Like many other millionaires and billionaires, Kevin O’Leary believes that we should teach our children about money as soon as possible.
If you ask investor Kevin O’Leary, he’ll certainly say it’s never too early to start teaching your kids about money. In fact, the president of O’Shares ETFs and host of the “Court of Money” program believes that at the age of six, parents should talk to their children about finances. “Having discussions about money and how it’s made at the dinner table is really, really important,” O’Leary told CNBC Make It. “The concept of money saving and how the world works is something even a child can grasp at an early age.”
Parents don’t need to delve into personal finances with their kids, says O’Leary, but they should explain “what money is and the concept that you work for it, that you actually do something to solve other people’s problems and they reward you with money.”
He says the goal is to help children have a “positive connection” with money and understand how money can be helpful to them when they want to have a family of their own one day. By teaching your kids about money at an early age, you are doing them the greatest favor ever.
Having a positive relationship with money is important, as is having a basic understanding of concepts like debt and interest. O’Leary said his children are familiar with the concept of debt from a young age.
“When my son was 6 and my daughter was 6, they knew what debt meant,” he says. “These really simple concepts are important because it helps fend off the damage done by credit cards in young people’s hands who don’t understand what happens when they don’t pay back their debts.”
This millionaire’s advice is the same as that of other experts. Take, for example, billionaire Warren Buffett, who has previously said that the biggest mistake parents make when teaching their children about money is to wait too long. A study from the University of Cambridge found that children were able to grasp basic money concepts between the ages of 3 and 4. By the time children reached the age of 7, the basic concepts were related to behaviors. Future finances will often be developed.
And according to O’Leary, parents can’t just sit back and expect their child’s teacher to give them the information they need to become successful. He says children don’t learn enough about “debts” in school and this is ridiculous. Kevin O’Leary asserts: “It’s your responsibility as a parent to do it, it lies on your shoulders.”