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In the last article, Life lessons kids learn from owning property – Part 1 we looked at how crucial education is for finance and investing.

Homeownership and property investment is a great opportunity to educate our kids about these topics.

The first 3 essential life lessons we can teach our kids through real estate ownership was:
1. Good things come to those who wait
2. Budgets and finances are more important than you realise
3. Good relationships are essential in your life

The last 2 life lessons, 4 and 5 are:

4. The ability to strategise is important

As mentioned, property investment is a long-term game.

Those who start early and catch the bug rarely want to sit idle once they see how well their property is doing in terms of value.

They’ll be keen to grow their portfolio and monitor its progress. To take advantage of opportunities.

Talk to your children about what their journey will look like. Ask them:

  • How long they plan to live in their first property?
  • When would they like to buy their next home?
  • What about investing?
  • Will you need more cash flow or can you go for capital gains in your investments?
  • How will real estate purchases fit in with the various stages of the life you imagine for yourself?

Ask them to plan ahead for properties three and four. What will they look like? What kind of freedoms will they deliver to you?

Real estate ownership and investment can help them foster a strategic mindset they can apply to other aspects of their lives as well.

5. Lending knowledge is powerful

There is nothing quite as daunting for kids as their first experience into the world of banking and finance.
Understanding the concepts of good debt and bad debt will become key. Going through the loan process helps with this immensely.

They’ll discover that a maxed-out credit card can be the difference between a ‘yes’ or ‘no’ on their home loan approval.

They’ll also learn about:

  • How to compare interest rates and things like fees and charges, and break-free costs
  • About interest only loans, principal + interest loans, and loan-to-value ratios.
  • The differences between investment loans and home loans
  • Fixed and variable interest rates
  • What drives the RBA to move the cash rate.

In summary: The 5 life lessons

1. Good things come to those who wait
2. Budgets and finances are more important than you realise
3. Good relationships are essential in your life
4. The ability to strategise is important
5. Lending knowledge is powerful

Want to chat about how to give your kids a hand up? Contact us.

Nick Holden

Nick Holden is the Founder of Simple Property Investment and an insured, qualified Property Investment Advisor under the ASPIRE Network industry body. He is a Licensed Real Estate Agent, holds a Diploma of Financial Services (Financial Planning) and Cert IV Financial Services (Finance and Mortgage Broking). As there is no 'one size fits all' with property investment, he is on a mission to help ordinary Australians create wealth for their futures with personalised strategies and advice.

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