Unknown Speaker 0:36 Welcome to Indy's Real Estate Gurus brought to you by Advisors Mortgage Group and fix it mortgage our branch NMLS is 33041. Now here's your host the hard work and mortgage guy, Rick Ripma. Rick Ripma 0:54 Thank you for joining us today we appreciate it very much. This is our show right before Father's Day. Ian Arnold 1:02 Yeah, well, Happy Father's Day or early Father's Day to you. Yeah, Rick Ripma 1:05 you too. It's I think it's gonna be interesting. I love the way you talked about how to set this up and what we could do to help people under you know, really get with their kids, we see this all the time, we tend to see it well, you might because you have kids that he might see it with your friends. I tend to see it with my customers. And it's usually they're helping their kids purchase a home. Well, I forgot the intro. Well, you are getting up there in age, I am. And I'm Rick Ripma, your Hard Working Mortgage Guy, and I'm Ian Arnold, Advisors Mortgage Group. And we're here today again, we're talking about the Father's Day Special, we want to help you, with your kids and grandkids really help them understand their finances. I was talking about my customers, you know, there'll be I'll have customers who are helping their kids buy houses, maybe they're gifting money, maybe they're, you know, being a cosigner on the loan. And these are things that are really helpful, but there are things that need to be done to help people get through that. And for some reason, in our society, it's a taboo subject to talk about money. Ian Arnold 2:14 Yep. I mean, I mean, even in my family, it was and it was kind of interesting, as I got higher in age and bout to graduate, my dad literally didn't want to talk to me about that type of stuff. So it is it's weird, but it's I think it's a conversation people need to have. Rick Ripma 2:33 I do too. And it's, it's tough because I think there are two ways to do it. You can talk about your own specifics. Or you can make up your own specifics. And just, you know, you don't tell you scenarios, yeah, you use scenarios you use fake, not fake numbers. So you say okay, so let's say if you are going to do this or that, especially with little kids, and I think that's where we'd like to start today is talking about the small children like your kid's age. Ian Arnold 3:04 So Rick and I are two different spectrums of life. My kids are five and seven. So I'm putting everything together as what I will probably say and stuff like that in the future to them, or if not what I'm doing now. Where Rick, what are your ages? Yours? My youngest is 29. Okay, so yeah, so they've already grown up, and hopefully, they're not still dependent upon you Rick Ripma 3:29 know, they're not. I'm hoping to be dependent upon them. Ian Arnold 3:35 So I mean, that so we got a wide spectrum. So a lot of this will be me, it's looking forward to future and what I could say, What should I say that type of stuff where you it's more, hey, this worked with this kid this, this didn't work with this kid, but it worked with that one. Rick Ripma 3:52 Right? It's just, that it's really important. And it needs to start at a young age. Correct. But if you miss the young age, you need to start it at an older age. Yes. It has to be done. It has to be done. Yeah. And it's, it's really shouldn't be a taboo subject. I think the problem is, is that most people, don't want to share their own information. Or maybe they don't feel like they know what they need to know to do that. So if you have small kids, I'll just recommend a book. It's called Three Cups. And it's you can get it on Amazon. I can tell you I can't remember the author but I interviewed him years ago on my show. It's got three cups on the front. I know that I know the illustrator is April Willie. And if you find that book that and you're looking for something that's very, very helpful for your for the small kids, probably up to about 10 or 12 years old. It's really helpful to help you walk through this and the theory isn't in that book as you have three different cups you have So as you get bring money in, you put them in the three cups, three cups are you have savings, you have given, and you have spent. Yep. And the percentage that you put in each and how you do that. And I think that's a really a very good way because you want kids to see that and get used to it. And you don't want. It's never good if you earn money, and you'd never spend any, any of it on yourself, the rewards not there. And I think that's part of what needs to happen. Ian Arnold 5:29 I agree because then you don't have the appetite. Well, why am I doing this? I mean, it's the same thing. Like, with my kids, I recently started trying to allowance. And what it was is, again, my kids are so young, I'm like, Hey, you make your bed, you clean up the dishes after, and keep your room clean. I'll give you $1 per week. The good news is my son looked at me and goes $1 You can't buy anything for $1. So then I was like, alright, well, no, sit down. Let's think if you do this for five weeks, you now have $5. So I tried to break it down for him to show him that if you once you earn it, it becomes it increases if you save it. Yep. So which is nice and try to get my kids that way. Rick Ripma 6:15 Yeah. And you know, it's funny, because he's probably not much you can buy for a dollar. But it accumulates, right? Yep. But it sounds like you can buy a week of him. Ian Arnold 6:26 Hey, my whole thing is to is the value of money. Oh, yes. And that's what it really comes down to that I don't want to just give it to him because then he'll always expect it. And then I'll have a 30-year-olds living in my house in my basement. I don't want that I want him to value the dollar and learn that look, if I save I can get this. If I spend it. It's gone away. Rick Ripma 6:50 Right. So Right. I agree. 