“As long as this [investing] is part of an education process, I want that education process to happen in my house. And I want their first […] big win or loss, which is going to happen if they’re investors, I want it to be earlier on when they’re still in my house with a small amount of money, and we can talk through that.”
— Evan Wilson
Returning guest Evan Wilson joins host John Lanza to talk about how his allowance system has evolved since his initial podcast appearance five years ago. He discusses helping his kids become savvy investors by adopting an ownership mentality, thinking about risk on the money-smart journey and wanting his kids to experience investing ups and downs when they are young. Evan and John also address leveraging compound interest, building wealth, starting the money conversation early and transitioning from money jars to debit cards.
Evan Wilson is the founder and general partner of Wilson Investment Partnership. There he invests in great companies, especially those that put customers first. Before becoming a full-time investor, Evan was a research analyst and CFO. For seven years he also co-hosted The Money JAR Podcast by Junior Achievement, which focuses on the intersection of kids and money. Evan is a husband and father of two who lives in Portland, Oregon.
Links (From the Show)
- Connecting with Evan
- Evan’s first Art of Allowance Podcast episode
- Money-Smart Mentions
- Junior Achievement‘s The Money JAR Podcast
- Investor Peter Lynch
- This edition of John’s “3 Ideas to Share & Save” newsletter mentions Jason Zweig’s “mad money” concept.
- David Owen’s podcast episode
- John’s short essay on the Breakthrough Allowance
- John Rothchild’s book on Shelby Davis, The Davis Dynasty: Fifty Years of Successful Investing on Wall Street
- Our compound interest infographic
- A video short of Morgan Housel talking about Warren Buffett
- George Clason’s book, The Richest Man in Babylon
- Thomas Stanley and William Danko’s book, The Millionaire Next Door: The Surprising Secrets of America’s Wealthy
Show Notes (Find what’s most interesting to you!)
- Evan’s money “interest” (Get it?) centers on bringing companies, the stock market and investing into the family. [3:53]
- The evolution of Evan’s allowance system [5:18]
- The impact of investing on the Wilson family’s money-smart journey [8:21]
- Understanding risk: what’s “safe” versus what’s “best” for your kids [9:44]
- How a McDonald’s drive-thru can help you start the investment conversation with your kids [12:40]
- Jason Zweig’s “mad money” concept [15:28]
- The crypto conversation [18:50]
- Drawing the line in terms of allowance [22:18]
- Evan’s concept of “useful constraint” [25:43]
- Thinking about spending at the family level [26:48]
- Two Money JAR Podcast learnings: talk and talk soon [27:49]
- The hockey-stick approach to compound interest [31:18]
- Evan’s inspiring investing philosophy [34:37]
- How Evan’s parents’ lack of interest in investing informed his journey [37:18]
- A bit on Warren Buffett and Charlie Munger [39:05]
- You might want to think beyond index funds. [42:18]
- Why Evan hopes his daughter loses her debit card [47:01]
- Feeling comfortable talking about money [49:02]
- Evan’s best investment of time or money [49:13]
- The Wilson family mantra [49:28]
- “Starting young is more important than how much.” [49:51]
- Two familiar money-smart book recommendations [50:13]
- Incentivizing reading and buying books [51:37]
- A textbook pricing PSA [52:49]
- Celebration through conversation [54:18]
Click here for the full transcript.
If you liked this episode …
Need more advice on investing with your young child? On his episode of The Art of Allowance Podcast, financial psychologist Brad Klontz details how he introduced his seven-year-old to the stock market. Stream his strategies beginning at 10:05. Also, Brad’s thoughts on why an initial investing big win could be a problem mirror Evan’s concerns.
Interested in introducing your tween or teen to investing? Samantha Paxson, the Chief Experience Officer for Co-op Solutions and a mom to an eleven-year-old, discusses long-term versus short-term investing during her appearance on the podcast. Tune in at 39:55 for our conversation with guest co-host Robin Taub.
Want a counterpoint to Evan’s affinity for individual stocks? Popcorn Finance Podcast creator and host Chris Browning outlines his “boring is better” approach to investing during his Art of Allowance Podcast episode. Listen in at 7:11 or stream the corresponding video short.
Please Subscribe
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Full Transcript
This transcript is from The Art of Allowance Podcast, Episode 72, featuring host John Lanza and guest Evan Wilson.
00:00:00,719 [John Lanza]
Hello, and welcome to Episode 72 of the Art of Allowance podcast. I’m your host, John Lanza.
00:00:09,880 [Evan Wilson]
This is something I’ve also thought a lot about. And, and risk to me, I, I see… So first from the parent perspective, I, I see many parents, including myself, who the automatic bias is, well, what’s safe for your kid and not what’s best for your kid? And I’m always trying to reframe in my own head, well, what’s best for them? It, it’s safest for them to invest and not have any, uh, significant wins or losses. But as long as this is part of an education process, uh, I want that education process to happen in my house, and I want their first big, or their first l- their first big win or loss, which is gonna happen if they’re investors, I want it to be earlier on when they’re still in my house with a small amount of money and we can talk through that. Um, so I, I don’t… I know both are gonna happen at some point in time. I want both to happen as soon as possible, and I want it to be something that they get comfortable about both sides of that risk coin.
00:01:09,739 [John Lanza]
[Instrumental music] In this episode, guest Evan Wilson returns to talk about how his allowance system has evolved since we last talked five years ago. He discusses helping his kids become savvy investors by adopting an ownership mentality, thinking about risk on the money smart journey, and wanting his kids to experience investing ups and downs when they’re young and under his roof. We also address leveraging compound interest, building wealth, starting the money conversation early, and transitioning from money jars to debit cards. Evan Wilson is the founder and general partner of Wilson Investment Partnership. There, he invests in great companies, especially those that put customers first. Before becoming a full-time investor, Evan was a research analyst and CFO, and for seven years he also co-hosted the Money Jar Podcast by Junior Achievement, which focuses on the intersection of kids and money. And as you might suspect, I appeared on the Money Jar Podcast with Evan. Evan is a husband and father of two who lives in Portland, Oregon, and I hope you enjoy my conversation with Evan Wilson. [instrumental music]
00:02:37,879 [John Lanza]
Today I am speaking with Evan Wilson. Evan, welcome.
00:02:43,519 [Evan Wilson]
Thanks, John. I’m, I’m so happy to be here. This is a topic that I love to talk about.
00:02:48,899 [John Lanza]
I know you do. And, uh, that’s because you were the co-host of Junior Achievement’s Money Jar podcast with another guy who was a guest on the show with you, Todd Yuzuriha. And, uh, I think you left the show in, what, 2020 after more than a hundred episodes?
00:03:04,879 [Evan Wilson]
That’s right. It was a, it was a great run. Um, you know, it was time for me to take everything that I learned about allowance and that intersection between kids, family and money and put it to practice with my two kids.
00:03:16,139 [John Lanza]
Yeah. And you joined me for a conversation with Todd, I think it was 2019 or 1 BCO, before COVID.
00:03:23,639 [Evan Wilson]
[laughs] Yeah, exactly.
00:03:24,699 [John Lanza]
Um, so I, I, I… A lot has happened since then.
00:03:27,879 [Evan Wilson]
Yeah.
00:03:27,899 [John Lanza]
And what I liked about our conversation, I went back and listened to it, is you are a very clear thinker about money. And I think ’cause you’ve thought a lot about it, obviously, and you’ve talked to a lot of people about it. And I’m looking forward to seeing how kind of your perspective and your family’s perspective on money has kind of evolved in the years, five years, which is incredible, since, uh, we last talked on the Art of Allowance podcast. But before we do that, deep dive into those waters, Evan, tell us a little bit about yourself and what you’ve been up to recently.
