Teaching Kids to Be Entrepreneurs is Key to Addressing the Wealth Gap: Here’s Why

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Scott Trench wrote a great article last week about the wealth gap and identified the main problem as lack of financial education. Today, I’m going to take that a step further. The real problem leading to such a huge wealth gap is that there are two types of people in this world: people who know how to create wealth and people who don’t.

Wealth creation is, by my own definition, the act of developing assets that provide a unique value to consumers who are willing to pay more for the asset’s outputs than it costs to deliver the unique value. Wealth creation allows you to subsequently build wealth through the accumulation of income producing assets over a long period of time. Wealth creation is the first step.

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How Do You Create Wealth?

The good news here is that you can create wealth even if you work a 9-5. You are essentially your own small business, a one man shop providing services to a consumer, your employer. So now the question becomes – are the results of your operations providing more value than the cost of those operations?

If you make $4,000 per month and spend $4,000 per month, you are not creating wealth. You are a struggling business bound to declare bankruptcy. In accounting, we call you a “going concern.”

On the other hand, if you spend less than you make, you are creating wealth. You then have the ability of rolling that created wealth into income-producing assets, such as real estate, allowing you to create and accumulate even more wealth. This is known as the snowball effect.

Notice that there are three components of the wealth creation formula: income, savings and investing. All three components are important; however, the first two, income and savings, are most important. Without income and savings, you can’t invest.

People often want to generate more income for themselves. What they fail to realize is that generating more income requires a new value proposition, meaning that if you continue to do today what you did the day before, there’s no reason for you to earn more money. And the biggest problem with the 9-5 is that even if you create more value for your employer, you may not see a pay bump for months.

Yet generating more income remains the most important factor to creating more wealth. Without increasing your income, your rate of wealth creation will be low relative to the people who have figured out unique ways to increase their paychecks. This is the ultimate paradox of the 9-5: everyone has the same goal, to create wealth, so they get a job and discover that their employer inhibits their ability to realize that wealth creation goal by giving annual raises inaccurately reflecting the value the employee adds to the organization.

Related: 5 Ways to Use Real Estate Investing to Teach Your Kids About Finance

So people resort to talking about savings and living a life of frugality, as this is an area they can control. You can now see why those frugality articles are so popular — everyone has a 9-5 job, and they can’t figure out how to make more money, but they can certainly figure out how to save more! Don’t get me wrong, savings is an important component of the wealth creation formula. Understanding how to budget and how to save will allow you to roll your net earnings into income-producing assets and build wealth over a long period of time.

So yes, even with a 9-5 you can create wealth. But how do people create substantial wealth?

They Become Entrepreneurs

You will never realize your full wealth creation potential if you are working for someone else’s business. I always laugh at the people who say their employer pays them “fair” or “market” rates. Newsflash: if you are working for someone else, you are underpaid, as that’s the nature of business. If your employer pays you what you are actually worth, they won’t make any money. If an employee generates $60,000 for my business, I’m going to pay him/her less than that amount in order to make a profit. The problem is that employee is actually worth $60,000.

The only way to determine what you’re actually worth is to become an entrepreneur. The people who have created significant wealth know this. They figured out how to add value to the lives of their customers, and as a result, they are paid what they are worth and their efforts are directly and timely rewarded with an increase in earnings.

You see, entrepreneurs are on the right side of the wealth creation game. They start a business with a unique value proposition that allows them to create wealth. The entrepreneur hires employees who help him/her create additional wealth. They roll their earnings into income-producing assets to further build their wealth. The wealth gap between those who know how to create it and those that don’t further expands, causing uproars, protests and higher taxes on the rich.

It’s not unfair that these entrepreneurs have generated substantial wealth and their employees haven’t. They just figured out how to solve a problem allowing them to create wealth and build upon it. After studying several entrepreneurs and business owners, I’ve decided two things: I will be an entrepreneur, and I will teach my future children how to become entrepreneurs.

Let’s Teach Kids to Be Entrepreneurs

This brings me to the main point of my article: to teach kids to be entrepreneurs, solve problems and create wealth.

