ONE HALLOWEEN, SOME of my teenage buddies and I were having a great time throwing water balloons at trick-or-treaters. It was a lot of fun—until we got caught. After getting hauled down to the police station for a lecture, and then receiving another one when I got home, I’ve been pretty much on the straight and narrow ever since, including when it comes to money. Over the years, I’ve discovered various tried-and-true rules of investing and those have been the keys to my success. In my personal Investor Hall of Fame, I’d include Warren Buffett for his lessons on patience and the value of letting compounding work to your benefit. I’d also include Burton Malkiel for the classic he authored, A Random Walk Down Wall Street. It taught me that the markets were so efficient that I’d be better off buying index funds than individual stocks. And, of course, there would be a place for Vanguard Group founder John Bogle, who made it possible to follow Malkiel’s advice by creating the low-cost index fund. These wise sages, along with others, provided me with the rules needed to succeed. But despite my reverence for time-tested wisdom, I give myself a little wiggle room. Most of us can’t always invest like robots. Sometimes, we want to do something with our money that doesn’t follow the established rules for investment success. A popular compromise: Set up a “fun money” account. I allow myself to play with 5% or 10% of my portfolio. Here are four examples of how I’ve had fun by not following the rules. 1. I’m a little embarrassed to admit that I have a position in bitcoin. Crazy? Yes, I know. Buffett calls it “rat poison squared.” But even Buffett gets some things wrong. It isn’t unusual in the history of innovation to see resistance to new ideas. For instance, if you’re drinking coffee as you read this, it’s a privilege that was once prohibited. In 1675, King Charles II banned the sale of coffee in England because coffeehouses were deemed to have “produced very evil and dangerous effects.” In other words, people sat around drinking coffee and critiquing the king. In fact, from refrigeration to margarine to recorded music, innovation has a history of being resisted. Perhaps it’s predictable that a challenge to our understanding of money would also meet with cat calls. We don’t yet know whether cryptocurrencies will have stamina and change how we think about money. But for this banker, it’s an invigorating debate—one that challenges me to set aside my preconceived notions about what constitutes money. I enjoy having some “skin in the game,” if only to focus my attention as the debate rages. And—who knows—maybe bitcoin will go to $1 million. 2. Some purists will think I’ve sinned because I own some individual stocks. Over the long term, the odds of an individual investor beating the market by picking stocks are very low. Even so, I think some good can come from investing in individual stocks. It’s important to think of stocks not as blips on a computer screen, but as ownership of a company, and investing in individual stocks can help with that. I bought my kids Nike and Apple stock when they were little. I wanted to teach them that they owned a company that made things they used. Infecting my kids early on with pride in stock ownership made investors out of them as adults. [xyz-ihs snippet="Mobile-Subscribe"] I also love owning Berkshire Hathaway. One of its holdings is BNSF, a railroad that runs through Montana. When I see a BNSF train pulling a long line of railcars, I smile, knowing it's making me money. And I always remember I own Dairy Queen when I have ice cream. It adds to the enjoyment. 3. Owning whole life insurance is harshly criticized by many, including some popular radio personalities. The argument against whole life is simple. It’s too expensive. We should buy cheap term insurance and invest the rest. But hear me out. I’ll use one of my policies as an example. It’s a $25,000 face value policy I bought in 1985. I’ve paid $312.50 a year into it ever since. The cash value is now $30,500 and the death benefit is $54,887. I estimate the internal rate of return on the policy has been around 5.4%. Last year, the return was 5.03%. It’s from a AAA-rated mutual insurance company and the cash value only goes up. Where else could I get a risk-free, tax-free yield of 5.03% today? I have a number of these policies yielding more than 5%. If I didn’t have them, I would be keeping emergency money in a savings account earning almost nothing. They allow me to earn a decent return and to invest more aggressively elsewhere. I’m not advocating anyone should buy whole life. But I’d argue these policies aren’t as bad a deal as some advisors suggest. 4. Perhaps the biggest financial rule I broke was taking on more than $1 million of future expenses without a clear plan to cover the cost. I’m talking about the decision my wife and I made to start a family. According to the U.S. Department of Agriculture, the cost to raise a child through age 17 is $233,610. We had five, so that adds up to $1,168,050. I was 29 when we had the first one. Our net worth was $20,000. We didn’t look at the cost but proceeded on the assumption that if we lived frugally, worked hard and invested well, we would make it work. Many—and probably most—families make the decision to have kids without a solid plan for how to cover the cost. That may seem financially irresponsible. But it’s a choice that most parents never regret. Joe Kesler is the author of Smart Money with Purpose and the founder of a website with the same name, which is where a version of this article first appeared. He spent 40 years in community banking, assisting small businesses and consumers. Joe served as chief executive of banks in Illinois and Montana. He currently lives with his wife in Missoula, Montana, spending his time writing on personal finance, serving on two bank boards and hiking in the Rocky Mountains. Check out Joe's previous articles. [xyz-ihs snippet="Donate"]