00:03:58,359 [Evan Wilson]
Sure. Well, I have always been fascinated with money and companies and the stock market and investing. And, uh, the Junior Achievement podcast gave me an opportunity to overlap that with a new interest of mine since I had kids, which is, uh, which is how to bring that into the family. Uh, I spent the first 15 years of my career as a research analyst on Wall Street, uh, researching, uh, internet companies, vide- video game companies and those, those, uh, stocks, whether or not my institutional investor clients should have them in their portfolio. Uh, we sold our company in 2014 and I started to be a business person myself. So instead of just thinking about the stock market, I started thinking about how to run companies. Uh, and I did that for five years and, and had a great time learning about what actually makes a company successful. Um, starting two years ago though, I started my life as a professional investor, and now I have an investment partnership, uh, with my capital and my partner’s capital. And I go out and I try to find great companies f- for us to invest in. And I’ve been doing that. Uh, now, uh, have, uh, a small firm called the Wilson Investment Partnership that, uh, allows me to in… I think all of this learning is now getting to go into that bucket.
00:05:07,439 [John Lanza]
That’s great. And I think we will talk, uh, about investment and, uh, how you are kinda taking that knowledge and sharing it with your kids. I’ll be very curious to hear that.
00:05:18,719 [John Lanza]
But let’s start with allowance ’cause we’re on the Art of Allowance podcast and give everybody kind of a base. So I think I’d like to know how your allowance has evolved in the five years since we last spoke. Um, I think your daughter’s probably… What, what is she? 12 or 13 now? Is that, is that about right?
00:05:35,299 [Evan Wilson]
Uh, she’s 12 now. Yep. Exactly.
00:05:35,619 [John Lanza]
Yeah. Perhaps start with how you began with your allowance and then how it’s evolved and then kind of how maybe philosophically you think about allowance ’cause I like your kind of views on the way you think.
00:05:48,819 [Evan Wilson]
Yeah. Well, I have to give a lot of credit to you…. um, [laughs] you and the work that you’ve done, uh, really, uh, led me to think about the, the specifics about how allowance should be an interaction between, uh, parents and kids and their learning about money. And it’s the third piece, it’s the learning about money piece, which is the most important, uh, uh, goal of allowance. It’s not to give your kids spending cash. It’s about to constantly be having a dialogue about this very important topic. Um, we do, uh, maybe now what has become the standard, three-bucket allowance program, number of dollars based on the age of the child. And, uh, we don’t obviously save and give and spend, equally broken up, um, uh, and we- we pay our allowance on a weekly basis. It’s worked great. And in fact, we actually haven’t had to make that many fundamental tweaks to it. Um, one of the things though that, that is a little bit of a debate I’ve had with other parents on the subject, and you and I may have talked about it in the past, is whether or not to tie allowance to jobs around the house. We actually haven’t done that. The work that they’re expected to do around the house is just to be part of our family rather than for a, you know, some sort of financial commitment for us. We have extra money that they can earn for pulling weeds or picking up slugs or doing all of those things that are necessary here in the Pacific Northwest-
00:07:05,473 [John Lanza]
[laughs]
00:07:05,693 [Evan Wilson]
So, those things aren’t tied together. Where I think the big evolution though has come from is that our saving bucket has turned into an investment bucket. Now, there- some of the sa- the savings bucket is still savings, and they’re not touching it, and it’s for their concept of the emergency fund. But because investments are such a big passion for me, we’ve been really starting to talk about them, about what is investing, why would you want to do it, and- and how would you even go about that? Uh, now, both of my kids, my daughter mentioned, she’s 12, my son, who’s eight, both have in- investment accounts, and have invested in, uh, five or six companies themselves. And, uh, they’re pretty eager to not just save their money, but think about like what that means to put that money to work on their behalf.
00:07:57,373 [John Lanza]
It’s interesting because if I recall from our previous conversation, your daughter was really focused on saving, and
00:08:08,313 [John Lanza]
that was at a time where it was probably a little too early to in- uh, get her into investing. Although there’s- there’s some people we’ve had in the podcast, Brad- Brad Klontz, for example, who’s a money expert, and he had his kid investing as- at- at seven years old. So, I’m curious how investing has kind of… Has it lit a fire, uh, in terms of her excitement about the save jar now? Uh, I’d like- I’d like to know kind of what her perspective has been in the investing world.
00:08:37,393 [Evan Wilson]
Yeah.
00:08:38,873 [Evan Wilson]
Well, y- you know, they- I think that they know that they have a weird dad, when it comes to this particular subject.
00:08:45,533 [John Lanza]
[laughs]
00:08:46,253 [Evan Wilson]
Uh, the way that most, you know, parents have a passion, whether it’s watching a- really getting into a book or a television show or a movie or a sports team, and thinking about and analyzing what’s gonna come next, and what do they do, and plot line, all of those things, I think about companies exactly the same way. They just have to be part of that, because as we’re driving down the road, I’m mentioning like, “Well, look at the number of people that are in the drive-through at McDonald’s.” Or, “Look at the number of people in line at Starbucks.” Um, tho- those are things that we talk about, and- and they’re very aware that the products that they buy come from companies, and many of those companies, if they want to, they can have an ownership stake in them. And now that- that I’ve got them thinking about investments, we can talk all this stuff about ownership, about investments being an association in their life, inviting these companies into their life, and what does that mean, they’ve thought a lot more about, um, kind of the advantages that are to be gained, uh, from having an investment portfolio.
00:09:44,573 [John Lanza]
That’s great. I was gonna ask you about risk later, but I think it’s, uh, I- I think it’s an appropriate time to ask about it now, because I remember when Brad came on, Brad Klontz, he said, you know, one of his concerns was that his kid would- would actually be successful in investing, in say, investing in one stock, right? It would shoot up and he’d be all excited, and that’s how the world works, and, uh-
00:10:06,753 [Evan Wilson]
Yup
00:10:06,833 [John Lanza]
… and that- that could certainly
00:10:10,193 [John Lanza]
really affect a money personality, you know? These early experiences do have effects on- on people. So, I’m curious how… ‘Cause you’ve thought a lot about… We discussed it a little bit, but we didn’t really go in depth, but you’ve thought a lot about risk. And I think you were thinking about it from the para perspective when we were talking last time. But how do you talk to your kids about that? Do you worry that they’re gonna either have like, uh, some unsuccessful attempts at investing or successful attempts at investing? Or you just kind of chalk it all up to early mistakes, which is okay, and that’s the same reason we’re getting money in their hands with an allowance? Give me some of your thoughts on that.
00:10:49,873 [Evan Wilson]
Well, this is, uh, this is something I’ve also thought a lot about. And- and risk to me, I- I see… So, first from the parent perspective, I- I see many parents, including myself, who the automatic bias is, well, what’s safe for your kid and not what’s best for your kid? And I’m always trying to reframe in my own head, well, what’s best for them? It- it’s safest for them to invest and not have any, uh, significant wins or losses. But as long as this is part of an education process, uh, I want that education process to happen in my house. And I want their first big or their first- f- first big win or loss, which is gonna happen if they’re investors.
00:11:32,973 [John Lanza]
[laughs]
00:11:33,353 [Evan Wilson]
I want it to be earlier on when they’re still in my house with a small amount of money, and we can talk through that. Um, so I- I don’t… I know both are gonna happen at some point in time. I want both to happen as soon as possible, and I want it to be something that they get comfortable about both sides of that risk coin.Erm, my daughter’s naturally risk-averse. Erm, my son is, is not as risk-averse, and so I think that their money personalities I know are going to be independent of me. I think any parent knows that. It’s nice having two to see how different they are, to know that I’m not in-
00:12:07,336 [John Lanza]
[laughs]
00:12:07,535 [Evan Wilson]
… control of the whole thing. Because of the differences between them, I just need to talk to them both about risk and that we need to accept whatever comes, and I want them to think about this time in their lives, being young, living at home, no real expenses associated with it, to being a time where they take risk in their life. And don’t wait until late in life to be, quote unquote, ready to take on the risk because of all of your experiences. Let’s do it now, let’s learn the lessons, and then you can go on and do this stuff, uh, hopefully more successfully.
