16 Ways Parents Pre-Program Their Children To Be Poor

Tip of the Morning

 

 

 

When I travel the country speaking to high school and college students about exactly what they need to do to become financially successful in life, I like to begin my presentation by asking the same three questions:

“How many want to be financially successful in life?”

“How many think they will be financially successful in life?”

Almost every time I ask the first two questions, every hand rises in the air. Then I ask the magic third question:

“How many have taken a course in school on how to be financially successful in life?”

Not one hand rises in the air, ever.

Clearly every student wants to be successful and thinks they will be successful, but none have been taught how. Not by their parents and not by their teachers.

Not only are there no courses on basic financial success principles, but there are no structured courses teaching basic financial literacy.

Is it any wonder that most Americans live paycheck to paycheck? That most Americans accumulate more debt than assets?  That many Americans lose their homes when they lose their job? Is it any wonder that most Americans cannot afford college for their children and that student loan debt is now the largest type of consumer debt? 

We are raising our children to be financially illiterate and that leads to financial struggles later in life.

Parents who are success mentors to their children, teach them specific good daily habits. And these habits put them on autopilot for financial success as adults. 

In my five-year study of the daily habits of the rich and the poor, I uncovered specific habits that were common among those struggling financially.

Below are 16 ways parents pre-program their children for poverty, extracted from my bestselling books, Rich Habits, Rich Kids and Rich Habits Poor Habits:

