an in depth knowledge of the fundamentals of gold and silver and investing in these precious metals. If you are interested in capitalizing on the precious metals’ opportunities and seeing Andrew present live in Bunbury, WA, click this link.
We thought it was time that we revisited our little Candy Man Chayse! When we last followed his enterprising adventure he had bought his lollies and bagged them up ready to sell.
Now he has to find a market for his product and learn to be a salesman. Before we share Chayse’s exciting adventure we thought that it would be interesting to consider the benefits of children earning pocket money through enterprise as opposed to children receiving a weekly allowance.
Children earning pocket money through enterprise will develop the mindset and skills of an entrepreneur! Giving children a weekly allowance conditions them to be “workers”. Robert Kiyosaki describes a worker as someone prepared to give their time for money, whilst an entrepreneur builds systems and businesses that produce a cash flow. Workers are more often than not time poor and cash poor, whilst entrepreneurs are generally time rich and cash rich.
Why is it then that the vast majority of us leave school and become workers?
A child receiving a weekly pocket money allowance is equivalent to a worker receiving a weekly salary. Relying upon a weekly allowance won’t encourage children to look for opportunities for enterprise. Their pocket money may or may not be aligned with doing household chores, just as a worker receives payment for doing work. Many kids leave school and slot into jobs for the rest of their lives because they have not been able to explore the entrepreneur within themselves!
Chayse with his box of candy!
Children earning pocket money through enterprise develop a whole different mindset. Parents of these children will encourage their children to look around to find opportunities. These kids learn to identify problems that they can solve and they’ll learn the art of negotiation. Enterprising children understand assets, liabilities, cash flow and profit. They will understand markets and customer service and they will develop the confidence to promote themselves.
Children earning pocket money though enterprise are more likely to value their profits and spend their money wisely. Weekly allowances are easily received and easily spent (knowing that more money will follow). This conditions kids to be reliant on a salary.
Enterprising children become self motivated to make money, and as they celebrate their successes, they quickly come to understand that they can in fact make a lot more money than their friends receiving weekly allowances.
According to entrepreneur, Cameron Herold (ted.com), parents wanting to raise entrepreneurial children won’t give pocket money to their kids. They will encourage their kids to go around their home or community and identify opportunities. These kids then make a plan and negotiate with either their parents or people in the community to provide the service or product for payment.
Getting prepared with his helpers.Selling to customers.
Kids may not be motivated to do this at first, especially if they have been used to receiving a weekly allowance. The trick here is to make sure they have a big “Why!” They need to want something badly enough. This then becomes their goal and reason.
So back let’s get back to Chayse’s enterprising story! Was he able to earn his pocket money through his Lolly Bag business?
He had his first opportunity to sell his lolly bags at his big brothers’ soccer games. During the game the spectators (his potential customers) mill around on the sidelines. So we primed him on what to say to customers. We also enlisted the help of his brothers, Amber and friends. It was all great fun and soon enough the customers came rolling in!
Now who could knock back buying lollies from a cute smiling four year old!
His lolly bags sold like hot cakes for two dollars each. Chayse couldn’t hold up the box because it was too heavy, so he managed the money jar, whilst his helpers held the box. He had to take his customers money and give change.
As word spread that there were lollies for sale, kids came racing in from all directions to buy Chayse’s product. The box became lighter and the money jar heavier… but despite the weight, he wasn’t going to relinquish it!
Chayse looked after his helpers by giving them each a lolly bag. Hopefully they will be willing helpers the next time he sells something.
Chayse also paid back the money his Dad lent him as capital to buy the lollies and plastic bags from the supermarket.
All up he was delighted with his fifty dollars net profit! He is now well on his way to reaching his goal to buy toy Nerf Guns. In fact his business was so successful, that Kit has recently decided to partner with him for his next endeavour! And under their mother’s guidance, they will research and decide on a charity that could benefit from some of their profits. So, stay tuned for that one!
Chayse is one of those children earning pocket money through enterprise. It would have taken him five weeks, with a weekly allowance of $5 a week to save the equivalent to what he profited at the soccer grounds during a soccer game.
In our next Enterprise For Kids blog we’ll introduce you to a self made millionaire who has some excellent tips for parents wanting to raise entrepreneurial kids. Don’t miss this article!
