How I'm Teaching My Kids to Master Real Estate from Day One | Ep 44

James: Welcome to the Furlo Capital Real Estate Podcast, where we dive into the intricacies of passive real estate investing. And our mission is to equip investors to invest wisely in both properties and people so that together we can build our wealth while improving housing. I'm James, and this is my wife, Jessi..

Jessi: I'm here, and I wanted to give you an update on the praying mantises.

James: Okay, alright, I'm ready. So we've been raising

Jessi: these things since they were teeny tiny babies. Yeah. The other day, we found, like, a massive one in the yard. And I was like, whoa, this is incredible. And then we've been finding, like, more and more of them.

And so I'm hoping That we found a female, we found some males. I'm hoping that they'll do their thing and we'll find some eggs and I'll get to do it all over again.

James: Oh man, that is good for you. So

Jessi: amazing. I've been watching them with the kids. They're, they, Eleanor is especially good at spotting them.

James: Oh yeah.

Even though

Jessi: they're super camouflaged. Yeah, we go and like look in the bushes. Cause I can have you like

James: point them out and I'm like, I don't see it.

Jessi: Oh yeah. She's just like, there's one, there's one. Ooh, look, there's one there. I'm like, how do you see this? Man, that's sweet. She's good at recognizing.

James: Well, speaking of our kids and raising things from little, little egglets, to full grown adults, we are talking about our kids.

And how we are raising them to master real estate. And doing it from day one. Awesome. Yeah, yeah. And so I just want to like, just share some of the things that we're doing. And obviously real estate is a little bit of a big deal in our household. Yup. Cause I live that life. And so we talk about it quite a bit.

And I will say my goal is not necessarily for them to quote take over the business someday. Sure. but I genuinely believe that real estate is an amazing asset to invest in and can afford them at least a little bit of income so that they can pursue what they want instead of just pursuing a high paying job.

Cause if you can at least supplement whatever you're doing with some real estate, which you may or may not have to manage. Yeah. Like you can go, yeah, go pursue your dreams. Who cares? Well in

Jessi: the bigger concept behind that too is the whole concept of investing and. Time, freedom, and the flexibilities that allows you, like, those are the concepts we want to them to grasp onto.

And, and then through real estate, we feel like is the best way to accomplish that, but like we want them to, to be thinking that way from the beginning.

James: Correct. Correct. So the first way that we do it is through some free range parenting and yeah, it's just really just and so not all of these are obviously not all a hundred percent directly related to real estate, but just that idea of, No, we let them go out and explore the world.

We have some walkie talkies that we hand them and whenever they go hang out in the neighborhood, like take a walkie talkie and we just let them go. And that's part of, because part of being an investor, like you're independent, man, you're out on your own, making your own decisions. And we just want them to get a lot, a lot of practice doing that as their kids.

Jessi: Yeah. You got to try things. You got to fail. You got, I, your line that cracks me up sometimes is like, well, let them get into a little bit of trouble. What are they going to do? Which,

James: which has definitely happened.

Jessi: Definitely. Yes. Yes. I ignored them. I was like, let's see what happens. So yeah, we were outside and I hear boys.

It's like our neighbor, grandma or whatever. She's like, boys, no more climbing on the roof. It was something like that. I was like, I'm just, I'm just going to let this. It clearly threw something up there, we're just gonna go

James: get it. Oh yeah, Samson came back home and said nothing. Just, yeah, cause we were out like, we were fixing the bike or something.

Yup. Yeah, yeah. I was like, dude, that's awesome. Oh yeah, I definitely was like, that's awesome. He's on the roof, getting into trouble. Like, that's how that works. Especially that kind, it's pretty innocuous. So I love it. That's parenting, free range parenting. We were big on that. Let him run. I, I think I'm more than you are, even, because we had the other day where, like, we had some friends come over, like, hey, there's this church event, they've got a bounce house, let's go.

And I was like, have fun, see you. And you were like, wait, you just let him go without taking him there? I was like, I don't know, it's a church down the block. I mean,

Jessi: yeah, it is like two blocks away, but still, it's like, you don't know who's gonna be there.

