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Estate planning tips *2022* | Estate planning, Inheritance and talking to children about money - YouTube
Channel: Naya Clinics
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hi I'm Lea and I'm an independent
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financial adviser and a therapist with
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nine clinics and this is nine clinics
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presents and when I tell you the topic
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you're gonna want to click away from
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this video today I want to talk to you
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about talking to your family about death
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and money if you haven't clicked away
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yet congratulations you are fighting the
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urge to ignore this topic there was a
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study done in 2014 that showed that
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people would rather talk about death
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than money my suggestion for you is to
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stop avoiding it
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the number one reason parents tell me as
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to why they're uncomfortable talking to
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their adult children about the future
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inheritance that they could expect is
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because they don't want their children
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to be too dependent on this unknown
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future they want their children to be
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financially sufficient and create their
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own financial progress they want them to
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work hard I mean why not the parent did
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the other reason why it's really
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difficult for parents to talk about this
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is because it kind of forces them to
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become aware of their own aging process
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they see death as somewhere so far in
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the distance but they'd rather kick the
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can down the road and pop it open and
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drink it my suggestion for you again is
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to stop doing that because the further
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you kick that can down the road the more
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spoiled it becomes and it becomes this
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big problem this big elephant in the
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room
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that no one wants to talk about in the
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longer it sits in that corner the harder
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it is to talk about it the more strange
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it becomes the more spoil that becomes
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so avoiding it and pushing it down the
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road is simply making the problem worse
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not better
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my next suggestion for you is to talk
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about money as early as you can that
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means even starting the conversation
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about money with your
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little ones in a way that's easy for
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them to grasp the earlier you talk about
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money the better it's going to be and
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the more comfortable not only your child
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will be with the concept of it but the
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more comfortable you'll be about talking
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about it with them and also teach them
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that the family is open and honest about
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finances it's not a ven vs. us situation
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it's the family's responsibility to work
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together to understand the budget
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how many is spent how it's made and how
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it's controlled in a household I have
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one family who's from Canada and in
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Canada I'm told by this client that it's
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normal for children to understand money
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at a very young age
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in fact Canadian schools give out money
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101 children's books to these kids in
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school and it's it's kind of a mini
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class in mathematics where the kids
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really learn about the mechanics of
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finances I have another client who
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waited until their children were in
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their 40s to have the big money talk
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this client has set up multiple
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businesses and so when they sat down to
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talk to their children when they were in
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their 60s mid 60s it was a huge event
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it kind of blew the kid's mind and I
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definitely don't think that the children
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had any idea what the parents had and
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how difficult it could be to take over
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these businesses to take over these
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assets and liabilities after their
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parents passed away that was a big event
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so I wonder how it could have been
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changed for the better if this family
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had started talking to their kids much
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earlier about what they had and what the
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expectations were at a very early age it
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may be a good idea to save the money
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talks to face-to-face conversations over
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dinner with your family or setting up a
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monthly quarterly annually weekly
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meeting to talk about money it could
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also be really helpful to send down a
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blanket email to the family this is what
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we made this is what we spent these are
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poor habits we have here opportunities
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we have so that this
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family feels involved in the process
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we're working toward a goal of financial
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peace together as a family system and
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everybody is in on it it could also be a
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great idea to wait until a big event
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occurs to use that as a prompt to start
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teaching your kids more and more about
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finances for example on my 13th birthday
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my dad instead of giving me a Barbie
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doll or soccer ball gave me a cheque
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toward my five to nine plan I can't say
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I was happy about that at 13 but I would
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be later and what I did get out of that
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was funding toward my college education
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and he taught me the value of money
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one potential pitfall or stuck point we
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haven't talked about yet is how
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comfortable children are about thinking
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about their parents death so when we're
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talking about estate planning and
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parents sit down with their children to
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discuss the future the children are also
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really uncomfortable because they don't
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want their parents to die and so talking
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about these things brings up a lot of
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emotions that they also are not
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comfortable with so starting the
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conversation earlier is going to help
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them become more comfortable about these
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discussions without directly attaching
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it to your death another suggestion is
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to become really aware of all your
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children's different personalities if
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you have multiple children because that
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can help you actually pick a person to
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choose as team leader when it comes to
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talking about and dealing with your