THE SPEAKER WAS passionate. “You bankers need to understand our culture is not like your culture. In our community, we don’t expect bills to be paid on time. If you’re really interested in serving our community, you need to adjust your expectations and not be asking us to change our culture in order to qualify for your loans.” Wow, did I get an education some years ago, when my bank attempted to reach out to the town’s minority community. We were prepared to discuss credit scores and the importance of a good track record of paying bills on time. Instead, we walked away thinking we may have done more damage than good. Clearly, the community’s view of our industry didn’t match our own view. In our defense, our intention to serve every segment of our community, including low income areas, was honorable. But we ran into a wide cultural divide we were ill-equipped to handle. But as a young community bank chief executive, I was idealistic and not easily discouraged. I was intent on finding a way to serve everyone. We had purchased a wealth management company to cater to our well-heeled customers. The bank itself was well-positioned to serve most of the financial needs of the middle class. But I wanted a way to reach the unbanked. That desire, however noble, set me up for an embarrassing failure. Freedom Loans—not its real name—sat in the middle of our Midwestern town. The most remarkable feature was a big ugly green sign in front of the tiny store. The sign would come alive at night and blink its bright neon lights spelling out the word, “LOANS…LOANS…LOANS.” It wasn’t subtle marketing—and hardly the image a preeminent bank in town would want to project. The owner of Freedom Loans—let’s call him Tex—wanted to sell the business. “Perfect,” I thought. We’ll buy Tex’s company and this will be our way to learn how to serve the unbanked in our community, plus I hoped to teach Freedom's customers how to improve their credit standing and to encourage them to favor the lower-cost loans available from my community bank. And, boy, did I learn a lot. Here are the highlights: 1. The poor don’t pay on time and don’t care about late fees. One of my first conversations with Tex was on his need to bring down his “past due” ratios. My bank kept past dues below 1%, while Tex was around 20%. He just looked at me and shook his head, saying, “You don’t understand what we do at all, do you? We love past due loans. That’s how we build up our late fee income. And nobody ever complains.” As I found out, he was right. 2. The poor don’t care what interest rate they pay. Tex charged an average 28% interest on loans. Tex taught me the poor don’t care about the rate. Only the payment schedule mattered to them. 3. The poor will pay almost anything to maintain one reliable line of credit. Tex gave me an education into the mind of the unbanked. They don’t care about interest rates. They don’t care about late fees. They don’t care about any other debts they were running past due. But they did care about keeping Tex happy, because he was their emergency fund. Tex would always advance them a new loan when needed if they would continue to pay him something from time to time. You could say Tex was a friendly loan shark. 4. It’s hard to find ethical lenders who share Tex’s view of customers. After the sale of the business, Tex only wanted to stay on for a short transition period. We hired a young man to train under Tex, with the intention of making him the new president when Tex retired. This trainee, however, never bought into Tex’s exploitation philosophy. He quit and went to work for a church, where he found more compatible values. 5. The poor suffer from fear and shame. Freedom Loans had a hidden parking lot in the back, which allowed customers to enter without being seen. Tex explained to me that this private rear entrance was a key to business success. The poor will almost never enter a traditional bank lobby, because they don’t feel they belong there. But they also want to hide their poverty from others, which would be revealed if they were seen entering a high-interest loan shop. The Freedom Loans experiment fairly quickly ended in failure. Our bank’s values were incompatible with the idea of charging exorbitant interest and fees, especially to the poorest among us. Freedom Loans never made any money. The lack of profitability was probably because no one in my company could buy into the Freedom Loans philosophy. But the failure motivated me to look elsewhere for ideas on how to help the poor. Over time, I’ve found some answers that work much better than my poorly conceived idea to buy Freedom Loans. Warren Buffett’s partner, Charlie Munger, has a saying: “Invert, always invert.” In other words, turn a problem upside down and look at it backwards. Here are two ideas that appear to be effective in raising the poor out of their mindset of poverty. Investment clubs. Over time, I became friends with a number of pastors in the minority community. They had formed an investment club that regularly met to pool members’ money and make investment decisions. These wise pastors knew that one path out of poverty was to teach their members to think more like owners and less like debtors. I think the club was