A Letter to My Children: Financial Wisdom From a Lifetime of Investing

As you grow into adulthood, you’ll be pulled in many directions—by your ambitions, friends, society, and the markets. Money won’t be the most important thing in your life, but how you handle it will shape your freedom, your opportunities, and even your happiness. I’ve spent my life allocating assets for families, institutions, and myself. What follows is a letter—really, a roadmap—of what I’ve learned. Consider it my attempt to pass you a compass for your financial journey.

1. Money Is a Tool, Not the Destination

Never confuse financial wealth with self worth. Money cannot love you back, but it can buy you time, options, and peace of mind. Use it as a lever to live a life aligned with your values, not someone else’s scoreboard. You will always be loved by those who came before you and that is far more important than any financial destination.

2. Always Spend Less Than You Earn

It sounds simple, but this one principle creates the foundation for everything else. If you master this habit as a child, you’ll never be trapped by money as an adult. Lifestyle inflation is the enemy of freedom. Financial success boils down to what you keep, not what you make.

3. Diversify—But With Conviction

Most people think diversification means owning hundreds of things. That is simply wrong. True diversification is owning a few different streams of risk—equities, bonds, real assets, maybe private businesses. Within those streams, lean into your highest conviction ideas, but never bet the farm.

4. Compounding Returns

Markets are noisy in the short run. You’ll see manias and panics. You’ll be tempted to sell when everyone else is afraid, or chase when everyone else is euphoric. Don’t. Compound interest is a slow miracle, and it only works if you let it run uninterrupted for decades.

5. Own Real Assets

Stocks and bonds are necessary, but don’t forget real assets—land, real estate, businesses. These anchor your portfolio against inflation and give you tangible cash flow. I’ve seen fortunes vanish in paper markets, but farms, rentals, and small companies endure.

6. Leverage Carefully—If At All

Debt can accelerate your success or destroy it. A modest mortgage on an appreciating home or income property makes sense. Speculating with borrowed money does not. Leverage is like fire: contained, it warms the house; uncontrolled, it burns it down.

7. Taxes Are Your Largest Silent Expense

Learn the rules better than most accountants. Tax efficiency compounds just like investment returns. Favor accounts that defer or eliminate tax (IRAs, 401(k)s, HSAs, Roths). Structure businesses thoughtfully. You don’t need to evade—just be smart.

8. Liquidity = Sleep at Night

Always keep 6–12 months of living expenses in cash or near-cash assets. Crises come without warning—job loss, illness, recessions. Liquidity is your ability to say “no” when everyone else is forced to say “yes.”

9. Learn to Value Businesses, Not Just Stocks

A share of stock isn’t a number—it’s a slice of a real business. Learn to read financial statements, understand competitive advantages, and recognize management quality. If you’d never buy the entire business, don’t buy even one share.

10. Bet on Yourself and What You Understand , But Hedge Your Short Falls

Invest only in know you understand and understand what you don't yet know. All hedges are bets against what you do not yet know. You will have time to learn anything but gaining a deep understanding in a few disciplines far exceeds knowing some about many.

11. Protect Against the Unknowable

Use insurance wisely. Term life when others depend on you. Health coverage always. Liability coverage if you own real estate or businesses. Catastrophic risks should be transferred; small risks you can self-insure. Hedge for downside Risk in the same way you invest for upside potential.

12. Generosity Multiplies

Money, when shared, doesn’t shrink—it expands. Invest in people, causes, and communities that matter. The returns are measured not in dollars but in meaning.

13. Remember the Equation of Wealth

Wealth = (What You Earn – What You Spend) × How Well You Invest × Time

You control the first two directly. You can influence the third by studying and being disciplined. The last—time—you only get once. Start early, and never underestimate it.

14. Character Outlasts Capital

Finally, understand this: your reputation, honesty, and integrity are worth more than any portfolio. Deals come and go, markets rise and fall, but people remember how you treat them. Play the long game not just in markets, but in relationships.

Closing Thought

If I could hand you just one asset, it wouldn’t be a stock certificate or a deed—it would be the mindset of discernment . Discernment to manage your money, your time, and your talents. You make your own decisions and chose to live the life that you want to live.

Love always,

Dad