100%. So let's stay with the small kids. What have you done with your kids to help through this process? What are your plans? Again, your kid's ages are five and seven, five and seven. So what are your What have you done? And what are your plans? You've already told us one thing that you have done, what else are you Ian Arnold 7:09 right now it's just the teaching about money. And that when you go to the store, just because mommy and daddy swipe or credit card doesn't mean anything. I mean if there's money there, but it just comes out. I mean, my wife put actually paid cash one time, and put a $10 bill in and got ones and some change. And my son thought at the time, that she got more money back. And he thought it was a wonderful thing. And I'm like no, no. So now he learned money and how to count money at school. So he understands a little bit more. But it's one of those things that we want to teach him. Things do cost money, and not everything can be just bought right away. Rick Ripma 7:49 Right, sometimes you have to save it up. That's right, that accumulation. And it's not it's saving it up, you know, for buying a house, they've ended up for whatever they want as a small child that may be, you know, I don't know what, what are your kids want? Ian Arnold 8:02 I mean, my son's into video games, and stuff like that. So again, money, it just an if you want that, you guys, but then once it's gone, it's gone. It's not like oh, well, I bought something bad. Well, guess what? You spent your money. I'm not going to reimburse you for it. Because you wasted your money. I want you to realize, Hey, maybe I shouldn't have bought that maybe I should have held off a little bit or something like that. Right? Rick Ripma 8:26 I think that I think the idea behind the three cups, which is what I like, I'm just gonna say for easiness. You're putting 33% in each cup, basically, right? Yeah, so you're just splitting it up. So you get $1, you put 33, 33 in one and you put 34 cents, right. And then the next week, you do the same thing. I think it really helps because I think you hit on something that's very, very important. They see it correct. They see the money accumulating. When it's the same, that's the issue with a charge card that people will have. When you charge something, you're not you don't really feel like you spent the money you've done a month later when you get the bill may be but when you're doing it, it's easy to do. I'm not saying that you shouldn't have charged cards in any way, shape, or form. I'm just saying that you have to realize you still are spending the money. And I understand I charge cards. It just doesn't have the same feel as paying cash. So I've gone to carrying a little bit of cash so I can pay cash Ian Arnold 9:25 is the difference between putting a card in a machine and going oh, I gotta spend $100 to reach in your wallet and pulling out five 20s to pay for something. Rick Ripma 9:35 No question. It's a lot more difficult. And that's something I think I think what we're really trying to get across is that you want to make sure they get used to money and you said your son was learning in school how to count money. Yep. You know that is a tremendous thing that you can have the school teacher or if your kids are at that, teach them you got to go through that you got to have them learn Ian Arnold 9:58 But even when I went through school they didn't they taught us how to count money. All right, a quarter 25 cents all blah, blah, blah. But what they don't tell you is all right now, if I take this and put it into a savings account, what happens? If I take that and put it into an investment account? What happens? That's what they don't talk about, which I'm still shocked about. That's my next step with the kids. Right now. It's the value of money, then the next step for me is going through that and going, alright, what can you do with it? Why just have your money sitting in a piggy bank? What does it do for you, it does nothing. So my wife and I, recently talked that we can cosign with them, and I've been looking this up to open up an investment account. Now our names will be attached to it and everything, but we can let them put it in there because it's gonna take more than a savings account. I don't know about today's market, but overall, then they watch it go up, and that's what I want them to see is, hey, look, I can put it somewhere and earn. Rick Ripma 11:00 Yeah, I think the process I think you've hit on the process, the processes, you start with them saving the money and seeing the money they're saving, correct. And I like the idea, it doesn't have to be three costs but have three cups, you put some here, some here somewhere, and then they can watch that and the money that they're invested, they have the money that they're there, they're going to use as giving. So maybe that maybe it's at the church, maybe it's at the Humane Society, maybe whoever they're going to do that too, they can see that build, and