We already know that most doctors don’t learn about finances during medical school and residency. We know that even if you’ve done well academically throughout your life, that doesn’t mean you’re going to be a savant at (or even have a clue about) saving and investing. We know that you’ll probably have to work hard (maybe harder than you want) to become financially literate because it’s not necessarily a part of our genetic code.

But we do know that parents can have a big impact on how their children learn and think about money. Over the years, many WCI writers have touched on the best way to teach your children about money, including learning gratitude, using board games, playing The Stock Game, opening investment accounts for them, or just giving them a debit card and seeing what happens.

As high-income professionals, it’s vital that you impart some kind of knowledge, and probably some of that knowledge will come from the lessons you learned from your parents. At WCICON24 (which you can watch in our Continuing Financial Education 2024 course), I talked to a number of attendees and speakers about what their parents taught them about money and how that impacts how they teach their own children or relatives about finances. Every person but one I’ve kept anonymous so they could speak their truths without potential judgment.

But speaker Paula Pant, who gave a great keynote on the difference between wanting to retire and just being tired, was enthusiastic about going on the record to talk about what she learned from her parents.

What Did Your Parents Teach You About Money?

Paula Pant, who runs the Afford Anything empire, said her parents never talked to her about money. They had recently immigrated from Kathmandu, Nepal and brought their young family to the US when she was a baby. As she said . . .

“When I was young, all of the milestones that a lot of people have when they’re between the ages of 16-30, my parents were doing those when I was a kid—their first car, they were renting their first apartment, that sort of thing,” she said. “They were very, very frugal out of necessity. What I learned from watching them was extreme frugality. I actually had to actively unlearn that when I got older. When I was in college and in my early 20s and I wasn’t earning very much, that extreme frugality served me very well. I just didn’t make much.

“But then as my income grew and the value of my time grew, extreme frugality started holding me back because all of these hours I could be spending working or increasing my income or growing my business were hours that I was obsessively penny-pinching and clipping coupons. I was passing up dollars to pick up dimes. It took a lot of unwinding to unlearn these habits from when I was a kid that were really important but that later in my life started holding me back. There can be a certain set of habits that can be productive in one stage of life but can be detrimental at a different stage of life. I’m more willing to embrace extreme frugality. There are some people who have never experienced that. What I teach my audience is when your back is against the wall and the poop has hit the fan, don’t be afraid of embracing that extreme, extreme frugality. But recognize that it’s temporary. Do it as a stepping stone. Let go of it when you get to a better spot in life.”

Here’s how other WCICON24 attendees answered.