00:12:39,076 [John Lanza]
Yeah, that makes sense. Can you tell me how you went about the initial foray into, into investment? Like, did you sit down, discuss how stocks work? Are they doing kind of, uh, fractional shares? However much detail you can provide, I think would be-
00:12:57,035 [Evan Wilson]
Yeah
00:12:57,155 [John Lanza]
… useful to everybody.
00:12:58,675 [Evan Wilson]
Yeah.
00:13:00,175 [Evan Wilson]
Well, I come f- I come to investing from an owner’s mentality. I don’t come from a, “Hey, this is a lottery ticket that you can buy and maybe it will up, who knows?” So, I really think about the first step in, in investing for them to come from knowing that they’re owning a small fraction of a company here, and when that company does well, you also stand to benefit with no incremental work. So, I talked about counting the line at the drive-through at McDonald’s, and to think about for them, and one of my kids is a shareholder and one isn’t, uh, to think about, well, if you see a lot of cars going through that drive-through, you’re gonna get paid for that if you own a, a piece of this company. The more of the company that you buy, the more that compensation will come to you, if you buy a great company, and there, obviously there’s caveats, but that’s the start of the conversation is, you’re associating yourself with that company and they are in return, gonna give you some of the, uh, of a hard work that they’re doing. And, and I think that that’s the most important piece, and that’s the, that’s the part that I would encourage most parents to talk about with their kids. Subsequent to that, when they, when they wanted to buy their first shares in companies, they were like, “Oh, yeah, this c- this is a company that I really think, uh, I want to align myself with.” Through the allowance app that we use, they also have an investment, uh, opportunity, and it was very easy for them to go and, and pick a specific dollar amount. And when I talk to them about how much you should invest, I think ab- I, I really talk to them about, “Well, what’s the total size of your portfolio, and then how, how comfortable would you be with this company being some piece of that portfolio?” And for them, it’s usually about five to 10% of the portfolio they put in an individual company on a dollar basis, and, and the number of shares really is not something that they think about, uh, they think about yet. We haven’t talked a lot about dividends yet. They know that they exist, but things like dividend yield, we haven’t talked about. I haven’t talked to them about valuation, uh, which is something I think a lot about in my investment life. But I haven’t said like, “Well, maybe you shouldn’t buy Apple, ’cause it’s trading at 24 times earnings.” Uh, really right now, it’s that famous investor, Peter Lynch, right, who always in- says, you know, “Start with what you know.” We’re in that phase, where I’m, you know, they’re talking about McDonald’s and Hershey and Apple and Verizon and Disney and all of these companies. And the ones that really click for them and make sense for them, that’s what they buy.
00:15:23,035 [John Lanza]
That makes sense. Uh, I will, I will, wanna ask you, when you said the percentage, so you’re kind of using the Mad Money concept from Jason’s Why, you know, like the, just take 10% and invest that into these, whatever stocks you find that are interest-
00:15:38,995 [Evan Wilson]
Yep
00:15:39,015 [John Lanza]
… of, of interest to you. And that makes sense, you would want it to be mad money, because the kids ostensibly don’t kn- I mean, they have you on their side, but they don’t know a lot about what they’re buying, and you’re kind of purposely setting it up so that’s not r- the focus is, “That looks interesting, let’s go with it, we’ll learn something.”
00:15:57,655 [Evan Wilson]
Yep.
00:15:57,675 [John Lanza]
So, the, uh, let’s just say the 90% is, so you’re saying as a percentage, that’s the percentage of the sh- of the save jar, is what you’re talking about in this case, or the save bucket that you have, correct?
00:16:08,155 [Evan Wilson]
O- of the, uh, yes, o- of the em- their portfolio I consider to be the amount of money that they’ve transferred from their save jar to their investment. It’s n- it’s a separate, you know, a separate account. I think about it as one jar, but it’s, yeah, that, it’s, they’re doing the math based on how much is in the investment account. And so-
00:16:27,315 [John Lanza]
Got it
00:16:27,375 [Evan Wilson]
… as that amount of money grows in the future, that, you know, one slice, that one unit, that will also grow in size of what their initial investment will be into a company.
00:16:35,855 [John Lanza]
Okay, so l- I, just getting into the details, if you, so do you have kind of a, is it like a grow jar? Let’s just call it a grow jar or investment jar. Is it 10% of that, or is it-
00:16:46,495 [Evan Wilson]
Oh
00:16:46,675 [John Lanza]
… 10% of all the money? Like, or s- so in other words, is there 90% of it that you’re saying, “You know what, we’re gonna put that in a low fee index fund and take, you know, take advantage of the kinda boring investment approach?” Or is it too early for that? That’s, that’s what I was wondering about.
00:17:01,235 [Evan Wilson]
Right now, about 90% of their savings jar is in an investment account.
00:17:08,495 [John Lanza]
Okay.
00:17:09,775 [Evan Wilson]
And of that investment account, all of the investments they’ve made are individual stocks at this point in time. I’m gonna, we were gonna talk a lot about index funds as a family, but we haven’t gotten there yet, because really, I want them to come from this ownership mentality. This is a part of a company, um, and I think individual stock’s the best lesson.
00:17:30,895 [John Lanza]
Sure. Yeah, that, that makes sense.
00:17:36,155 [John Lanza]
So,
00:17:37,535 [John Lanza]
what ab- have you noticed when they have made picks? You said your, your daughter’s less risk-averse, your son is more, um, kinda risk-oriented. Has that translated into how they’ve gone about the process? The reason I ask is, I had, um…… a woman on the podcast whose 11-year-old son came to her and said, “I wanna get into investing.” Now, his reason and interest, uh, it’s, it’s great that he was, his interest was sparked, but his interest was sparked by a friend at school who had happened to hit it big. I’m not sure what it was. I’m not sure if he had invested in some kind of crypto, if he had invested in, you know, Tesla at the right time, whatever it was, uh-
00:18:19,566 [Evan Wilson]
Yeah
00:18:19,646 [John Lanza]
… NVIDIA. He had invested in something and he had done well in a short amount of time. And so, he was excited about getting into investing, and we talked about the idea of only taking a percentage of it and making it that kind of mad money account. But I’m just curious how you think about it ’cause, you know, from his standpoint, he’s probably, uh, he was clearly not particularly risk-averse because he’s, this is, he’s new to the game. So, curious, uh, about your thoughts on that.
00:18:50,265 [Evan Wilson]
Well, uh, so I would, I would say if, if my son came to me and said, “Hey, Dad, I wanna buy crypto,” then the co- the conversation wouldn’t be about that individual idea or how much money you could make from it. It would be around, “Well, what are you buying when you’re buying this?” And hopefully, using the Socratic method, I could probably talk him out of buying that for those reasons-
00:19:13,845 [John Lanza]
[laughs]
00:19:14,425 [Evan Wilson]
… uh, personally. Not that, not that there are not interesting projects that are out there right now, uh, but I, but I think that that’s, y- you know, okay, that’s, that’s not necessarily what we’re trying to learn here. If he still pushed hard and he said, “No, I wanna buy, I want five percent, so one unit or one, you know, I would buy McDonald’s instead I’m gonna buy Bitcoin,” I would say to him, “Let’s do it. Let’s go for it. It’s a small enough piece of the overall bucket, and I want it to go up a lot or go to zero. I want both of those things to happen because then, that’s when the real learning takes place.”