they can get the benefit of giving that money. One of the things about putting money aside and giving it is it gives it tells your mind that you have more than enough. It sets people up for becoming wealthy one of the people that I knew, I've known for quite some time in and he's extremely wealthy. And he said he told his dad when he was a little kid, he's now in his 70s. But when he was a little kid, he told his dad that his dad would walk down the street and just give money to the poor, right? Yeah, dollar here dollar there. But he obviously knew what he was giving. And he said Why do you do that? And he said, Son, don't ever worry about it. It always comes back. And now this person is I mean, very, very wealthy, very wealthy. So it's one of those things that the giving is important, too. It's not just investing. It's not just correct, you know, the other pieces it's you have to do the giving you know, we're coming up on a break. So after the break, we're going to talk more about Ian Arnold 12:39 we're hit on credit. We'll talk more about it as they get older, what should you also get into it with them? How she talked to him about credit cards, should you talk to him about when you're when they're wanting to get a house, that loan or a car loan, stuff like that? Rick Ripma 12:53 And if you want to talk to us go to HardWorkingMortgageGuys.com That's HardWorkingMortgageGuys.com All of the information is right there. Unknown Speaker 13:06 You're listening to Indy's Real Estate Gurus brought to you by Advisors Mortgage Group and fix it mortgage. Now back to your host the hard work and mortgage guy Rick, Rick. Rick Ripma 13:20 Welcome back. And thank you so much for joining us. We appreciate it very much. Again, if you have any questions, you want to talk to us about mortgages, or you have any questions on what we're talking about today how to how to handle, these conversations with your children. Maybe if you're looking at them, they're at an age where they can finance a home, we can certainly talk about that. Again, I'm Rick Ripma, your hard working mortgage guy and I'm Ian Arnold Advisors Mortgage Group, and again to contact us go to HardWorkingMortgageGuys.com That's HardWorkingMortgageGuys.com. And, you know, I think it's Question of the week. Ian Arnold 13:55 Yeah, so the question of the week is brought to you by Debt Crusher mortgage, improving your life by relieving the stress of debt. The nice thing is Rick, this is something we do. This is the Debt Crusher mortgage is Our Debt Crusher mortgage. So which is awesome that we try to help people who have not had the best experience or best teachings of debt and got out got in over their heads. So guess what, now we're relieving them of that stress and helping them out. So important. It is very important. So last week's question was. What has only two words but 1000 letters? I actually went there today? A post office? Yep, make the total. Alright, so the new one is what is as big as an elephant but weighs nothing at all. See if your kids can get that one. Rick Ripma 14:47 Yeah. That goes right along with Yeah, Ian Arnold 14:50 so we were briefly talking about the whole how, like giving and stuff like that. So one thing that I know that our church and then does is they'll do like backpacks for kids or they'll do even like Christmas stuff or any type, they'll do like holidays, that then they'll put out little thing, the nice thing, we involve our kids now, I don't make them go spend their own money on it. Now, my wife and I will spend our money on it, but we have them help us out. And, and I think that's been tremendous. I mean, now, later on, I might be like, hey, I'll be like, hey, now set aside 10% or 15%. And then you're going to use that towards this. Just to give them this, the knowledge that looks, they can do it too. And it doesn't always have to come from us. But I just want them to get that. Rick Ripma 15:41 Yeah, I think it's important, though, that it's their choice, not your choice and where they put the money. Yes. And I'm sure if your son came to you and said, hey, Dad, I want to give to this out of my own pocket. Right? Yeah, you would let I'm not gonna say no, no. And I think it's important too, that they immediately start putting some money away for the giving, correct? You know, I think most times, it's 10%. You know, I said 33, 33, 33 bucks, probably 10%, you have to decide what you think is, is right. But I think you they have to do that. And you kind of push them to do that. But I think you have to be careful on pushing them to what you think is the right thing for them to give, they may decide that they like, like, my wife is really into animals. She loves animals. She's just very kind and she would never hurt anything. She even catches flies and lets them outside. Right? Ian Arnold 16:34 I mean, you came off a black Rick Ripma 16:36 eye the other day? Yeah, well, she knows kind of a fly was flying my way. And I was gonna get it. But it is important, you know, she would want to give and she does we too. animal groups, you know, because she wants them taken care of. We also give other places but I think it's important that they buy-in is there. That's what I'm, that's really what I'm saying. Now, we talked about the small kids, right? And that you it's an easy way to get them going out. Let's say somebody hasn't done that. Because like, once you've done that it's easy to get them