The secret to decreasing the wealth gap is to teach your children — and your children’s children — to be entrepreneurs and business owners. Give them the financial education and the wealth creation education they need. Teach them to create businesses, discover problems, develop solutions and then sell those solutions. Teach them how to define a value proposition and negotiate prices.

When I was a teenager, my parents told me that if I wanted money, I’d have to figure out how to earn it. I knew that lawns always needed to be mowed, and the task would often take homeowners an hour or more to complete, so maybe people would pay me to avoid doing it themselves. Once my parents agreed to allowing me to use their mower, I was in business. I mailed out fliers around the neighborhood and received a few calls. I started mowing and did a good job, which led to referrals and continuous business. To my surprise, I found that people also needed their mulch spread, driveways pressure washed, gutters cleaned, you name it.

The funny thing is, I didn’t even know I was running a business. I just wanted some gas money to go hang out with my friends. My earnings were laughable, but the education I received was priceless. I learned finance, marketing, operations, logistics and negotiations. This education has had a lasting positive effect on my life, sparking my interest in business and providing me with the confidence to start a side CPA practice and purchase rental real estate.

While I was working at Pricewaterhouse Coopers (PwC), I had the awesome volunteer opportunity of teaching financial education to middle schoolers. Teaching these classes made me realize the wide gap of financial education between children, even at such young ages. At the end of the class, the mother of one of the students, who was pretty well financially educated compared to his peers, approached me, and I asked how she teaches financial education to her children at home.

Related: The Innovative Way I Plan to Teach My Kids About Real Estate & Building Wealth

She told me that they don’t give their children an allowance; rather, if their children would like to earn money, they need to walk around the house and find a problem to fix. Once a problem has been identified, the parent and child will negotiate a fair price and a deadline to solve the problem. I thought this strategy was brilliant. Not only can it be fun for the kid, but it teaches them so many entrepreneurial and financial skills at such a young age.

Compare that to the parents that give their children a list of chores and pay a weekly/monthly allowance. These parents are literally teaching their kids to work a 9-5 job. They aren’t teaching their children to solve problems and capitalize on those problems. Even if these parents teach their children how to invest and budget, they aren’t providing their children with the knowledge they need to know how to create wealth.

Now, you have to take my parental advice with a grain of salt. After all, I’m in my mid-20s and many years away from having a child of my own. I don’t know the age at which a child realizes they need money, but when that day comes, I’m not going to task them and pay them an allowance. I’m going to ask them to find a problem around the house, tell me how they will fix it and then negotiate a price.

Conclusion: Will Your Kid Be the Next Big Entrepreneur?

At the beginning of the article, I mentioned that there are two types of people in this world: people who know how to create wealth and people who don’t. You are capable of teaching your children how to create wealth regardless of your financial situation, and doing so will put them so far ahead of everyone else.

Teaching kids to be entrepreneurs will have a lasting effect on the world. Not only will the wealth gap decrease, but imagine how many world problems your children can potentially solve. That sounds a lot better than sitting in a cubicle from dawn till dusk.

What do you think of this idea? What creative strategies do you use to teach kids about finance?

Let’s talk in the comments section below.

About Author

Brandon Hall

Brandon Hall, owner of The Real Estate CPA, is an entrepreneur at heart who happens to be good at taxes. Brandon is a real estate investor and CPA specializing in providing business advice and creative tax strategies for real estate investors. Brandon's Big 4 and personal investing experiences allow him to provide unique advice to each of his clients. Sign up for my FREE NEWSLETTER to receive tips and updates related to business and taxes.

46 Comments

  1. Brandon makes some very excellent points. I remember when I was in real estate and listed a house that badly needed exterior paint, the owner agreed to buy the paint and pay $500 (this was a long time ago) for me to paint it. I asked my 16-year-old son if he wanted to do it but only he if found people who would do the actual painting and he would supervise. He agreed and got the job done and picked up a few more jobs from neighbors in the process. He realized being stuck at the job holding a paintbrush wouldn’t allow him the freedom to drive around giving bids on additional jobs. Today he has a multi million dollar landscaping company with 108 employees.

