Those of us who have achieved a significant measure of financial security from real estate investing are often eager to pass on our wisdom to our children, especially our adult children, so they too can enjoy the benefits of being self-sufficient and avoid being solely at the mercy of employers and others.
While every situation is different, I would like to share four things I did with my adult children to encourage them to learn and engage in real estate investing.
First, I would like to point out that there appears to be a cycle of influence you may have with your children as they mature. Mark Twain famously said "When I was a boy of fourteen, my father was so ignorant I could hardly stand to have the old man around. But when I got to be twenty-one, I was astonished at how much he had learned in seven years."
In the first couple of years of your kids’ lives, you have some control over their thoughts and actions. As they progress into pre-teen and teenage stages, most of us parents lose all traces of control and the best we can hope for is influence over their thoughts and actions. When your kids morph into adult children with their own full responsibility over their lives and future, many of them proactively seek your advice again. That is a most opportune time to exert influence again. However, you can always subtly and continuously program your kids at all ages for success. I recommend that you read about neurolinguistic programming (NLP), even though it has been discredited scientifically from a purely theoretical standpoint. This recommendation is based on some of the practical concepts that I believe can help program your kids and also help program your tenants for compliance or at least identify which tenant candidates are more likely to be compliant and open to suggestion (watch this video in the Smarter Investing home study course).
1. Modeling
The first and most obvious action I took to help my children be exposed to the benefits and activities associated with real estate investing is modeling. Modeling is how kids learn most things. My wife and I have always mentored and helped other people (like our parents did), so it not surprising that our older son became an Eagle Scout/Big Brother/Habitat for Humanity volunteer while our other son served in the Peace Corps and works with homeless children, gangs and other disadvantaged populations. We never told them to volunteer. We didn’t have to. The same applies to occupational security and real estate investing.
My kids grew up watching that two solid occupations provide financial well-being without driving oneself crazy while at the same time part-time investing is a natural and normal activity that results in additional financial security and even serves as career insurance.
I started to be a serious part-time real estate investor (as opposed to just a generic part-time investor) when my kids were teenagers. That also taught them through modeling that it is natural to change, more accurately add, additional occupations at any stage of life. This too is an important lesson. Maybe some of you still need to learn this lesson. My kids saw this as natural.
I also shared with my children the decision making thought processes I used when I first became a serious business owner when they were in their pre-teen years. I exposed my kids to independent thinking that was very results-oriented while implementing the unwavering principles of ethical and legal compliance in everything I do.
Modeling is a powerful way to teach younger children about real estate investing but it also works for adult children, though they have to be motivated to improve their lives or else none of these recommendations will work.
2. Real Estate Investing Bootcamps
The second most obvious action I took was a no-brainer and that was to take my younger son to a 3-day real estate investing bootcamp when he was in high school. This was back in the days when bootcamps cost $3,500 plus travel expenses. As veteran investors already know, the return on investment on training is rarely less than 1,000%.
While it is hard to precisely quantify the exclusive impact of that single bootcamp, surely it exceeded a couple hundred thousand dollars in the first few years. So, the ROI for me alone was several thousand percent. On top of that, my son learned all about acquisition and management of rental real estate and lease-option. Today, my younger son is a teacher and plans to use his summers to buy-fix-sell and/or buy-fix-rent houses in the beautiful college town in Montana where he lives.
Even if you have adult children who live far away, co-attending a real estate bootcamp is a great way to learn and reinforce the strong family bond while providing the tools for your kids’ strong financial future.