going in the next few steps. Maybe not the top end, where we're talking about buying houses and things like that. But that next step, so as your kids get older, let's say they've saved that money, is that when you're going to then really get them to look at investing and have them start to investigate what yes, that type of thing. So Ian Arnold 17:33 like I was saying as we've already started, my wife and I started. Alright, so what should we do? So now we're starting to Alright, now go ahead and open up an account. So they just see it little by little as they grow up. Now, as they reach probably about teenage years, then we'll start talking more about credit, what is credit? How does that affect you later in life? Is there good credit? Is there bad credit? How do you gain credit, that type of stuff, and then it will be towards the whole credit cards. I will tell you this right now, my parents never talked to me about credit cards, the only thing I ever knew was yeah, you put it on a, you use a card to pay for something, and then you pay it off later. Well, that's all I knew, I didn't know there were limits or enter what the interest rates could be. And that was shocking to me later, and I wish somebody would have talked to me about that. And I plan on having that discussion with my kids. Now a couple of my friends who have older kids, actually opened up credit cards, small ones under their kids’ names and their names. So they cosign just like we were talking about the investment account. And what they do is they just keep the balance at like 200. And so what they told their kids is look, this is only for gas. And they showed them how to pay that off each said that you had to pay that off each month. Or if you don't, here's what happens, you have gone on a payment thing. So I think that's something they were telling me I'm like, that's actually smart, because not only do you show them that, but it helps start building their credit at a younger age than wait until you're 18-19. They're in college and not really living too much at home anymore. Rick Ripma 19:08 Yeah, I think what they're doing is the parent signs up for the credit cards and puts the child on as a signer. And I think the smart thing they're doing is they're not putting them on their charge card that has a 15,000. Ian Arnold 19:22 That's a wise idea Rick Ripma 19:24 charge card that they just got as a $200 limit. And you don't want to do a prepaid card because that doesn't help credit any No. So you do that. And then you put them on the card. I didn't know you could put somebody under 18 on a card, Ian Arnold 19:37 but I think they think it'd be 15 or 16. But it has to cosign. Okay. Yeah, it's Rick Ripma 19:41 not really a cosign. Yeah, it's a site they're assigned. There's they don't, they're a signer on the card. It goes on their credit, but they aren't actually a cosigner, but that's a great idea. Because you have to watch what they're doing. And then if you're the main person on the card, you get to watch what they're doing. That's extreme. really important. And we'll talk more about that as we get into when you're if you cosign for a house. So you want to watch that I did that same thing when my kids went to school and went to college, they needed money, right? So we got the cards, but they weren't very big limits, and we just made sure, you know, they, they were learning how to handle it correctly. So that is a huge piece. And credit is a huge piece. And if you can start them out, understanding credit at 15, or 16 credit means more than just being able to get a loan today, that it does they look at, they look at your credit, when you're looking for a job and trying, they're looking to hire you. There's insurance, they look at your credit based on you know, for your insurance. So credit is extremely valuable. Ian Arnold 20:46 When you go get an apartment, and you want you gotta get utility bills, if you have good credit, you're not going to have to put down a 200 or $400 deposit, whatever it is. Same thing. I mean, because if you have good credit, it means you know how to handle your finances. And I mean, even if you're going to get a cell phone, if you want to get on your own cell phone plan, guess what, if you don't, then you're going to put more money down. And that's just money getting thrown away. Rick Ripma 21:12 Right? So it's extremely important. So even if they're, as they get to the 15,16,17,18, you know, 20 year old through college, you still want to teach them not only as they bring money in hopefully, you know they've gotten jobs and through their high school years, you know, doing something. But they still want to teach them to take that money and split it up into what they're going to going to give, what they're going to save, and what they're going to spend, and a percentage of that so that they learn that you want to get that as a habit for them. We all know that's better, you may not have that habit, but it wouldn't hurt to start doing that if you're having issues with credit, things like that. If you haven't, you know, I'm not going to start it I've done this so I don't have that problem. But you know, it doesn't hurt if you're in this situation to even do it for yourself. You know, but as you get these kids to get older, and now they're getting into so all ages, you want to help them take whatever money they're learning, while you still have them where you have some