Mostly Money

104: Robin Taub on how to teach your children about money

December 10, 2021 Preet Banerjee
Mostly Money
104: Robin Taub on how to teach your children about money
Show Notes Transcript

Robin Taub returns to talk about her latest book, The Wisest Investment: Teaching your kids to be responsible, independent and money-smart for life.

We chat about the common concerns parents bring up with Robin with respect to money and the financial decision making skills they want to empower their children with. We then dive into what parents can expect to learn from this quick, strategy-filled guide that includes chapters and tactics for children of all ages.

To take advantage of Robin's special offer (mentioned at the end of the podcast), you can email her directly at [email protected]

LINKS

Buy the book: Amazon affiliate link
Robin's website: https://robintaub.com/
Book website: https://www.thewisestinvestment.com/

Robin Taub:

Well, I have to admit I did not pay a regular allowance. We were typical parents, we would forget some times we would not have money on us. So I think if I could have automated that, or systematized it better so that my kids did have more of a regular opportunity to manage money, because that's really why I think allowance is great. It does get

Preet Banerjee:

couldn't tell him that you're simulating unemployment or something by just having a stock. This is mostly money. And I'm your host, Preet Banerjee, and on the show today I'm joined by Robin tobe, author of the new book, The wisest investment teaching your kids to be responsible, independent and Money Smart for Life. Robin is a Chartered Professional Accountant by training, having previously worked at KPMG and Citibank, among other places. And now she is a financial writer, speaker and consultant Robin, welcome back to the show.

Robin Taub:

Thank you, for you so excited to be back.

Preet Banerjee:

I'm always pleased to have you on the show, especially now that you are my favorite guest of all time because you for longtime listeners who had listened to the last episode, you will know that Robin dropped off a very very, very nice Scotch a port L and it's a silent still they don't make it anymore. And at the like the last DRAM just sitting there in my cabinet. I'm waiting for a super special occasion to crack it open. And yeah, so because of that you our favorite guest while

Robin Taub:

I love that a shout out to my husband, Jonathan for providing that

Preet Banerjee:

little Yeah, so much, Jonathan. Much, much appreciated. Okay, so you're back on the podcast. And the reason is to talk about this new book of yours the wisest investment. So let's, let's start with the 30,000 foot perspective on this book, who is the target audience? And what will they learn from this book?

Robin Taub:

Its parents. And I know that sounds really broad, but it's for all parents who want this for their children who want their kids to be responsible, independent and good with money so that they can make appropriate decisions for the rest of their lives long after we're gone. As parents.

Preet Banerjee:

Right. Okay, so let's first take a step back. And I want to get your thoughts on what are the biggest concerns that you hear about from parents, when it comes to teaching children about money or talking to children about money? What has historically been those top concerns that you've heard,

Robin Taub:

parents do not want their kids to be spoiled, or entitled, I think it's something that keeps them up at night, especially with wealthier families is that they're they want their children to have a sense of purpose, not a sense of entitlement. And I think what goes with that is having this basic skill of financial literacy, I think parents are worried, especially if they're not doing a good job themselves, that their kids won't be financially literate. So they won't have the knowledge, the skills, the confidence, to make appropriate decisions at different stages of their lives. So parents know, this isn't an important thing to have. It's a basic life skill. And I think they worry that either they're not teaching their kids, and maybe they're not learning in school. And if they've struggled personally, or they know others who have struggled with money, they know what a negative effect it can have on your life, and they really want better for their kids. So I think those are the two main things that parents are concerned about.

Preet Banerjee:

You know, it's interesting, you touched on something which you address, I think in the introduction to the book is your concern that some parents might have that they may not be qualified to teach their money about kids, or maybe they don't feel that they have the skill set, or knowledge to teach their kids about money appropriately. And so you, you tackle that head on. And so the book does also give kind of a general framework that that parents can apply themselves, especially if they feel that maybe there's a part of their finances, that they've been neglecting for various reasons. Maybe they just haven't had time to dress it because life is just so busy. And then you throw kids into the mix, and you don't have a spare second, and I think so there's two things I want to ask him this question. One is, what do you tell parents who are worried about, you know, their ability to teach their kids about money? And why did you get this book? And then second, where did they find the time to? And what was your strategy behind this book and how you set it up to sort of take into account that they don't have a lot of time?