Part of what we love about this blog is that we get to share the amazing success of young entrepreneurs with not only our readers, but our kids. As we’ve been learning on Paul Counsel’s course, and what Dale Beaumont has reiterated, is that who you “hang with” is who you become like. Now that can be a scary thought or it can be an inspiring thought, depending on your peers and the people you spend the most time with.
Luckily we have wonderful family and friends, but for us, it’s also important to include peers who have achieved success in the areas we are lacking. Some of our family and friends fulfil those needs, but a sure way of increasing self effacy in these areas for us and our kids is to mix with other successful entrepreneurs.
Dale Beaumont is one such inspiring young entrepreneur. He doesn’t see himself as that young anymore, but his success started at the tender age of 19. Prior to developing his entrepreneurial skills, Dale was an accomplished gymnast and probably what you would call an overachiever. When Dale was 19 he co-authored a book called “The World at Your Feet” which was the basis of his successful program “Tomorrow’s Youth”. Here, he taught young kids essential life skills.
Dale started his journey when he was only 19.Dale Beaumont wrote Secrets Exposed Series.
In 12 short years he has published 15 books in the “Secrets Exposed” series, built amazing relationships with other young successful entrepreneurs, business owners and “thought” leaders and has recently developed the Business Blueprint model which has amazing systems to keep you ahead of your competition in business and free your valuable time where you can concentrate on things other than work 24/7.
Dale with one of his childrenInside the Sistine Chapel
Dale is married and has two gorgeous boys, so his focus is actually on travelling with his young family to all corners of the world. He is only able to do this because he is financially free and has set amazing systems in place within his business so everything ticks along with or without him! So you could imagine how appealing that is to Trev and I!
I won’t talk about the whole workshop that myself and my good friend Sally went to in Perth, but I thought I would share some highlights with you that really stuck with me as he spoke.
Presenting at Business Blueprint
“Empty bank accounts don’t feed the people.”
“The poor can’t help the poor.”
Just these two sayings alone say it all. Some people in this world want money for money’s sake – so they can have nice things and show off to others how well they are doing. Others want money so they can have nice things, enjoy wonderful experiences, but also do good things in this world and make a difference to the lives of others. We fall into that category.
Dale supports “Hands Across the Water” project in Thailand and it was inspiring to see him obviously making a difference to the lives of many boys and girls there. He even takes other entrepreneurs there with him, so they can have more purpose in their lives and help use their money in useful ways.
New Rules of Business Seminar
The internet has changed business forever and if you don’t embrace that change, your business will get left behind. A classic example of this was the Borders Bookstore. They were a wonderful “physical” resource, but chose not to keep up with how fast the internet was growing and actually sold their software of selling books online to their competitor, who did see the potential of the internet. That competitor was Amazon……..and I think most of you will agree that it has gone from strength to strength, whilst Borders, sadly, had to close their doors.
What I loved about Dale’s seminar is that you don’t have to do it all yourself, in fact, you would be crazy to. There are ways of making your business and your life easier and Dale spells these out with the amazing systems he has in place.
Dale shared with us something he learnt when he was just starting out in business.
The Coffin or the Hourglass.
The Coffin or the Hourglass
Basically many people starting in business spend more time on taking action than they do strategising or planning where they want their business to end up. Now taking action is important, but you don’t want your business to be like a coffin, where little time is spent strategizing, heaps of time is spent taking action (but sometimes not very fruitful) and the results then speak for themselves.
The hourglass on the other hand, is all about putting the time in with the planning, strategising, and “thinking” stage. With well thought out plans in place, the action you take is more focused and the results are more fruitful.
So what would you prefer? A business with the “coffin” model or one with the “hourglass” model?
I think what has made Dale so successful in such a short amount of time is his ability to let go of the things that could be done by someone else (outsourcing), and focus on the things he needs to do to be effective within his business. Dale uses particular software to help systemize his business, so his time is leveraged and far more productive.
Office Autopilot
Office Auto Pilot... an excellent automated system
One such program is called “Office Autopilot” and has an amazing array of uses and ways of streamlining the processes that you must go through to keep your businesses ticking along nicely. I’m sure there are others programs or software, but having just purchased this particular one myself and seeing first hand how Dale uses the software to enhance productivity within his business, I am more than happy to list a few of it’s features below.
“Office Autopilot” Software allows you to split test, track and automate emails through their Email Marketing function. Order forms, memberships, subscriptions, refunds and automated card handling are all made easy with it’s Web Payment Processing system.