successful because the effort came from within the minority community. Peer micro lending and savings groups. Similar to investment clubs, savings groups have proven successful in developing countries. These savings groups encourage capital formation, without the bureaucracy of bankers like me getting involved. Members can take loans from these savings groups, if approved by their peers, for purposes such as business expansion, home improvements, medical care or other needs—and without paying exorbitant interest rates. There’s a reason for the biblical prohibition against moneylenders charging interest to the very poor, who are least able to pay it. As far as I know, Freedom Loans didn’t help anyone in my town escape poverty. It most likely kept them poor. My confession in this article may not have the same impact as the 13 books St. Augustine wrote discussing his confessions. Still, this was an important lesson for this banker to learn. Not every market segment is a profitable niche, nor is it ethical to try to make a profit to the detriment of the poorest among us. But that doesn’t mean there are no alternative ways to bring human flourishing to those who struggle the most. Joe Kesler is the author of Smart Money with Purpose and the founder of a website with the same name, which is where a version of this article first appeared. He spent 40 years in community banking, assisting small businesses and consumers. Joe served as chief executive of banks in Illinois and Montana. He currently lives with his wife in Missoula, Montana, spending his time writing on personal finance, serving on two bank boards and hiking in the Rocky Mountains. [xyz-ihs snippet="Donate"]

IF I'M HONEST WITH myself, I’ve been financially comfortable for so long that I’ve lost the ability to truly relate to those living paycheck to paycheck. But over a lifetime of working with people and their money, I’ve learned to be aware of signs that someone may be on the brink of breakdown—and could use some help. I was only 22 years old when I had my first shocking experience with the power of money to cause a life to self-destruct. I was working as one of the federal government’s national bank examiners. A teller’s cash drawer was missing money and she was sent home. Around lunchtime, the bank president realized his truck was also missing. The teller had stolen his truck, and then driven for several hours before stopping and attempting to end her life. Fortunately, she wasn’t successful. But the experience made a big impression on me. Money is a double-edged sword with the power both to help fulfill our aspirations and to destroy. How can we help those who are struggling? Try these three steps. 1. Strive to be a “financial first responder.” That’s the label I give to those willing to help others in financial difficulty. We know that depression can occur in those suffering from too much consumer debt. If not addressed, serious consequences often result. In such situations, there are time-tested methods to give people hope. It doesn’t take an MBA to help those who have too much credit card debt. Just like we learn first aid to assist with a medical need when a doctor isn’t around, anyone can learn some basics to help financially stressed people who can’t afford professional help. I’ve trained others with materials from organizations like Crown Financial Ministries. The goal is to lay out a series of small, manageable steps that can be used to gain financial peace of mind. The first step might be to find a way to save $500. It’s something almost everybody can accomplish, and it gives them the confidence to move on to the next step of reducing debt. Crown’s money map is a brilliant formulation of baby steps to give those in deep debt hope that there’s a way out. 2. Redefine failure as a virtue. One of the reasons our economy has been a success is our acceptance of failure. For much of human history, debtors who couldn’t pay their loans went to prison. But in America, we made bankruptcy relatively easy so folks could discharge their debts and start over. You might think, as a banker, I’d prefer the harsh debtors’ prison method. But there’s real value to society, as well as to the individual, in making bankruptcy less severe. If bankrupt entrepreneurs are excessively punished for failure, they may give up on high-risk but potentially high-return opportunities. Think Henry Ford, who had two companies go bankrupt before he succeeded. Or Walt Disney, who was fired by an editor because he had no imagination. Or Mark Cuban, who failed as a waiter, carpenter and cook before finding success. [xyz-ihs snippet="Mobile-Subscribe"] High-tech firms like Amazon believe if they aren’t trying and failing with new ideas, they aren’t maximizing long-term value for shareholders. The list of failed Amazon ventures is remarkable. Amazon Fire smartphone lost $170 million before being shuttered. Kozmo.com was a $60 million dollar write-off. There are many more. Amazon founder Jeff Bezos has a high view of failure’s value: “I believe we are the best place in the world to fail (we have plenty of practice!), and failure and invention are inseparable twins." We need to remind ourselves and others that there shouldn’t be shame in failure, but there might be regret in being too fearful to try new initiatives. 