Robin Taub:

Right? So first of all, for parents who are feeling that way, you're not alone. There was a study that found that something like 78% of parents who tried to teach For kids about money, but two thirds didn't feel they've been very successful at it, and more than half didn't even know what information they needed. So we know that this is an overwhelming topic. And parents, you know, they do find it hard to teach their kids. And it is because either a lack of knowledge, a lack of confidence, a lack of time. So I did try to set this book up in an accessible way to make it approachable for parents. And, you know, the first chapter really is for them to try and get their own financial houses in order so that as parents, they can lead by example, because I feel like as parents, we are really important role models for our kids in so many areas, including money. So I want to sort of, you know, get rid of this barrier, that you have to be a CPA like myself, or financial expert, like you to do a good job with this you don't, this is something you can learn along with your kids. So don't wait, you know, don't feel like you have to be perfect. You know, even mistakes that you've made can be opportunities to share those with your kids, and what you learn from them. So, you know, when it comes to running a busy household, and you know, you're working and you feel like I just don't have the time to teach my kids, how am I going to fit this into our busy lives, I say to to parents to look for teachable moments. So these are opportunities to build a money lesson into your day to day lives. And they're like low hanging fruit because they just come up all the time. As you know, we're constantly interacting with money. We're always transacting, and it's just an opportunity to talk to your kids about what you're doing or how something works, and answer their questions. Rather than setting aside a specific time every week, you know, these things will just crop up. And then it's more meaningful when it's happening at a point where a decision is being made or something that's relevant in in all of your lies. teach that lesson.

Preet Banerjee:

Yeah. And, you know, I think that's great. Advice. And I think it's reassuring for anyone who's potentially you know, buying this book, either for themselves or for friends that they think would benefit from it. Wink, wink, nudge, nudge holiday season coming up. Great stocking stuffer, idea. Yeah, and one of the things that we talked about is these teachable moments. And I know, having talked to people in the field of financial literacy, financial technology, and specifically referring to a conversation I had with a friend of mine, Dr. Abney, Shaw, who's a specialist in the pain of payment, one of the things that we had talked about was, you know, the salience of the method of payment, and how as we move to a cashless society, cash actually becomes more abstract, right. So it used to be people were used to dealing with cash. And as we move to a digital world, digital money becomes more abstract. But now it's almost the other way around for kids who may not actually see a lot of physical cash anymore, especially during the pandemic, when a lot of businesses that were not even accepting cash. Everything is done online. And so my question is, do piggy banks still have the same effect? Or use cases that they used to? Or is there some kind of, you know, digital form of piggy bank strategy that you recommend today?

Robin Taub:

Okay, so the answer to that, and it's a great question. It's one of the reasons I updated the book, because we are basically living in a cashless society now, and it was accelerated by the pandemic. So I'd say with young kids, and let's say five to eight, a piggy bank is still a great way to start, hopefully, parents, you still have some cash lying around, or you can get some, because it's tangible. Like you said, it's concrete. It's not conceptual. So it's easy to they're easy for them to understand that you can, you know, teach them how to make change, you can play counting games, you can show them the cool images on Canadian money. So And what I also recommend is using a multi sided piggy bank, which has a slot not just for saving, but also for spending, sharing, donating so it's got four slots, one for safe, one for spent one for donate, and one for invest.

Preet Banerjee:

Oh, so you're this is an audio only podcast, but you're holding.

Robin Taub:

I'm showing you but Yeah, too bad. Your viewers can't see it yet. Yeah, but it

Preet Banerjee:

is a it is a pig with four different slots. And it's clearly labeled save, spend, donate invest. So yeah, where do people get Are those yours like?