James: I didn't care. Figured, again, I was like, let him get into some trouble.

So, that's what we do. Second thing. We play Cashflow for Kids. So, if you don't know, Robert Kiyosaki, author of Rich Dad Poor Dad and Cashflow Quadrant, came out with a board game called Cashflow. And it is really simple. You're like these rats who go around in a circle. And, you know, and through there you, you do things, you, it's, and it's all about filling out financial statements.

I think it's great. You're buying assets, you buy doodads, you're selling things. And the whole goal is to accumulate enough assets that you eventually, cool. Get out of the rat race. And then the big thing, well, they have a kid version of it and we've been playing that with the kids and we played it a few times and they're kind of like, These are, this is a math game.

I'm like, yeah, I know it's great,

Jessi: but

James: just teaching them those concepts, you know, like, yeah, here's how this works. And, and every time we do it, they pick up just a little bit more. And so that's one of the things that we're doing. We are just regularly playing games. Eventually we'll get into Monopoly cause it's great.

There's still like, I think Eleanor can handle it. Samson's still a little bit young.

Jessi: Yeah.

James: But yeah.

Jessi: Well, it's good that one of the things I like about cashflow for kids is it gives them those opportunities to think through like. the concept of starting a business or owning a business or what is an asset versus a liability.

You know, if I spend this on, you know, going out to the movies, does that actually give me a benefit? And it's like, well, sure, it's fun, but now the money's gone, you know? And so they're, they're like, yeah, that's fine. getting to play those things that is like real life that they're not doing yet. They will, they get some of those life experiences, which we'll talk about, but it like speeds up that process.

Yeah. Yeah.

James: And that's how I think about it. Cause we'll play this, we'll play the adult game with other adults. Right. And, and what I'll tell them is like, yeah, this like, that's what we did. We just played that game in real life. And what I like about the board game is yeah, it just, it puts it on fast forward mode, 10 X is the speed.

So you can see the big picture. Yeah. So super helpful.

Jessi: Another, another cool thing that I liked from that game from watching our daughter is she, she picked up on the nuance of. Like a job and a business, like owning, owning a business and working a job. And, and she is still mulling that thought over in her head, but currently has this idea of like, she wants to go into like fashion or hairstyle or something and she's, and she's wrestling with like, well, do I, do I want to be the person who does the work every single day or do I want to own the business?

And like, I could. Be there working or I could go off and do something else, you know? And it's like, yeah, those are good things to think about and process and ask the question.

James: And ultimately you'll probably start off as an employee for someone else. Learn the ropes, learn the

Jessi: skill and then go

James: off on your own and expand.

Yeah, I know. Yeah. It's going to be great. Another thing that we do and we mainly like, so we're not perfect. It turns out we took a break over the summer and we're going to get back into this fall is we do what we call a weekly cashflow payday. And so it, It's essentially is a very fancy way of us saying like you get an allowance, but we call it payday Yeah, which is kind of a throwback to the game.

That's the game whenever you get paid you have a payday Yeah, and what we do right now is we're giving them three dollars kind of fun about this is when they were babies and people would give us money for them. We put them in these bottles and now we're just giving them their money back. We're doing it 3 at a time and there are three envelopes that they have.

There's a giving envelope cause we want them to learn about generosity and what that looks like. There's a spending envelope and then there's a saving envelope and they have to give something to giving. But then for the saving and spending, they could do whatever they want. Now, if they choose the saving envelope, they give that back to us.

They can't touch it for the week, but for every dollar, and there's an amazing pay rate, they get a quarter back. And Eleanor like very quickly was like, Oh my gosh, I'm putting all of my money in the savings because she figured it out. Samson was like, dude, forget that. I want to spend. But then Eleanor would run into a problem where she would be like, Oh, gosh, I found something I want and I don't have anything in my spending envelope.

We're like, yeah, man, that's the balance. And then, and Samson's more like, we get to the payday and he watches how many quarters she gets. She's like, what the heck? I'm like, well, dude, like you've got to save, got to save. And so we're just trying to help him. She said balance. Now I'm right now it's, it's super simple, right?

