Book Review – Wealth Ways for the Young by Pete Wargent

Whenever I read a new book, I have the mindset of “what can this book teach me that I haven’t already read in a different book”. Particularly with finance books, a lot of the information across the books is rehashed over and over with the same messages drilled in over time.

This is not an issue of course, because realistically, for basic financial knowledge there is only a few key messages that need to be talked about – spend less than you earn, invest what you can, pay down your debt, live within your means etc. With such a limited scope of work, there is no question that a lot of finance books do provide the same sorts of information.

So, did this book teach me anything new about finances? Well, no, not really. It is a perfectly fine book for a beginner, it explains the concepts well and is written in a way so that it flows really easily. I enjoyed the regular anecdotes from his or his family’s personal life, it did make it seem a lot more real in a way which I do appreciate.

The goal of this book was not really to teach about finances however, it talked about something which I am very curious about, and that is how to pass on financial knowledge to our children. A lot of people within the FIRE community (myself included) wish we had a greater understanding of the financial world from an earlier age. If only we knew what we know now, back when we were 18, then we could really take advantage of time and compounding to really grow our wealth.

What is the next best thing then? It would be how we get our children to be financially literate as early as possible so we know they can take care of themselves from an early age and by doing so, we can leave a legacy for our future generations.

There is a common adage with respect to intergenerational transfer of wealth. The first generation creates the wealth, the second stewards it and the third consumes it.

If we can pass on the sound financial knowledge to our children, then not only can we hope the second generation maintains the wealth, but actually grows it. As well as encouraging that they pass this information on to their children, so the wealth does last more than a couple generations.

I may be getting ahead of myself here, talking about grandchildren which is a long way off now. For now, even children is a long way off. Although I cannot talk from personal experience, I am sure all parents will back me up on this in that they want the best for their children. We want them to have more than we had, we want them to have live a prosperous life. Providing a sound financial knowledge is key to being able to achieving that, and that is where this book is incredibly helpful.

Talking about money is never easy, but with children we can start to break down that taboo topic. If we involve them in money discussions early on in their development, it can become more of a norm to discuss which can help in the long run.

Where this book really excels, is it breaks down what sort of financial activities you should be doing with your children depending on what age they might be. Obviously it is not a one size fits all approach, but it provides nice guidelines which will be helpful when raising a child.

For Example: Chapter 3 – From Pocket Money to First Jobs

(this is only a summary as the actual book goes into much more significant depth)

Age 6+

Offer kids money for completing chores around the house.

Age 11+

Provide your children a monthly allowance, use three money boxes for saving, spending and donating.

Age 13+

Budget, save and invest.

Age 15+

Encourage them to find part time work, help find them a job which suits their schedule.

And that is it, relatively easy step by step guide on where you should be at with your children based on their age if you were hoping to pass on financial knowledge to them. At the end of each chapter, a few pages are dedicated to a financial blueprint which can be used to gauge where your children should be at and what they might need to be focusing on. As Pete does explain, it is not a one size fits all, just a rough guide.

One Oddity

There was one section in this book I really found confusing however, I do not want to call it a negative because it was not inherently bad, but it just did not seem to fit. Chapter 7 – Minding Business. Pete himself does claim that this is a bit of an eclectic chapter, and I have to say I definitely agree with him.

While I was reading Chapter 7, I actually thought there might have been a misprint of my book because I felt some of the pages should have been earlier in the book in different chapters. Overall, it was pretty difficult to follow as it jumped all over the place. That being said, however, it still did provide useful information, just in a random fashion.

A quick summary of where the Chapter went:

• Setting up a will to pass on your assets
• Ensure we keep company with positive and like-minded people
• Make more frequent home loan repayments
• Do not ignore Superannuation, pick a low fee high return fund
• Salary sacrificing into Superannuation
• Employing Debt
• Ten Rules for Starting a Business

As you can see, the chapter covers a wide range of topics which are seemingly unrelated. I have a feeling that Pete wanted to write more in depth about the individual topics above, but we given a word limit on the book and was forced to squeeze it all in to one chapter.

It is not necessarily a negative, just a peculiar thing and this one chapter I did find hard to follow as it did seem to jump all over the place.

Part 2

There is also a Part 2 of this Book – The Wealth Way: For Teenagers

It is basically a short summary of the basics of financial knowledge that a teenager should know if they are aiming to become financially literate. For a teenager who has minimal financial knowledge it would be incredibly useful to read and understand.

The information provided is basically a summary of Part 1 of the book, so personally I did not read it in too much detail.

Conclusion

In summary, given I do not have children, I am not really the intended audience for this book. However, I do plan on having children someday, so knowing that this book exists is helpful in that I know I can always go back to it when I do eventually have children.

If I did already have children, I believe this book would be a great tool for any parent to have if they were wanting to teach their children all about financial literacy. There is nothing ground-breaking in the messages presented, they are common sense approaches, but to have it all laid out for you is a great asset to have.

I would recommend this book to any parent out there who is hoping their children can reach levels of financial prosperity.