00:19:52,525 [Evan Wilson]
I don’t think, because of what I know about individuals in the market, I don’t think that my kid is going to have a big win in cryptocurrency at the age of seven-
00:20:03,185 [John Lanza]
[laughs]
00:20:03,665 [Evan Wilson]
… and have big win after big win after big win all the way through till he’s 18 and he’s leaving my house. The probability is too small. What’s most likely-
00:20:13,085 [John Lanza]
Yeah
00:20:13,105 [Evan Wilson]
… to happen is he’s gonna have a big win, and then he’ll have a big loss, and then that is exactly where I want him to be, is to be thinking prudently about risk on both sides.
00:20:22,365 [John Lanza]
That makes sense. I think that was one of the mistakes that we made is that when my daughter started investing, and she did the same thing, which is kinda buy what you know, we probably should have, uh, encouraged her to buy more stock.
00:20:36,405 [Evan Wilson]
Mm-hmm.
00:20:36,465 [John Lanza]
Because in this case, she bought, she bought, uh, stock that, uh, it happened to be adidas, right? And so, and it went up, um, but the whole market went up. And I actually did make the point to her later when she sold those shares of stock, I said, “You know, if you had actually just invested in a low-fee fund, it, we would’ve got, it would’ve been the same amount.” And that was, that was not meant to say that that was a mistake or anything. It was just to say, just to give you some perspective. But I like what you’re talking about, which is you’re having them invest in multiple stocks, so like you said, the probability is that they’re going to have some winners, some losers, and all you’re setting this up for is this ongoing conversation, so picking up the conversation that starts about money with allowance, and then turning it into kind of a conversation about money with regard to investing. Now, you, you do have an unfair advantage over most of us out here, uh-
00:21:29,665 [Evan Wilson]
True. True
00:21:29,745 [John Lanza]
… which is, yeah, and that’s, that’s great for them. And, uh, but, but-
00:21:33,785 [Evan Wilson]
Well, but I think the-
00:21:34,825 [John Lanza]
But-
00:21:34,845 [Evan Wilson]
… I think the, the i- I don’t think it’s a big disadvantage doing what you do do versus what I did versus what someone else-
00:21:41,825 [John Lanza]
Yeah
00:21:41,865 [Evan Wilson]
… is gonna do. Sometimes in the minutia. I learned after hosting a podcast around these subjects for, for, for seven years that the most important lesson is talk to your kids about money.
00:21:53,485 [John Lanza]
[laughs] Yeah.
00:21:54,065 [Evan Wilson]
That’s it. W- Whatever the vehicle is to do that and if, and if adidas ended up not being the right thing, and it should’ve been adidas and Nike and Under Armour and, you know, Decker and all these other companies, um, as long as you’re having that, that thing where it either goes well or doesn’t go well and you come back and you continue the conversation, then, I mean, I think that’s most of the game.
00:22:16,365 [John Lanza]
Yeah, I think we both agree there. Is there anything, and this is not to say, because allowance, the purpose of allowance is to set up these conversations, to let them make mistakes, but is there anything that you have learned in the process, uh, that you’ve gone through with both your kids that you might do differently, that you might advise-
00:22:35,845 [Evan Wilson]
Hmm
00:22:35,865 [John Lanza]
… parents to do differently if you were to do it again?
00:22:39,285 [Evan Wilson]
I think, uh, going into the allowance, the spend jar, with a clear expectation of what the kid is gonna pay for and what the parents are gonna pay for.
00:22:51,125 [John Lanza]
Mm-hmm.
00:22:52,025 [Evan Wilson]
And you can divide these between, “Okay, well, parents will take care of needs and kid will take care of wants.” But then kid is like, “Well, I need to go to the store and buy brown sugar ’cause I’m baking brownies for the family.” And you’re like, “Well, gosh, it’s sugar and it’s brownies, and I don’t know if I wanna support that, but they are-“
00:23:10,305 [John Lanza]
[laughs]
00:23:10,645 [Evan Wilson]
“… baking brownies for the family and we want them to learn how to cook.” And anyways, I think, a- drawing that line of, “Okay, here’s what allowance is for. Also- as parents, we’re still gonna take care of your food, your clothing, anything associated with school, but you have to pick up anything beyond that. If you want new LEGOs, that’s on you.” Um, so, so, uh, that, that’s something I don’t think that we were really clear on, and so we found ourselves having that conversation over and over again, is like, “What is this money actually for?”
00:23:39,725 [John Lanza]
Yeah, I think that’s a very good point. And I was going to ask you, so this, that was a good, uh, segue into one of the questions I wanted to ask you, which was,
00:23:47,645 [John Lanza]
so as we transitioned our kids from the dollar per week per age of the child allowance, you know, so $5 a week for a five-year-old, $9 a week for a nine-year-old…. we moved into an allowance where we gave them some more responsibilities. Now, different people do different things, and I think there’s a lot of different ways you can go about this. Our approach was that we would have them take care of their own clothing, their own communication, um, which was the phone. But the- the clothing and food at… So this was food, not food in the house obviously, [laughs] but, uh, if they’re gonna buy lunch at school or if they’re gonna go out with friends, that kind of food, those were… And then gifts for friends. And then we gave them a larger allowance. Now, different parents will do this differently. They will say, “You know what? Once you get to that point, you’re gonna get a job or we’re gonna give you jobs,” or whatever it is. “We’re gonna not move it, not have an allowance.” Our approach was more kind of the David Elman approach, which was their job was more school and we’re using the money as a teaching tool. So, I’m curious to know if you’ve made any kind of transition, um, to- in that regard, with regard to responsibilities. Have you identified the responsibilities? And also, I- I think your point is very valid here, which is, what is covered? And, you know, there’s a certain amount of wiggle room that as a parent you have to kinda figure out. And, uh, one good example is, if you’re requiring them… I remember a parent asking, they had started this allowance, we call it the breakthrough allowance, and she emailed me [laughs] and she’s like, “Am I allowed to buy my daughter an ice cream when we go out?”
00:25:26,407 [Evan Wilson]
[laughs]
00:25:28,447 [John Lanza]
I said, [laughs]-
00:25:29,047 [Evan Wilson]
[laughs]
00:25:29,047 [John Lanza]
… I said, “You’re welcome to do whatever you want.”
00:25:31,727 [Evan Wilson]
Yeah, exactly.
00:25:32,087 [John Lanza]
Like, you know, [laughs] so… It’s not about, uh, denying them, it’s about teaching them responsibility with money. So, I’m curious to know how you’re thinking about approaching this or what you’ve done so far?
00:25:43,647 [Evan Wilson]
What I want is to provide a useful constraint. And my whole budgeting philosophy, even with my wife and I, is that we like giving every dollar a purpose. And having that constraint where anything extra has gotta come from somewhere else, but if you can do more with less, then you have- you’re creating that extra on your own. And, um, I don’t… I- I- I anticipate that at some point in time, we’re gonna go to a much lo- larger dollar amount so we can include more things. I think communication and- and food and clothing, that’s great things for a teenager. We’ll go to a larger dollar amount to- to say, “Okay, this is how many- this- these things cost, so here’s your constraint. You gotta fit it all into this bucket.” But we haven’t done that yet. But if we do do that, I think that, like I just said, I think that that’s gonna say, “Well, hey, if I can have my cell phone bill be $15 a month instead of $20 a month, then I get $5 to spend on other things,” that’s the way that I want her thinking about this and- and I- it would provide that useful constraint. So… Let me add one interesting wrinkle. You- you probably know about it, but this- this was new to me. I was reading a book, uh, about a famous investor named Shelby Davis and he was famously very cheap. Like he said-
00:27:00,967 [John Lanza]
[laughs]
00:27:01,007 [Evan Wilson]
… “Okay, yes kids, you can have a swimming pool, but you have to dig it yourself.” You know, that type of thing.
00:27:05,587 [John Lanza]
[laughs]
00:27:06,187 [Evan Wilson]
So, uh, but what he did was, he said… He told the kids how much that the parents were spending on individual budget items.
00:27:15,487 [John Lanza]
Hm.
