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The Amazing Authorities Podcast
Smart Money Starts Young: Raising Financially Wise Kids with Ernest Tan
00:25:50
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- [00:01]
A
Welcome to the Amazing Authorities podcast, where game changers, visionaries, and category leaders share how they built their brands, platforms, and global influence. Your host is Mitch Carson, international speaker, media strategist, and creator of the Instant Authority system. If you're ready to learn from those who've done it and want to become the go to expert in your space, you're in the right place.
- [00:32]
B
How many of you are parents listening today? Because the expert you're going to listen to and truly, he has earned the badge as an expert because he's a father of three boys and he's got a wife that loves him. Somehow this whole equation works. And Ernest Tan is going to educate me and you at the same time about financial literacy and understanding with your kids. So when they turn 18, which is normally the legal age in most countries, they've got a good grip on how to manage their lives. Ernest, welcome to the show. You truly are an amazing authority.
- [01:15]
C
Thank you very much, Mitch, for the warm and really thankful for that introduction. Although I need to correct you for one bit. I think in Singapore, 21 is the adult age, not 18.
- [01:26]
B
Oh, my gosh. Well, we're talking to a Singaporean, and if he says law at the end of a sentence, it's not because of the legal system. He's Singaporean. And they have that little verbal addition just to warn you. Okay. Yes. Oh, all Good. So it's 21 in Singapore.
- [01:44]
C
Yep, it is.
- [01:45]
B
In national service, they get drafted at what age?
- [01:50]
C
Typically 18 years old. So we get to hold a gun and a rifle before we turn into an adult. A bit weird.
- [01:55]
B
That's that. See, now that there's. All right, that's a different topic, a different podcast interview. Something I don't understand. Sometimes things just don't make sense. And, and, and, well, well, let's focus on the kids. And sure, let's take a look at your book that you wrote because this encapsulates your effort. And there it is. So smart money, start young. And his name is Ernest Tan. Now look at that big piggy bank. And the kids learn about this. And I was so impressed because you've got three boys, little rascals, running around, energetic is all. I don't feed them candy because I think they would go absolutely crazy running around. Yeah, and no caffeine. Wait till they're at least adults at 21. But what have you taught your boys since they could start understanding about money?
- [02:47]
C
So I think the first important thing before they can even comprehend about money is how do they hold off exactly what they want, because one of the key things that I feel a lot of young kids these days, and speaking not just as a parent to three boys, I also happen to be a educator. In my past job, I've seen thousands upon thousands. The one thing missing is actually the delayed gratification. How do they hold on, have a bit of patience and delay that thing that they really want? Because it is a key skill for financial literacy, in my humble opinion.
- [03:22]
B
Well, where did you learn it? And don't blame. Don't say, oh, I'm Chinese heritage. No, come on, you gotta get. There's more to it than that. I. I know you, so I can joke about it in a friendly. And I'm smiling when I say that it. And you smiled back, so it was no offense.
- [03:38]
C
Oh, man. You have just cut off the simplest answer I could give. And okay, to some extent, I guess it has to be the fact that I am Asian. Okay, okay. Yeah. But to a large extent, I do have to thank the fact that I am not only born to an Asian society, but it's also a pretty parental thing, whereby my folks did tell me to hold on, wait. And that kind of delayed gratification kind of seeped in as I was young because I was told, wait first. Hang on. Let's get a couple of things done before we can go ahead and do or get. What is it that you would like to.
- [04:17]
B
All right, so you also have a wife that you're involved, and she's there active with her parenting. You're both active parents doing this. Does she embrace the same methodology? And how important is that or philosophy?
- [04:33]
C
So both of us are extremely aligned, especially when it comes to our children. So there are a couple of times whereby our children would ask us certain things and without even looking at each other, without even consulting each other, we would often give the exact same or very close answers to the questions that they ask. So, for example, can I watch television at this time? Most of the time our answers will be, have you done this? Have you done that? Have you completed these things yet? And if you have, which is pretty conditional. And are you able to wait a little bit more? Because we would like to have dinner as a family first. So by being this aligned as a husband and wife to our two. Sorry. To our three kids, it is very important and it helps the children know that they can't pit one against the other.
- [05:25]
B
And I liked how you answered their question. They asked you a. Or just one of them asked you. Or maybe they all asked collectively, can we watch tv? And you didn't give a yes or no answer, which is a closed question. You gave a response with a question, have you? Blank. And that's a smart way of answering. You know, when I provide consulting services, I don't give the answer, even though I may know what it is. I'll let my clients come up with the answer based on the questions I ask. So I think you're conditioning your kids in the same way. Was that strategic or did just come out that way?
