Our boy Kieran (11yo) just did his third lawn mowing job this weekend. Earning a massive $70 for his efforts!

Kieran has been saving up for a new $800 mountain bike. After nearly one year of dozens of lawns, dog walking, etc. around the local area he has nearly hit his goal. However he is now having second thoughts on spending all his hard earned cash and thinking of getting a one year second hand bike for $400 – $500.

He wants to put another $500 into his LIC taking his portfolio to over $1500. Over the last few years his dividends have been steadily increasing. A $40 dividend per year that grows to $50 and more may not seem much to adults but to an 11 year old that is huge free money. The lesson is so much better when they actually see the money go into their own account.

We didn’t suggest this too him but he has seen with his own 11 year old brain – the power of letting the money work for you. All three of our kids have the same starting share portfolio in Argo but Kieran is the first to take it to the next level and make more money do the work.

Most grown adults don’t understand the power of compounding in investing until it is too late.

We have good friends that encorage the opposite! They advise to get a car loan at 17/18 years old as it will be a good for the next loan – WTF! What is wrong with the old fashion saving up for what you want instead of living beyond your means? Better still, save and invest compounding your savings. This works for all things in life whether getting a phone, computer, car or first home.

The scary thing about this mind set it’s the opposite to what most will learn or do. The government certainly don’t want you to delay your gratification (spending) as it hurts their term in office. They promote the opposite and encourage spending to ‘stimulate’ the economy.

We are certainly proud of our kids early understanding and good work ethic.