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The Money Robots: How To Build Wealth

Here's a story I came up with to teach my kids about how to build their wealth over time and not to compare themselves to others.


For this story, I thought I'd try a new approach, using letters. I hope you and your kids enjoy reading Dave's letters to his parents!



The Robot Camp Story


Dear Mum and Dad,


The first week at Robot Camp has been so much fun. We've been learning some of the basics for building robots.


I've already made some friends. Some of them told me they had been reading lots of books about building robots before they came here. One of the boy's parents has a really successful robot-building business!


I can't wait to start building my first robot!


Love you,

Dave


 

Dear Mum and Dad,


I've just finished my first robot!! It's so cool!


The teacher taught us all how to build a simple robot that stacks blocks. I took a little bit longer than the others to build mine but I don't care as it still works perfectly.


We've been told that we are having a competition to see who can stack the most blocks with our robots. Each week, we'll be learning new things which can be used to modify our robots. Next week we will be given some more parts to use and we can also trade some of the blocks we've stacked for even more new robot parts. I'm a bit nervous but excited.


Also, each night, before bed, the camp leader is reading us a couple of chapters from this book, Grandpa's Fortune Fables. It's really exciting, I've managed to answer of the all quiz questions correctly so far.


Miss you!

Dave


 

Dear Mum and Dad,


It's getting really tough. The teacher taught us some new things to help modify our robots so they could stack more blocks. I didn't really understand it.


Some of the kids have traded in all their blocks for new robot parts. They are building new/faster robots. Their new robots have already stacked more blocks than mine.


I decided to keep my blocks and just use the new parts we were given to make another robot like the first one. I managed to build it a lot faster which is a positive. At least I now have two robots stacking blocks.


I hope next week is easier!


Love you,

Dave


 

Dear Mum and Dad,


I want to come home. Can you come and pick me up?


The lessons are so hard. I have no clue how to do the new things. The other kids are starting to laugh at me as I can only build the same simple robot each time. I now have four of them.


The other kids love the new ideas they are learning and keep trading all their blocks for parts to build brand-new robots. The robots they are building are so impressive. One kid, Kitty, reckons her new robot will be able to stack more blocks in one week than my 4 robots have stacked during the whole camp.


Some of the other kids are copying exactly what Kitty is doing (although I don't think they really know how it is all working!)


I'm feeling lonely and sad that I'm going to come last in the competition!


Please come and get me!

Dave


 

Dear Mum and Dad,


Kitty's robot is amazing. I don't even want to look at it as it makes me feel so bad. She's nearly stacked as many blocks in a week as my 8 robots over the whole time we've been here (I'm getting pretty quick at building the basic robots) and there is still a week to go!


Some of the kids believe that Kitty will win. However, one other kid, Copper (whose parents build robots for a living), has this amazing robot which has gold panels and flashing lights. It looks so impressive. Others have started copying him and added these things to make their robots look really cool. I haven't seen Copper's robot stack any blocks yet but I bet it will stack loads really quickly.


Can't wait for this camp to be over!


Love,

Dave


 

Dear Mum and Dad,


You'll never guess what! I won the competition!!!!!


Kitty's robot's screws came loose as she built it in such a rush and ended up knocking down all her blocks! As many of the other kids simply copied what she was doing, their robots also broke down and knocked their blocks down too.


We also discovered that Copper's robot didn't work. It couldn't actually stack any blocks. This surprised everyone given how impressive his robot looked. His parents never taught him how to build robots. They were sending him some blocks so he could get new parts for his robot, however, he cared more about making the robot look good rather than getting it to build anything.


As my simple robots have been constantly stacking blocks for weeks, and I've been building more robots each week, I ended up winning easily.


I can't believe it. All the other kids are now saying they wish they had kept it simple like me.


I love Robot Camp!! I can't wait to come again next year!!!!!!!!!


See you next week!

Dave


The End!



Lessons from the Money Robot Story


This story has many money lessons, some more subtle than others.


The main message is that when it comes to money, doing the simple thing over and over is the best way to build wealth.


Think of Dave's robot as simply putting some money into the stock market in exactly the same way each month. It might not be the most exciting approach but doing this consistently means that gradually 'the stack' (your money) gets bigger over time.


The other kids were all trying to find more complex ways to build their wealth. They believed that these strategies would build their wealth more quickly. You can think of this as the new 'hot strategies' which arise and which everyone believes will make them rich. We've seen this with NFTs, cryptocurrencies, and even some individual companies (Game Stop), where the stacks grow quickly but something goes wrong and their stack falls completely.



Complex strategies are not always smarter strategies ...

I was recently talking to a good friend and he was surprised that, even though I have worked in the investment industry for decades, my investment strategy is so basic. I explained to him that most people in the investment industry are trying to find ways to make money quickly but, as the story highlights, over the long term these approaches generally fall down. I've not seen a complex strategy which I believe I can implement which will outperform my simple strategy over the long term. So I stick to the simple strategy!


This is a really hard topic for many 'smart' people. In life, clever folks come up with great ideas and usually get rewarded. For example, when an engineer invents a supercomputer, they often get a big payout. But when it comes to making money, smart people tend to make things complicated, even though simpler strategies often work better in the long run.


If you want to learn how to start investing in a simple way for you and your kids, then check out my blog, Ten-Year Investment Plan for Kids [educational only, not linked to any financial products]



Other subtle elements from the story


Here are a few other money lessons from the story:


  1. Ignore the flashy things: Copper's robot looked fancy but didn't have any substance. We hear about this all the time when it comes to money. People have fancy houses and flashy cars but in many cases, they don't have any wealth. They have borrowed money. When it comes to money, we need to make sure our kids don't compare themselves to others. For another fun story on this topic, check out my 'Invisible Slime' Story

  2. Parents need to teach their kids about money: Copper's parents clearly knew how to build robots but never taught him, they just gave him blocks. This is why it is so important rich parents teach kids how to manage their money, not just give their kids money. You can read more about this in my blog, Why I Feel Sorry for the Rich Kids

  3. Rich vs Wealthy: Some of the kids' robots built stacks of blocks but they traded them all in and started over to make fancier robots. To me, this reminds me of 'Rich people' who get money but then spend it all. In contrast, the 'Wealthy people' keep some of their stack (money) and make it grow over time. You can read more about this topic in my blog, Rich Kids vs Wealth Kids.


I also used 'robots' for this story as I believe that saving/investing should be automated to ensure that wealth is being built over time. I plan to write more about this in a separate blog.


I hope you enjoyed this story. If so, please share and subscribe for more stories to help your kids learn about money.


Thanks for reading!


Will


P.S., Do you think your kids will be able to answer the money questions at the end of each chapter of our best-selling book, Grandpa's Fortune Fables? Why not find out by getting them a copy? Available on Amazon.

Grandpa's fortune fables book cover. Financial education book for kids 6-12

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