- [06:08]
C
I feel that how it came about is because I myself am an educator and I never like to give my kids or my students the answer straight away. I feel that it cuts short their thinking. And not only that, I am extremely interested in knowing why do they think in a certain pattern. I'm very interested to know what is their thought process like. And when I know the thought process, I can then tweak my responses in a way that is number one suited to them, but also guide them towards an area or an outcome that I feel aligns with the people that matter.
- [06:43]
B
How important is it for you to give them what they want? Even though there's a delayed gratification, do you think it'll hurt the whole system that you've designed? Let's say if they go ahead and finish X, Y and Z, whatever it was, have dinner as a family together, then at 7 o', clock, assuming you eat at 6 to 7, you're done, the dishes are in the sink, what have you. And they then say, hey dad, can we watch what do you say at that point?
- [07:14]
C
So it takes a bit of time to get to that, but it does have a bit of conditioning. But it's quite important that they do finish up and they are knowledgeable that there are these pre required conditions before they can even come to us because it happens before that they will test us, they will push us. But as long as my wife and I or the people in the house are very consistent with our expectations, then after a while they kind of get the drill. And they would automatically. And I think some people use the word automagically, I think you're the one that actually coined them automatically. So they will automatically do the things that is kind of predictable and expected and that makes our lives a lot easier. Granted my three children are currently 7, 9 and 11 years old. And there have been times that they push their luck.
- [08:12]
B
Well, is it luck or push the limits of their parents using cute faces or distorted or try to use humor or dad, you know, with that wine sound that comes out like you twisted, you Know their ear. Is that a manipulation that happens. Happens with Singaporean kids, or is this just something happens in America?
- [08:36]
C
I think it's all over the world. I just thought, okay, all right.
- [08:39]
B
Yeah, that's universal.
- [08:40]
C
It's universal somehow coded into the DNA.
- [08:43]
B
Well, what do you do? All right, so they understand about delayed gratification, but let's get into the meat and potatoes.
- [08:51]
C
Yeah.
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B
You at one time shared with me how you sit down as a family, which is so different than it is in America. You sit down in the family and show, this is the amount of money we have. Come. They're involved in the household finances. I've never heard of that until I met you. I mean, if I had asked my mother how much money she made or something like that, my face would have ended up in Beijing. Oh, the slap would have been, you know, heard all over the world.
- [09:30]
C
Yeah.
- [09:30]
B
Like, are you kidding me? That's not what kids ask or exposed to. It's none of my beeswax would have been the reaction. And then a. Than a thunderous slap. And I'm not kidding. It's just you don't cross that line. But you, in your case, are just the opposite, the antithesis of the way the Western society is structured. Where did that come about?
- [09:58]
C
I don't think it is something purely Western because my own parents did exactly the same thing. So when I asked, how much money do you make, what exactly is the income and how do we actually spend the finances before, I think the kind of response that I would have gotten would be pretty similar to yours is that my face would have been heard all the way in the U.S. okay.
- [10:15]
B
Instead of Beijing.
- [10:17]
C
Instead of Beijing. Because Beijing is a lot nearer right now. But I think it was in reaction. And the reason why I've chosen to do this is in reaction to the kind of upbringing that I had. And I didn't feel it was really healthy because I didn't know. I didn't have the full picture as to how my parents were doing financially. And because I had zero idea how they were doing financially, I would have made requests that were seemingly unbecoming of the second generation, of a younger generation or someone who has lesser power in the families of. And with the lack of knowledge. And I did behave like a sport brat. I told myself that when I'm older, I don't think I want, if I were to become a parent, to behave in such a manner. I want to treat my kids as co equals in decisions, although they will not be co equals in executing the decisions which are made because I do want them to be involved. I want them to know what is happening. And I do want them to understand that certain decisions are made, either because that month there is a lack of resources, or maybe that month we happen to have a lot. And why are we gifting certain amount of monies? Because we are very transparent when we gift X amount of money to certain organizations or X amount of money to the church. There's a reason why, and that's why.
- [11:40]
B
Well, talk to me about the importance of charity because that's also something that you've instilled in your kids. And I just haven't seen that too many times that I've seen with other parents, but not often.
- [11:53]
C
So I think giving is extremely important. The act of giving to me reduces the greed or eliminates the greed for money. And I do not want my children or anyone that I happen to teach to ever get tied too much to money because I believe wholeheartedly that that money is purely a tool and the tool needs to be utilized to magnify who we are. So I want my children to know that money is the tool. And gifting that money through charitable organizations, or in my case because I am a practicing Christian, we will give money to support the church in our, in our goals for whatever it is that by giving it, we, we understand that we don't control the money, but we are stewards of it. And not only are we stewards, we have decision making ability, but ultimately it does not belong to us. And this money just falls on our hand because it is ours to decide what to do with it. And for some of it, it does have to feed our needs because we need to live, we need a place to stay, we need clothes to wear, we need to get transportation. But most importantly, we need to also gift a certain amount of it based on our ability to help out those who for whatever reasons, just are not able to do the things that we are able to enjoy. And I want my children to do that. Granted that it is not 100% successful, there have been times they said I don't want to give. And that's where I go back to. Why are you thinking that way? What exactly is going through your head then? When I understand better, I can then tweak my responses accordingly.
