This month we have one item we are sharing. It’s that important and that good. How do I know? At Hill Investment Group, we’ve been doing a series of morning Zoom calls for a few years now, and this piece from our own Charles Kafoglis is viewed as one of the best we’ve ever had. Charles won’t tell you this because he’s too humble, but his five-minute video is something everyone should see. 

Why? It frames the magic of compounding in an easier way to digest and incorporate into your own life. Whether you are building towards financial independence or already there, I encourage you to watch our natural teacher, Charles Kafoglis, and his talk on “The Greatest Double.”

Summary of Topics:

• Example of doubling from one of Charles’s favorite teachers
• What it looks like to double every ten years
• Phases of life – learn, earn, adjourn
• The impact of the last double
• Do you have 3, 4, or more doubles?

For the past 10 years, most US investors have been star managers without really trying. In our country, investor portfolios are typically US large-cap dominant, so while they are up this decade (and specifically this year with the S&P), they didn’t fare well the first decade of this century.

I recommend spending a few minutes with this piece from Dimensional. They took a look back at the stock market over the past 20 years. While the 2000s and 2010s have differed starkly in performance, collectively they have reinforced investing lessons on patience and discipline – the real stars! Read their synopsis at the link below.

A Tale of Two Decades: Lessons for Long-Term Investors

Parents everywhere stress over how to have “the talk” with their children. Is it too early? Am I prepared to answer their questions? Can’t I just let school handle this?

No, it’s not the birds and the bees. It’s the money talk.

If you’re counting on our educational system to have the money talk for you, your kids will probably be short-changed. In a 2017 “report card” measuring states’ effectiveness at producing financially literate high school students, only five received an A. Just 17 states required high school students to take a personal finance course (now 19). More than half of American students will graduate without taking an economics class.

To put this in context, schools (and maybe parents) seem better equipped to talk to kids about drugs, sex, and alcohol than about money.

But why is this? As is often the case, we avoid talking about things we ourselves are uncertain of. So, the first step before initiating a money talk with your kids must be inward: What are your own preferences, goals, boundaries, and standards when it comes to money? Reflecting on these questions should improve your conversation.

The most valuable financial lessons to address early on relate to priorities. Is saving money for a family vacation your priority? Talk about it. Is sacrificing luxuries to pad your kid’s college fund the priority? Be transparent. Rather than simply telling a youngster what a savings account or a 529 plan is, put it in context for them – why is this important to your family? Ask them how they feel about it too. You may discover their priorities aren’t the same as yours!

Money talks should be dialogues, not lectures. Keep it simple. I once brought this “Setting a Standard” one-pager from the JumpStart Coalition to a daddy/daughter dinner. Something as basic as discussing the difference between borrowing and buying can lead to important revelations.

Lastly, remember that financial education isn’t limited to teaching. Consider what you model every day. How do you talk about money with your spouse? How transparent are you about bills, investing, estate planning, etc.? Keep this in mind, because kids are always tuned in.

Even if your kid does learn about money in school, there is no substitute for authentic, one-on-one engagement. Accordingly, it’s incumbent upon us as parents to champion financial literacy standards. Whether we choose to acknowledge it or not, money has power. For your sake and theirs, it’s worth taking the time to help your kids understand how to wield it.