Put it in for every dollar you get a quarter. Eventually I want to turn this savings thing into make it a lot more complex and interesting. Actually have it be an investing thing. So you might still have like, yeah, there's a savings thing and we're going to give you a penny back for every dollar or something, right?

Five cents a nickel. Sure. Like make it super easy. But then have other things where you go, Hey, would you like to invest in or buy this asset? So like, for example, maybe it's Hey, we want to buy this stock. And or maybe, I don't know, I'm trying to think of what, what would be interesting. Yeah, you want to buy the stock of this company and I'll, I can, I'll print something up and maybe they're like, yeah, you can buy I don't know.

Well, we're Apple and not for their actual price range, but like, yeah, if you buy the stock for 10, let us hold onto it for two weeks, then you'll get. I don't know, 12 back, which is a great rate. You know, and, and then, and maybe there's another one where it's like, Hey, here's this other one. We want you to invest in it.

If you pay maybe it's a lawn mowing business, pay 10 to get started. Every week you then have to contribute a little bit more, but at the end of a, let's just say two months, maybe we'll give you back all of that. Plus you know, so let's say that at that point you paid an 18 like, yeah, we'll give you 30 back, something like that, where they kind of got to like, I want them to think through, here's what some of these different assets look like.

And we'll have cool pictures and they'll have the piece of paper and we hold on to the money. And then, but maybe on that one, I like, if they don't contribute, you know, ah, yeah, there's a downside to it. If you're not able to keep it up

Jessi: or

James: something,

Jessi: your business shrinks or

James: yeah, or something. So I'm looking forward to having that more creative and just like, and they don't get every single opportunity all the time.

It's like, Hey, this week, these are these three that are in front of you. And maybe they're already invested in something else and something amazing comes along and they go, ah, man, you go, yeah,

Jessi: that's

James: how it is. And I want them to learn that lesson as well. Yeah. And so, but for the moment, I'm really just trying to like.

drive home, like not saving and investing is good. And so like the reward is massive.

Jessi: Yeah.

James: And yeah, it's good. One thing

Jessi: I wanted to point out too is, is we're very distinct on It's not like an allowance we are we're giving them a payday with the purpose of them managing money, right? You know, we're sharing some of that load with them.

Like we manage money. We want you to be able to do that, too Here's some money. Yeah, we want you to manage it and they do have opportunity at different times You know, it's not a standard thing where it's like, hey, yeah, if you want to do a chore for me I might pay you for that, but we don't pay them to do work.

They contribute in other ways in our household, and really the money is just them learning how to manage it.

James: Yeah, I've, we were listening, we do this parenting class, and one of the rules, I'm like, how much money do you give them? Not enough. And, and it really is like, they're just learning and yeah, and eventually over time we will increase that amount and then they will have more responsibilities for that spending envelope that,

Yeah, right now it's just fun stuff, but even then it's been super fun cause we go to places and and like if we go somewhere fun, we'll actually, we'll go, Hey, here's 40 bucks.

Figure it out. Yeah. If it's a bigger trip. And they're in control. I'm like, yeah, you can buy whatever you want. Go for it. And that's, I really love those situations because now they're like, they're, they're doing the value game in their head and trying to figure out, is this the best use of my money?

Jessi: The thing I love about it too, is it causes them to think about purchases that they're making.

Like, for example, Eleanor went with me to night grocery shopping and she was like, Oh, I want that thing. I want that pair of earrings. I want this thing. And I asked her, did you bring your money with you? She was like, Oh, I don't know. No, but now she's considering the cost of it and You know, she's gonna look at her spending envelope and be like, how much do I have in there?

Do I actually want that thing? It's not just mom. Can I have this? Oh sure. Yeah, you can get whatever you want Or no, no, no, no, no, you know, it's yeah, there's this good balance of yeah, you have control you have some funds Do you have enough? Do you not? This is up to you. I'm not the one who gets to, has to be the bad guy.

It's, it's super good.