00:27:15,627 [Evan Wilson]
And if the kids could find a way to… Let’s say our power bill is $300 a month. If you can find a way to make it $275 a month by turning off the lights or unplugging the computers, then you get that 25.
00:27:28,427 [John Lanza]
Hm, mm-hmm.
00:27:28,707 [Evan Wilson]
Uh, so have them think not just about their own, uh, little, you know, money bucket as it comes in, a jar every- that comes in every month, but thinking about it at a family level. And then they- then you get to have the conversation about all these regular bills that would otherwise not cross their imagination that an adult has to pay for.
00:27:46,447 [John Lanza]
Yeah, that’s a really good idea. I like that a lot. What are some of the, uh, money maxims that you learned on The Money Jar podcast that you kind of take with you?
00:27:57,587 [Evan Wilson]
Hmm.
00:27:57,607 [John Lanza]
You know, one or two things that kinda came up consistently that you’ve brought into kind of your money perspective?
00:28:05,587 [Evan Wilson]
Well, we talked about the first one already. It’s the gold standard. It’s that too many people in our country don’t feel comfortable ab- about money themselves, and so therefore they don’t talk about it with their kids at all. And passing whatever information you have, uh, down to your kids is important. But it’s important because that conversation is the kid- the kids are gonna bring so many things to you that you haven’t figured out and you need to also figure out and so you can have this- this dialogue about a subject that many people is taboo. Uh, it’s interesting for my investing, you know, when I talk to people about companies, there’s almost this feeling that companies are in a s- sinful because of a profit motive, even though they work for a company themselves that they don’t think is that way.
00:28:48,147 [John Lanza]
[laughs]
00:28:48,167 [Evan Wilson]
Or w- but- but I mean, it’s that conversation about, “Well, what are we- what are we doing here? What are we doing with saving? What are we doing w- with investing? What are our motives and where do I not know the answer?”
00:28:59,067 [John Lanza]
Hmm.
00:28:59,087 [Evan Wilson]
And so I can go out and get the answer and talk- bring it back and talk to my kids about that and then see what next questions they have. So, talk about it. I think that that’s not a money thing. That has to do with many other subjects in terms of raising kids, but that’s the gold standard. The second- the second one- second one is, it’s- it’s how early you start, not how much you save.
00:29:18,927 [John Lanza]
Mm-hmm.
00:29:19,107 [Evan Wilson]
And compounding interest, which I hope we talk about, I love the subject, I know you do. I mean, you just run any sort of math and it really is, it’s not about the- the month- the- how much you save on a weekly or monthly basis, an annual basis, how early you start. You know, the… That dissuades some older folks. They’re like, “I’ve missed it.” No, I don’t think so. I think it’s still is for every age, that’s good advice. The best time to plant a tree is 20 years ago. The second-best time is today. Um, that mentality.
00:29:46,827 [John Lanza]
[laughs]
00:29:47,327 [Evan Wilson]
So, I- I- I think it’s- it’s early and- and you have to figure out what you wanna talk to your kids about, ’cause they’re not ready for every conversation right away. But starting it as a habit, even if they roll their eyes or think it’s annoying, uh, you wanna get them started young. So, talk and talk soon.
00:30:04,097 [John Lanza]
Yeah, it makes a lot of sense. I- I’m sure you’re familiar with, you know, Morgan Housel talking about-
00:30:08,237 [Evan Wilson]
Yep
00:30:08,358 [John Lanza]
… Warren Buffet and saying, “Obviously, Warren Buffet is a, is a genius, certifiable genius, and he’s a great investor. But the reason we talk about Warren Buffett is because he started at age 11 and he’s been ve- investing continuously for 80 years.”
00:30:24,358 [Evan Wilson]
Yep.
00:30:24,517 [John Lanza]
And the- so the point that sometimes gets missed, it’s not that he, he- he was going to be a rich guy almost certainly, right? Um, although he will tell you there were certain things that fell into place, of course, uh, as he went through the process. But it was probably going to happen. But the reason he’s a household name is because of time. That’s really the key element there. So I’m glad you brought up compound interest.
00:30:46,938 [Evan Wilson]
I- I think 90% of his wealth he earned after the age of 50.
00:30:51,817 [John Lanza]
Yeah, I think it’s actually higher than that.
00:30:53,618 [Evan Wilson]
Maybe higher.
00:30:54,037 [John Lanza]
It’s- it’s a i- it’s a huge amount of his wealth after the age of 50. And, uh, so that gets to this compound interest, um, issue because this is such a tough thing to get acro- I mean, it’s a tough thing to conceive of as just a human, you know, as a 55-year-old [laughs] human, how do we get something across to our kids? We’ve talked about… I- I’ve had this conversation with folks, and we’ve talked about visualizing it, but have you come out, come across any really effective ways to get this concept of the power of time and compound interest? Because it’s really the key element for these kids to understand is just get in the game and stay in the game.
00:31:33,317 [Evan Wilson]
The best way that I’ve found is through a- a visualization tactic. It’s- it’s, uh, but it’s not with a spreadsheet with- with numbers-
00:31:41,997 [John Lanza]
Hm
00:31:42,017 [Evan Wilson]
… where you multiply the number by 7% forever, uh, and seeing those numbers get big. I think that that sticks with folks, but it- it doesn’t really, for whatever reason, once the numbers get so big that it ju- they just kind of lose it.
00:31:54,517 [John Lanza]
Yeah.
00:31:54,557 [Evan Wilson]
So really what I do for folks is I draw them a picture with just two lines, and I say, “If you were to make 7% on a dollar forever, how do you think, what would that line look like?” And almost always, it’s this very linear path. And- and I say to them, “Well, in a situation where you have this linear growth and life gets more expensive in a linear path as well, like, how do you ever get ahead?” And almost inevitably they say to me like, “Yeah, exactly. I don’t know.”
00:32:24,737 [John Lanza]
[laughs]
00:32:24,917 [Evan Wilson]
“I- I’ve not figured that out.” And I say, “Well, the- the… your expenses will increase over time. You’ve got that part right. But the first part you, you got that one wrong. The way to do it is to compound interest, which only means that if you stay invested and you- you keep investing consistently, your money will not go in a straight line, it will provide this hockey stick ramp.” And th- that’s always the thing that- that, “Wait, okay, I’m picturing a line in my head and you’re telling me it’s this kind of parabolic thing that happens at some point in the future?” And I- I’m like, “Yeah, that’s it.” And then you take it to the, then you take it to the spreadsheet or you give ’em an example, whatever. And then I, then the message that I just try to give to them is, the idea between starting, you know, later and starting now is you wanna move that hockey stick, you wanna move that as far forward in your life as you can. You wanna move that up to where you still have an opportunity to use the- the- the- the big numbers on what’s most important for you. And maybe that’s retirement, um, maybe that’s giving, um, maybe that’s on your family. Who knows what it is. It really doesn’t matter. Just- just know that you start now to move that line over to where you hit it.
00:33:39,837 [John Lanza]
I like that idea. I actually now want to create a little chart that does… I haven’t seen that, where you actually take the difference and then move it over, kinda like people, what people do with the supply and demand curve. Uh, I- I like that idea a lot. I’m gonna… I think we’ll make, come up with a little visualization and stick it, uh [laughs]-
00:33:58,677 [Evan Wilson]
Yeah. It’s yours
00:33:59,137 [John Lanza]
… in the show notes for this.
00:34:00,597 [Evan Wilson]
Yeah, I think-
00:34:01,017 [John Lanza]
Um..
00:34:01,177 [Evan Wilson]
… I think that that, and then, and then if you want to, you can talk to them about when true independence comes is when that expense line, right, which is going up like this, you move that hockey stick over to where it crosses over, and that’s the, that’s the key point. That’s not, that’s not, I think the- the thing that I’m gonna talk to my- my kids about yet, but for- for a slightly-
00:34:24,257 [John Lanza]
Yeah
00:34:24,277 [Evan Wilson]
… for- for someone who’s finally had their first job and they know what it’s like to work a drive-through lane and they’re really eager to try to figure out how not to have to do that every day-
00:34:33,837 [John Lanza]
[laughs]
00:34:34,277 [Evan Wilson]
… then they’re ready for that conversation.
