So folks, we delve again into another ancient Jewish discipline that is so diametrically opposed to what we normally teach our children. This one was a real revelation for me.
We normally encourage our children to become educated as soon as possible, get a job, buy a house, settle down, have kids etc etc. Our sons and daughters who follow this order of life are deemed as sensible and wise – and so they are. Well, that regime is not deemed wise with Jewish folk – well at least not the ‘buy-a-house’ part of it anyway. Here’s how smart Jews do it differently.
|My good friend Kathy gave me this beautiful chook book.|
If you were in a wise Jewish family you would have taught your children from tiny about the Jewish Jars (a post for another time) and every cent they would have received for birthdays, Purim, Hanukah etc would have had 20% taken out and popped away for investment – small coinage really, but instilling a vital wealth-principle from very early. As soon as Jewish children get their first part-time job in a call centre or as a casual part-time intern in a law firm or start their own micro-business etc (yet another Jewish insight for another post – AKA suitable jobs for young people) their parents and community then actively encourage them to have (as a minimum) a 60% savings rate i.e. spend 40% and save 60% of the earning from their part time jobs. So, whilst Jewish children are at high school and university they are actively socking away 60% of their part-time earnings until they finish their studies and get a full time job. This represents a 60% savings rate of their own money from the age of approx 16 through to 22 when they finish their studies. It is entirely reasonable, possible and normal for a Jewish child to have socked away at least $50, 000 dollars in this 6 year period.
|Home cooked meals - save a fortune|
Oh! A deposit on an entry-level house you say? No. Wrong. That $50K is invested and not touched nor actively added to besides methodically reinvesting earnings from it every quarter. When that Jewish child is old, there will be at least $1.2 million dollars sitting there quite aside from any other financial or life decision they have made since the age of 22. Over $ 1.15 million of this is passive earnings. Jews totally understand and leverage the vast power of time. Time can only be truly utilised by the young.
So at 22 years old, with their degree done and dusted, 6 years of solid work experience notched up, a full time job, a future $1.2 million dollar nest egg already cooking, Jewish children start their adult life just like all the rest of our children. The hidden and unspoken difference is that they are already wealthy in their own right and by their own work. Yes, they will marry, get a mortgage, have kids, travel, have hobbies, have ups and downs, get sick, chase a career, have wins and losses just like the rest of us – but as mere adolescents they have already amazingly taken care of their basic financial future.
|Prep two meals at once - frugal much|
In short – wise Jewish families facilitate their young people to invest UP FRONT before they start their adult life in earnest. Wise Jewish children start life with their wealth predetermined by their own habits, with their own hard-earned money and supported by a like-minded community. By 22 they are already seasoned and habitual savers, skilled in basic investments, old hands at delayed gratification, practiced frugalistas and….wealthy.
How’s our 22 year old children by comparison?
This principle blew my mind when I found out about it. I stumbled across it in a journal which benignly stated that Jewish families prefer their children to invest early in life before committing to home ownership … my mind instantly snapped ‘on’ as if someone had just switched a huge floodlight on and I instantly researched deeper. Astounding. Practically any teenager can do it. Any parent can support it. It is so profoundly simple too. Why hadn’t I thought of this myself? Gosh.
Take care folks and stay nice of course.
Mr HM (Phil)