Mellody Hobson
speaker
238 appearances
2 recordings
2 series
first heard Jan 2025
last heard May 2025
Mellody Hobson’s voice in public audio — every appearance, attributed to the second.
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Appearances
And I think he'll feel better about it as well.
I would take a hard line on that one.
I would tell the camp, the camp cannot, I would push back on the camp saying they should not be going to places that don't accept cash because seven-year-old children should not have credit cards. I want to know what the other kids do. I have a quote that I use in practically everything in my life and especially with my child. Start as you intend. Start as you intend.
You do not intend for her to be waving around a credit card in that way. So at seven years old, that is not the way to start. You want to start with her being very, very respectful of money, even if you have resources that she can take advantage of.
This is, I know, easier said than done. And it's, again, it's our money habits that they're picking up.
Yeah, start where you intend. And so what do you intend for your child? You know, certain things where you look precocious and cute really wear off early. You know, when you're 22, you just look like a jerk. And so just, you know, sort of vision, envision whatever it is today and then project it into the future.
But I would say right now, just being very practical, I would implore you not to give her a credit card or a debit card for the reasons I've already mentioned. She cannot comprehend this. It's too hard. And so, you know, she's got a few more years. You know, she doesn't even have, you know, sort of advanced reasoning yet, right?
And she might be the smartest kid ever, but it's still very hard to work these things through in your mind. And that just will not help her.
Wow, there's a lot there. First of all, congratulations. I have to say the same thing. Your first job, that's a big deal. And just embarking upon life, it's a very exciting time. And I don't know if that's your apartment, but if it is, that's an awful nice kitchen for her first apartment, just FYI. And your mom would be very happy with how clean it is.
But I will say that the piece of advice that I would give my younger self is advice that I knew at the time because I studied this issue, but I'd only double down on it is compounding is a very powerful thing. And what I mean by that, you can start with very small amounts of money. And if you give that money time to grow, it turns into very big amounts.
And so I think a lot of people think it's not even worth it to save $20 a month. It's not worth it to save $25, $10, whatever it might be. But when you do the math on that over 40 years, you've got thousands and thousands of dollars. And so every little bit adds up.
And I would just encourage you, even with living as tightly as you probably are, find a way to forego something that doesn't make you feel totally deprived. But if you could forego it occasionally, you could put away a little extra money. So, you know, if you get your lunch at work, one day you take a sandwich or two. You know, I can go down the list of those sort of things.
Something that you say, I'm going to miss or skip this time so that I can put this money away.
and then again the magic of compounding warren buffett calls it who who's one of the greatest investors of all time the eighth wonder of the world it really really can make a difference there's something i'll just give it to you quickly so you can think about it called the rule of 12. you may have learned that in school so the rule of 12 says if money compounds 12 a year in five years it doubles
So if you have $1,000 and it compounds at 12%, you have 2,000. So then you do 6%. Let's even be more conservative. So it would double in 10 years. So, you know, if you had $1,000 in 10 years at 6%, it would double. It's a way of you thinking about money that you're putting away And saying to yourself, because you're so young, over a long period of time, the stock market has returned 10% plus.
That would actually be possible for you. So it's not fantastical or magical thinking. And the thing about the doubling, so let's just say it's the $1,000 that grows at 6%, that's $2,000 in 10 years. It's $4,000 in 20 years. it's $8,000 in 30 years, $16,000 in 40 years. Now think about that as if you were putting away money in a 401k plan or something like that. And you start off with 10,000.
You can see how the map just gets to be so compelling.
Can I give you one important point? So I gave a graduation speech. A few years ago, actually during COVID, I did a Zoom graduation speech and I did it on something. I said, you know, no one does a commencement address about money. Yeah, that's what I did. Yes. And I made one comment to the graduates and I'm going to say it to you. Select a date certain. You pick whatever date you want.
You pick whatever year you want that you will not accept another dime from your parents. A date certain. Whatever you say at 24, at 25, at 22, I will not accept another dime from my parents ever. It will impact. power you and put you on a path that I cannot explain. Now, some of us had no parents to lean on, so it wasn't a choice. It actually gave us an advantage because we were all we had.
When you have a safety net to lean back on, I don't think you're as rigorous as you could be. And I'm not saying that for everyone. But it's true.
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