• “My mother is an immigrant from Eastern Europe. She taught me to save. My father, too. Save, save, save. He said to pay yourself first. Whenever you get a bonus at work, pretend like you didn’t get it. Just sock it away. He grew up during the Depression so he was risk-averse. He saw the Depression. He was not as risk-tolerant as I am. How I taught my child, I evolved and learned a lot more than my parents did. I taught her savings. When she got her first job at Trader Joe’s when she was 16, I took her to Fidelity in front of my advisors there and showed her what compounding would do and talked to her about the Roth IRA and gave her a mommy match. She could have money to spend, but she had that incentive. I told her that my employer did that for me. Then, I told her about the total stock market index funds.”
• “My parents were more open and transparent about their salaries and experiences than most parents were. It gave me an idea and a perspective of what we had and what we could afford. But they weren’t as vigilant in saving and investing as they could have been. There was often stress about money and talk of not having enough. I’m much more proactive in teaching my kids about saving and investing, but I’m also a lot more fortunate to have a much higher income. I have the luxury of being able to do that.”
• “From my mom, I learned to live below your means, invest sensibly, and work hard. She made a career change from being a teacher to what we now call an IT specialist in her 40s. That was very unusual at that time. She worked that job for 20 years. She was the only woman in her department for years. Then, she retired comfortably. From my dad, I learned not to be an idiot with money. He was an idiot with money. He inherited a huge amount of money and then blew it all day trading and died with like two months of expenses left. I had the two polar opposites.”
• “My mom was very open about money. I watched her balance her checkbook. You could see this money was going here; this was going there. This was how much we had in our account. There was no secrecy. I hope I pass that on to my kids. We talk about it all the time. They know how much money we have; they know our investment plan. I’ve tried to be sensible like she was.”
• “My dad became a day trader when he was forced into an early retirement during the 2001 recession. I was graduating from high school and going into college. We lost the money, anywhere from $100,000-$200,000. That’s a lot of money. It would have paid for up to my first year of med school. I took out loans for med school. I held a job down at any given time during college and during the first two years of medical school. [I came out] owing a little more than $200,000 for med school and maybe $9,000-$10,000 for college. I still owe $83,000. But with PSLF, that should be gone by the end of the year. After a few years of [my partner and I] learning to invest and watching our 401(k)s and 403(b)s grow over time, we think investing is a great idea for our 9-year-old. My 9-year-old asked when can we create his investment fund. ‘Did you talk to your financial advisor about my fund yet?’ We thought this was so amazing. I was so horrified about what happened when I was a teenager. That wasn’t going to happen to me.”
• “My dad taught me a very important lesson. He was not great with the education. I’ve learned a lot more from [WCI Founder Dr. Jim Dahle] than I did from him. But my dad said there are two kinds of people in life: there are spenders and there are savers. He identified himself as a saver in contrast to my uncle, who lived a very flashy life. When I was a young boy, Arnold Schwarzenegger had a Hummer, the original one. It was the coolest thing in the world. I told [my dad] that I wanted a Hummer when I turned 16. My dad said that if I got good grades, I could have a Hummer. With time, I realized it wasn’t that he was going to get me a Hummer. But if I got good grades, I would get a good job. And if I got a good job, you can buy whatever you want.”
• “My parents are non-medical. My dad had a great job when I was younger. He lost that job. We had a couple of years of some very lean times. They had saved very well, and that got us through that. But they didn’t talk very much about it to me or my sister. We were pretty young at the time. But there were two things they never let suffer: education and health insurance. I probably didn’t do as good of a job as we could have with our kids. My husband is also a physician, and we had a lot more money for our children than either of us did growing up. We probably should have taught them. There’s still time, and we are working on that. It’s never too late.”
• “I learned a lot from my mom. I’m the only child of a single mom. My mom was a bartender, and she was very frugal. She didn’t have much money, but she made it go a really long way to provide opportunities and experiences for me. She always talked about money. I remember knowing how much things cost, whether it be at McDonald’s or T.J. Maxx. She was very open if we couldn’t afford things. I never felt like it was an excuse. Over time, I learned not to ask because I knew how much things cost and I knew what our means were. I didn’t want to make her say no and make her feel bad. That made me fiscally conservative, going through undergrad and training. Now, having my own kids, my husband and I differ on this. But I talk openly about money with my kids. I do the same thing my mom did. We talk a lot about needs and wants. My mom didn’t do that, but we have way more money than my mom had. I think a lot about entitlement issues and try to instill a frugality mindset with my kids when we don’t really have a need to be frugal anymore. It’s a choice to be frugal. If they ask for something, we make a decision based on whether it’s a need or a want. If it’s a want, do we have enough of that thing? Do we have enough squishmallows? Then, we can reflect on the number of squishmallows that we have.”

