Six Questions Worth Answering

Asked by kids. Useful for adults.

Most wealth management firms send out a year-beginning letter in January. Market predictions, economic outlook, portfolio adjustments for the year ahead.

I'm going to do something different.

Late last year, I asked kids and teens (kindergarten through grade 12) to send me their most pressing questions about money. What do they actually wonder about? What confuses them? What are they curious about?

The questions I got back were remarkable and fundamental. Why is money important? Why do we use it instead of gold? How does debt work? Can poor people become rich?

So instead of the usual January predictions, I'm answering six questions from kids. Some will make you smile. Some might make you think. And if you have kids or grandkids, there are activities you can do together throughout this letter.

Our annual investment letter will come later this quarter with the market view and portfolio thinking you'd expect. But I wanted to start the year exploring ideas that matter, asked by people who haven't yet learned to overcomplicate them. These early questions tend to sit quietly underneath many of the financial decisions adults wrestle with later.

Here are six questions worth answering.

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Question 1: Why is money so important?

Age 8, Grade 3

Money is important because it's how we trade things fairly with each other. Imagine you have a toy your friend wants, but they have a book you don't want. You could trade directly, but what if you don't want their book? Money solves that problem! You can sell your toy for money, then use that money to buy what you actually want. It's like a universal trading card that everyone agrees to accept.

But it goes way beyond toys and books. What's the value of your work? What's the value of your ideas? What's the value of feeling safe at night, or having fun with friends, or learning something new? All these things that matter in life have value, and money is the symbol we've created to represent and exchange that value.

It used to be physical (gold coins, paper bills). Now most of it is digital, just numbers moving between accounts. In the past, different societies used different things as money. Some used gold, some used shells, some used other valuable items. But the principle is always the same: money is our agreed-upon system for saying "this matters this much to me, and I'm willing to exchange this much value for it."

That's why money is important. Not because the paper or coins or digital numbers themselves matter, but because they represent everything we value and give us a way to exchange that value fairly with each other.

 

Try This At Home: Next time you're at dinner or in the car: Play "What Would You Trade?" Pick an item (a toy, snack, whatever) and go around asking what each person would trade for it. You'll quickly see why having one thing everyone accepts (money!) makes life easier.

 

Question 2: Why is there different "centses" instead of them all being the same?

"HeartLove", Age 6, Grade 1

I love how you said "centses", that's adorable! Here's the thing: different coins exist to make buying things easier. Imagine if we only had pennies, buying a car would require bringing a huge bucket of coins! Or if we only had hundred-dollar bills, buying a candy bar would feel impossible. Different “centses” help us pay for things that cost different amounts.

What's interesting is that these denominations change over time based on what's useful. Here in Canada, we used to have pennies, but we don't make them anymore because things just aren't really priced in pennies these days, they're not useful anymore. Meanwhile, some countries that had really high inflation had to create million-dollar bills because their money lost so much value.

But here's the deeper insight that matters: the denominations themselves don't actually matter. What matters is the strength and trustworthiness of the underlying currency. You can divide it into pennies or millions, if people don't trust that currency to hold its value, those denominations are meaningless.

For adults, this same principle applies to how we structure investments. Why do we have stocks, bonds, mutual funds, ETFs, private holdings, public holdings? They're all just different structures, different "denominations" if you will. Some people in our industry will try to sell you on fancy structures: "We do private equity! We do alternatives!" And yes, we use those too when appropriate. But we never lose sight of the fundamental question: what's the underlying investment? What's actually inside that structure?

In the end, whether we're talking about cents and dollars or investment structures, it's the same lesson: the denominations don't matter. The strength of the underlying thing, the currency you can trust, the investment that delivers value, that's what's important.

 

Try This At Home: Next time you're out together: At a store checkout, have your child figure out how to make exact change using different coin combinations. Or at home: Give them a jar of mixed coins and time how long it takes to make $5. It's harder than it sounds!

 

Question 3: Why do we use money and not gold?

Age 8, Grade 3

Great question, and here's something that might surprise you: some people do still use gold! Governments and big countries still keep gold locked away in special vaults, just in case. In societies where people don't trust their regular money, they'll trade gold instead. So gold hasn't gone away, it just plays a different role now.

