As my daughters grow up, they have new and different interests so I have started to tailor some of my content so that it remain engaging for them.
They are now more aware of Apple and its different products. They share an iPad and know how to use my wife's iPhone more than she does.
I therefore thought I'd use Apple to share some real life stories and help reinforce some of the money lessons I have spoken to them about in the past. Remember, we can't just tell our kids about money once and expect them to suddenly be great with money. We have to continue to remind them. If we can do this in different ways then it keeps it engaging for them.
I thought I'd use Apple to teach them 3 money lessons, plus one bonus life lesson.
Money Lesson #1 - Apple is focusing on cashflow!
Apple has historically focused on selling products. This has allowed them to build a brand which people want to buy from. The challenge is that you have to keep finding people to buy the products to get the cash. This isn't something that they need to worry about now but it could be in the future as we are seeing people changing their phones and computers less often than before (as the upgrade in power / features is already so far ahead of what people need). Therefore, Apple uses the money it has made from selling products to find ways to get regular payments (cashflows) from their customers. The different monthly subscriptions include:
Music streaming (Apple Music)
TV streaming (Apple TV+)
Games (Apple Arcade)
Data storage (iCloud+)
News (Apple News+)
Fitness (Apple Fitness+)
These services mean that Apple is focusing on generating a more predictable set of cashflows going forward. Even if they didn't sell more physical products, they would still be making money. This is an important money lesson. I want my girls to think of their money and consider how they will use it to generate a predictable set of cashflows. This could be from investing the money in the stock market (i.e. getting money from dividends) or potentially owning properties in the future which they can rent out. Essentially, if they can find a way to generate cashflows with their money, they will eventually have enough to cover their costs and won't need to work. Just like Apple could eventually survive without needing to sell as many phones or computers.
Learn how to set up an investment account for your kids here
Money Lesson #2 - Don't just buy products, also buy companies!
When I initially talked to my daughters about investing in the stock market, I used McDonalds as an example. For this more recent discussion I instead used Apple. You can read the full McDonalds version here. Essentially, as part of the investment fund that we set up for our daughters, they own a piece of Apple. This means that some of the money Apple receives from selling iPhones and iPads etc goes to my daughters. They liked this idea as some of their friends have Apple products so they know that their friends essentially gave them some money (although they don't quite appreciate how small the amount is!). I thought I'd use this opportunity to open up a spreadsheet to show them the benefit of investing in Apple the company compared to just buying their products. I said to them, if someone bought an iPad when my eldest was born (2012) they would have spent $650 (iPhone 4S) and not have anything to show for that now. If someone else had bought Apple shares with that $650 they would have seen their money grow to $6,123 (as at 24 February 2023).
Stock Price of Apple since 2012
Many people just buy products from companies. I want my daughters to not just look at buying products from different companies but also buying the companies themselves. For the avoidance of doubt, I'm not recommending that you invest in Apple as a single investment. It just makes for a good example. For more guidance about investing in the stock market, please see our free guide here.
Money Lesson #3 - Apple had to be very patient!
If you've read my previous blogs, you'll know that I believe that ‘patience’ is the super power of the wealthy and it is my third of my 3 Rules of Wealth. Apple is a great story about patience. Most people focus on the success of Apple and its founder, Steve Jobs. Since Apple was created in 1977 it hasn't, however, been a smooth ride. Whilst Apple had a good start with its first computers, it really struggled for over a decade from 1985 to 1997. In fact, Apple almost went out of business in 1997 (it was actually rescued by Microsoft). They managed to survive when they were facing very tough competition from IBM. It wasn't until 2001 when they released the iPod, 24 years after they were founded, that its fortune really turned around. The iPod was a massive success. It then led to the iPhone which took them to a whole other level. In a world where everyone focuses on achieving success quickly, we need kids to grow up knowing that success isn't a simple path. Most of the time it is very bumpy. Those that can be patient, and learn from failures, are likely to be the ones who are more likely to be successful in the long-run. This is particularly true when it comes to investing. People want all the benefits of investing (great returns) but can't accept the risks in the short-term. I want kids to see that bumps along the way are part of the process. Expect bumps to occur and remember back to stories, such as Apple, to realise good things can happen even if there are bumps.
Bonus life lesson - Apple kept an open-mind (eventually)
Apple's major success story is the iPhone. Many people remember when Steve Jobs did the first presentation showing off the phone and it being a game changer for Apple and the phone market at large. The interesting thing was that Steve Jobs initially said he'd never create a phone. He hated phone companies. He also didn't want to sell something so similar to the highly successful iPod. A group of his employees disagreed with Mr Jobs. They did research and prototypes. They kept telling him that they should do it but do it in an Apple way. Eventually, after a number of years they managed to change his mind and they created the iPhone. This compares to the story of BlackBerry. They felt that no one would want a phone without a physical keyboard. No matter how many times they were told they needed to change, they didn't. This closed minded approach ultimately meant BlackBerry went out of business! I told my daughters this story as I always want them to keep an open-mind. Many people see changing your mind as a weakness. I'm definitely in the camp which believes that changing your mind is a strength. I want them to be open to new ideas and adapting in an ever changing world.
In this blog, I used Apple to talk to my daughters about three very different money topics. As they are fans of Apple, they were engaged and asked some great questions. I feel talking about money should be engaging and put into a context that they can relate to. I've seen a lot of boring money content which can really put adults and kids off wanting to learn. Here is a recap of the different lessons I shared with my daughters: Money Lesson #1 - Apple is focusing on cashflow! Money Lesson #2 - Don't just buy products, also buy companies! Money Lesson #3 - Apple had to be very patient! Bonus Life Lesson - Apple kept an open-mind (eventually) I hope you share these money lessons with your kids. Thanks for reading! Will P.S. if you would like to support Blue Tree, so we can help more families start talking about money, please check out the following:
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Activities for kids: Boris and Gail's Fortune Club
Book for kids: Grandpa's Fortune Fables