• “My parents were very conservative with their money. But the things that were important for them—taking us on trips and stuff—they prioritized that. I think I have learned from that. The things that are important for me, I will pour money into those kinds of things. My parents were not very materialistic or superficial, and I’m the same way now. You have a limited amount of money, so think about what is important for you. Use your money for things that make you happy and things that matter to you.”
• “From my parents, it was a very scarcity mindset. Investing was only in retirement. Sock it away for retirement. In terms of money mindset, it was work hard and save as much as you can. We’re going to teach [our kids] the stuff we learn here at WCICON: diversify, come from an abundance mindset instead of a scarcity mindset, investing in yourself is going to be the payoff.”
• “I learned from them not to run and hide from money. Not addressing it, not investing, not planning for the future is going to hurt you in the long term. I learned that as you’re coming into so much money, get a financial advisor and get people you can confide in. It’s like winning the lottery when you graduate residency. It feels just like that. You’ve got bad money habits from people who didn’t learn from anyone. I learned from their mistakes, which was not to invest and horde all the money. Don’t horde it. Get an emergency fund; then start investing it. I love stable. Do stable. But invest in something so that you have something for retirement.”
• “My parents didn’t have much money when we were younger. When they started making more money, I was in high school. They just saved a lot. They never really changed their spending even after they started making money. They put a lot away, and they’ve never spent a lot of money on their lifestyle. They’re sitting on more than enough to retire, and they just booked their first business class flight in their lives for a trip to go to London. That is probably one of their biggest splurges. Their mindset has changed enough to start traveling. What I took from them the most was saving, starting the IRAs and 401(k)s really early, and filling them up. Investing a lot early has been the biggest thing for us to put us in this position. We haven’t gone out of the box in investing, but we’re perfectly secure just from that. That started in college. I was doing internships and summer work in college, and they said whatever you make, they put it in for me. They helped me fill those buckets. They also had a no-debt mindset. They never really incurred debt, and if they did, they cleared it fast. We’ve expanded a little bit as we get told that it’s OK to have certain debt. But we were very aggressive to be debt-free early. We’re helping our kids understand when it’s OK to take some debt and how to manage it. My parents saved every penny they could so a budget never really mattered. I want our kids to use budgets to see where they can save and where they feel comfortable spending so they can enjoy life.”

More information here:

Money Song of the Week

On the surface, Octopus’s Garden by The Beatles doesn’t seem to have much in common with finance. But I saw Ringo Starr and His All-Starr Band live in concert last month, and when that 83-year-old man who looks and acts like he’s in his 50s sang that tune, it got me thinking. Is Ringo really singing about an octopus, or is he singing about what he one day hoped to be?

So, I took a deeper dive into the lyrics.

As Ringo, perhaps one of the most underrated drummers in musical history, sang on the tune that came out on 1969’s Abbey Road album . . .

“We would shout and swim about/The coral that lies beneath the waves/Oh, what joy for every girl and boy/Knowing they're happy and they're safe.”

The genesis of the song came when Starr was taking a break from his bandmates and hanging out with comedian Peter Sellers on a yacht in Sardinia, off the coast of Italy in the Mediterranean Sea. As Starr said, via Genius.com, the yacht’s captain told him that octopuses “hang out in their caves and they go around the seabed finding shiny stones and tin cans and bottles to put in front of their cave like a garden. I thought this was fabulous, because at the time I just wanted to be under the sea, too.”

Being under the sea was Starr’s safe place (especially with all the turmoil his band was experiencing at the time), and just like a future retiree who’s looking for a safe retirement, the octopus in question is collecting assets for the future.

“I thought that was the most beautiful thing I’ve ever heard,” Starr said. “They make themselves this garden. A couple more tokes, and I was just in heaven.”

Is it a dumb tune? Maybe you think so. But George Harrison would disagree with you.

“I think it’s a great song because, on the surface, it’s like a silly children’s song, but the lyrics are great. […] All that about ‘resting our heads on the seabed’ and ‘we’ll be warm under the storm’ is great,” Harrison said. “Because it’s like if this level is the storm and if you delve a little deep into your consciousness, it’s very peaceful. So Ringo wrote this cosmic song without knowing it.”

In retirement, all we want is to be safe and comfortable and well taken care of, just like an octopus who’s tending their garden far away from the scary storms of life. Ringo singing it live in a small theater 55 years after he created it really made me see just what he was trying to say. Or maybe Ringo was just high at the time.

More information here:

Tweet of the Week

This is why teaching kids about money is so important—so that they’ll pay better attention to their toothware.

[email protected] .]