    But I have another point Brandon did not cover and that is “Genetics”. If what Brandon suggests, a parent teach a child to be an entrepreneur was strictly based on environment then every wealthy person would have equally successful and wealthy kids but such is not the case. Think about it, if we all tried to become an entrepreneur who would fill the quotidian worker positions?

    If we look at our primate cousins there is a clear pattern, a pecking order, established where most chimps sit around and wait to be told what to do and when to do it by a dominant male chimp. For women simply substitute hyena for chimp as hyenas maintain a matriarchal society.

    To become the “dominant” chimp or hyena a member of the group must demonstrate aggressiveness and fight for the position, to do things that the majority of the group would not do. Most chimps and hyenas will never do this because their genetic makeup isn’t such that they are sufficiently genetically programed to do so. If they were so motivated, as were their companions, then chimps and hyenas would be fighting 24/7 for dominancy and little would be accomplished. The net result is most chimps and hyenas as evidenced by their activities, not fighting for dominance, are satisfied to take a subordinate role just are most humans who will opt to punch a timecard rather than become the timecard manufacturer.

    Agreed this is a simplification but genetics do play an equal role in successful entrepreneurship just like environment, i.e. being taught by parents, teachers etc. to become an independent thinker and doer.

    This might explain why some people who were economically challenged and educationally deprived children rose from poverty and ignorance to become business owners and leaders and to do great things and their parents had little if anything to do with their success.

    • Tammy Vitale

      Well said TomPhelan!

      I was going to argue that:
      “They roll their earnings into income-producing assets to further build their wealth. The wealth gap between those who know how to create it and those that don’t further expands, causing uproars, protests and higher taxes on the rich.”
      was a gross oversimplification given that our government is churning out laws favorable to the
      rich who have the money to spend on lobbying for their own interests – or what they think is their own interest. In the long run, everything being the same as now, capitlism will fail because at this rate there will be no middle class to spend money on the goods and services, returning us to the company store model (which I think is the goal).
      but you, Tom, made a great argument. So I’ll second your comment!

      • Brandon Hall

        Tammy – while it may be true that policies favor the rich by allowing them to further their agendas, is the answer to that problem to impose socialistic policies and end up like Greece?

        Since that sentence was a small portion of the 1,500 words I wrote, what did you think of the article as a whole?

        I appreciate you reading and commenting!

        • Tammy Vitale

          Since I am teaching my kids wealth building, I can’t disagree. But I think you have to start somewhere [ this sparked a loooooooooong conversation with son on my facebook – he is my own partner in wealth building and learning as we go] – and to imply that each person who builds wealth is pulling themselves up by their own bootstraps because they’re more (fill in the blank) than the rest of the herd distracts from the good things you have to say, and I wonder why you didn’t just leave that out – since is *was* a small portion of the 1,500 words, was not necessary for the rest of what you had to say and since, obviously, it was the point that stood out to two commenters.

        • Katie Rogers

          Maybe we should avoid framing issues in either-or dichotomies, our runaway capitalism vs Greece. Could not there be any number of healthy alternatives?

          You said, “Newsflash: if you are working for someone else, you are underpaid, as that’s the nature of business.” I ran into this many years ago when I was providing a certain service to clients, all by myself. People paid companies $40/hour for the service, but paid me $25/hour. I did well because I could outbid the companies, yet if I worked for the companies , my pay would have been $8/hour–the wage they paid their own employees to perform the exact same service. My friends said that because I was so successful at providing this service, I should form a company and hire employees in order to have even more clients and make even more money. But actually when I ran the numbers, it was more profitable to stay small and do the work myself, especially because I could not live with paying someone a third of what I was being paid to do the same work. It seemed like a violation of the Golden Rule. I figured it was not a viable business if I had to underpay employees so grossly to turn a reasonable profit for myself.

        • Brandon Hall

          Hey Katie – thanks for reading and commenting. You make some great points, however I take issue with:

          “I could not live with paying someone a third of what I was being paid to do the same work. It seemed like a violation of the Golden Rule. I figured it was not a viable business if I had to underpay employees so grossly to turn a reasonable profit for myself.”

