Rich Kid, Poor Dad: The Book on Raising a Financial Whiz
Though only a third of 2012 has passed, Zac Bissonnette is already a strong contender for the cheekiest author of the year award.
His new book, “How to Be Richer, Smarter, and Better-Looking Than Your Parents,” is filled with reasonable advice about debt and savings for young adults. But the 23-year-old author — this is his second book that the Portfolio imprint of Penguin has published — also compares financial services professionals to rapists and says that big, national banks are run by morons.
What really stopped me in my tracks, however, was the title. As out there as it is, it’s also a sly bit of genius.
Richer. Smarter. Better looking. This is a lot of what book-buying parents want for their young adult children. So rather than wondering whether Mr. Bissonnette’s own parents resented being called out in this fashion, I seized on a different question:
Who raised him, anyway? And how do you produce the kind of a twentysomething who knows so much about money at such a young age?
Mr. Bissonnette isn’t the only young adult who has written or advised his way into semiguru status in recent years. Ramit Sethi, the author of “I Will Teach You to Be Rich,” has trodden similar ground, and financial advisers like Lauren Lyons Cole and Brittney Castro are also making a name for themselves dishing out plentiful helpings of financial common sense.
So I called them all — and their mothers and fathers, too — to ask for some parenting advice.
Turns out there were no compound-interest workbooks in any of their homes. Nor was there reading aloud from credit card terms or “The Millionaire Next Door.” But all of the offspring had a visceral memory of a habit or tactic they learned from their parents, which formed the foundation for the advice they give to other young adults today.
The Rev. Keith Oglesby, Ms. Lyons Cole’s father, paid his way through Georgia State University in part by running a by-the-pound business called the Coffee Bean Barn in Atlanta.
And he did it by tracking every cent he spent. “I was able to make a dollar last,” he said. “And when I sold the business, that money seeded some of the life my wife and I made together.”
When Lauren, his eldest child, went off to college, he handed her a small spiral notebook to track her own spending, not really thinking she would do it.
Ms. Lyons Cole, who is now 30, still has that notebook tucked in her apartment in East Harlem, along with all the others she filled out from the first day of college until she started tracking her expenses on Mint.com in 2007. The early entries from her freshman year at the University of Florida include $1 given to a homeless man and multiple entries for fast food at Chick-fil-A.
“This will make me sound like a money anorexic or something, but it was about having a sense of control, of knowing what was happening,” she said. “There was something about that routine that gave me a foundation at a time when everything was changing around me.”
Ms. Lyons Cole said she realized that financial planning was the right career choice after years of being the person at the party who meets new people and finds out their salary, rent and student loan payment in the first conversation. And part of the reason she has succeeded may be because her clients want to mimic the way she manages to afford to travel for at least a couple of months each year.
“I don’t believe in budgeting and don’t put limits on myself, but I do have awareness around my spending,” she said. “Like someone who eats healthily, it’s just a consciousness.”
The Floor Mats
A running theme throughout Ramit Sethi’s book, blog and courses is the idea that we should all negotiate like Indians do. When I asked his mother, Neelam Sethi, whether anyone might take offense to the idea, she seemed surprised.
“That’s the way we grew up,” she said. “You never purchased anything without bargaining, whether it was milk or eggs or fruit.”
It’s the big purchases, however, that had the most impact on the 29-year-old Mr. Sethi, a Stanford University graduate who often tells the story of watching his father, Prab, a mechanical engineer, negotiate for days in pursuit of a fair price on a Honda.
And why was the teenage Ramit dragged along for all the negotiating sessions? “When we were growing up in India, big purchases were very rare,” said Neelam, a teacher who moved to the United States in 1982. “You had saved up for it and talked about it for years, so you would take the family along. Then, you’d stop at the temple before you went home to say blessings for being able to buy something.” “Every car he showed me had the mats in there,” Mr. Sethi said. “He said I could go to Wal-Mart , but if I was getting a name-brand car, I was not going to buy Wal-Mart floor mats.”
Mr. Sethi got his floor mats, and the lesson stuck with Ramit. “He didn’t mind being a little uncomfortable,” he said.
And so the “What would an Indian do?” question is now part of a variety of Ramit Sethi’s sample scripts, from getting a bank fee waived to much more consequential negotiations over things like salary. “If you bargain like an Indian, what you’re saying is that I’m willing to ask for what I want,” he said.
Brittney Castro found her calling as a financial planner while she was still a student at the University of California, Santa Barbara, but it was her mother who helped start her down that path.
Brittney’s most powerful money memory? “Waking up early and clipping coupons” with her mother on Sundays, said the 28-year-old financial planner who works in Los Angeles.
The Castros managed to raise their three children mostly on Mike Castro’s salary working for the Los Angeles Police Department. One of their biggest splurges over the decades was a new minivan when he retired from the financial crimes unit.
“I think it’s hard for us to splurge,” Brittney’s mother, Linda, said. “We love going to T.G.I. Friday’s at happy hour and getting half off of wine and using a buy-one-get-one-free coupon. I’d rather go twice than once.”
Ms. Castro’s thirst for a bargain will be familiar to Zac Bissonnette’s mother, Beth Wechsler. Zac’s father is a carpenter, and she made a modest salary as a licensed independent social worker.
She wanted to work part-time to spend as much time as possible with her two sons. So she spent years seeking bargains at flea markets and took young Zac along. “I would start to feel guilty,” his mother said this week. “We lived on Cape Cod, we should have been going home to go to the beach. And he’d say, ‘Please Mom, just one more.’ ”
“I loved it,” said Mr. Bissonnette, who still haunts flea markets and is a contributing editor for the magazine Antique Trader.
For years, Mr. Bissonnette got most of his clothes, toys and books from flea markets, and it changed his outlook on spending as an adult. “When you grow up shopping that way,” he writes in his new book, “everything in stores seems that much more expensive and you really think twice about parting with money.” It’s also, he noted in an interview this week, a really good reminder of how many things people buy that they didn’t really want.
To him, the lessons of the flea market speak not just to money but to values, a theme that runs throughout his book. “The idea that things that you own — and acquiring more and better of those things — can improve your life, there is such overwhelming evidence that it doesn’t work,” he said.
And his advice for parents may not be something that they want to hear. “Do I think parents who drive luxury cars set a bad image for kids?” he said. “It sets the idea that this stuff is important in life. They’re learning that this stuff can make you happier, and you can rely on mass-produced goods for some sort of fulfillment. And you can’t.”
For all of the fun he makes of his parents — and a sad scene or two in the book depicting his family’s occasional financial troubles — Mr. Bissonnette struggled to remember a single time when they splurged on things they shouldn’t have. He had strong memories, though, of a trip to the Cape Cod Mall when he was about 8 years old and his parents chose not to buy an enticing television set.
“The people who exhibit antimaterialistic tendencies,” he said, “are the ones with the profiles of a typical American millionaire.”