James: It's so good. Yeah. That's probably one of the most powerful things that we do with them is let them actually practice and do it in the real world. Yeah. Another thing we do, we share stories and they do ride alongs with me. So when we're doing real estate stuff, like I don't whatever it's work stuff.

Like I try to explain it to them and then they'll come with me and they'll walk through properties and they'll see them and they know which ones they are. It's kind of funny. Like they're. How they remember which one it is. Like we're doing this project in Lebanon. They're like, is it the one near the field?

I'm like, yeah, the field. Oh, okay. Yeah. Yeah. I know that one. They're

Jessi: like me. I'm like, is that, is it the one with the dude who does this?

James: Yeah. Whereas I'm like, it's a street name, but yeah, but no, that's what we do. Like, and so they see it. And and especially this last summer, they did a lot of trips with me to properties and and they're like, oh, this is cool.

This is what dad does. And, and I let them like swing hammers. And again, we were doing a repair on a property and I handed them the whatever that's called, the sandpaper to the wall and, and like, and they got after it and, you know, they lasted about five minutes, but like, this is lame. Like, Hey, I get to see the

Jessi: physical aspect of things.

That's how this works.

James: Yeah. Yeah. Another thing that we do, which again is this is only semi related as we do an end of day reflection questions and I've been slowly evolving this thing. And so. this will, it will probably change a year from now, which is fine, but it's really, again, we're trying to create independent thinkers and people who really think about stuff.

So the first question I asked them is, Hey, what's something good that happened today? And usually they got a, they got a fun answer for that. And then I'll ask them, what's something that you're proud of? I also will often ask what was something that's challenging, but my observation has been something they're proud of was something that was challenging that they overcame.

And so I'm like, I, I sometimes ask that, I sometimes don't. I'm just, cause I'm like, yeah, it sounds like that was challenging. And you did it. The other one, and this one's huge is I will ask them, what did you fail at today? And, and I celebrate whatever it is because I want them to not be afraid of failure.

I don't want them to be perfectionists because I think there's so much in our schooling where it's like, get the right answer, get the right answer, get the right answer. For example, tonight, Samson shared with me that he did not finish his math test. Like he just didn't get done. Yeah. And I was like, awesome.

That's all right. High five. Yeah. I'm like, good. I was like, that tells me that you're being pushed and you are, you're You're learning and they're going outside of your comfort zone. I'm like, that's awesome. Congratulations for not finishing. You know, I think he was a little like, wow, it was not the reaction I wanted or expected.

Yeah. I'm like, yeah, no, I want our kids to fail. And I do the same thing with Elmer. And when she tells me like, yes, and I try to make it very clear, I'm like, this is good. You're learning, you're being pushed. You're getting better. Yeah. That's what this feels. Yeah.

Jessi: That's often I've When I have those types of conversations, you typically ask those questions, but every once in a while, I'll have a conversation like that.

Like, where did you fail? Or they'll, they'll bring something to me and say like, this was really hard today. And I like to follow it up with, and I think you do this too with what did you learn or like, what do you think you'll do differently next time? And often they have something like, oh yeah, I like, I failed at it because of this, so I think I'm going to try this next time.

And That, that's the piece that is like, you're learning, you're growing, you're pushing yourself. It was good for you to fail, but you're gonna get better. Yeah, it's

James: a combination of, I don't want you to be afraid of this, and instead, like, take action. Don't just take it for what it is. Yeah, don't just

Jessi: be like, well, guess I don't know how to do that.

James: It's

Jessi: like, no.

James: The last question I'll ask is, how did God show up in your life today? That's been pretty interesting, talking to them, because they're kids, and, I've had to kind of give them like, here's some options on how it could work. And that's when it was really good. Again, just getting them to reflect on their day to slow down a little bit, to take it in.

I think it is. I think it speaks more for more thoughtful kids and they're just fun. All right. Next summer, next summer, we're going to start a business with them. And because I, what I want them to do is I want them to get good at identifying a problem and solving it. I don't know what it's gonna be. We could be washing windows.