- [13:30]
B
That's, that's outstanding. So what, what do you teach your kids when they're of age to understand and comprehend? I mean, there's one thing of laying out the books each month, but you talk about delayed gratification. Do you show Them, here's how much utilities are. Do you go through the expenses of living with them?
- [13:49]
C
So it's not every single month that I would go through the expenses with them. And money in our family is quite an open thing. So we do go for, we do pay for things. We do. They do, they do see me sit down at a table. They do see me scrolling through my phone. And when I am in my mode of paying, sometimes I need a bit of peace and quiet because there's a lot of numbers that I need to crunch. And yet at times when I would like to invite them to say, look at it, take a look at a spreadsheet, and only when they're able to comprehend what the numbers mean, then I would explain. This month we are spending about 200 bucks on our utilities. We spent about $1,000 on our groceries. We probably spent about $800 an hour going out for our meals and etc. So once they understand that, then they can make comments, or rather I can then ask them, do you think we can make certain decisions like our utilities is this much, maybe it's 200. Do you think we can reduce it? Now look around the house, because it has to be very practical and usable for them. Look around the house. Are there things which are currently running that we aren't using that we could maybe turn it off? And when they're able to see all these things and maybe even the groceries, sometimes we buy a little bit more expensive. Do you think we can get the home brand stuff compared to the branded stuff? And we do bring them out for shopping. So. Yep, these are the kind of questions that we ask based on the fact that we have spent a certain amount in a certain category. And then we just ask, where else can we deploy that money? All these kind of questions and hearing the answers is just so interesting.
- [15:26]
B
And you also inform them leaving lights on in a room that's not being utilized, things like that, that, okay, that would, oh, that would be a no. No. With my mom growing up. Yeah, that would be a no. No. Not necessarily a strong reaction, but hey, go flip that, Turn that on. And after a while and then once you start, start feeling the pinch of paying your own bills, you're a little more aware of leaving lights on or. Yeah. Or, or a fan that's on. Or the air conditioner when you're not in your condo or in your house. I mean, those things add up, especially when you see the bill.
- [16:09]
C
Totally.
- [16:10]
B
Yeah. Or, except, you know, and I, I, I know I had a bill for over $1,000 because I misunderstood my phone overseas charge from Verizon Wireless when I used it when I was overseas on a trip. This is so many years ago. And I came back and I got the me I about right there grabbed my heart thinking, oh my gosh, I was used to a hundred dollar bill a month or whatever it was. And to see that, that was a shocker. So I think pain causes a behavioral change, doesn't it?
- [16:44]
C
For sure. And I think that having the kids to go through the consequences of their decision is also something that my wife and I are very big on. So let me just give you a really quick story. There was one time that my son, I mean every single day they would get a certain amount of allowance which in Singapore, let's just give it a number, which is three bucks. And he has the ability and capacity to spend whatever it is. On some days he would have access and he would keep it aside. The one time he went and blew six bucks because he was able to save up that amount and he just blew everything away. And we then asked him, so what happened? It's because he saw something that he liked and he spent that money. And consequently he wasn't able to get a re top up of his allowance because he then spent beyond what he was allocated for that day. So it's a little bit of like taking loans or extending on your credit card kind of feeling. But right now there isn't any kind of interest that you have to pay on it. So letting them feel that on that day where you overspent, you don't have any funds left the next day was something that my wife and I made a conscious effort to instill in them. And what did he have to do with no money? He had to head over to our snack box and take the really yucky dry biscuits. Didn't quite like. And instead of getting a soft drink or maybe a sugar drink for the day, which sometimes he does get, he then had to head over to our water filter and get water or top it up with the water cooler at school. So consequences. Yeah.
- [18:14]
B
All right. So consequences do cause behavioral changes for sure. And they don't have to be severe, but they do leave that. I mean there's that trick that I've heard for years. If you in the speaking industry, for example, I think toastmasters came up with this. If you say an or an ah, you get a rubber band and snap your wrist on your wrist and to remind you of using those verbal fillers and. Or if you say something negative, snap keeping Your. It's that behavioral shift for negative behavior or consequence. The consequence is pain. The consequences, a little bit of. Remember, not severe pain. You're not going to go in the hospital, but. Ow. Oh, yeah, I remember. Okay. I can't do that again.
- [19:05]
C
I have. I have not heard of this kind of. Well, that's really tough, man.
