The secrets millionaires teach their kids

Encourages kids to write a letter to a friend, fast-forwarding to a future in which they've achieved all their goals. Photo / Getty Images

Success breeds success, and former tennis player turned author, speaker and self-made millionaire Steve Siebold has spent 30 years studying exactly how it does that.

Now he's sharing the secrets self-made millionaires teach their kids to hand them the keys to financial success.

Siebold drew on the collective wisdom of 1200 millionaires and billionaires to find out how they pass on not just their wealth, but a wealth of knowledge.

His new book, Secrets Self-Made Millionaires Teach Their Kids drills into that knowledge with some uncomfortable truths about how the rich help their offspring develop good financial habits that will make them rich. or richer.

In interviews with Money magazine and CNBC, Siebold shared some of the biggest lessons billionaires instil into their offspring, and tips on how to raise a millionaire.

Play rich sports

Steven Siebold says who you surround yourself with does matter, and having rich friends exposes you to "their heightened level of awareness around everything related to wealth". Photo / Facebook

Young people who play golf, tennis or other sports favoured by powerful people have better networking opportunities than those who participate in more activities like basketball or baseball, which are often popular with the general public, Siebold says.

It might be an unpleasant truth, he says. But it's also fact: more deals are done on golf courses that footy fields, (as US President Donald Trump would probably attest).

"Those sports are dominated by wealthy families, and so the connections they can make in those sports are substantial," Siebold says.

It takes work

"You'll have to be willing to sacrifice your time, sleep and leisure to build something great," writes Siebold. "It's not glamorous or pretty. While your friends are out having fun, you'll be working."

Hang out with rich people

Siebold says who you surround yourself with does matter, and having rich friends exposes you to "their heightened level of awareness around everything related to wealth".

"Read their books, attend their events, donate to their charities … and whatever else you can do to gain introductions and build relationships."

Each dollar counts

"Excessive spending can ruin you," warns Siebold, no matter what you earn.

"It happens every day to people with millions of dollars at their disposal."

Spend, he says but "just make sure you don't overextend yourself in the process because that will put you on a treadmill of having and not having money."

"Excessive spending can ruin you," warns Siebold, no matter what you earn. Photo / Getty Images

Money solves problems

And solving problems makes money, Siebold says.

"Being rich won't make you happy, but it will solve 90 per cent of your problems," he writes.

"If you have a problem, and you can make it disappear by writing a cheque.

"If you want to be rich, solve a problem. If you want to be very wealthy, solve a bigger problem ... the world will gladly turn over their money to you."

Have a vision

As a motivator, Siebold encourages kids to write a letter to a friend, fast-forwarding to a future in which they've achieved all their goals.

"We want to test drive their emotions," Siebold says.

"The premise of it is that people don't really get things that they want because of the thing — they don't buy the big house, the fancy car or get the certain job because of the actual thing, they get it because of the way they think it's going to make them feel."

Big picture versus small picture

Keep an eye on both business pictures Siebold writes in what's billed as "watch Wall Street and Main Street". that means chatting with local business people as well as knowing what's happening in world markets.

Think big

"Almost every self-made millionaire I've interviewed over the past 30 years has told me he expected to be rich," writes Siebold.

"Expect to get rich in your 20s or 30s. … It's not going to happen overnight, but it doesn't have to take a lifetime."

Money isn't scarce

"Reject the mass belief that money is a scarce resource. … It's not," Siebold says.

"What is scarce are people with solutions that others want to buy, and that's what you need to master.

"If earning money is based on solving problems, and the number of problems is infinite, then your ability to earn money is infinite," says Siebold.

You don't have to be a genius

Most rich people are "no brighter than the average person struggling to make ends meet", Siebold says.

"Getting rich is less about intellect and more about focusing on the accumulation of wealth."

He says the rich use their time differently: "The masses spend their time. The rich invest it."

"Spend your time basking in entertainment, and you will struggle your entire life financially. Invest your time creating solutions to people's problems, and you'll never lose a minutes sleep worrying about how to pay the mortgage."

Remember to laugh

Children should take time to be kids — and chill out, and laugh, Siebold says.

"Reduce stress, have more fun and enjoy the process, because it's not just a matter of getting to become a self-made millionaire — it's the journey along the way. It's the path to it," Siebold adds. "If it's not fun, you're not going to enjoy it as much."