They might not be old enough for that. It could be pulling weeds for different neighbors. I feel like they could be really good at that. It could be going to garage sales, finding deals, and reselling them on eBay or Facebook Marketplace or something. I don't know how I feel about that one. I want them to do something and it's going to be a quote, family business, and we'll probably bankroll to get whatever it needs to be started.

But I think it'd be good if it was like service oriented and I, I pull in the weeds is a great one. Cause they can, I'm outside the timing doesn't really matter. That's definitely at their skill level, focus level. I don't know. A friend,

Jessi: a friend at the office had her daughter this year, who's two years older than our oldest wanted to.

Earn some money and start, and like do a business. And so she was like, okay, like, that sounds great. Like, let's do that. And so her daughter wanted to walk dogs and wash cars. And and my friend was like, I didn't fully think through that. She couldn't, wouldn't quite be able to do the job all by herself.

So she was like, I had to shift my, my perspective a little bit. So like going into it. Yeah. I like that. Yeah. This is a family endeavor. Like we will help you. Yes. We're not just going to be like, go figure this out.

James: Yeah. Yeah. No, a hundred percent. And I think that first year you and I will probably have to take a leadership role in it and really like, Hey, this is like, we're leading it.

We're doing it. Let me show you how it's done. Right. But eventually like, yeah. And I'll knock on the first couple of doors and do the pitch and so they can see it. I'm like, okay. Now it's your turn. Now you try. And, and part of it will be like, dude, the goal isn't necessarily to get business. The goal is to knock on a hundred doors.

Like, that's what we're doing. And however many customers we get out of that, that is what it is, but that's the goal. So I want to, I want to just, yeah, identify problems and practice solving it.

Jessi: Both of them have, have mentioned things similar to this before in the sense of like, you know, Okay. I've got an example for both of them.

So Sam was like, we were cleaning out his room and getting rid of stuff. And he, he was kind of mulling over like, okay, well, if I get rid of stuff, I could sell it and then I could get different stuff, which I'm like,

James: yes,

Jessi: I don't know if this solves the problem of having too much stuff, but you get the idea of like selling things and there's a trade there.

And then Eleanor, the other one was. She heard about a cause that was raising money for a, for a pregnancy center foundation in her class last year. And she was like, how do I do this? Like, I, I'm going to make something and sell it. And then from the money, like I'll put towards this thing. And, and so I was like, yeah, okay, I will help you with this.

I'll help you with marketing. Like, I'll help you take pictures. So she made bracelets and, and then she was like, okay, well, how do I, how do I get it to people? I was like, I don't know. Do you have any ideas? You know, she's just like, okay, well, what if you. What if, like, you know more people than I do, like, what if you texted them, you know?

And it was just like, okay, yeah, let's walk through this. So, that's brilliant. Yes. Yes. All in. Let's start a business. Yeah,

James: I think it's gonna be great. And yeah, I was listening to a, to a guy. He's a, I don't think he's a billionaire quite yet. But, like, multi multi millionaire. And he was saying that's what he did with his kids.

And what they did was they, I think they kept half of it or a third of it back to fund the next year's business. And they just, they changed it up every year. It wasn't like, Hey, we're doing this again. It was like every year with something

Jessi: new.

James: And he goes, and so the businesses just kind of kept snowballing because they kept having more and more funds to get going.

And that's super cool. So I love that. I'm like, I'm in. Other thing we're going to do is we're going to read books because I like to read, they should like to read. It's going to be good. We're going to read the classics, rich dad, poor dad, casual quadrant. I think I'm about to sneeze. Nope. Maybe. There it is.

So we're going to read Rich Dad Poor Dad and Cashflow Quadrant. We're then going to read which is all about money mindset. We're going to read Million Dollar Weekend, which is again like starting up a business and how you, again, that's like really like find a problem, solve it, very hands on. I think we're going to read Four Hour Workweek because it talks about just that idea of focusing on what's the What's the critical path for success?

The 80 20 rule. How do you get people involved to help do it? I think never split the difference. Is it gonna be a good one? It's all about negotiation. He's a former hostage negotiator. It's such a good book. I think we're gonna repitch anything. Which is all about like how you pitch ideas and the game of money and the psychology behind it, I think it'll be good.