3. Remember the limits of money and the value of life. I became a bank chief executive in my mid-30s. I was driven to achieve great numbers. When something or someone got in the way of that objective, I could lose perspective. Fortunately, I worked with a bank attorney named George who had flown multiple missions over Germany during the Second World War. He had the perspective to distinguish between what was really important and what was a temporary problem. One day, my bank discovered a customer had sold “encumbered” assets without first paying off the bank loan that was secured by those assets. Even worse, he lied to the bank, saying he still had the collateral. George and I met with the customer and his lawyer. As the start of the meeting, the customer began talking. He was completely broken. In tears, he shamefully admitted his deception. He was looking at financial ruin and possible criminal charges. But I was mad and less than sympathetic. Fortunately, George took over the meeting. Rather than beat the guy up, George sensed the man was suicidal. George comforted him with assurances that he could get through this situation. I remember George telling him, “You know, in a few years, no one will even remember this happened. We have to get through this, but you will have a life once it’s over.” I’ve heard a lot of sermons where a preacher taught the Christian virtue of loving those who have wronged us. But that day, George taught me that lesson more effectively than any preacher could. With George’s encouragement, the customer got through his problems and went on to lead a productive life. In the years that followed, I had to deal with many problems created by bad money decisions by my employees and customers. But I never forgot that lesson I learned from George. Thanks to him, I found I was able to show a little more humanity in dealing with financial problems. Joe Kesler is the author of Smart Money with Purpose and the founder of a website with the same name, which is where a version of this article first appeared. He spent 40 years in community banking, assisting small businesses and consumers. Joe served as chief executive of banks in Illinois and Montana. He currently lives with his wife in Missoula, Montana, spending his time writing on personal finance, serving on two bank boards and hiking in the Rocky Mountains. Check out Joe's previous articles. [xyz-ihs snippet="Donate"]

YOU NO DOUBT remember Peter Lynch, the celebrated manager of Fidelity Magellan Fund. He quit Magellan’s helm when he was just 46 years old. His comment at the time: “You remind yourself that nobody on his deathbed ever said, ‘I wish I'd spent more time at the office’.” Nothing brings more clarity to money’s limitations than consideration of our mortality. A few weeks ago, I thought about this truth as I lay awake all night, waiting to hear from my son. He and his wife had checked into a hospital to give birth to their first child. The plan was that we would receive regular text updates, regardless of the time. But the hours passed and no updates arrived. My wife and I had an ominous feeling that something was wrong. As we agonized and prayed, we struggled to contain our fears, imagining all the things that could be going wrong. Why hadn’t our son kept us updated? Were mother and baby okay? Finally, a call came at 3:30 a.m. Our fears were not unfounded. It was a traumatic birth—the baby initially had trouble breathing. But I’m happy to report that, thanks to incredibly talented medical personnel, our new grandson and daughter-in-law are doing fine. For me, the difficult birth has triggered a time of introspection. Has my life been too focused on the accumulation of things that won’t last—or have I have been building true wealth? The word “wealth” comes from an old English word. Its meaning is closely related to happiness and to the wholeness that comes from a well-balanced life. As we each examine our life, what traits should we look for if our goal is true wealth, rather than just lots of money in the bank? Here are eight things I view as valid metrics for measuring true wealth: Family and friends. According to research, a robust support network is almost always a leading indicator of happiness. That network is even more important amid today’s COVID-19 isolation. Community. The richness that comes from connecting with others through churches, civic groups and other forms of community engagement are at the core of civility. It’s what made my years as a community banker so rewarding. Education and experience. If we suddenly took all the money in the world and gave everyone an equal share, there would be inequality again by the next day—because of our differing abilities to adapt and respond to the situations we find ourselves in. That, in turn, partly reflects the wealth we’ve accumulated in the form of education and experience. Contentment. Growing up, I was surrounded by many lower middle-class families—and yet I rarely saw the envy and angst that destroy happiness. Instead, I saw that in the workplace, with its constant jousting over salaries and bonuses. Health. If we lose our health, we can’t work, play or travel as much as we might desire. To compound that aggravation, we must budget more for medical expenses. Good health is a key part of true wealth, and it’s worth investing in through a healthy diet and regular exercise. Spiritual peace. My daughter taught me a little about this when I visited her in South Africa. She was spending a gap year helping at an orphanage. Coming from an affluent American family, she assumed the people she’d be working with would be poor and unhappy. But as she explained to me, they were poor but happy. She saw the connection between their deep spiritual faith and their joy in life. A generous spirit. It’s a wonderful feeling to give generously to others. Studies show that many people derive great