Financial Advice For My New Son

MY WIFE AND I recently welcomed a son into the world. It’s the coolest experience anyone could ask for.

- Morgan Housel

His only interest right now is keeping us awake 24/7. But one day—a long time from now—he’ll need to learn something about finance. When he does, here’s my advice.

1 You might think you want an expensive car, a fancy watch and a huge house. But I’m telling you, you don’t. What you want is respect and admiration from other people. You think having expensive stuff will bring it. It almost never does—especially from the people you want to respect and admire you.

When you see someone driving a nice car, you probably don’t think, “Wow, that person is cool.” Instead, you think, “Wow, if I had that car people would think I’m cool.” Do you see the irony? No one cares about the guy in the car. Have fun; buy some nice stuff. But realize that what people are really after is respect, and humility will ultimately gain you more of it than vanity.

2 It’s normal to assume that all financial success and failure is earned. It mostly is, but only up to a point—and a lower point than many think. People’s lives are a reflection of the experiences they’ve had and the people they’ve met, a lot of which are driven by luck, accident and chance.

Some people are born into families that encourage education; others are against it. Some are born into flourishing economies encouraging of entrepreneurship; others are born into war and destitution. I want you to be successful, and I want you to earn it. But realize that not all success is due to hard work, and not all poverty is due to laziness. Keep this in mind when judging people, including yourself.