Robin Taub:

Fish? That's like one of the top questions I get is where can I get that piggy bank? And the answer is, it's a company called Money savvy generation. And if you go to my website, which is Robin tov.com. I have a resources section and it's on there as a listed resource because I just think it's like a perfect thing for a young kid to start off with. But going back to your question, remember how we always talked about The jars system for adults at one point, like put cash in jars. And when you know, when you're out of the money, you know that you've hit your budget for that category. And that was how people, well, that's just not realistic anymore at all to your point. So we do have this challenge now that we're living in a digital world and our kids are on their phones all the time, they're using, you know, their phone, for paying for things for social media for all kinds of stuff. So why not harness that technology and have it help us? That's how I've approached it. And I think, you know, once a kid is preteen, maybe 1012, I think they are, you know, once they have a phone, they are able to understand these conceptual versions of money a little bit better, like tapping with a debit or credit card or with your phone. And as you know, all the banks in Canada have these all the mobile banking apps have features built into them that will that can really help you track your spending and control your finances. So whether it's setting up alerts and notifications, to let you know that you've spent money, again, like you said, the pain of handing over cash to someone is now gone. So how do you make that? How do you replicate that? How do you make that kind of spending feel real again, so you can set up notifications. If you wear a smartwatch, you can get buzzed on your watch, to just remind you that you've spent money, you can use the use the app to help you track your spending. And then you can use the information you get from tracking to help you set budgets, you can check your balance, it's just it's right there on your phone. So I feel like even though it's harder in some ways, we also have so many more tools just in our pockets.

Preet Banerjee:

That's a great point. And I think, you know, a great business idea which no one would invest in is instead of having like a, you know, like a vibrating alert is to one that one that actually shocks you like some kind of painful shock,

Robin Taub:

like low man very Pavlovian.

Preet Banerjee:

Yeah, I don't know if that would fly. But to introduce the actual pain of payment,

Robin Taub:

instead of just that little vibration, you get like on an Apple watch.

Preet Banerjee:

Oh, can you imagine tilting me maybe in the metaverse one day, you know, every time you make a savings contribution, is triggers some kind of dopaminergic response in your reward system in your brain. And yeah, that would be really cool. Yeah, yeah. Maybe a bit too big brother ish. But

Robin Taub:

yeah, I mean, it is I don't think the banks are gonna be too happy about, you know, shocking their customers. And sometimes, it is like, even not literally shocking, but I'm having some sticker shock moments right now, when I see the price of certain things, you know, we could get into that hold inflation or inflation or Sri inflation discussion. But anyway, there are also lots of apps to that parents can use to help teach their kids about money to help give, you know, to pay their allowance, and those kinds of things that are tied back to some learning as well.

Preet Banerjee:

And all those you have that in your resources section on your website? Yes, yes. Yeah, that's great. Yeah. So if anyone's listening, you want to learn about those resources in apps, check out Robbins website. Okay, so let's, let's take another step back and sort of give a general overview of how the book is divided. So there's five chapters, and it is a short read, it's not an intimidating read by any names, and it is chock full of strategies and extra, like you get right to it. So can you break down the flow of the book? Sure.

Robin Taub:

So the first chapter, as I mentioned earlier, is really for parents to help you get your own financial house in order. So you can lead by example, and be good financial role model. And I talked about, you know, really the why behind this, why is teaching kids about money, the wisest investment, and, and I also, you know, touch on financial literacy in school, because that has also really improved a lot over the last 10 years. And I also get into these 11, healthy habits of financial management, that will help parents, you know, get their house in order, and that they can also model as good financial behavior and habits for their kids. So things like paying yourself first, and having a financial safety net, which would mean an emergency fund and appropriate insurance. And then also, what I added in this edition is having updated wills and powers of attorney, because I think if the pandemic taught us anything, it's like you got to be prepared. So um, so that's chapter one. And then I have just four other chapters in the book, there's only five and total as you say, it's under 200 pages. And each chapter is for a specific age group. And I have four age groups in the book, young kids, preteens, so nine to 12, teenagers 13 to 18 or so and then young, young or emerging adults 19 And up. And then within each of the four chapters, I structure of the chapter under these five pillars of money which are very similar to the piggy bank. So earn first you have to earn money before you have any choices with money. And then you can decide if you want to save, spend, share, or invest for the long term. So each chapter gets into specific topics, examples, family discussions, activities, very, very tactical stuff for each of those five pillars for that age group. So it's you're always sharing age appropriate information with your kids, because that's really important that it's information that they can absorb that's relevant to their lives. So I really tried to, and I try to build on it. You know, that's the idea is you start when they're young, and you build and you build, and by the time they're emerging adults, they have a really good foundation.

