Part 4 – A Year of Lessons on Money Matters for your Children & Grandchildren

Contributed by: Matthew E. Chope, CFP® Matt Chope

Try it all and be prepared to make some mistakes.

That’s a good reminder to everyone, no matter the generation. But when it comes to passing on lessons about money matters to your kids or grandkids, I say try to keep those mistakes small and learn from them. Many of us like to have firsthand experience (I know I do) rather than just taking someone’s word for it. But if I could offer advice from my own experience, here’s what I’d say:

Start with Diversification

In my opinion, diversification is probably the number one most important rule in investing.  It will not make you rich but it can help keep you from going poor. You want to diversify your experiences greatly in your 20s because it’s easy to invest a lot of time and energy in one area and end up not liking where you get to.  Imagine climbing a ladder for 5-10 years only to find that it was leaning against the wrong wall! Use this time in life to literally and figuratively invest your time and money in anything that you’re curious about. Try things that make you uncomfortable.

Along the meandering path, realize you are going through this learning curve.  Try to take it all in. Notice your senses, your happiness and fulfillment relating to the different activities you invest in.  Most people get to the last quarter of their life seeking greater fulfillment and happiness from their life.  They never paid attention during the first quarter to the path they were on or the wall they were climbing. 

Along your journey consider that data is not information and information is not knowledge and knowledge is not experience and experience is not wisdom (as you’ll see in the diagram below).  Reflect on where you might be in each investment.

Digging Through the Data to Make Decisions

To take this idea a little deeper, we are continually inundated with data; the internet, TV, radio, people -- some with facts and some with opinions.  A key to financial success for many is being able to distinguishing useful data and information from nonsense. Knowing how to gather a collection of measured data that can be extrapolated into information is the cornerstone of constructive decision-making. 

Knowledge requires thoughtful discernment of information, combined with known truths founded on logic based proofs.  Notice I went far with math from the last statement.  So this is how my thoughts are structured and it works for me.  There may be other ways to get to constructive decision making also, but I believe this will determine a great deal of your financial success in life.  

Facts can strengthen beliefs to formulate knowledge, but this is where you will find disagreement.  My experience has been that a combination of well-formulated beliefs with accepted knowledge provides a basis for openness and understanding.

Throughout the coming years you will go through interpretations of knowledge gaining first-hand experience as events almost seem to repeat.  These experiences might not be exact but understanding the patterns over decades can eventually lead to wisdom.

Matthew E. Chope, CFP ® is a Partner and Financial Planner at Center for Financial Planning, Inc. Matt has been quoted in various investment professional newspapers and magazines. He is active in the community and his profession and helps local corporations and nonprofits in the areas of strategic planning and money and business management decisions. In 2012 and 2013, Matt was named to the Five Star Wealth Managers list in Detroit Hour magazine.


Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Matthew Chope, CFP® and not necessarily those of Raymond James. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Diversification does not ensure a profit or guarantee against a loss.