- [19:09]
B
Yeah, that's a little tough. And yeah. You know, the Catholic schools were known for correcting their kids using rulers. Put your hands out and the rulers were whacked on. On your. On your knuckles. So that was a. I don't. I don't think it's. It's active today, but when I was growing up, it was absolutely part of the program. You do something pretty serious. And if I. I said a cuss word as a kid, my mouth got washed out with soap because I had a dirty mouth. Yeah. Pretty common. So, I mean, you learn through pain. And I think there's a better way. The way you're describing is like, okay, well, you're gonna have to top up your. Instead of getting a sugary, fun drink, which is smiling, or an ice cream, what have you, you get water.
- [19:56]
C
Yeah.
- [19:56]
B
Which is ultimately healthier anyway than a sugary, sugary drink. So you've got a gift for our listeners. What is it, Ernest? And where can they go?
- [20:09]
C
So I actually have a gift for parents, and this actually is titled the Maturity Ladder. And I don't see finances as purely helping kids to become financially independent, which is a good goal, but I see money as a tool to help children master money and to go up a kind of maturity ladder ascension. And you can actually head over to my website, which I'm going to pass over to Mitch, and you can hit it to. You can head over to the link itself. But I do want to state that the five steps of the ladder will be. First level will be discernment, understanding the difference between needs and wants. And next up, the ladder will be having the discipline to utilize money itself. Beyond that, it's about having the decision judgment. So that's the next rung of the ladder, whereby you're able to make decisions and understand why exactly those decisions are made. Before we head over to the epitome and apex of it. It is being the great stewards of the resources that you actually have. And finally, the ultimate epitome and the apex of it is to have financial character. So utilizing financial finances to help you develop the ultimate character of being a great human. Ultimately, I feel that if we're able to determine at what stage our kids Are this resource is able to help you take note of how the behaviors of a child is and some helpful steps for you to ascend them up and hopefully attain the ultimate financial character. And I really spent a lot of time coming up with this and I do believe that if you utilize it you will help to have or have groom children to be really great money maturity money mature individuals.
- [21:52]
B
That's great. Now I do need the link because most of the people are listening and they're not necessarily watching it. So we need to have something. Where can they go to learn and get this tool for the people that are listening. Can they go to your website and then you'll have a link there? Hint.
- [22:10]
C
Oh yes. If yes. Yeah, if you're actually going to go, I, I will provide. I will actually show you the link to my website and it's at www.leonacademy.com and you can see it on my shirt over there. So just head over to the website and I will head over to.
- [22:24]
B
Let me, let me, let me spell it out because most people are audio only. L E A v e n academy a c-a dash dash e m dash y dot com and is it just dot com?
- [22:35]
C
Yes, it is just dot com.
- [22:37]
B
Okay. And there is a blurb about where they can get this on leaving academy.com.
- [22:43]
C
yes, it will be there.
- [22:45]
B
Okay. Well that's what we needed to to have. Ernest, what are the keys before we wrap up that you want to share with parents? Because mostly this is about parents listening so their kids can be better parents themselves and better adults. More matured, more responsible adults. What have you learned along the road? I mean, three boys has taught you lots of lessons and I'm sure you're learning one every day.
- [23:12]
C
So I think the three keys that I have for all parents and this will be really quick because I want to give you the maximum value as possible is number one, understand that your child is also growing and learning. So don't be too harsh on them because as we go through this road of learning about finances, they have to grow and learn at their own pace. So don't be too harsh on the mistakes which are made. So that's really important and I write about it in the book. Number two, it is being very open with your kids about the situation that you are currently in, just like how I am. And I feel that when we trust our children to understand the situation of the family, they will provided they are mature enough, understand the things that are happening and would also be willing to come alongside parents in order to make decisions as a family. And I think all kids want to come alongside because they want to behave like adults. They want to be an adult. So that's the second key. The final key is this helping children understand that it's a massive difference between needs and wants. And I think not enough people these days can discern between the two. And if they're able to understand there's a massive difference between needs and wants. And when the needs are being filled first and foremost and when there's enough resources left after or left over, then you can go and go ahead and fill the wants. I think that kind of progression is going to be so helpful to whoever it is listening.
- [24:45]
A
That's great.
- [24:45]
B
So ladies and gentlemen, go to leave in L E A v e n academy.com to get more resources and hold your book up once again so people can see this and you can go to Amazon to buy Smart money Start young. And the author is Ernest Tan. And you can spell Tan T A N Ernest is honest. So there you go. It's smart Money Start young. Ernest Tan. He's been our guest today as an amazing authority for from Singapore. We will see you next time in the next episode with another featured guest on the Amazing Authorities podcast. Ernest. Thanks for being here.
- [25:23]
C
Thank you.
- [25:24]
A
Thanks for tuning in to the Amazing Authorities podcast. If today's episode inspired you, take a moment to subscribe rate and leave a review. It helps more experts like you rise to the top for behind the scenes access and free free resources to boost your authority. Head to MitchCarson.com until next time. Stay amazing.