Preet Banerjee:

Now, I think one of the challenges is the different sources of information, the different mediums where children can get access to information about money, good advice, or bad advice. So, you know, for for parents whose kids might be watching, I don't know, crypto bros on YouTube or Tik Tok, it's whatever. Right? Yeah. And you know, some of them are peddling some pretty strange messages. There's some good information, but I think part of the perspective possibly, for some of them is that the old, the old people, they just don't get it. Right, you know, money is changed. And, you know, you should be investing in Bitcoin or whatever. And, you know, I know, some young kids were getting exposed to this, and not some of the other sort of more basic stuff. Yeah. So what what is your advice to parents to, you know, deal with this, the these conflicting sources of information that they may be exposed to? And that's not just limited to money, that's the, you know, yeah, goes for any topic,

Robin Taub:

for sure. But let's say, you know, when it comes to money, if your kids are on tick tock, are are on YouTube, and they are learning about money, I mean, I think just the fact that they're interested is good, and you want to encourage that, right. But you have to take the information that you're learning with a grain of salt, sometimes based on who it's coming from. So I think as parents, that's always our job is we want to make sure that our kids are learning from, you know, valued, trusted sources. And, you know, I mean, I think about my own kids, and I know that they do, especially my son, I know, he learns a lot on YouTube about money. He's older, though, but I think with younger kids, you want to have a conversation with them. And maybe that is, you know, the opening to talking about money, because that's sometimes a awkward or uncomfortable thing for parents to do. But if their kids are following these influencers, and they have these ideas, it is an opening to have this discussion and maybe present the other side of the the, maybe the less glamorous, less cool, or less exciting way about making money, which is kind of like that slow and steady wins the race, you know, patients and traditional asset classes, but it's just a counter to some of the things that they may they may be seeing just like mean stocks and crypto and stuff like that. So I think yeah, the book is a little more I do talk about cryptocurrencies and robo advisors, but it also really gets into the very fundamental things like stocks and bonds when it comes to investing. And, you know, overall money management.

Preet Banerjee:

Yeah, man, and not at an intimidating level, I would say so, you know, I skim through the book, and, you know, the, the topics on investing. For some people, they say, okay, that's, that's where I check out. And I'll say that it is really presented and couched in a way to say, well, you know, here's how you can learn about it. Here's not, you know, 10 hours of your of your life that we're going to now dedicate looking at P E multiples,

Robin Taub:

right? It's not technical that way. No, it's really meant to be more of a high level introduction to like, what is a stock? What is a bond? How do we, you know, construct a portfolio in a really you know, 30,000 foot level right?

Preet Banerjee:

So you're not you're not telling parents listen, you know, when it comes to your six year old and you want to teach them about leveraged buyouts, here's how you do it. It's not

Robin Taub:

Yeah, or Spax No, it's not about that. You know, and even like a six year old or like I talk about, you know, a lemonade stand. And I actually my neighbors down the street, we're doing like, I guess the 2021 version of a lemonade stand which is they were making these like beautiful beaded bracelets, and they were selling them and they were donating half of their profits to Sick Kids Hospital in Toronto, so actually amazing their picture on Instagram because they were like, so cool. These girls are loved by 12. So You know, investing, you know, that's a form of investing. It's investing in a business and stuff. So, yeah, age appropriate age appropriate. I always want to make sure that the, you know, parents share age appropriate information with their kids. And, and that's, I mean, with my own kids now, like we actually do talk a lot about cryptocurrency. And we talk about means means talks, because my kids are in their mid to late 20s. And my daughter's even like doing her CFA. So she's the they're speaking a different kind of language. Right? Yeah.