          There will be supply and demand for employees at every price point. If you “grossly underpay” your employees (which I never alluded to in my article), you will have grossly inexperienced or underskilled workers. Your quality will deteriorate and your business will likely struggle to maintain it’s brand. There have been many case studies addressing price points for employees.

          Paying someone less than what you are able to sell their services for isn’t a bad thing. It’s the nature of business. You should be able to take a premium for their services because you are the one taking the risk of building a business and putting in tons of extra hours to build out a client base. Some people don’t want to do that and they are happy with a salary, and that’s perfectly fine! But I wouldn’t get too caught up with feeling bad about underpaying them. If they wanted to start a business, they would, but many people don’t want to for a variety of reasons.

        • Katie Rogers

          “Some people don’t want to (start a business) and they are happy with a salary, and that’s perfectly fine!.” Right. “If they wanted to start a business, they would, but many people don’t want to for a variety of reasons.” Right again. It was ME who did not start that business because I was fine with the $25/hour. However, I NEVER would have agreed to work for one of the competitors for one third of that.

          ” You should be able to take a premium for their services….” Also true, but how much of a premium is fair, and how much is exploitative? It seems that the Golden Rule should always be our guide.

        • Brandon Hall

          “However, I NEVER would have agreed to work for one of the competitors for one third of that.”

          That’s exactly my point and a perfect example of capitalism. You never would have worked for $8/hr because you placed a higher value on your skills and experience, therefore you pass up jobs offering that rate. It’s your choice. If someone values their skills and experience at a higher hourly rate, they will seek out firms that pay that higher hourly rate.

          Now, I totally get where you are coming from and I agree that you shouldn’t be intentionally exploitative. I think the reputation of firms that do exploit their employees suffer in the long run which forces that wage to increase.

          I wouldn’t offer employees a very sub-par rate as I don’t want a sub-par skilled worker. But even if I did, if there’s demand at that rate, I’m not sure I’d feel bad about it (or maybe I would and give a great bonus!).

          Thanks for your comments! I enjoy the back and forth 🙂

  2. Good article and responses. Here is my take on it (in general – but exceptions are always there):

    Rich will always get richer because they know the rules of the game and how to use/exploit them.
    Poor are going to get poorer bec they don’t know the rules of the game and how to use use/exploit them.

    So, what the Middle class or poor folks to do? They need to stand up and take charge instead of complaining and moping around. As Brandon said they need to save more first. I have seen poor folks/students buying $500+ iPHONE/iPADs bec their friends have the gadgets or to fit-in the popular group or show-off or look cool or buy $200 sneakers bec a Basketball star’s name was on it instead of investing that money to further their long-terms goal of learn and invest or start a small business or learn the tax rules to take advantage etc. So, instead of spending time in Facebook, search the web of knowledge and ideas..
    Instead of spending countless hours of watching TV, exercise and get fit so that the health is good and have more energy…
    Instead of eating junk food and soda, cook healthy food and eat them. I have seen obese people drinking large soda while having salads..

    All of these add up over time and it is more of a problem for adults bec they are teaching the same thing to the younger ones..

    So, the bottom line is , poor folks should look at the mirror and see what are wrong things they are doing and that take charge of their time/health/knowledge and make decisions that will make a better tomorrow or further their agenda and remember the “choices” they are making today is their own and nobody is forcing them.

    • Katie Rogers

      In my California town, real estate is so expensive that even people making twice the median income cannot afford to buy. Therefore, many of our young professionals have given up. My town therefore has an vast overabundance (compared to almost any other town) of cafes, foodie joints, gyms, yoga studios, symphonies, etc for them to not save their money at.

      • Brandon Hall

        Katie – is it possible to move out of town where prices are more affordable and simply commute back and forth each day? It may be worth it if it will boost your financial position.

        Just because there is an overabundance of cafes, foodie joints, gyms, etc., doesn’t mean people have to spend their money there.

        • Katie Rogers

          The nearest place where the sum of the rent and transportation is less than the rent alone here is about one and one-half hours drive away. I was not talking about my personal financial position, but that of the numerous young professionals in my town. Of course, they do not have to spend their money on food, exercise and entertainment, but when the median house is $1,000,000, they feel like why bother trying to save a down payment. So they spend it.

