Teaching children how to sell helps financially and w/ self esteem

Teaching children how to sell helps financially and w/ self esteem

One of the reasons poor people are poor is because they have nothing to sell. The fact is that the minute you have something to sell, you can start making money. The art of selling is a skill that can help children financially and even with low self esteem issues.

I know what you’re thinking; putting a fragile child to sell products does not help with low self esteem issue – it would only hurt a child to have to face rejection. First lets be honest – selling is just part of every day life, so is rejection and how you deal with rejection.

I use to frown upon the girl and Boy Scout organization because they exploited children to sell cookies to raise funds. While I still believe their being exploited, I believe the experience can be a positive plus when it comes to life. Every person on earth is always selling something, selling themselves to potential friends, schools, colleges, jobs and vice versa, every day we are faced with rejection. Rejected in love, work promotion, friendships and more – how we deal with rejection and the skills we have when it comes to selling is what really makes some people stand out more than others.

Shy children need to learn how to sell

how to sell fight shynessWhile I am not advocating some emotional training here, I am stating the fact that “selling” and I mean learning how to sell and overcoming rejection – can help a child with low esteem and could definably help a child’s financial future.

As I wrote this, these two children walked into my office looking to sell some candy bars to help raise funds for a scholarship. I knew what they wanted because this is the third group that has come by here. The minute I said that a group had already come by here one of the girls said “Well you could give us a donation too” the second girl burst into a loud grunting compliant “Ah man dog, this sucks, this is a lousy Christmas….” Ofcourse It did not seem like they suffered from low self esteem, but their attitude [ as if entitled ] to receive something from me only proves that their lack of “selling skills” is what inhibits them from reaching success – a sale.

My daughter is generally a shy girl, she can be loud, boisterous, a regular pre-teen, but ask her to talk to strangers and she emotionally shuts down. As I have mentioned before in my blog I am trying to help her convert her hobby of making jewelry, into a jewelry business. This Christmas I told her that during Christmas break we [ meaning her and I will just accompany her ] were going to go door to door to try and sell her jewelry. She freaked, she said she could not do it. Apparently unbeknownst to me the last day of school was half a day and she was spending most of the day with her mother at work. My wife, always the "sneaky" individual decided to take the jewelry with her to work and she and my daughter sold all but one set and made $27 dollars in 40 minutes.

I would have preferred for my daughter to have done all the work by herself, but the lesson I was trying to instill in my daughter was successfully made. That while the fear of rejection can hold you back, the sweet smell of success will drive you even farther forward. At first she didn’t want to face rejection, she said “who would buy my jewelry”, but when I arrived home that night, she could not stop talking about how people liked her stuff and how much money she made. While this is just her first step in selling a product, it is a good first step. I have always taught my daughter that she had to be her own person, to believe in herself. This helped bring that lesson home, it was not just dad, but total strangers who approved of her, of her work and paid cash as proof.

Selling is a skill to be learned, honed and practiced

I do not have the space to go over all the techniques about how to sell, how to deal with rejection. But selling, understanding how to deal with people and rejection changed my life. I was a shy kid and even a more shy adult – I called it being a loner, but in reality it was my inability, my fear of dealing with people and having low self esteem [ lack of confidence ]. I was forced to sell when the only job I could find was in the retail business selling shoes. Then over the years retail [ selling ] has seemed to have stuck with me. Selling is partly knowing how to converse with people - many people today lack the simple skills to carry a conversation with others.

The basic’s of selling:

#1 - Know your product, is it good, do you believe in it?

When it comes to self-esteem, do as I did, I taught my child that she was special, not because she was better but just one of a kind. No one, no one at all can be her equal because there is only one of her, being different, unique, one of a kind keeps her special.

Does not matter what you are selling – the question should be, do you believe in it?

#2 – It is a numbers game do not take it personal.

A sales person should know and understand that not every one will love, accept and buy your product. Be that product a cell phone, a car or you yourself. People are different and have different wants needs and likes. A good sales person knows he/she has to offer a product 4, 7, 10 times before getting one sale. You have to keep trying.

#3 - Because they said no today they may say yes tomorrow?