The Contact Database is all in one place for the history, purchases, referrals, files and notes etc. The Software covers Market Automation, Affiliate tracking, and Direct Mail Postcards (where you can personalise your business).
I love the If-Then Rule System where you can easily write extremely flexible and powerful rules to automate what happens next in your business. So basically, the system will have your rules “if this happens, send this email, if that happens, sent that email. This is such a time saving feature of the Office Autopilot.
The Software has a WordPress Integration system where you can set up a Word Press site in seconds. You can build a totally integrated membership site in minutes and add smart forms or order forms with a click of the button.
The program builds leads with drag’n’drop landing page creator and can split test pages for marketing purposes. Event Management from events, webinars to teleseminars make follow up easy and with Task Management processes and great Customer Service and Training, what more could you need.
As mentioned earlier, there are many programs out there, but this one is a good email marketing system combined with a good CRM system. Many are just one or the other.
So, how does all of this relate to Entrepreneurial Kids, you may ask. Well, for any business that our kids choose to start, using the internet will be a given, especially when they are young adults. If we want our kids to be competitive in today’s markets, we need to show them the way by taking the time ourselves to invest in “cutting edge” programs. They in turn, will follow our lead and already have the mindset that says “Get savvy! Learn…learn…learn!”
Bed time reading!
Generation Y (anyone born after 1980) are already building and creating things that will improve efficiency in their lives. Why spend time on something that takes 6 hours if you can streamline it and do it in one hour! That’s what our children are going forth into when they build their businesses.
And we agree totally. Life is not meant to be all about work. We want to work to live, not live to work……and we want our kids to get this concept too.
But in the meantime, if you are looking for an inspiring mentor and stimulating bedtime reading why not get stuck into one of Dale Beaumont’s books. Each of his books are either authored or co-authored by Dale and cost less than $10 from Amazon. His Secrets Exposed Series of books are the perfect gift for someone to kick start their entrepreneurial journey.
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Jai and Kaitlin also attended the Green Super Camp Bali, although their experiences were a little different to Flynn’s as they were with teenagers from 14 to 17 years old and their learning and activities were different. They also had life changing experiences and returned to Australia with plenty of stories to share and noticeable positive changes. Here is Jai’s account in his own words….
Dance & drama!Jai being prepared by his team to present a talk to the group.
The Green Super Camp was a once in a lifetime opportunity! I reckon I learnt more in the one week I was there than I have all of high school! It’s hard to explain what we learnt, but it involved quantum strategies, learning how to trust, have integrity, be balanced, and be self motivated… We also learnt some easy ways to increase our grades!
The way we were taught these things were also very unique… there were so many skits and stories and we were involved in any way possible! Learning became fun and we found it easier to remember things. Everybody there was so friendly and strong friendships were formed quickly.
Green Super Camp BaliHigh Ropes Course.Building project.
Although the kids on the camp were from all around the world, we all got on really well and learnt a lot about each other!
The Green Super Camp Bali was very different to any other camp I have been on… Every morning, to be able to have breakfast, we had to stand up as a team and yell out this chant:…
Team games.Making friends... camp in the background.
“HUNGRY HUNGRY * clapclap * VERY VERY * clapclap * HUNGRY VERY * clapclap* VERY HUNGRY * clapclap* TI CALACKA PI A PI A TI CALACKA PI A PI A TI CALACKA PI A PI A MAKAN!”
At first we all thought this was really weird and immature and none of us were really comfortable chanting it, but after a few days, nobody cared about how they looked (another thing we learnt) and we all got right into it!
Green Super Camp Bali 2012
My favourite part of the camp was interacting with the people there and mucking around with new-found mates! And if I had to say my least favourite part of the camp, it would be the fact that we sat a lot and our bums were sore by the end on the camp but that was minor compared to how much fun we had. Overall this camp was an amazing experience and I would happily go back any day! I would recommend this camp to anyone who is experiencing problems in their life, or would just like to try something new!
By Jai
In our next blog we hope to visit Kaitlin’s account of the Green Super Camp Bali. She hasn’t put pen to paper yet, so possibly we will take a look at something else until she gets round to it. It will be interesting to see if the camp lived up to her expectations!
Twelve year old Flynn confidently exited through the International airport departure gate, heading off to a foreign country for an experience of a lifetime at the Green SuperCamp Bali!
Flynn dancing at the Green SuperCamp BaliThe kids are taught Quantum strategies to learn.Balinese martial arts in the Mud Pit!