          On the other hand, they should maybe consider buying a house an hour and a half away even if they have no plans to commute themselves to work here. They could rent it out. I know a few who did just that. One young guy bought two houses in Las Vegas, and hired a property manager. He is very happy with his decision.

  3. Austin,

    You make some good contributing points but I do take issue with statements you make that appear absolute, e.g.

    “Rich will always get richer because they know the rules of the game and how to use/exploit them.
    Poor are going to get poorer bec they don’t know the rules of the game and how to use use/exploit them.?

    Your statement would leave one to believe that no Millionaires or Billionaires ever go broke because they have “learned the rules”. Look at Donald Trump or Robert Kiyosaki, they have corporations that have gone bankrupt including “real estate” schools.

    And another statement you make might convince one to believe that if you are a Millionaire or Billionaire it is but one long string of uninterrupted financial successes. How about the Kentucky Colonel who hit the road at age 70s broke and with only the belief that his fried chicken recipe was the best.

    I think we are all saying much the same thing in different ways but stamens made as absolutes concern me. We can all dig a little bit deeper to discover more of our history and evolution and how it dictates much of what we do today.

    Many, if not most poor people could improve their stature in life by making more of the “right choices” but who is controlling the choices offered to them to make? I say it is the “Oz” behind the drapes that Dorothy’s dog Toto pulled aside to reveal reality. The ones behind the drapes are usually the rich and powerful and many, not all because it could be inherited like the Walton or Koch families, have more of the “aggression” genes.

  4. Tom,
    I think in human terms, I consider “Motivation” as opposed “Aggression” the correct terms (chimps aside) as more relevant (parents needs to get involved here). I consider “Hustle/Hard work” as opposed to “Genes” as more relevant (mental handicap aside). Parents/Elders should be the role-model for young.
    Each one of us need to reflect on “why we are in this situation” from our past “choices”. Not everyone is born w/ silver-spoon in their mouth. But people became rich from every aspect of life throughout the ages. Some have sacrificed their Family life and/or became ruthless to keep their wealth but others kept it at a “balance”. So, each of us need to spend time/energy that will further their goal regardless of what “hand they have been dealt with”. Everyone can complain about something (some the weather, the neighbor, govt, Koch/Soros/WMT etc). Even Warren Buffet can complain that but he takes advantage of the situation that he is in or given.
    USA is a country of opportunity. We have seen too many “handouts/bailouts” recently.

    • Austin,

      Again you make good points and you would think “poverty” would be an incredibly powerful “motivation” for most poor to get out of their penurious environment, but it isn’t.

      So, the question becomes one that the politicians have not been able to answer for decades. “How do you motivate poor people to rise to the occasion, to seize every opportunity provided to them?” For example, education, you would think a poor person would easily grasp the concept that education equals advancement ergo he/she would be eager to go to school and learn all that he/she can and excel. But again they don’t, they lack motivation and I believe the failure to appreciate what’s being handed to you is both environmental and genetic.

      And regarding “bailouts” and “handouts” I agree with you, there has been and still are too many including those for wealthy corporations.

      • Katie Rogers

        Education is really a complicated question, and I believe that the inability to take advantage of what is available is mostly environmental or cultural. Americans simply do not value education. You can see this clearly when you are in less endowed foreign countries and observe that children themselves want, but do not have, educational opportunity available. When they do have access to opportunity they are willing to work hard to not only get to school but learn as much as they can when they are there. Many years ago I knew a poor child (in America no less) who got a job as a candy striper in the Catholic hospital at age 14 so she could have the right to attend the Catholic school tuition free, because, as she said, her local inner city school was a dead end place to be. There are not many American kids like that.

      • Brandon Hall

        Tom – how much does the environment play a role in that lack of motivation? When I was teaching those financial literacy classes, it was to students living in very poor areas of DC. What we ran into was: “my buddies don’t care so why should I?”

        Teaching those students definitely put everything in perspective for me.

        • Tammy Vitale

          if you don’t see the rules of the world working in your neighborhood, why should you care about it?