But here's why most of us use regular money instead of gold in our daily lives: gold is really inconvenient. Imagine trying to buy a coffee with gold. How would you break it into the exact right amount? It's heavy, carrying gold coins everywhere would be exhausting. It's expensive to store safely, and if you have a lot of it, you'd need insurance and likely even armed guards to protect it.

The real answer to why we use money instead of gold comes down to one word: trust.

When people trust their currency, when they believe that a twenty-dollar bill today will still be worth twenty dollars tomorrow and next year, they use that currency. It's easy, it's convenient, it works. But when trust erodes, when people start worrying that their money won't hold its value because of inflation or political instability, they start looking for alternatives. Throughout history, the most popular alternative has been gold.

Now here's the interesting part for grown-ups: This is a cycle that's been repeating for thousands of years. Societies use currency when trust is high, revert to gold when trust breaks down, then return to currency when stability is restored. You can read financial history from any era, and gold shows up. It's deeply woven into how humans think about storing value, and it will probably remain part of our economic future.

In 2025, we saw gold and silver prices surge significantly. Why? Because some people were questioning institutional trust, worried about currency stability, uncertain about the future. This isn't new, it's a pattern as old as money itself.

Bitcoin and other cryptocurrencies are now part of this conversation too. Bitcoin is far more convenient than gold, it's digital, easily transferred around the world, doesn't require physical storage. But gold has something Bitcoin doesn't yet have: thousands of years of human history and psychological connection. Gold is part of us in a way that newer alternatives aren't quite yet.

The key insight: we use money because we trust it. The moment that trust wavers, people look for alternatives. And understanding that cycle, understanding when trust is strong and when it's fragile, is crucial for thinking about where to hold wealth.

 

Try This At Home: At dinner: Ask everyone to imagine carrying their weekly spending money in gold instead of bills or cards. How heavy would that be? Where would you keep it? Would you feel safe? This shows why convenience matters.

 

Question 4: How does debt work? Like if you have $1000 and you buy something that's $1010, would you be in debt?

"Dollar Bill", Age 10, Grade 5

Dollar Bill, great nickname! And yes, if you spend $1,010 when you only have $1,000, you'd be in debt by $10. That means you've borrowed $10 that you need to pay back.

Here's what debt really is: it's when someone extends trust to you, allowing you to use that trust like money to buy something now that you'll pay for later. If you spend more cash than you have, you're making a promise to repay that difference in the future.

A lot of people are afraid of debt because it's a future promise, and you have to be confident you can keep that promise. But debt isn't automatically bad, it's a tool. When used responsibly, debt gives you the ability to purchase, invest, or create something now instead of waiting years to save up for it.

Think about buying a house. Most people don't have a million dollars sitting in cash. So they borrow that money, own the house today, and pay it back over time with their future earnings. In exchange for having that money available now instead of later, they pay the lender some extra money (called interest) as compensation for lending it.

The history of debt is actually pretty wild. Long ago, if someone couldn't repay their debts, really terrible things could happen to their family. People could lose their freedom, children could be taken away. It was so bad that some societies had to create special 'forgiveness days' where all debts were erased just to prevent everything from falling apart. Today, we have laws that protect families from losing everything. But debt still carries weight because of that deep history.

Throughout history, societies have cycled between trust-based credit systems (ie. debt) and physical money systems (like gold) depending on how much people trust each other and their institutions. When trust is high, credit flourishes. When trust breaks down, people revert to hard assets. We saw echoes of this in 2025 when gold surged as some people questioned whether they could trust the system.

The lesson: debt works when trust works. Use it responsibly, make sure you can repay it, and it's a powerful tool for building the life you want. But respect the weight it carries, because that weight has very deep roots in human history.

 

Try This At Home: The Allowance Advance: If your child wants something but doesn't have enough saved, offer to advance next week's allowance, but they'll get nothing next week (because they already spent it). When next week comes and they have no money while friends are getting theirs, discuss how it felt to have money early vs. having nothing later. This teaches the real cost of "buy now, pay later."

 

Question 5: How can poor people become rich people?

"Penny", Age 7, Grade 2

Penny, that's the question everyone wants answered, including a lot of adults! I don't have a magic formula, but here's what I've learned after years of working with money...

The fundamental path to wealth is creating value. If you create something people want, a product, a service, an idea, and they find it valuable enough to exchange their money for it, that's how wealth builds. The greater the value you create, the more wealth you can generate.