control over what they earn, what they're going to put in there as saving what they're going to put as what they're going to give and what they're going to put in is what they're going to spend. And then as they get older you an add-in, you know when is that 14,15 You add in the credit piece? Correct? because your kids need to borrow, you know, they might need to buy something that you've okayed. But even if they do it on a credit card that you're seeing, you know what they're doing? Yep, you know, it helps. So now that's through now let's get to 20 out of college right now they're on their own. If they've done all the right things, as you said, they can go rent an apartment, and they don't need you to cosign, Ian Arnold 22:57 correct. Well, the other thing is, is what I saw, I kept before here I was in the car business. Now say they never got a credit card. Guess what, if you tried to go get a car right now and get a loan? All the banks will tell you no. No credit is not good. I mean, it's worse than having bad credit, bad credit, they'll at least give you a high-interest rate, zero credit. They won't give you anything. Rick Ripma 23:21 Right, because you haven't proven yourself yet. I know when my son graduated from college, he moved in with two other roommates. They moved to Chicago, and both those roommates had their parents cosign on the lease. I did not. I did not have to. Oh, that's good. Yeah. And that's what happens if you can set this up correctly. Ian Arnold 23:42 So let me ask that. So once your kids got old enough, and let's say even in high school, or a little bit in college, they started bringing home a paycheck. And so how did you talk to them about how much money to put away roughly or and also? How much money should they be looking at trying to make in life? Let's be honest, we can all make $10 An hour and survive off of that. So right. What did you talk about? Well, there Rick Ripma 24:12 are several things that I did. I think were important. Number one, I have always I was fortunate to like earn a decent living. So we took them on nice vacations, we live in a nice house. I wanted them around people with money because I wanted them to feel good about money and I wanted them to want the luxuries. It worked on two of the three. One of them. He didn't really care he was happy doing what he was doing. He's really into birds. And he always he doesn't have a real full-time job but he has he makes good money doing all these little jobs that he does. The other two what I did, and I'll start with I'll really take my older one. You know, because he set the stage is as they got older, all three of them I started doing the investments with them. And we and they, and they, they investigated the investments that they wanted to invest in. Okay, so what stocks did they want to go stocks bonds, one of them ended up with stocks, and the oldest one ended up in stocks. He investigated it. And he actually did pretty well. We started out with some fake money first and just did a fake plan around laying around so he could figure it out. And then and then he actually started by buying stocks with the money he had saved, and did pretty well. The middle one, he didn't that that was against his risk tolerance. So he just put it in a money market account. Still smart, still smart. The youngest one he was, I mean, he came out of school, and he was an investment banker. Now he works. He's in finance, is far ahead of me now, over how to invest, right, he really knows his stuff. But that's what I did. I put it in, I had a little advantage in that they worked for me, part-time. So they learned mortgages and things like that they learned credit, they learned a lot based on that they already knew quite a bit, but they learned a ton based on because I could bring them in, they worked for me. And they could learn that but it is important. You know, and I would talk to them about credit because since they were working for me, we could go through a credit report, we could show what a difference, they could see what it means you can borrow buy a house or not buy a house. You know, if you're one of the things I wanted to make sure we talked about is if you're going to cosign for a child or really anybody, and you're gonna cosign for a mortgage, I would definitely recommend or even a car, that the payment that you make the payment, yes. You don't let them make the payment. They make the payment but they give you the money. Correct. And then you make the payment. And the reason I do I recommend that is because if you don't do that, and they can't make the payment they don't want they won't tell you. Ian Arnold 27:06 Well, the nice thing about online is now everything's online. And I did this when I sold cars is everybody has information. You have a password and username all the time both people make it so much easier. So parents can always go in there and check you do. Yep, that hasn't been paid. Alright, I'll pay you to owe me this. Rick Ripma 27:24 Well, we're running out of time. So we really appreciate you joining us today. We hope you found this helpful. Hopefully, you can talk to your kids a little better about how to handle money and credit. If you have any questions or you want to talk to us, just go to HardWorkingMortgageGuys.com That's HardWorkingMortgageGuys.com. Next week, we're going to talk about the top five critical things you need to know before you purchase