          If you put a dog in a cage, open the door and then shock him every time he tries to leave, eventually you can leave the door open and the dog will stay in the cage. This is the scenario for why battered women stay with their batterers. It is also the scenario for anyone trying to leave the only world they know (financial or otherwise).

          As a teacher, you should have had a good example, better yet a good experience to take your students to see to counter that argument. Isn’t that what teaching is all about? Providing experiences that open up a veiw? I’m curious about your response to that statement. It seems you let them teach you their perspective instead of finding a way to share your own.

        • Brandon Hall

          Tammy – I volunteered through PwC to teach the class, so I’m certainly not trained in that role. I was simply asking Tom a question, I wasn’t accusing. I think motivation plays a huge role, and I was asking for his perspective on how much of a role he thinks environments play.

          I shared with the students plenty of great examples and things they could do. I find it interesting that you think a volunteer teacher can’t learn something from those he/she teaches. I open my eyes to my surroundings and try to learn from every opportunity – maybe that’s the difference between you and me.

  5. Joel W.

    So much to comment on… where to start?

    Brandon, excellant article. To see someone your age (You look 16 in your picture :)) thinking family legacy is refreshing. Parent’s should be teaching wisdom, not just intelligence. Your example of the mother and her son was a great tool that I will use while teaching my four boys.

    Thank you for bringing up the point of your job as a business, not enough people get this. We have to rememebr our hours at work are a product. Do you add value or detract value at your place of employment?

    As for genetics people, don’t get me started. Genetics has very little to do with anything if it did I’d still be working for minimum wage back in some dead end job in Alaska. My genetics say I’m a knuckle draggin ape, that runs up debt, and doesn’t know how to save or build wealth. Some how (I beleive by divine intervention, lets not start down this road) I have broken that family cycle. Some of the least intellectually intelligent people end up the world’s best leaders/businessmen because of something else…. someone taught them wisdom, or they had to go find it because they didn’t have anything else to rely on.

  6. Scott Trench

    Brandon – thank you for this excellent article and the shoutout to my piece last week! I completely agree with your premise and the points you make here. I’d like to point out some of my own observations on two of your points in this article:

    First, you astutely point out that income is far more powerful a component of the wealth building formula than frugality. While I agree with this, I think that for the vast majority of folks, frugality is and must be the starting point in wealth creation.

    It’s just such an incredible mental leap to not cling desperately to the 9-5 when one has low or no net worth. The 9-5 is seen as a lifeblood. Earning excess income outside of the 9-5 is VERY hard for most people just starting out. Enter frugality. Frugality is easy, it produces results fairly quickly. And once a base layer of wealth (2-5 years of expenses) is stored, the loss of the 9-5 is much less scary, allowing one to aggressively and confidently tackle the income side of the equation.

    Second, I agree completely with the childhood education in finance and entrepreneurial endeavors. I will follow up with my belief that this education must come from the public school systems, not just from the parents, in a way which equally benefits and delivers access to opportunity for everyone. It would not be “Fair” (one of my favorite controversial words!) for your children to be trained up all their lives on how to be wealthy entrepreneurs, but not deliver those same concepts to the masses in our public education system who instead will be training to be quiet but productive 9-5 laborers in your children’s future businesses!

    • Jade Spell

      I also agree that some form of financial literacy is necessary for many in society to function at a level beyond what we see today. However, mere transfer of wealth to address wealth inequality will never guarantee success, although many politicians use that populist theme to create class envy. In the same vein, financial literacy *should* be something kids learn in school and have reinforced at home. But even with that additional education, there will be an inequality in how that knowledge is implemented, meaning some will continue to create wealth at a greater rate than others. Is that “unfair”? Not at all, and it accurately reflects the nature of the human condition (those who will vs those who won’t or can’t).

    • Brandon Hall

      Hey Scott, thanks for reading and commenting. Your first point is great, in that people learn frugality first. I look at my own life and actually have to agree – I learned how to save and budget in college and only just launched a business this year. So I guess I too learned the savings side first, then the income side. It’s just that I’ve realized the earning (financial) power of a business completely eclipses the power I once thought savings had. Don’t get me wrong, learning how to save is extremely important and will certainly better your financial position, but it won’t make you rich.

