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Asset Preservation Advisors




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APA’s philosophy is to work closely with our clients to develop an in-depth understanding of their unique needs and objectives. We then customize a municipal bond portfolio that best meets their specific goals and needs. APA manages high quality municipal bond portfolios in four strategies: Short-Term, Intermediate-Term, High Income, and Taxable.

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"The Thin Green Line" Author Paul Sullivan on Talking Money with Children

In his new book, "The Thin Green Line," NYT columnist Paul Sullivan encourages parents to teach their children well about money.

| BY Donald Liebenson


There is a fine line between who is rich and who is wealthy, and according to New York Times columnist Paul Sullivan in his new book, “The Thin Green Line: The Money Secrets of the Super Wealthy,” being wealthy is better and earns you a place above that line. The thin green line, Sullivan writes, separates those who, no matter their wealth level, are living in financial comfort. “Below the line,” he writes, are people, rich or not, “who did not have the security of true wealth. They may have had a lot of money in the bank, but their lifestyles were so extravagant that their finances were fragile, at best.’

In part two of our conversation, Sullivan stresses the importance of financial awareness and walking-the-walk as a way to promote healthy financial behaviors in the next generation.

The money talk, ideally, should be had at home, Sullivan told Millionaire Corner in our phone interview. “But if the parents do not understand these issues, how will they teach their kids?” he cautioned. “A key thing to drive home to parents is that your kids are watching everything you do and listening to every single thing you say. If you tell them, ‘Don’t eat a chocolate bar before dinner,’ and then you go and have one before dinner yourself, your kids are going to say, ‘Wait a second; Dad is a hypocrite. “

Transparency and honesty are key for parents to adopt in talking to their children about family finances. “The parents who have it right are the ones who wrestle with financial issues at the dinner table,” he said. “(For example), the family needs, rather than wants, a new car. It’s 10 years old and will cost three grand to repair. This is great for kids to hear. The notion you shouldn’t talk to kids about money honestly and openly is doing them a disservice. You have to make that connection between the work you do as a parent and the choices you make with that money and what it means for your kids.”

Kids may not know their parents’ net worth, but they are going to have a relative sense of the family’s wealth or level of riches whether the parent says anything or not, Sullivan said. When Sullivan’s own daughter returned from visiting a friend, she asked her father, “Why is their house bigger than ours?”  A couple of weeks later, she returned from another friend’s house and asked why it was smaller than their house. “Kids see these things,” he said. “They are paying attention.”

Regardless of age, Sullivan emphasized, any questions about money should be answered honestly. “One of the smartest guys I know, a therapist, told me to answer the question your child asks and then be quiet. My (New York Times) colleague Ron Lieber, in his new book, ‘The Opposite of Spoiled,’ has a great line, which I’m going to use: “’Why do you ask?’ That’s a great way to punt (while formulating your answer.”

Another imperative for the money talk is that children may not understand what they don’t see in their daily lives. “We don’t use cash anymore,” Sullivan observed. “Between credit cards, debit cards (and paying online), kids never see you spending.”

But more important than learning about budgeting and making the connection between where the money comes from to what the money buys is that “money has little bearing on who you are as a person,” Sullivan stated. “Money shouldn’t carry with it an assessment of competence or intelligence, but for too many people, it does. For too many people, money is a way of winning some sort of game that they are playing in their head. I think that’s the most dangerous thing (to impart to) kids.”

Across the generations, Sullivan perceives a stark divide in attitudes toward money.

“Millennials are conservative,” he observed. “Just as they were trying to go to college or were getting out of college and trying to get a job, everything fell apart. That was a jarring psychological experience for them. They are much more skeptical of advisors and believe they can do it on their own. They are looking for a tangible investment like real estate. I’m not saying this is a good way to go about it, but it’s understandable why they are reacting this way.”

This is in stark contrast to Baby Boomers, of whom Sullivan, himself a Gen Xer sandwiched inbetween, is not a big fan. He sums up their attitude as, ‘I’m going to be a kid forever; why should I save money?” Then they turn 65 and only have $100,000 in the bank. There is something to be said for a happy middle ground between being wildly optimistic and being so deeply pessimistic that you are too conservative with your money.”

Sullivan recommends focusing on things households can control (saving money) instead of things they cannot (daily stock market gyrations). “Saving for college and retirement are tangible goals,” he said. “You are planning for them and that will put you on the right side of the green line and free up anxiety as long as you are saving x amount of dollars you need to achieve your goal.”

“The Thin Green Line” is an aspirational book, Sullivan said. It is not a book about deprivation. “Have your Starbucks $4 latte every day of the week if that’s what you want,” Sullivan said. “But know that it is a choice, and depending what you earn, it’s a choice that could come at the expense of something else. As long as you are thoughtful about these things, you have a chance for everything to work out well. I hope the stories in the book help people to connect to their own concerns and allow them to reflect on what they can do to get to a more secure space.”

 

 



About the Author


Donald Liebenson

dliebenson@millionairecorner.com

Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.  

A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.