  1. Not Reading to Learn – 63% of self-made millionaires in my study were required by their parents to read to learn. Their parents made them read two or more books every month on topics such as: history, biographies of successful people, science, self-improvement, etc. 97% of the poor in my study said their parents never made them read to learn and thus never forged this Rich Habit. 
  2. Gambling – 6% of the wealthy in my study played the lottery vs. 77% of the poor. Worse, the poor admitted to playing the lottery regularly. According to Nicolas Christakas Habits (Yale University researcher), habits spread like a virus within your social network. Children are constantly observing what their parents do. If parents gamble, their children will very likely gamble as adults.
  3. No Dreams or Goals – 82% of the self-made millionaires had a clear vision of who they wanted to be. They had dreams and goals that motivated them to forge Rich Habits which enabled them to realize their dreams and achieve their goals. Conversely, 97% of the poor had no dreams or goals. They lacked a clear vision of who they wanted to be in the future.
  4. Failure to ExperimentParents who push their children to experiment with different activities during childhood, increase the likelihood that their children will discover an innate talent or something they enjoy doing, which could lead to a lifelong vocation. The Boy Scouts and Girl Scouts institutionalize experimentation through their badge system. This enables scouts to explore things that interest them so that they can learn valuable marketable skills.
  5. Eating Unhealthy Food – 21% of the wealthy in my study were overweight vs. 66% of the poor. 78% of self-made millionaires ate little to no junk food (less than calories a day). 97% of the poor consistently ate too much junk food (more than 300 calories a day). Children eat what their parents eat. If their parents are heating junk food, their kids will eat junk food. Junk food includes fast food.
  6. Do-Nothing Habits – 63% of the wealthy in my study spent less than 1 hour per day on recreational Internet use. 74% of the poor spent more than an hour a day in the Internet. 67% of the wealthy watched less than 1 hour of TV per day vs 23% of the poor. 9% of the wealthy watched reality TV shows vs. 78% of the poor. Besides, TV and the Internet, time wasting habits also include Snapchat, Instagram, video games, etc.
  7. Absentee Parents – 83% of the wealthy in my study attended back to school night for their kids vs. 13% of the poor. 29% of the wealthy had one or more children who made the honor roll vs. 4% of the poor. When parents are engaged with teachers and the school. they become accountability partners to their children.
  8. No Daily Self-Improvement – The drive to improve was a hallmark of the self-made millionaires in my study. Daily self-improvement was a habit forged in their childhood years thanks to their parents. The poor in my study said their parents did not make self-improvement a priority growing up.
  9. Poor Money Habits – 73% of the wealthy in my study had smart money habits, long before they became wealthy. 95% of the poor did not. Many were, in fact, financially illiterate, as were their parents. This is the main reason so many who struggle financially, fall into the credit debt trap as young adults. They just don’t know any better.
  10. Toxic Friends – 79% of the wealthy surrounded themselves with like-minded, upbeat individuals who were pursuing similar dreams and goals. Only 16% of the poor said they did this. Habits spread like a virus throughout your social network. How well do you know the friends of your children? Do they possess the traits or habits you are trying to instill in your children?
  11. Anti-Rich Bias – 78% of the wealthy in my study said they believed the wealthy were good, hardworking and persistent individuals. created their own good luck through hard work, persistence, daily practice, determination and goal achievement. 95% of the poor believed the rich were not good, hardworking people. 52% of the poor believed the rich were rich primarily because of random good luck. They did not believe the pursuit of wealth is what made that luck possible.
  12. Victim Mindset – 79% of the wealthy in my study said that they believed they were personally responsible for their success or failure in life. 82% of the poor believed they were poor because of factors outside their control, such as Wall Street, banks, the rich, government policies, circumstances they were born into, etc. Are you raising your children to take individual responsibility for their life circumstances? Do you, as a parent, constantly blame rich people, employers, the government, Wall Street or society for your poverty? Do your children see poverty as dictated by fate, which only leads to a feeling of hopelessness and helplessness?
  13. Entitlement Mindset – Children must be taught to work for the things they want, such as cell phones, video games, toys, etc. When they are given everything they want by their parents, it’s easy for kids to develop an Entitlement Mindset. having a Victim Mindset leads to an Entitlement Mindset, especially when you look to government to solve your financial problems. The adult world punishes those with an Entitlement Mindset.
  14. Lack of Consistent Exercise – 95% of self-made millionaires in my study exercised aerobically 30 minutes or more per day, four days a week. Only 23% of poor did the same. Studies have shown that daily aerobic exercise improves brain health, brain efficiency and IQ. Children mimic the habits of their parents. Do you, as a parent, exercise daily? Do you make your children exercise daily?
  15. No Success Mentors – Almost all of the self-made millionaires in my study had some success mentor in life. Success mentors put you on the fast track for success. They teach you what to do and what not to do. They also teach you the habits you’ll need in order to succeed in life. The mentors of my millionaires were one of their parents (56%), a career mentor (24%), a teacher (8%) or someone else (4%). Parents are often the only shot most have at having a success mentor in life. Only 4% of the poor said that they had a success mentor in their lives. Are you a success mentor for your child? Do you actively seek success mentors for your children? You can find success mentors in the Boy Scouts/Girl Scouts, Big Brothers and other similar organizations. Are your children part of any mentoring organizations within your community?
  16. Negative Mindset – 63% of the wealthy in my study had a positive, optimistic, upbeat mindset. 94% of the poor had a negative, pessimistic, hopeless mindset. Studies, such as the Broaden and Build Study, have shown that a negative mental outlook inhibits and depresses the ability to focus, creativity and certain other brain functions. The expression of emotions and your positive or negative outlook on life are habits. Children pick up the habits of their parents. Are your Parent emotions and mindset negative or positive?

Thanks to something called mirror neurons, children are hardwired to mimic the habits of their parents. Good or bad, they will mimic your habits. If those habits are good, your children will mimic your good habits. If those habits are bad, they will mimic your bad habits. 

According to a Brown University Study, in which the habits of 50,000 families were analyzed, the author of the study, Dr. Pressman, found that most of our adult habits were forged by the age of nine.

In another study by Nicholas Christakis, he found that habits spread throughout our social network. Parents are a big part of that social network.

Since children spend most of their early lives with their parents, these two studies show the critical role parents play in the habits all of us forge in life.

We don’t have a wealth gap in this country, we have a habit gap. We don’t have income inequality, we have habit inequality.

If parents have too many Poor Habits, what’s the remedy? 