      A great second point too. I think that the people who know how to run businesses, live frugally, invest well, etc. should be “guest teachers” in schools across the country. I don’t want a regular teacher teaching something so important, especially if that teacher hasn’t figured it out for themselves.

      I know there are a few non-profits that aim to spread financial literacy education across public schools. Maybe one day we can create a similar organization and figure out the gap that the current ones have failed to address.

  7. Jerry W.

    Brandon, excellent article. I think environment and motivation play a large role as well. Having the means to invest and earn an income can be a huge advantage. That being said many wealthy families have had their fortunes dissapated by other generations who who lacked the motivation to continue what their ancestors started. I think many many families who had a sudden influx of great wealth did not have much experience for the next few generations in teaching their children about maintaining and increasing the family fortune.

      • Tammy Vitale

        You find the leader (every group has a leader) and you concentrate on making sure s/he understands possibilities and potentials. After that it’s easy. Finding the leader takes some outside the classroom work. And change is often not measured in human life times. Teachers are seed planters. And the process of teaching is a 200% all in process.

        • Brandon Hall

          Tammy – your statement “You find the leader …. After that it’s easy.” is a gross oversimplification of the process. Perhaps you should volunteer to teach underprivileged children financial literacy and you’ll see what I’m talking about.

          I agree that finding the leader takes time outside of the classroom, and it’s certainly something I’d love to do later in life. But I’ve only volunteered to be a guest teacher a few times which isn’t enough to do what you are suggesting.

          Perhaps we should all start (or join) a non-profit dedicated to teaching financial literacy!

        • Brandon,

          There are so many directions this discussion could take and one could earn a BA Degree on the subject but to stick to your question, “Tom – how much does the environment play a role in that lack of motivation?” here are my thoughts.

          Motivation plays a key and dominant role in whether one can and will rise to the occasion. And implanting motivation into young minds doesn’t mean you wait until junior or high school, by then it can be too late.

          I have a daughter who taught elementary school in North Philadelphia and believe me many of those young children in the 4th and 5th grades were already without motivation and that was a direct result of the parents. My daughter tried for a few years to capture and redirect as many young minds as she could but eventually the frustration evolved into despair. My daughter went back to school and received her Masters from University of Pennsylvania and then her PHD from Columbia. She is a Professor specializing in “Cognitive Learning” and educates Teachers (she motivates the teachers to motivate the students) and she feels her endeavors are more productive.

        • Brandon Hall

          Thanks for your response Tom. I wonder at what age it’s imperative to intervene to keep that motivation at a high level. I appreciate you sharing your insights and perspectives!

        • Brandon,

          I wrote a books years ago on “Selling” in real estate and I had a chapter on the validity of the axiom, “A salesperson is born not made”. The old genetics v. environment debate.

          In my research I came across an extensive article how and why baby’s cry and how many versions of crying there are and what creates them, e.g. pain, fear, hunger etc. The author felt that even babies have picked up on the fact that manipulation works and some forms of crying are forms of manipulation. If parent’s cannot discern among the various types of crying they are being manipulated and the reason for the baby’s manipulation, he/she cries because he/she is motivated to get something. My point, motivation is learned from the cradle.

        • Brandon Hall

          Wow, Tom, that’s fantastic. I’d love to read that article if you can link to them. and your book!

          Thanks again for adding so much insight to this thread.

        • Brandon,

          The book was entitled “Rich Realtor® Poor Realtor®” and I sold it on the the internet on my web site, Rich Realtor® Poor Realtor.

          Guess who threatened to sue me, NAR because I was using its logo “Realtor®” even though I made sure the ® was present with word Realtor. I had to collapse my web site and thus my Ebook sales ceased.

        • Katie Rogers

          I have been a teacher (not just a volunteer) in inner city schools . Finding and motivating the class leader is the key. After that it is easy to motivate the rest of the class to find hope where none existed before. And it does require 200% all in. Absolutely.