00:34:36,417 [John Lanza]
Love that. You bring a lotta wisdom, Evan, and that’s why I have to ask you this question, which is, what is an important truth about money, we’re digging deep here, that you have learned or that you believe that very few people agree with you about?
00:34:52,797 [Evan Wilson]
I have a, uh, e- m- a- and I know that my, my ideas around investing in particular are very philosophical. I’m not investing just to get to retirement, or I’m not investing just to produce a particular return. I’m investing to enhance my life, in a way associating myself with companies, associating myself with investments and- and in people that I other wouldn’t- I otherwise wouldn’t have access to. I really do think that, you know, being someone who’s from a small town in Oregon who runs a small investment partnership out of Portland, I’m not, uh, I- I’m- I’m not the foremost expert or the best really at anything. I- I know a lot about this ’cause I talked about it for a long time, but I’m just like anybody else. And the fact that I get to go and choose which problems and which opportunities I invite into my life through investment is a very powerful ownership mindset that I, that I… It’s not that people disagree with it, it’s just they don’t think about it that way.
00:36:00,577 [John Lanza]
Mm-hmm.
00:36:00,857 [Evan Wilson]
I can have… I can choose my favorite CEO in the world and I can give him some portion of my investment portfolio. This is someone who I trust and I respect, and that you could turn the stock market off for 10 years and I would be happy that they just had my money. I’m happy to know-
00:36:16,697 [John Lanza]
[laughs]
00:36:16,957 [Evan Wilson]
… that they wake up in the morning…… thinking about how to make this business the best that it can be. It’s already great. They’re already great. And I get to go along, I get to go along for the ride. And all of a sudden, instead of being vested in just my business or the opportunities I have here at a local level, I’m, I’m standing with the greats. I’m, I’m, I’m associated with the best of the best. And if you think about companies I think in that way, it really is a leveling up for, for who your board of directors is, right? Your personal board of directors. You know, you can have, uh, you know, people talk about Elon Musk or, or S- Steve Jobs, or, you know, uh, d- whoever it is for you, I have my own. I just love the fact that I’m now in a certain sense, in a small percentage, I’m in the same room getting what they get. And that’s, that’s just powerful to me and a f- like a powerful philosophy for why I wanna be invested in the first place.
00:37:16,748 [John Lanza]
That was inspiring. I’m curious, did you have a person in your life that was the kind of conduit to how you’ve thought about this? Is it your personal board of directors? Is it a specific person? Is it your parents? Is it a one or two or three people?
00:37:34,207 [Evan Wilson]
Um, my mom is an acupuncturist. She’s not into investing at all. My dad was a small business person. Um, he equated most investment with gambling, and was not ab- able to get over the risk hump, and could never understand why
00:37:54,687 [Evan Wilson]
I was interested in investing in the first place. And I didn’t have the philosophy. He had just espoused, uh, when he was-
00:37:59,987 [John Lanza]
Right
00:38:00,047 [Evan Wilson]
… he was, uh, still, still with us. But I think actually-
00:38:04,227 [John Lanza]
Hmm
00:38:04,247 [Evan Wilson]
… the fact that I was into it and they weren’t really got me early thinking about like, “Why? Why am I taking this separate path?”
00:38:11,487 [John Lanza]
Hmm.
00:38:11,507 [Evan Wilson]
“How can I justify it to myself? How can I justify it to them?” And, um, it was once my, my father passed away in 2012, which was a time that I’d just had my first child, I was just about to sell my business, uh, uh, the first business I worked at.
00:38:29,847 [Evan Wilson]
All of those things together and thought for me like, “Okay, for this next portion of my life, let me really get my values together as it relates to investment, and how can I fuse together kind of what I love to do on a day-to-day basis with learning about these companies, which I’m really attracted to, with what my personal philosophies are and how I want, not for just myself, for my kids to be thinking about that.” And, and it, it was, it’s only through making all the mistakes that I got there. And, um, yes, I have, there’s people in my life that I think about, like, uh, you mentioned Warren Buffett. I think it, everybody should read Warren Buffett’s letters or watch his interviews. Not that he’s got it all figured out, uh, but just that he thinks about a lot of these things in a philosophical way, and there’s many, many others that might also help you on your path.
00:39:19,007 [John Lanza]
I think what’s most interesting about listening to Buffett and/or Munger, probably more so Munger, is just the how to, how to think about risk. They d- they really… And how to think, how to, how to learn how to think, uh, particularly Charlie Munger. And I, I think the tough part about, uh, grappling with Munger, though, is that it becomes very clear how hard it is to truly understand how to make decisions that are good decisions.
00:39:48,707 [Evan Wilson]
That’s right.
00:39:48,727 [John Lanza]
You know, and then he’s very often talking about investing decisions, but any decision, because you have to not only understand the direction you wanna go, you have to fully understand the direction you’re not going to go. And it becomes very clear how much w- how much mental horsepower that takes and how much time that’s gonna take. And I’m not sure that, uh… You know, I, I, I get intimidated by that too, uh, still in the process of trying to be a clearer thinker, but it’s still worth grappling with that because you do realize, or you, you find the gold standard and then you try to kind of live up to as close to that kinda standard as you can in the process.
00:40:29,767 [Evan Wilson]
Well, you’re, you’re right. Uh, Charlie’s hobby was collecting psychological errors.
00:40:37,487 [John Lanza]
Yeah. [laughs]
00:40:37,507 [Evan Wilson]
Watching the world around him and cataloging psychological errors. Almost in the anti-checklist.
00:40:43,647 [John Lanza]
[laughs] Right.
00:40:43,987 [Evan Wilson]
Not in the like, “Okay, here’s what I wanna be,” but, “Here’s what I…” He, like the classic one, “Tell me where I’m gonna die so I never go there.”
00:40:52,567 [John Lanza]
[laughs] Right.
00:40:52,847 [Evan Wilson]
Right? Like, so he’s, he’s, he’s, he, he basically said, “Well, here are all the other things that I shouldn’t do, and if I don’t do them, who knows what I should be doing, but at least I won’t be making the mis- same mistakes that I’m seeing around me.” But you’re right, not everybody is, uh, wants to spend their free time cataloging psychological errors. It does take a lot of horsepower.
00:41:12,167 [John Lanza]
Yeah.
00:41:12,207 [Evan Wilson]
Uh, but, uh, but I don’t think, I don’t think that we should st- I think that people do think a lot about their values in general, and they, it’s only one more step to, to connect that to their investments. And that’s, that’s the leap. They’ve done a lot of the hard work, and they just need to go one step further to the other areas in their life like investing, which I think that, that those things are, uh, applicable.
00:41:34,387 [John Lanza]
Yeah. But isn’t the difficulty with… Because I, I would put myself in this, in, uh, in those shoes. Like, I’m gonna be much more comfortable following say, you know, Morgan Housel’s advice of putting all my, put my, putting my money in Vanguard and, uh, low fee fund, uh, because I’m… I know now, I’m not… I just, I don’t get jazzed the same way you get jazzed about individual companies, right?
00:41:59,047 [Evan Wilson]
Yep.
00:41:59,067 [John Lanza]
I get jazzed about my own company, but not so much-
00:42:01,787 [Evan Wilson]
Yep
00:42:01,807 [John Lanza]
… individual companies. And so, like, what advice would you have to some, to, to us, to the [laughs] folks like us who are, who are not approaching it that same way?
00:42:11,547 [Evan Wilson]
Sure.
00:42:11,827 [John Lanza]
And then how do we get that… How, what, what messages do we wanna get across to our kids?