I think a hundred million dollar offers is another one that is like, how do you create compelling offers that people want? And I think there's at least books to get started. I think there's going to be other ones. Buy back your time. We'll probably make that list. Which is all about like, how do you hire people to help you scale and grow?

Yeah, I think there's just going to be a lot of that'll like, you know, we'll read it. Each independently have discussions around them. That kind of thing. Especially over the summer when they don't have other reading assignments. Or as many. We're like, dude, we read in this family. I think it's gonna be good.

And yeah, I think I got it.

Jessi: Yeah, I was like, a lot of them are like on here.

James: Yeah, I remember the Automatic Millionaire. That was the one where, that was a watershed moment for you. Where you were like, oh my gosh.

Jessi: Yeah.

James: That's amazing. The science of Superman. That's probably a good one. No good to great is fantastic.

A Millionaire

Jessi: Next Door is, is an interesting, more of a story. I reference that one

James: all the time. Yeah. So yeah, that might be another good one. But yeah, I want to read books with them and just get them thinking about some of these concepts beyond just you and me telling them, but like, oh yeah, here's what these other people are saying that have like really spent time thinking it through.

I think it'd be good. And then I think eventually. They'll do some work for me.

Cause I think it'll be good. And they'll do things like bookkeeping, budgeting. I want them to do some tenant screening, do some underwriting for deals. Like let's actually run the business. Yeah. I'll probably get them to swing a hammer every once in a while.

But more of like, yeah, here's like the, the more officey back endy type of business. I want them to just get experience doing that. And not necessarily with the goal of like, so you can take over for me one day. I mean, that happens cool, whatever, but really just more like that. I want you to expose you to all this process and I can, and I'll probably pay him for it and stick a hundred percent of that into a Roth IRA and it'll be okay.

And it just starts on that process.

Jessi: Yeah.

I think another, a big thing that we do that balances all of this and is like, it's overarching. All of these different concepts is just a money perspective, you know, and it's like, Yes, all of these things are good. All of these skills are good. Managing money, investing, knowing how to use it, building businesses.

But we, we hold this view that we're stewards of everything that we have. It's a gift from God. And so overarching all of this is like, we want them to internalize like your called, you're, you have a gift, like you have these, this gift of funds and time and talents, like you get to use them. And are you going to use them wisely?

And what does that look like? And so that is like this overarching, like concept or, or heart behind everything too, that we, that does, it, it, it comes into all of these different conversations that we have with them.

James: Yeah, no, that's great. Yeah. The goal isn't necessarily to, Teach them to love money.

Jessi: Yeah.

To be a billionaire. Well, yeah. You's not get it.

James: No. Necessarily. It's more to recognize, I get it. For me, it's like I wanted to learn some independence. Mm-Hmm. . And I want to learn how to identify problems and solve them. Yeah. If it happens to be real estate, cool. If not, cool. Yeah. You know, I'm, I'm okay with that, whatever that is.

Mm-Hmm. , I happen to think also if they. Figure out how to insert some real estate into whatever it is that they're doing I think it can be a really good counterbalance to whatever that is. Yeah, so I'd like them ideally to walk away with some of that Yeah, I mean they're gonna inherit some anyways Just because I don't anticipate us selling everything by the time we die because we live off the cash flow.

Yeah, so Yeah, I Yeah, that's what we're doing. I'm excited. It's super fun right now that a fun age where they're not, they enjoy it all. It's all still kind of new and it's all fun. And there'll come a point in time where they're like, ah, dad, again, but then we'll, we'll upgrade to the actual cashflow game and then we'll do two Oh two, which is the, like, Oh, that was, it'll be good.

Yeah, I like it. So there you go. That is what we're doing to teach our kids. And if you want to come along for the ride and learn more about what it is that we're doing, we've got an awesome email list that you can get on. And I got an entire email series that does a whole bunch of education stuff.

You can find that at furlo.com. And if you enjoyed this episode, we'd love it if you left either a rating or review, wherever it is that you've listened to this podcast. And so with that, thanks for listening and have a great day.