Teachers can fill the void. The school system can step in and instill in their students good habits. Habit education must, therefore, become a structured part of our education system.  

Furthermore, high schools should be teaching very specific financial education courses to students beginning in freshman year:

  • How to Pay Bills and Balance a Checkbook (freshman year)
  • How to Save and Invest Your Savings (sophomore year)
  • How Insurance Works – Auto Insurance, Home Owners Insurance, Health Insurance (junior year)
  • Understanding Student Loans (junior year)
  • Personal Income Tax Fundamentals (senior year)

Schools teach what they are required to teach and nothing more. It’s unfortunate, but few financial education courses are a requirement in most schools.

Choose Purpose Over Prosperity

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It’s not easy deciding what to do for a living. Parents and teachers do their best in steering young adults into jobs, careers or professions that offer the best compensation. This makes it possible for young adults to provide for themselves and, eventually, their own families.

Sounds like the right thing to do, but for most, it’s a recipe for disaster. When you choose a job, career or profession based solely on current of future compensation, you are choosing prosperity over purpose. At some point during your life it becomes evident that you do not like what you do for a living. That revelation typically manifests itself when you have young children, a mortgage, car loans and other bills to pay. Its hard to make a career change with adult responsibilities.

The correct approach is to choose purpose over prosperity. Doing something you love involves pursuing something that taps into your inner talents. We all have unique talents. The job of parents and teachers, instead, should be to inundate kids with a multitude of activities that expose their inner talents. This is the only way kids will find that thing they love to do. And when kids engage in activities that expose their inner talents, only then will they find their purpose in life.

Finding your purpose in life means you will never have to face the revelation that you do not like what you do for a living. When you pursue your purpose in life, the money eventually finds you. Always choose purpose over prosperity. It’s the only true path to success and happiness.

Whose Investment Are You?

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The fact is, most people work for someone or some organization. From the perspective of the employer, their employees represent an investment; an asset. From the perspective of an employee, their employer is a means to an end. That end, for most unfortunately, is a paycheck. A select few, however, are in it for more than a paycheck. They go the extra mile. They do more than their job description. They pursue responsibilities that go beyond their job description. And here’s the little known secret to success that only a unique number of employees have discovered – going the extra mile is an investment in themselves.

When you do more than your job requires, you grow. As you grow, you become more valuable. Not just to your employer, but to every competitor in your industry. The more you go beyond just earning a paycheck, the more you learn, the more new people you come into contact with and more your stock rises.

Going beyond a paycheck and your job description shifts the investment from your employer to you. It’s an investment in yourself. And the more you invest in yourself, the more opportunities you create.

That was one of the hallmark’s of the self-made millionaires I uncovered in my Rich Habits Study. One of the self-made millionaires in my study started in the equivalent of the mailroom. I interviewed him because he had risen to the 2nd in command at a pharmaceutical company in New Jersey. He’s now worth in excess of 8 million dollars. He somehow uncovered that little known secret of success.

If you want to be a success in life you must invest in yourself. You must take on responsibilities that push you outside your comfort zone. This discomfort means you are growing. When you go above and beyond your job description, you are no longer an investment of your employer. You become your own investment.

The Pursuit of Any Worthy Dream Must Become Your Main Purpose in Life

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Dreams come with baggage. They take time and effort. Sometimes the effort feels like an endless investment. It would be so much easier if there was a light at the end of the tunnel. The light of certainty. Unfortunately, there is no certainty when you are pursuing a dream.

In my research, I found that self-made millionaires were not the brave and confident heroes written about in so many books. They worried about the outcome of all of their efforts and were concerned about all of the money they poured into their dreams. They doubted themselves. But what makes them unique is that, despite so many mistakes, failures and unmet expectations, they kept pursuing their dreams. They just did not quit, despite the anguish.