happiness from giving to those less fortunate. As a banker, I met many wealthy people who couldn’t enjoy this sign of true wealth—because they had for too long failed to give. Virtue. When we acquire our wealth by stepping on others or cheating, there’s ultimately a loss of joy in our riches. The Book of Proverbs says it well: “Ill-gotten treasures have no lasting value.” I looked at a lot of tax returns as a banker, trying to qualify customers for loans. When they didn’t qualify, many would admit that they didn’t report all their income and instead were often paid under the table. John Wooden, the great basketball coach for the University of California at Los Angeles, said it well: “The true test of a man’s character is what he does when no one is watching.” I’m not against success and riches. But we should all ask ourselves, “How am I using my riches to bring true wealth into my life and the lives of others?” It is, I believe, a crucial question—and it took a family crisis to jolt me into giving it the serious thought it deserves. Joe Kesler is the author of Smart Money with Purpose and the founder of a website with the same name, which is where a version of this article first appeared. He spent 40 years in community banking, assisting small businesses and consumers. Joe served as chief executive of banks in Illinois and Montana. He currently lives with his wife in Missoula, Montana, spending his time writing on personal finance, serving on two bank boards and hiking in the Rocky Mountains. Joe's previous article was Life as a Loan Shark. [xyz-ihs snippet="Donate"]

I GOT STUCK IN a conversation at a dinner party recently with a name dropper. It was painful. Wanting to impress me, I suppose, I learned that, “Yes, Janet Yellen and I are good friends. I’ll be traveling to D.C. soon and I’m looking forward to connecting.” But it didn’t end there. I also heard about this person’s exotic travels and homes around the world. And the fabulous career that supported this lavish lifestyle. And the incredibly insightful views this person had on politics and other issues. If I’d had the chance, I could have offered that I once met Janet Yellen at the buffet table during a lunch break at a Federal Reserve conference. I said “hello” to her and she said “hello” back. Janet and I are close, too. I recount this experience not because I think narcissists can’t grow wealthy. They can and do. Still, I think we should look to the old-fashioned virtues of humility and stewardship to guide our thinking about money. King Solomon’s Proverbs tells us, “The outcome of humility and of the fear of the Lord is wealth, honor, and life.” How does this ancient wisdom speak to us in the 21st century? Consider four ways. First, humility in investing leads us to avoid big investment bets. If the market professionals can’t beat the averages, humble investors will lean toward spreading their money broadly, owning a globally diversified mix of stocks and bonds. Second, humble investors won’t assume high future investment returns, instead compensating by saving as much as they reasonably can. [xyz-ihs snippet="Mobile-Subscribe"] Third, humble investors won’t assume that a long life is guaranteed. To protect those who depend on us, we make sure they’ll be okay if something happens to us. This includes not only life and disability insurance, but also a well-designed estate plan. A fourth lesson comes from the book The Millionaire Next Door: We can’t necessarily spot those around us who have grown wealthy. Why not? Unlike my dinner party friend, the humble wealthy don’t need to impress anyone with a show of wealth. They typically don’t want recognition for donations. That same humility may lead them to drive older cars and wear less expensive clothes, which leads to increased savings. A virtuous cycle exists in the lifestyle of the humble. But, in my opinion, humility alone isn’t enough to have a successful relationship with money. After writing a book on money a few years ago, I did a number of radio interviews. In one interview on a Christian radio station, I was asked how I could encourage Christians to save money when Jesus taught that we shouldn’t lay up treasures on earth but instead store them in heaven. It’s a great question—and I think there’s only one answer for those of us in the Christian tradition. We don’t actually own anything in this life. Rather, we are stewards of what we’ve been given and must manage our wealth accordingly. That has three implications for how we handle our money—implications that I think are useful to everybody, no matter what their religious beliefs. First, as a steward, we need to consider the most effective way we can use our wealth to help others. The radio interviewer may have thought the best way to do that is to give all but essential money to churches and nonprofits. The evidence, however, suggests otherwise. The World Bank estimates that more than a billion people have been lifted out of extreme poverty in the last 25 years. A realistic goal set by some: Erase almost all abject poverty in the world by 2030. This incredible progress in eliminating poverty is partly the result of charitable efforts, but it’s also because more people have access to capital, thanks to free markets. To be clear, it’s good to give money to charitable ventures. But in the stewardship model of managing wealth, investing in businesses that employ people—and which provide life-enhancing goods and services—is also a virtuous choice. Since businesses are lifting more people out of poverty that any other efforts, it makes sense to have our money