Now, creating significant new value from scratch is difficult. And it’s worth acknowledging that it’s harder for some people and easier for others depending on where they start, but the underlying mechanism doesn’t change. So many people participate in value creation rather than originating it themselves. You can work for companies that create value, support value creators, expand on existing ideas, help get products to market. All of these are valid paths. The key is being part of the value chain somehow, whether you're creating it, working in it, or investing in it.

The adult version of this question gets more complex. Sometimes you're not creating value that exists today, but value people believe will exist tomorrow. The biggest example of this in 2025 was artificial intelligence. We've seen dramatic improvements in AI capabilities over the past few years, better language models, more self-driving cars, advanced robotics picking up momentum. But what's the actual economic value AI is creating today? That's hard to measure, and it's probably far less than the massive amount of investment pouring into it.

Yet people who've been building AI companies, working in AI development, or investing in the AI supply chain have created significant personal wealth. Why? Because even though current economic value is hard to quantify, it's clear that AI will be extremely valuable in the future. People are investing their money today, parting with cash now, for returns they expect tomorrow.

Markets can get this wrong sometimes. They can be too early, or misallocate capital, or get caught up in speculation. You hear people talk about "bubbles" in various sectors. But whether that's true in any particular case isn't really my point here. The point is that becoming wealthy is fundamentally about creating value or participating in value creation or investing in future value creation. Those are three different paths, but they all connect to what we talked about in Question 1: money represents value, and value is what matters.

There's one more thing worth mentioning: you don't have to pursue wealth just for wealth's sake. Sometimes people create far more wealth than they actually need to live the life they want. They weren't really pursuing money, money came as a result of the value they created or the work they enjoyed doing. Warren Buffett, who just retired this year after building one of history's great fortunes, often said that money was his scorecard for how well he was investing, but he lived a relatively modest lifestyle considering his vast wealth. What he really loved was the intellectual challenge of investing.

The path from poor to rich isn't about chasing money directly. It's about finding a way to create or participate in creating things people value. Do that well, and wealth tends to follow.

 

Try This At Home: This week: When you see someone working (a delivery person, barista, teacher, whoever), ask your child: What value is that person creating? Why do people pay for it? Could they create more value and earn more? This shows wealth comes from the value chain.

 

Question 6: Are economics/money the most important thing for determining quality of life?

Age 12, Grade 7

This is a big question, and honestly, the answer is different for everyone.

Money affects your ability to build the life you want, but it's not the life itself. The life is the experiences, the relationships, the things you love doing. Money is the tool that helps you access those things, both now and in the future.

For some people, the life they want requires very little money. For others, supporting family, traveling, creating experiences, whatever matters to them, requires more resources. Neither is right or wrong. It's about knowing what you want your life to look like, then making sure your money can support it without sacrificing your future.

Money is like a scorecard. You need to check it. You need it to be healthy. But you can't spend your whole life staring at the scorecard and forget there's actually a game happening. The game is your life, the relationships, experiences, things you care about. Money just needs to work well enough in the background so you can actually play.

That's the balance I try to help people find.

 

Try This At Home: At dinner this week: Each person shares one thing money can buy that makes them happy, and one thing money can't buy that makes them happy. Then discuss: Which list matters more?

 

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If you have kids or grandkids who come up with their own money questions throughout the year, send them my way. I genuinely enjoyed this project, hearing what they wonder about, thinking through how to answer them honestly. If there's interest, I'd love to make this an annual tradition. Or maybe something else entirely. We'll see where it goes.

Over the coming weeks and months, you'll see our annual investment letter with the market analysis and portfolio thinking you'd expect. Alex will also be sending early-year reminders about RSP contributions, TFSA maximums, and other planning items to consider as we move into 2026.

These six questions reminded me why I love this work. Not the portfolio construction or the investment selection, though those matter, but the conversations about what money is actually for. What it enables. What it can't buy. How it fits into a life well-lived.

I'm lucky to get to do this. That's entirely thanks to you and the trust you've placed in our us and our firm. Thank you for that.

Here's to a thoughtful 2026.

 

Matthew Williams, CFA

Senior Portfolio Manager, Investment Advisor

Williams & Associates, Wealth Stewardship | Richardson Wealth Limited