Preet Banerjee:

Well, you know, you mentioned those young girls who started that wild with the beat. Yeah, yeah. So I actually wanted to ask you about, you know, the ease of starting a business online, like the barrier to entry now is super low. You don't even need capital to start up a website and start selling things. And I think I've seen teenagers who are like, like, drop shipping. From China through? Yes,

Robin Taub:

I know. It's, it's unbelievable how sophisticated our kids are. So these, these girls have an Etsy shop. Yeah, like, they're really sophisticated. And it's very impressive. Um, yeah. And I also, I think it was two weeks ago, I was on this CP, Ontario did a financial literacy workshop for high school students. And, you know, the kind of questions that they're asking are very sophisticated. And you're right, you can start a business, and E commerce kind of business or an Amazon affiliate kind of business really easily nowadays. So I think understanding some really basic stuff about business like, you know, buying low and selling high and those kinds of concepts, I really do try to teach, teach that stuff in the book. I mean, and then like, you know, you've just developed a great investing course, if people want more. There's so many great self paced, video based courses that you can do online, depending on, you know, you want to do it yourself with with ETFs, you want to get into trading, do you want to get into option strategies? Like there's lots of great information out there, especially yours?

Preet Banerjee:

Thank you, when it comes to failure? What is your perspective on how much financial failure children should be allowed to experience? So So for example, where I'm going with this is I kind of thought that it would be really great again, with the lower barriers to entry of starting an online business, to encourage kids to start online businesses. And if it takes off great, and if it fails, that might be even better, because I feel like yeah, the greatest teacher sins is failure.

Robin Taub:

Yeah. Fail fast. You know, isn't that like a Silicon Valley thing? Yeah.

Preet Banerjee:

Fail fast and pivot? Yeah.

Robin Taub:

So first of all, I mean, as a parent, it is hard to watch your kids fail, it's hard to watch them struggle. And I think our natural instincts as parents to protect them kick in, and we want to bail them out. But when it comes to money, that is not the best thing. Because that you want them to make mistakes, when the stakes are low, when there's not a lot of money involved when the mistakes are not going to be expensive, because they will learn if they waste money on a toy that they never end up using. Or they pay full price for a video game that they could have waited a month and bought used. They'll they'll learn something from that and take it away for the next decision that they make. Whereas if we're always stepping in and giving them more money and bailing them out, then they'll just think I don't have to worry about this. There's always going to be more money where that came from, you know, I don't need to be careful. Money's not a finite resource. And we all know that that's not true. So

Preet Banerjee:

great. P QE, parental quantitative easing.

Robin Taub:

I love that. Yeah, exactly. Like taper off. Stop bailing them out. You know, everyone learns from their mistakes me, me included. I'm sure you're the same. So oh,

Preet Banerjee:

I have made some offers. And those are those the those are the situations where I learned absolutely the most saw, I agree with you 100%. I think it is critical to allow a certain level of failure. And I think it pays off in the end. But yeah,

Robin Taub:

it's part of them becoming independent. It's not an easy transition. But it you know, it's not just with money, you sort of have to some point figure, you've done your job. And that's why I like talking a lot about values Preet. And that was sort of one of the other strategies in the book is being really clear and understanding what your values are what's most important to you because they can act as an invisible framework to hide to help guide and prioritize financial decisions and other decisions in life because at some point, you're going to have to sort of step back and let your kids make their own decisions throughout their lives, including money and it's just not great to be a helicopter parent. on many, many levels,

Preet Banerjee:

I'll have to take your word for it because I don't have kids. So I rely on experts like you, to inform us about how to teach kids about money. Now, I have one last question for you. Where's my list here? Yes. You mentioned in your book. You mentioned in your book that your best investments, were your two kids. Yeah. I want to ask you, if you could do anything differently when teaching kids about money, if you could turn back the clock, are there any things that you would have done differently?