invested there. Second, a humble person may not be inclined to negotiate a hard bargain for goods and services for him or herself. A good steward, however, will negotiate furiously to get the best deal. Sometimes, I talk to Christians who think it’s virtuous to avoid aggressively pursuing their career. I advise them to change their thinking. Diligent stewards will see maximizing their salary for their God-given abilities as a part of good stewardship, and then they’ll use the resulting wealth to improve the world around them. Third, the good steward sees all of life as an opportunity to be wise with the resources he or she has been given. Children are to be educated for future productivity. Money is to be grown in investments that serve others. Time is to be used productively, balancing opportunities to work with the need for rest. Supporting the nonprofit sector—both financially and by volunteering—remains an important part of good stewardship. What happens when humility and stewardship are not central to managing our wealth? Instead of seeing money as a tool to support a purposeful life, it becomes the thing that we imagine gives our life meaning. But that likely won’t satisfy us for long. Joe Kesler is the author of Smart Money with Purpose and the founder of a website with the same name, which is where a version of this article first appeared. He spent 40 years in community banking, assisting small businesses and consumers. Joe served as chief executive of banks in Illinois and Montana. He currently lives with his wife in Missoula, Montana, spending his time writing on personal finance, serving on two bank boards and hiking in the Rocky Mountains. Check out Joe's previous articles. [xyz-ihs snippet="Donate"]

I’M NOT MUCH OF a bartender. But when my wife and I hosted an art show in Missoula for a friend, I got the chance to serve wine while meeting a whole new group of people. Bankers—my usual social circle—tend to be strait-laced analytical types, so it was entertaining to spend an evening meeting creative folks from our thriving arts community. One young couple, who sported an array of tattoos and piercings, had a story that caught my attention. I’ll call them Louise and Leonardo. They had recently moved to Missoula from Asheville, North Carolina, another cool mountain town with a lot of similarities to Missoula. Not too far into the conversation, it became apparent that they’d moved to Montana on a whim, didn’t have jobs, had little money and held to a philosophy that emphasized living in the moment. The concept of deferred gratification wasn’t part of their thinking. They believed that they had many years ahead of them when they could work, but right now they wanted to pursue their passion for travel and new experiences. Do you have a Leonardo or Louise in your life? I don’t want to minimize the challenges of discussing bourgeois values with 20-somethings infatuated with the pursuit of their passion at all costs. Are there ways to pass along financial advice without crushing their dreams of a life full of meaning and purpose? Here are my four suggestions: Introduce them to their future self. Snapchat, for instance, has a photo filter called Time Machine that lets you watch yourself age, becoming a much older and grayer you. Some money psychologists see great value in this. The theory: If we can visualize our older selves, it will help motivate us to defer spending and instead save for the person we’ll become. [xyz-ihs snippet="Mobile-Subscribe"] Face-aging apps can help open up a discussion with the Leonardos and Louises of the world—and do so in a fun way. When we’re young, it’s easy to find just about everything interesting and think that’s your life’s passion. But in truth, it can take years to discover what you’re truly passionate about. At that juncture, you’ll want to be in a financial position to do what you love. Perhaps using an aging app can help spark a discussion about purpose later in life and the wisdom of doing a little financial preparation today. Show the power of compounding. For instance, you might demonstrate how saving regularly for a dozen or 15 years can help folks reach an inflection point, where their annual investment gains equal what they’re saving each year. The dream of never worrying again about money can be motivating to those who would prefer to focus their life on other matters. Introduce the concept of ownership. Buy your Leonardo and Louise a few shares of a company whose products they use and understand. I did this with my granddaughter. She’s a big fan of Disney, so I bought her a share of Walt Disney Co. You might even get the stock certificate framed—and be sure to reinvest the dividends, so they see how that helps drive investment growth. Lead by example. The goal isn’t to be rich for the sake of having lots of money. Instead, show how saving money allows you to live generously and to lead the life you want. There’s no more powerful example to the younger generation than an authentic life that has meaning and purpose. Joe Kesler is the author of Smart Money with Purpose and the founder of a website with the same name, which is where a version of this article first appeared. He spent 40 years in community banking, assisting small businesses and consumers. Joe served as chief executive of banks in Illinois and Montana. He currently lives with his wife in Missoula, Montana, spending his time writing on personal finance, serving on two bank boards and hiking in the Rocky Mountains. Joe's previous articles include Prepare for Pain, Doing Good and True Wealth. [xyz-ihs snippet="Donate"]