When they realized success, it was not something that washed over them in one singular event. It was more or less an evolution. Success is only perceived in hindsight. It is typically not something that becomes self evident. There are set backs, which create doubts. Then turning points, followed by major advances which inspire confidence. Then more set backs, and more doubts, then more turning points and then more confidence. Dreams do not come easy. It’s not a linear climb up some ladder. It’s more like climbing monkey bars. Sometimes you feel like you are moving one bar backwards, sometimes you feel you’re moving one bar sideways, other times it feels like you are not moving at all and every now and then you find yourself moving two or three bars upwards.

Because of this inherent uncertainty and the emotional ups and downs, the pursuit of your dream must be for all of the right reasons. Money alone is not a good enough reason. You must see your dream as that thing you will do, irrespective of any financial gain, for the rest of your life. It must become your main purpose in life.

Good Habits Take the Grind Out of Grit

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Grit is just another word for persistence. Persistence, above all else, is the main secret of all success. Never quitting on a dream is the definition of persistence.

But being persistent requires that you grind it out. You must do certain things every day that move you closer to realizing your dreams and your goals. This is where habits come in. Good habits automate the success process. Because they’re automatic, unconscious behaviors and thinking, they take the grind out of the pursuit of success. They make you automatically persistent, without the need to rely on willpower. Automating success by adopting good success habits means you don’t have to grind it out, willing your way forward every day. Habits made success easier because they enable you to grind it out without really feeling like you are. Good habits take the grind out of grit.

There’s a Zombie Inside All of Us

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Do you have any cravings for human flesh? Well, if you do, you better get yourself to a Doctor quick. That’s not the kind of zombie I’m talking about here. I’m talking about the zombie brain that resides inside each one of us. First, let me share some brain facts with you. Every human brain has three parts:

  • Brain Stem
  • Limbic System
  • Neocortex

The conscious parts of our brain, our consciousness, is spread across the following regions of the brain.

  • Temporal Lobes – Neocortex
  • Amygdala – Limbic System
  • Septum – Limbic System
  • Hypothalamus – Limbic System
  • Insular Cortex – Limbic System
  • Singular Gyrus – Limbic System

This represents a small fraction of the brain. The rest of the brain, many of the leading neuroscientists argue, represents our subconscious.

The subconscious parts of our brain are actually running our lives. To a very large extent, our behaviors, thinking and habits are controlled by our subconscious. We are, to a large extent, zombies, controlled by our subconscious.

The good news is that the conscious part of the brain is under our control. It is the command and control center of the brain and can override our subconscious. You’ve probably read about the Buddhist monks who are able to control heart rate, body temperature and other bodily functions normally controlled by the subconscious brain. Well, it goes much deeper than just controlling body function.

By exerting our consciousness we can also control our behavior, thinking and habits. But in order to do so we must become aware of our behavior, thinking and habits. You can’t change what you do not track. By tracking, you can identify which behavior, thinking and habits you’d like to change and then direct the conscious brain to override them. It will takes you anywhere from 18 to 254 days to change your habitual behavior and thinking (University College of London study).

We see many people under the control of their zombie brain every day. These are people who play the victim card and complain about their circumstances in life. They believe they have little or no control over their lives. They blame their parents, society, government, Wall Street, the wealthy and anything else that can justify their circumstances. They do not take responsibility for their lives. It’s not their fault. It’s just the luck of the draw.

That’s too bad. Your circumstances in life are the byproduct of your behavior, thinking and habits. You can change your circumstances by changing your habitual behaviors and thinking. You are the master of your zombie brain. You can make it do whatever you want it to do. You are in complete control of your life. Don’t play the victim card. When you allow your zombie brain to control you, it only leads to misery and unhappiness. The brain can be an incredible master or a very poor servant.

The Most Common Cause of Regret

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Unrealized potential is the most common cause of regret. Not living up to your potential is a sin against humanity. When you look at all of the great successes in life, they all have one thing in common – they lived up to their potential as human beings: Elon Musk, Steve Jobs, Warren Buffet, Andrew Carnegie, Michael Jordan, Michelangelo, Einstein, Galileo, Stephen King, John Maxwell, Tony Robbins, Dr. Ben Carson, Arnold Swarzenegger, Leonardo da Vinci. The list goes on. These individuals went all out in life. They pushed the limits of their potential and the world rewarded them. They believed they had unlimited potential and that nothing could stand in their way. The ones who are no longer with us died without any regrets. They tried. They gave it their all.