00:42:16,367 [Evan Wilson]
Yep.
00:42:17,687 [Evan Wilson]
I, I’m a big fan of index funds…. and, uh, I- I’m not gonna dissuade anybody from going in that path. And I think that the low cost, low cost index funds are a real financial innovation that, that I- I’m so happy that they exist. And, and th- they’re a part of my portfolio as well, and I think that they probably should be some part of everyone’s portfolio. Um, it’s, um,
00:42:44,513 [Evan Wilson]
it’s, uh, it’s fun to see that, that… You know, just during my career, we’ve gone from such low exposure to index funds to now, when I talk to people about personal finance, that’s usually where most people start. They kind of know what it is. It’s great. Um-
00:42:57,553 [John Lanza]
Yeah
00:42:57,634 [Evan Wilson]
… so, so, so that’s great. Now, the, he, he… But let me give you one point for why I think people want index funds, but they maybe they’re not quite getting what they’re thinking and why there might be some advantage to also including individual stocks in your portfolio. And this is not something that I think that, that is gonna be great advice for everybody, but it might, it might strike a chord with some folks. I think index funds for people is, it’s an outsourcing method. You’re saying, “Here’s… I don’t need to worry about my portfolio because I’m gonna get what the market gets. I can control what I can control. That’s fees, and that’s taxes, and I’m done.” And isn’t that nice? [whooshing sound] Now I don’t have to worry about anything anymore, right?
00:43:39,433 [John Lanza]
[laughs]
00:43:39,453 [Evan Wilson]
It’s done. It’s outsourced. I actually don’t see that happening very well in the investors that I talk to that are just in index funds. They’re just in, they’re just, they’re just forced to be focused on other things. So the things that they’re focused now, the… These are the associations, remember, that we’re inviting into our lives. These, these folks are in- inviting into their lives, “What happens in the market is what happens for me.” And you need to be focused then on what is happening in the market or that, have you seen what the market has done? And what drives the market? Well, the Federal Reserve drives the market. Uh, the economy drives the market. What’s happening globally, geopolitically is driving the market. Uh, broad valuations across lots of companies you don’t, you know, know necessarily who they are, what they… Those, those things are driving the market. And when people are in to, in, in the index funds and there’s a bad year, then they’re very worried about, is this the end of America? Or what happens if the US and China get into war? So these are still things that they’re thinking about, and they’re not to the point where they think, they think they’ve outsources and they- outsourced it, and they actually have, they’re just worried about different things. So the individual stock, you know, like
00:44:57,993 [Evan Wilson]
those people are not having the feeling that I could just give my money to this management team, this company, and turn, just turn the mar- stock market off for 10 years.
00:45:06,913 [John Lanza]
[laughs]
00:45:07,333 [Evan Wilson]
They’re not getting to that point where they can say, “I just feel comfortable with whatever happens in America because that’s what’s gonna happen with my investments.” They’re still nervous about it. They’re just nervous about a different thing. So I just, I think that it’s a great invention. I think for many people, that’s right. I just feel more comfortable that if I pick the best of the best management teams, no matter what happens at a macro level, they have individual agency to choose how they’re gonna navigate through it, and they will do better than everyone else will. And, and that’s what helps me sleep well at night. And, and again, that’s not for everybody, but that’s the way that I think about it.
00:45:46,633 [John Lanza]
That is a interesting perspective. Thanks for sharing that.
00:45:50,313 [Evan Wilson]
But for 90% of people, 95%, low cost index fund.
00:45:55,013 [John Lanza]
But it’s either way, it is a… The, the process that you’re doing and I think the process that I went through with my kids, and I, uh, talked to a lot of parents, um, and money experts who are doing that with their kids, too, is just giving kids exposure to the stock market is an important part of the process, especially early, because we wanna make those low stakes mistakes early-
00:46:18,033 [Evan Wilson]
That’s right
00:46:18,513 [John Lanza]
… and giving them that, the opportunity to do that. Great. Thank you, Evan.
00:46:22,933 [John Lanza]
I wanna ask you before we go into the gauntlet that is the fast and fun round-
00:46:27,593 [Evan Wilson]
Okay
00:46:27,753 [John Lanza]
… I, I wanted to ask you about your debit card, the transition to the debit card. So you were using your money jars, and then you transitioned to the debit card. So did you transition both kids at the same time? Uh, why did you do the transition? Uh, how is the transition going? How do you look at debit cards, uh, in terms of something that is working for you, something you might, you, you wish they would, they, they worked differently? I’m curious how that’s, that process has worked for you.
00:47:02,313 [Evan Wilson]
I think my daughter got her debit card sooner than my son, although there wasn’t any real science [laughs] behind that.
00:47:08,993 [John Lanza]
Yeah.
00:47:09,113 [Evan Wilson]
Uh, she’s, sh- because she’s, she’s very good with her, her save and her spend, she has this mentality that, “Okay, I’ve taken care of my save piece, and I know that I’ve taken care of my give piece. So I have this debit card, and I can actually go use this money because I’ve already taken care of all my responsibilities, and I f- and I feel good about it.” She doesn’t s- use it a lot. Um, I think that it’s the right tool for her to use her spending on because, right, we’re not using checkbooks anymore. It’s something that she has to learn, and we need to talk about, right? It’s all about that money conversation. Um, she hasn’t lost it yet. I’m hoping she does.
00:47:47,313 [John Lanza]
[laughs]
00:47:48,273 [Evan Wilson]
Um, but she hasn’t lost it. Well, she’s lost it around the house, but then she’s always finds it again. But th-
00:47:53,693 [John Lanza]
Yep
00:47:53,713 [Evan Wilson]
… but she hasn’t lost it out, out in the world yet. But I, I think that debit cards, like many of the other things we talked about, it’s an important part of the lesson package, and, and I’m s- I’m so glad that she has it and has, like, our local store or whatever, has those few low stakes opportunities to go and use it.
00:48:09,233 [John Lanza]
Yeah, I think the losing it is, uh, a plus with… Our daughter lost her, uh, debit card recently. And the good part about having the conversation open is that immediately, like, there’s no hesitation, “Turn it off. Can you turn it off?”… they immediately know to turn it off and they can turn it back on.
00:48:27,003 [Evan Wilson]
That’s right.
00:48:27,243 [John Lanza]
And they’re not, and, and, and we as parents are not judgmental about it. You know, if it happens 10 times, then it might be different, but if it happens once or twice, you’re like, “That’s part of the process, not a big deal.” And, uh, uh, it’s a, it’s a good perspective, I think, to, to say that having them lose it in these low stakes environments, um, that, that seems to be our, uh, big takeaway here is-
00:48:48,903 [Evan Wilson]
That is a, that’s a theme.
00:48:50,043 [John Lanza]
[laughs]
00:48:50,403 [Evan Wilson]
That’s a theme. I didn’t know it would be.
00:48:52,844 [John Lanza]
Yes, it makes sense. All right, so let’s get into our fast and fun round of questions if you are ready. Are you ready, Evan?
00:49:00,224 [Evan Wilson]
Oh, I’m ready.
00:49:02,044 [John Lanza]
Okay, what does the term money empowered mean to you?
00:49:06,603 [Evan Wilson]
Feeling comfortable about talking about money to not just you, your spouse, but also your children and, uh, y- your larger family.
00:49:13,763 [John Lanza]
What is the best investment of time or money you’ve ever spent on your kids?
00:49:18,184 [Evan Wilson]
Our allowance app, uh, we use Greenlight. I know that there’s others. Uh, spending the money associated with that. I, when we started the money jar, I was like, “Why doesn’t this exist?” It exists now and that’s great.
00:49:28,603 [John Lanza]
What advice, um, to your kids do you most hope that they will heed when they become young adults?
