“Alexa, how can I get rich?” he asked staring at a speaker kept at a distance.
Nothing happened for a few seconds.
“Alexa! Alexa!” he shouted.
Nothing happened even then.
“Huh!” he blurted in frustration and went back to his playful ways.
This is a small conversation I heard of a 9-year old at our Camp Millionaire workshop in Mumbai on Sunday during a small break before we play musical chairs to explain kids the concept of demand and supply.
Well, the speaker on the other side of the intended conversation was not Alexa – virtual assistant developed by Amazon – but a plain one that operated on Bluetooth. But this 9-year old mistook it for one, and thus wanted to start a conversation to a get a quick response to his question. The question, however, sounded more like a command.
It wasn’t “Alexa, how can I get rich?” It was, “Alexa! How can I get rich!” in a tone that sounded rude the second time.
I have an Alexa at home gifted to me by a dear friend, but it now resides in the storage. My younger kid used to use it much more than the rest of us did. And I could sense something wrong sometimes in the way he commanded this virtual assistant.
One was, of course, wasting too much time talking to the speaker and asking questions like – “Alexa, can you sneeze?” and “Alexa, are you an alien?” and “Alexa, are you better than Siri?” (Siri is Apple’s virtual assistant)
And the second, and one that really led me to store it away, was the rudeness that sometimes showed up on his face when Alexa would not understand or know the answer to his question (like the 9-year old at the workshop).
This rudeness, I thought my kid could practice even with real humans because he could have become used to barking orders with no consequences. There were no “Alexa, please,” or “Thank you, Alexa.”
Now, this may seem like a fear that is too far-fetched into the future. But that is how you think if you start inverting almost all situations and questions (asking ‘what could go wrong’ instead of ‘what could go right’), doing pre-mortems, and deeply believing what Charlie Munger said,
“All I want to know is where I’m going to die, so I’ll never go there.”
He was certainly a wise man who said, “You are free to make whatever choice you want but you are not free from the consequences of the choice.”
Sadly, consequences are what we fail to put our attention to as we make decisions under uncertainties. It’s not that we are not aware of the consequences; it’s just that we fail to give them much importance because, like death, we keep believing that bad things won’t happen to us.
And this – ignoring consequences – is exactly what we often end up transferring to our kids as they observe us deal with our own lives, which we often live without the fear of consequences.
Like smoking in their presence, consuming alcohol, lying on the phone, using too much of the phone, indulging in road rage, using verbal or physical aggression to solve problems, spending too much money, borrowing too much money (when our kids understand this), living a sedentary life, or drawing comparisons between our kids and others who gets better grades than them.
One of my strongest beliefs as a parent is that kids don’t hear what we say, they only see what we do. And thus more than preaching about the good ways of living life, we must set good examples ourselves.
Consider the usage of mobile phones and social media that has penetrated the fabric of our society so deeply and something that kids are more prone to pick up from their parents than anything else.
That almost 50% of kids in our workshop on Sunday were carrying mobile phones was fine because their parents would have handed them the same to talk in case of emergencies.
But the fact that most of these kids were staring into their phones while having their lunch was what was scary. And as I sneaked into what some of these kids were watching on their phones, it was Facebook and Instagram for the older kids and Youtube for the younger ones.
Or consider the case when we asked this question in the workshop about where to save money, and one kid replied, “Underground.”
When we asked what he meant by the word ‘underground,’ he replied that it was a place that no one else outside the house knows about, and where you can stash away a lot of cash. His father does a lot of this underground thing, and that’s all that he knew about.
I was shocked to hear this from a 14-year old but was sad that this kid did not know about the potential consequences of such undergrounding, because his father would have never bothered himself about it.
Now, we get a lot of money-smart kids at our camps, those who already know something about the importance of saving, the difference between needs and wants, long-term compounding, and the need to start early. One can make out that this is because their parents are talking to them about these concepts at home, and possibly also setting up the right examples and environment through their own actions, and possibly also explaining the consequences of not doing these.
I believe this last part – explaining consequences, and using some – can be a powerful parenting tool. When our children break a rule or fail to act responsibly, we can implement a consequence or allow the natural outcome of their behavior to take effect. Over time, these results act as a teacher, helping our kids to learn how things operate in the real world.
Unfortunately, far too many parents short-circuit this process, either failing to implement appropriate consequences or bailing their kids out – shielding them from the slightest discomfort. These parents believe they are expressing love by sparing their children from consequences. In reality, they are setting up their kids for frustration and failure later in life.
Newton’s third law states that whenever a body exerts a force on a second body, the second body will exert an equal force in magnitude and opposite direction. In other words, the law of action (cause) and reaction (effect) says that to every action, there will always be an equal and opposite reaction.
We benefit a lot, and our kids do too when they learn that life is made up of cause-and-effect relationships — even though the effects or the consequences they experience may sometimes be unpleasant.
Nassim Taleb wrote in The Black Swan –
…in order to make a decision you need to focus on the consequences (which you can know) rather than the probability (which you can’t know) is the central idea of uncertainty. Much of my life is based on it.
Warren Buffett wrote this is in 1997 letter to shareholders –
If we can’t tolerate a possible consequence, remote though it may be, we steer clear of planting its seeds.
And this in his 2005 letter –
On a daily basis, the effects of our actions are imperceptible; cumulatively, though, their consequences are enormous.
The weight of these words fell on me again when I saw that kid at our workshop being rude to Alexa, because he knew, unlike doing it on a real person, there were no consequences of his barking orders to this virtual assistant.
One of my favourite examples while talking to my kids about consequences is that of Russian Roulette, where you put a gun with one bullet and five empty chambers on your head and shoot. I tell them that for the first shot you take, the probability that you will survive is a huge 5/6, or 83%. Then I ask, “Would you play this game if someone were to offer you a few hundred crores of rupees.” The answer is no. I raise the bet, and the answer remains no.
At their ages, my kids may not understand the part on probability, but they certainly understand the part on consequences, which is death in this game.
“Who would want to die in return for even a lot of money?” my 7-year old son asked me the last time I talked to him about this example.
“Sadly, there are many who do!” I replied.
Now I am waiting for some more time before he grows a bit older to explain how and why people do such things, and why they forget about the future consequences that are enormously bad.
And also about the power of compounding that my 14-year old daughter understands now, and also that it has long-term consequences that are enormously good.
P.S. When you ask Alexa – How can I get rich? – here is the advice she actually offers – “…if you want to get rich fast, try investing your money in stocks, bonds, or real estate. To increase your wealth over time, get a degree and pursue a high salary career as a doctor, surgeon, attorney, IT manager, or software engineer. You might also want to relocate to a bigger city if you want to make the most money at these professions. No matter what your profession or living situation, you can get rich by saving money. Try creating a budget and cutting costs where you can, like buying food in bulk.”
Nice try, Alexa! But let me do this bit for my kids instead of delegating to you. Thank you!
Venkatesh Jayaraman says
Thanks Vishal for this piece of Article. Timely to think what our kids should be exposed and the awareness they need in terms of consequence of actions.
I usually go through the comments sections as well to see if there were any counter points by the readers, further insights or their experiences.
Very surprisingly there was no comments in this piece of article.
M. Bains says
Great Article Vishal Ji,
Can you recommend a good book on the subject of compounding or compounding interest. Regards
Vishal can u suggest some good books for an 14 year old . he is through with rich dad poor dad