  8. Joseph M.

    Interesting article. I definitely do feel that school and most parents teach young people to become employees rather than business owners or entrepreneurs.
    In society there is the belief that entrepreneurship is risky…so the message is often “it’s risky , so you are safer by working for someone else”
    I think that during the last financial crisis a lot of people realized that those “safe secure jobs” aren’t always safe and secure. You hear all the time of people that worked somewhere for many years and then get laid off. It’s pretty risky to just have one income source versus several.
    Entrepreneurship is hip these days among younger people, I feel more than ever before. It seems more and more common for younger people to open up a business catering to the wants or needs of people in their age group and with their same lifestyle.
    I think the issue though is that most parents are not entrepreneurs and most teachers aren’t either.
    I think one reason entrepreneurship appears to be on the rise is because wages for employees have been flat for a long time.
    Out of necessity people are starting side businesses , selling things online, doing consulting work or even real estate in order to sustain their lifestyle.
    I’ve been hearing more and more the term “side hustle” which wasn’t a term people would talk about before.
    Also the internet has opened up more opportunities for people where they can earn income without getting a side traditional job where they physically have to be there.
    I think the lines between employee and entrepreneur will blur more in future. I could see more people becoming more independent contractors , and less people having the 9-5 job..I think you are already seeing this to some degree.

    • Brandon Hall

      Thanks Joseph for the in-depth and insightful comment! I especially liked this one: “I think one reason entrepreneurship appears to be on the rise is because wages for employees have been flat for a long time.”

      Dead on.

  9. Ruth Bayang

    I am dismayed at a comment my 16 year son made just this week. He’s working his first job ever. He said he likes the “security” of a steady paycheck. I feel like I have failed. I am relatively new real estate investor. Been flipping for the past 1.5 years. I got laid off from my 9-5 job in February. But I didn’t go out and get another job. Flipping has been good to me. I taught my son years ago to play the board game, Cash Flow. He understands what passive income is. Now, I think he has lost sight of that in exchange for a steady paycheck. “I know I’ll get paid every Friday,” is what he said. “In real estate, you don’t know when you’ll get paid, how much you’ll get paid or even if you’ll get paid… there’s no guarantee.”

    I tried to point out that a job is no guarantee either.. that his company can get bought over by another corporation and fire everybody; you look at your boss the wrong way and you’re fired, etc. He is set in his ways.

    How do I turn this around?

    • Brandon Hall

      Hey Ruth – I’m no parent, so take my words with a grain of salt.

      When I was a teenager, I too enjoyed seeing the steady paycheck. Since I didn’t have any prior *steady* income or a benchmark to compare it to, I thought it was amazing to consistently receive a paycheck each week.

      When I grew up a bit, I realized that wasn’t the way to go and that building a business is what I ultimately wanted to do.

      You need to determine what motivates your son – is it money? Is it a sense of accomplishment? Is it financial freedom? Motivations can change pretty rapidly, but if you can pin one down you may be able to tailor your home life to that motivation.

      If he needs money for something, instead of saying “no” or “you have to work for it” tell him that you will gladly provide him with the funds he needs if he can provide you with some sort of value. Then encourage him to figure out what value he can provide and in what capacity. Can he find problems to fix around the house? Can he help you in your flipping business? Make him seek out the problem, present it to you, then negotiate a price.

      You probably won’t get the reaction you are looking for: the “wow being an entrepreneur is great!” But you will be instilling entrepreneurship practices and skills in him, and eventually he’ll realize that’s what you’ve been teaching him all those years.

      Good luck and keep us posted!

  10. Ruth and Brandon,

    I hate to keep inculcating “Genetics” into this excellent discussion but like it or not genetics play a large role in our entrepreneurial make-up or lack thereof.

    Most of our primate cousins sit around all day and scratch while waiting for the dominate male, or in the case of hyenas, the dominant female, to instruct the group what to do. Sound familiar? Most of us are followers and that is okay and absolutely necessary. We can’t all be Pharaohs and we can’t all be workers.

    I am NOT suggesting this is the case with Ruth’s son and Brandon’s suggestions are excellent. The best Ruth can do is try to create an entrepreneurial environment for her 16-year-old son. Maybe she can match his wages with work provided by her where she emphasizes to her son that he can fit the work around his schedule, something far more convenient than having to travel to work and punch a time clock and then march to the drum beat of the Boss.

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