00:49:36,603 [Evan Wilson]
Our family mantra is never give up. And I’m gonna… I say so much to them, but I just, I hope that that’s, that’s the one they take away. Like, and it’s not just like you, it’s like, “This is what our family does. We don’t give up.”
00:49:50,123 [John Lanza]
Great mantra. If you could transmit a message that everyone would see, I call this the Tim Ferriss question, sky-written on a billboard, wherever, what would that message say, Evan?
00:50:01,043 [Evan Wilson]
Starting young is more important than how much. And that’s it. Young before amount, every day. And that’s not just money. That’s learning, that’s relationships, that’s everything that compounds.
00:50:12,623 [John Lanza]
Very nice. And what is kind of one money smarts, it could be book, podcast, media, whatever, that you kind of go back to or that you gift the most often?
00:50:24,143 [Evan Wilson]
I love to give two books. One is The Richest Man in Babylon. I’m sure you know. Uh, because it’s in parable form, it kind of syncs up with the, uh, a teenager who’s ready to start reading about this stuff on their own. And the other one is the one that was the most influential for me when I was in high school, which is, uh, The Millionaire Next Door. And, uh-
00:50:43,603 [John Lanza]
Mm-hmm
00:50:43,623 [Evan Wilson]
… all of the, my brain cells that were like, “Oh, I gotta have all this stuff to show that I have it,” that book was the thing that, that, uh, got me thinking very differently on the subject.
00:50:53,763 [John Lanza]
Those are two incredible recommendations. You, you… It’s hard to do better than, than both of those. It’s funny because, uh, The Richest Man in Babylon, I just gave that, we’re giving that to, uh, our daughter for her birthday.
00:51:07,143 [Evan Wilson]
How old is your daughter now?
00:51:08,403 [John Lanza]
Uh, so it really hits home. Very good. Well, this one was… This… She is 21.
00:51:11,663 [Evan Wilson]
Yeah.
00:51:11,783 [John Lanza]
And, uh, she’s turning 21. It’s a little late, but we’re gonna get it to the, uh, 18-year-old at some point soon. But, you know, the, the thing for their, at their age is they have so… They’ve so much reading that they have for college. [laughs] It’s tough to, uh, to throw in a long, any kind of long book, but the advantage of The Richest Man in Babylon is that it is not a long book.
00:51:34,583 [Evan Wilson]
No, it’s not.
00:51:35,323 [John Lanza]
And so, it’s a good present.
00:51:37,063 [Evan Wilson]
Well, I, I, uh… This is a controversial one, but I have a list of books, um, that I’ve told my kids, and I’m a little embarrassed to say this, but I’ve told them that I’ll pay them to read the books.
00:51:48,783 [Evan Wilson]
And so instead of them saying, “Hey, I need some more money, can I go pull weeds or pick up slugs?” I have a list of books. Here’s these books. Read these books. I will pay you to read these books. I’m not gonna tell them how much I’m gonna pay them-
00:52:01,443 [John Lanza]
Yeah. [laughs]
00:52:01,463 [Evan Wilson]
… ’cause that’s what I’m embar- that’s what I’m embarrassed about. But, um, that, that is… I would rat-… I, I, I put so much more value in books like The Millionaire Next Door than the pulling the weeds and picking up slugs, uh, that I-
00:52:14,383 [John Lanza]
Yeah
00:52:14,403 [Evan Wilson]
… I just, I want them, I want them to take me up, uh, on that subject.
00:52:19,963 [John Lanza]
Uh, I like that idea. We did that with our… I mean, this is different, but one of the things we did with our incentivi- incentives with, uh, our allowance program was that we would pay half of, uh, for any book that they wanted to buy. So, you know, effectively doubling their book buying power. And I like that idea of paying-
00:52:39,003 [Evan Wilson]
Did it work?
00:52:39,203 [John Lanza]
… paying them for a book. Yeah. In fact, in fact, they’ll still ask us to this day, like, “I wanna get this book. Will you pay for half of it?” [laughs] They don’t always do that, but they will ask that. Um, that doesn’t apply… Now, for textbooks, we just pay for those.
00:52:52,803 [Evan Wilson]
Yeah.
00:52:52,823 [John Lanza]
But with regard to sort of going back to the, uh, what you pay for and what allowance pays for, that is one of the things. Although there would be an argument to say that you’d be better off just giving them a textbook allowance and then they can find the most cost-effective textbook. But I will say they’re very good at, at, at, uh, working the textbook market. And I have some experience in selling textbooks in a past life, so I’ve told them the horror stories and they do a pretty good job of finding cost-effective textbooks. Anyway-
00:53:25,203 [Evan Wilson]
That, that should be a podcast.
00:53:26,623 [John Lanza]
The point being-
00:53:26,643 [Evan Wilson]
If you haven’t done it yet, that should be a podcast, and please send it to me if you do it.
00:53:30,063 [John Lanza]
[laughs] Uh, about textbook pricing?
00:53:33,283 [Evan Wilson]
Exactly.
00:53:34,503 [John Lanza]
Oh, it’s, uh, yeah. It’s a, it is absolutely crazy. The good part is there are a lot of options for these kids. Like, so you, if you see an eye-popping amount out there, this will be the PSA of this, uh, podcast, you can almost always find a much more cost-effective way for your kids to get the, the books, uh, or learning materials that they need. The good part is I think a lot of the professors are kind of on board with that, you know? And, and that’s not to say that there aren’t some great textbooks. I wanna make that very clear. And for the authors of textbooks, I think there’s some phenomenal authors. But the prices of some of these textbook is so outrageous. Anyway, too much on textbooks. If we do do an episode on it, I will send that to you, Evan. One last question, which is how can people find you to the extent you, that, uh, you want them to find you on social media and the web? And is there anything that other people can do that might be helpful for you?
00:54:30,183 [Evan Wilson]
I don’t have much of an internet presence anymore. I’m intentionally keeping my investment partnership very small. And, um, I, you know, I really value my time and an empty calendar and open schedule to be thinking all these…… crazy thoughts that I’ve got to, a platform today to talk about. If anything, I want people to just, to, to change how they think about risk, to change how they think about their enso- the associations, uh, with investments, um, and what they want to bring into their life. And then to go on to celebrate those things through conversations with other people and, and to bring everyone along with you and your family. Uh, it is such a, it’s such a rich, it’s such a rich area, um, to talk about. Uh, it just… I’m still sad when I hear and talk to people, and they say, “My parents didn’t tell me anything about this stuff.” It should be an area of connection. Should be an area of learning. Um, and, and that’s just what I… If anybody could just have, go have one more conversation, then I’ll be happy. They don’t have to follow me on Instagram.
00:55:25,349 [John Lanza]
Oh, wonderful. I appreciate you taking your valuable time to share your wisdom with us. I knew that you would not disappoint, and you did not. And, uh, it’s nice to catch up, find out what’s going on with your family. And good luck on all of your endeavors and thanks again for coming on the podcast, Evan.
00:55:41,009 [Evan Wilson]
Let’s do it again in a couple of years.
00:55:47,990 [John Lanza]
I really appreciate you taking your valuable time to listen to this episode. I hope you found it useful. You can find detailed show notes for this and all past episodes at themoneymammals.com. That’s T-H-E M-O-N-E-Y-M-A-M-M-A-L-S.com. Just click the podcast and blog link at the top of our homepage to discover our entire podcast archive. And if you like my work here, please, please leave a rating, or even better, a review, on whichever service that you use to stream these podcast episodes. You are part of our Money Smart movement, and this podcast plays an important role in that movement. Your rating and review will help other people like us find this material. And lastly, if you’d like three ideas to help you raise money smart kids delivered directly to your inbox each week, I think you’ll really love my weekly newsletter. Just click on the little purple circle with the chat icon at themoneymammals.com, and select, “Get our newsletter.” Of course, please consult with an investment or financial professional before engaging in any decisions that might affect your financial well-being. And until next time, don’t forget to enjoy the journey.