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family's finances if child B is
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mathematically minded or simply just
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more organized than his or her siblings
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that could be the person that you pick
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to head up the team of financial
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discussions this person would be
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responsible for making major decisions
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final decisions and creating topics of
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discussion long after you've passed and
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of course when you're talking about
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these things you're gonna want to take
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into account the personalities of your
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children and their ages to help you set
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up a framework for what you're going to
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be talking about in what details you
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another really important topic is
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talking about divvying up your assets
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some families are hard and fast about
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splitting down the middle or splitting
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equally between the kids each child will
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get this percentage of my estate and
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nobody will get more and nobody will get
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less other families are different and
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they have reasons for that for example I
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have one client whose son has struggled
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with an addiction for most of his adult
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life in through his teen years this
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parent has felt an inclination to gift
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more to that child than his other child
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who is self-sufficient and financially
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independent at this time in his life
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some people may look at that dynamic and
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really shake their heads and say why are
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you rewarding the child who has battled
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addiction and almost punishing the child
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who has become self-sufficient and then
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that client that dad who I'm speaking of
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would turn around and explain that he
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doesn't see his one child's addiction as
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something that that child has done wrong
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and deserves punishment for in fact he
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sees it as an illness that needs culture
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and needs nourishment so it helps him
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feel better about thinking about death
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knowing that he's taking care of that
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child who has battled addiction it's
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okay to be really clear with your kids
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about how you plan to divide assets and
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this could be really fluid and plastic
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throughout your lifetime things change
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and you should update your children
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anytime it does change so hopefully now
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that we're coming to the end of this
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video you have ideas rolling around your
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head about how to start the conversation
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with your family it's really important
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before you do that to set up a framework
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in a game plan as to how these
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conversations are going to start
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progress and end what is your what is
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your endpoint where would you like to
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arrive at the end of these conversations
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which essentially would be at your death
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so easing into the conversation is a
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suggestion I have for you for example
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don't talk numbers right away
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you don't have to it's really not about
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the numbers right away it's about so
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much more than that it's not about the
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fact that you have $10 in your bank
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account and fifteen hundred dollars in
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an investment account and two million
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dollars of life insurance it's not about
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that it's about the fact that you had
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the bank account what is it a brokerage
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account what is that in life insurance
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what the heck is that explain the
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concepts and the mechanics of these
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accounts first and then tackle numbers
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later if you're a parent who is truly
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worried that their child will become
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unmotivated to become financially
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self-sufficient once they hear about the
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financial makeup of your family start to
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qualify for example if you're talking to
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your child about their college education
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and you tell them listen I put away
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quite a bit of money into a five to nine
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plan for you so that you don't have to
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take out any loans or you don't have to
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pay any of your college qualify that for
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example here's what my dad did for Nate
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my dad said you can use your five to
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nine plan to pay for your college
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tuition every time you get an A you
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don't get a name
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no dice you pay that really worked to
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motivate me to perform well in school
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stay engaged and also be really
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appreciative of the fact that that money
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was there and developed some gratitude
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toward my father who worked very hard to
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put that aside for me and of course the
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purpose of putting that aside for me was
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to motivate me to do well in school so
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that I could hopefully do well outside
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of school and become financially
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self-sufficient one area of caution
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would be to take care when talking about
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money
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in a more controlling way it could be
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really easy for you to educate your
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children about money and what you have
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and then start using that in a
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threatening way how are you using it
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because if you're using it to threaten
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your children it's possible that they
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may resent you for that and then the
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trust is broken and I wonder how that
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may affect future communication
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between you and your children I wish you
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luck embarking on this journey of
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talking to your family about money it
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could be a really good idea to sit down
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with a financial adviser and a therapist
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to start building your framework that I
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talked about to start building your game
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plan it can be difficult to start this
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kind of conversation on your own and
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it's really helpful to have a third
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party who's objective to sit down with
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you and make sure that you're going
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after what you really want out of your
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life and making sure that your children
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are just as comfortable as you are
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discussing these things
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you
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