Robin Taub:

Hmm, well, I have to admit, I did not pay a regular allowance. We were typical parents, we would forget some times we would not have money on us. So I think if I could have automated that, or systematized it better, so that my kids did have more of a regular opportunity to manage money, because that's really why I think allowance is great. It does get

Preet Banerjee:

couldn't tell them that you're simulating unemployment or something by just having that play. Stop.

Robin Taub:

Yeah, so um, you know, that would be one thing. But, you know, generally, I feel like it's gone pretty well. I mean, I guess another thing. So my kids, when they, they each had a Bar Mitzvah were Jewish, and they got money that's traditional that you get some money. And I basically just invested it on their behalf in a couch potato portfolio of index funds. And, you know, it was an interest account at a discount brokerage, I wish I had gotten them a little more involved in that at the time, they would have been 13. So a little young, but it wasn't really until they were, they were 18. And they could open a TFSA. And we could transfer it over that I really started getting them involved in what I had invested in. And I mean, it wasn't like I made a big mistake or anything, but I think I should have discussed more with them, and seen what they what they wanted to invest in, as opposed to me just trying to do something simple and low cost that would grow and then knowing they would take it over one day. So rude.

Preet Banerjee:

Yeah, alright, I'm going to leave it there, because they don't want to give away the entirety of the book, I want people to buy the book. So they have a reason to do so. And also to suggest it as a great stocking stuffer for people around you who may benefit from the book. Now, Robin, as you know, the last minute, two minutes of the every episode is open floor for you to give a a brazen commercial, so feel free.

Robin Taub:

Alrighty, I'm ready. So if you're looking for the book, please go to the wisest investment.com. That's the website is just the books name, the wisest investment calm. And you'll see links there to Amazon for the physical book and the Kindle version. And there's also a free financial role model self assessment, if you sign up. So we were talking about the importance of being a good role model and walking the talk for your kids. So you can get that for free there. If you're interested in doing the values validator, then check out my other website, which is Robin hood.com. That's the one with the resources. So that's a free values validator. And then actually I want to mention that we are doing a promotion on books right now. So if people order directly from us books at Robin tov.com until December 17, free shipping, signed copy, and we are going to donate we're going to match. So for every book that's ordered through us, we're going to make a donation to a charity that supports youth financial literacy. Oh, so one was done for one book. Yeah. So do

Preet Banerjee:

you want to mention mention how people can take advantage of that offer?

Robin Taub:

Yeah, just email books at Robin tov.com the number of copies and the address and we will invoice you.

Preet Banerjee:

Okay, now include that on the show notes as well. If people are listening in, that'd be great. Quickly look on your phone, tap the link to do that. Robin, thank you. That's been fantastic. And my very last question before I let you go is what is the last DRAM that either you or your husband have enjoyed?

Robin Taub:

He has been into these Japanese whiskies lately so I think it's he picky and I again I don't always know exactly, it's just like a good one in my life to have some of this. So I have different tastes. I sort of like the more mild or sherry cask type whiskies he likes to smokey PD ones, and my son does too. So I think it was probably one of his good Hibiki ones. And I also we also kind of got into bourbon. No, yeah. So do you like it or

Preet Banerjee:

are you have a few bottles? It's it is a nice change. Yeah, sure.

Robin Taub:

Right. Have you do you know pappy Van Winkle? Have you heard? Ah,

Preet Banerjee:

yes, I do. I have had that a few times in the US and only yet at bars but he Yeah, he looked at a bottle to my collection.

Robin Taub:

He had a client in Louisville and he brought some back so Okay, in order to maintain my status is your favorite task? Yes. I'll have to get you some pappy Van Winkle.

Preet Banerjee:

Yeah, that's right. You will. I know. Okay. That's not you don't have to but I love it. All right. All right. Robin, thank you so much for

Robin Taub:

having me. It's always so much fun and I appreciate it. Thanks. Pretty.