The rich are better leaders than the poor

The rich rule over the poor, and the borrower is slave to the lender. Proverbs 23:6

The rich rule over the poor

The first half of the proverb isn’t saying that the rich should rule over the poor it is just stating a fact. I don’t think parents talk enough about money with their kids so we try and be open about it in our household.

I tell our kids that rich people are usually rich because they are good problem solvers, like to innovate, are good at figuring out how to make things better and are good leaders. Poor people are usually poor because they are satisfied with the things around them and are not very interested or good at making things better. The middle class is somewhere, well – in the middle. This isn’t always the case, there are some cases where people are wealthy from inheritance or amazing circumstances and the same with poor people, however these are exceptions to the rule.

The borrower is slave to the lender

We are big fans of Dave Ramsey here in the Rambeck household. He inspired me and Mrs. Awesome to get out of debt and live within our means. In fact the title I got for this blog (Kill it and drag it home) is a phrase I hear from Dave often.

We want to avoid debt at all costs.

Here is how I put it to my kids at the breakfast table:

Consumer debt is always bad. Don’t buy a big screen TV if you don’t have the money.
Business debt is almost always unnecessary too.

Let's say you want to start a lawn mowing business. Well, you’ve got to first buy a lawn mower for say $200. Instead of borrowing the money, you can:

Rent the mower first, save and then buy a used one with cash.
Start a gutter cleaning business first, save up $200 dollars, then buy the mower.

Now here is the other thing I want my kids to understand. Debt is not inherently bad. Everyone is constantly in debt; debt is the way the world works. Anybody who works for someone or has someone work for them is constantly in debt. If I go to work for someone, it is very typical for them to give them two weeks of their time before they get payment. For two weeks that company is in debt to you. If you take payment for services up front then you are in debt to your client until you deliver the product or service to them in full.

Daddy, are we rich or poor?

Even though we struggle to get by at times we always tell our kids we are wealthy… because… well, we are. I put my annual income into the Global Rich List and it says that I am the 6,998,957th richest person on earth by income (out of 7 billion people). That puts me in the top 0.10% of the richest people on earth. Not too shabby if I don’t say so myself.

Wealth is relative and just being American almost precludes you from being poor. Every financial struggle I have ever had would be a welcome “burden” to 6 or 7 billion other people around the world.

Most likely if you are reading this post, you are in the top 1% of earners in the world.

Do you have a clear position on debt and money? Do you talk openly with your kids about money? Is it negative or positive?