Saying goodbye to our son at five in the morning, then watching him leave Australia, knowing that we would not be able to speak to him for over a week, left us with a feeling of tremendous pride… although we were struggling with letting him go.
Focus...... self confidence...... determination!
When Cathy and I learnt about the Green SuperCamp, we immediately knew that it would have tremendous character building benefits for our kids. We wanted to share their experiences on our Enterprise For Kids blog for our readers, as we strongly feel that the skills, values and knowledge that the Green Super Camp instils into kids are the same key attributes that will build future leaders and entrepreneurs.
Here is Flynn’s reflection of his camp in his own words!
The Balinese mud dance!Supercamp was an absolutely awesome experience!
Supercamp was an absolutely awesome experience!
The biggest challenge that I faced was going to Bali on my own without my parents. I just knew that I wanted to go on the Green SuperCamp, and to do that I had to go on my own.
I loved trying all the fun activities like mud wrestling, high ropes course, Balinese dancing and seeing all the zoo animals.
I became friends with kids from all over the world. There were kids from America, Australia, Bali, Indonesia, London, India, New Zealand and Japan. Everyone there were really nice, they were happy and they persevered with all the challenges. I liked everyone at the Green SuperCamp!
One of my favourite activities was the mud fighting because I learnt self defence and I learnt how to throw people over my back. This activity taught me the importance of perseverance and to never give up.
Learning...... the key to success!
We were taught how to use Quantum strategies to think and learn. As a result my reading has become seven times faster.
The Bali Green SuperCamp was a fantastic experience. I think that everyone should have a chance to go!
As parents we have noted a number of positive changes in Flynn since the camp.
Team Building...... responsibility and care!
At his school, the teachers have commented that Flynn has been making a real effort and that he has been keeping away from any sort of mischief. He has taken to reading books (which is something he normally avoids!), so much so that he has reached this term’s reading goal in only three weeks! He has an air of confidence and purpose with the things he does. This is evident with his responsibility with chores and with his focus and efforts when playing weekend soccer. Flynn has been easy to get along with at home and appears to be very happy with life!
Next up we share Jai’s experience at the Green SuperCamp Bali!
If you are visiting this blog because you are interested in running your own summer camp and you’re looking for a proven formula, then maybe this information could help.
We were delighted that our three eldest children were able to attend this year’s Green SuperCamp in Bali. They had amazing life changing experiences that have left them with new understandings and beliefs about themselves that will remain with them forever.
Kaitlin at the Green SuperCamp Bali.
Each of our kids applied for a Green SuperCamp scholarship. The scholarships would help us cover the cost of the camp. Kaitlin, Jai and Flynn each wrote why they wanted to attend the camp.
We are very inspired by the passionate words that they each wrote in their applications. Below we have some words from Kaitlin, and we are very proud of her passion and talent in getting her message across to the organisers of the Supercamp.
Here’s what Kaitlin wrote…
“I am the eldest of seven children in my family. We have been brought up to strive for excellence and to aim as high as we can. My parents have always been determined to give us kids the best opportunities possible to get the best out of life.
This year I have started year 11, and have found it quite difficult. I have been held up by limitations of my time and motivation. I would love to attend the “Green Super Camp” in order to break these barriers. I want a life where I can be a role model and inspiration for my siblings and others. I want to be able to contribute to the world and show so many people a way to be free, but I’m still trying to work out how to get there.
Kaitlin Flying like a fox!
I’m so keen to develop a mindset for success. I want to meet new people from around the world, and absorb their confidence and energy. My goal is to become a school prefect or Head girl and to be accepted into University. To do this I need to \understand and learn about myself. I want to know what it takes to be a leader and to be confident in myself to be one.
If I receive this Scholarship, I would be determined, open and ready, to absorb all the information possible for me to be the best person I can and to motivate others to be the same. This is an experience of a lifetime, and I’m ready for it now.”
You will have to wait for the next blog to discover what each of them learnt from their camp experience! Until then…….
Kiyosaki emphasises that by teaching kids to understand balance sheets, you are giving them the basis of a financial education. Balance sheets have two columns, Assets and Liabilities. Kids need to know the difference between Assets and Liabilities.
On the other hand, the poor and middle-class earn a salary, which they spend on liabilities with little or nothing left over to buy assets. As they go through life they buy more and more liabilities and have to work harder to earn more money to pay for them. Many will borrow money to buy more things.