Don’t let life pass you by without exploring your potential. We are all gifted with unlimited potential. It is up to us to explore the limits of our potential. If we don’t, we live a life filled with regret.

The Words You Use Affect the Way Others Perceive You

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I remember my first job in NYC. I was 21 and interning for Bankers Trust right across from World Trade Center Building #1. I was finished with my work day and headed down the two story long series of escalators which delivered all of us down to street level. There were four of these escalators, two that went down and two that went up. While on one of these down escalators I ease dropped on a conversation two bankers were having in front of me. To this day I have no idea what they were talking about. But what I do remember was how impressed I was. They used words like Michelangelo used clay or paints. It bothered me that I did not understand the words they were using.

That summer I decided I was going to learn ten new words a day. So I pulled out the dictionary, took out a binder, some paper and a pencil and began writing down words I didn’t know. I did this every day for about two months. As summer came to a close, I was now the proud owner of 500 new words. And I started to use these words, weaving them into conversation. I remember playing pool in the rathskeller back at college. There was a very pretty girl in the group. She knew some of the guys I regularly played pool with. We were all discussing Poland, which was in the news. They were going through a revolution there. I remember sharing my opinion with the group about this revolution. I test drove some of the new words I learned over the summer.

About an hour later, as I was walking out the rathskeller, the pretty girl accompanied me up the stairs. She never did this before. I confess, my heart was beating like a rabbit. She said to me, “I didn’t realize you were so smart.” We became fast friends after that and had many more conversations. We came very close to dating but I never had the ask a girl out on a date confidence to ask her out. I’m of Irish decent and, at the time, I was working on my eighth year of puberty. I still looked like a man child and felt ugly and very awkward back then.

I kept that word binder, but confess that I lapsed in my devotion to learning new words. When I was finishing up my study on the daily habits of the rich and poor in 2008, I discovered that one of the Rich Habits the millionaires all seemed to have was a daily devotion to learning and self-improvement. So I found my old word binder, dusted it off and renewed my study of words. It has helped me enormously in communicating my research in the books and articles I’ve written as well as in the numerous media interviews I’ve had.

The words we use every day create perceptions. They are like magnets, drawing to us all sorts of people. Rich people had figured that out long before they became rich. The more words you know, the better your ability to communicate what you know. Words create perceptions. If you want to create the perception that you are smart, you must increase your knowledge of words and use them in conversation. Learning new words helps you grow as an individual. They increase your confidence. They transform you.

Start your word binder today. Devote just fifteen minutes a day to increasing your vocabulary. Add five new words a day to your arsenal. People will take notice. Words will elevate you and draw the right people into your inner circle.

5 Step Process to Daily Growth

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“Success is not a destination, it’s a journey.” John Wooden

Achieving success requires that you pursue and realize your dream. In order to realize your dream you need to gain new knowledge and develop new skills. You must evolve into the person you need to become in order to realize your dream. The key to realizing your dream is daily growth. The key to daily growth is daily learning. You need to make growth a daily habit. But how? By processing growth into your daily schedule. Each day commit to reading at least 30 minutes about something that helps you gain more knowledge. That’s step one. You then need to document what you’ve learned each day. Writing down new information helps reinforce that knowledge. Many of the self-made millionaires in my study maintained a binder that they filled with new information and then separated that new knowledge into topics. That’s step two. Once a week they would review their “fact binder”. That’s step three. The fourth step requires that you use that new information. Knowledge, without action will not stick. Finding ways to act on what you’ve learned creates a synapse, or neural pathway in the brain. Repetition moves your new knowledge into long term memory. That’s step five.

Tip of the Week – The 5:1 Rule

The wealthy are good listeners. They subscribe to  the 5:1 Rule. This rule states that every minute of talking requires five minutes of listening.