People have needs and those needs change with time, often times it takes people a bit of time to even realize that they need something or that something they rejected is of use or to their benefit. The old saying is try, try and try again - never give up.

#4 - Presentation is key, likeability is a factor.

People never think of how they look, speak, act or even how they present themselves to others until it's too late. The first time most teenagers ever realize that how they present themselves is important is when they are trying to get accepted into a college or applying to a job. Ask any young man who is trying to impress his new girlfriends Dad, presentation, likeability, personality - it is very important.

#5 - Look, listen, understand then SPEAK?

One of the things they first taught me when I started any job or profession that required selling a product or myself was these simple tips: look, listen, understand then you speak.

If you want to start a conversation with some stranger [ to sell a product or make a new friend ] you have to:

a- look, if in a home at the decor, pictures so forth, if not in the home, at the person how they dress, act, speak present themselves.

b- Listen, be slow to speak and quick to listen. Listen to what they are talking about, get to know who they are, what they like, what interest them.

c- Understand; try to understand what and why they say what they are talking about. Understand their point of view and try [ it's a guessing game ] but try to keep their topic of conversation going if you know and understand it. Never try to pretend to know something you do not - people can tell a fake. Be honest and genuine about learning if you do not understand, most people like to know things and teach others.

d- Speak, people like to talk, and usually they speak too much. Learn how to look, listen, understand then speak. Plus always try to stay on topic, with in the current conversation. One of the flaws of most sales people is that 2 minutes into the conversation and they are throwing out their sales pitch. You have to learn about the people, let them get to know you to get comfortable with you and then you slowly begin to sell them.

Ofcourse there are some sales situations where a quick sales pitch is necessary - shoe store, cell phone, home depot and so forth. But in general with real estate, life insurance and making general friends it is best to follow the steps mentioned: look, listen, understand and then speak.

Why would my child ever need this selling technique?

You are probably wondering why a child would need to learn these "selling techniques"; he/she does not need this to help them make friends or to help them over come shyness.

Think of it as you like, but this would give your child a step up on all his/her friends. Even if your child is at ease and makes friends easily, what about college, job interviews, selling cookies or high school prom queen? One day your child will have to sell him/herself in order to sell a product or get a product or service. Maybe your child will need these techniques to simply win out a colleague at getting a scholarship, promotion or some other prize.

It's up to you; after all it is your child.

When 5 Cents is worth more than 5 Cents

When 5 Cents is worth more than 5 Cents
Helping children learn about money

Parents are always running into a brick wall when it comes to the subject of money and children, I mean teaching children the value of a dollar that is. It’s one of the reasons I started my blog: Money and Kids.

One hot topics is on Allowances.
Parents are tossed between giving a child an allowance, fearful of having a child believe money grows on trees or having the child earn his/her allowance which seems unfair to child and others who believe in the policy that we are a family of citizens and depend on one another to survive, therefore we should not pay our children to do what is already expected of them as part of the family [ chores ].

Whether you want to have your child earn his allowance or give it to them freely does not, in my opinion, really teach a child the value of money.

When is 5 cents worth more than 5 cents?

In order to teach a child [ for that matter most adults ] about money, you have to understand money. Many people quote the bible in saying: "My people suffer for lack of knowledge." But many of those same people who promote study and education - learn little to nothing about money.

children allowanceHow can you expect to teach a child about money by simply making them work? All your doing is training them to be good employees for the rest of their lives. And if you try to teach them how to budget, how to live beneath their means - what does that say about you, all your unfulfilled dreams and wants? So if you give them allowance [ money ] free or if they earned it - what did you really teach them?

Open your mind to More than what you see
Here is a tip to help teach your child to grasp some knowledge and understanding about money.
There are a lot of things we have to teach our children about money. How to make it, what it is really worth, what happens to money, how to manage money and best of all - how to make money work for you.

But lets start with this: When is 5 cent worth more than 5 cents?

Find yourself a nickel with a date of 1964 or later [ sometimes they are hard to come by, and there is a reason why ].

Then sit your child down and ask them which would they prefer: would they prefer to have the nickel or a quarter?
** Chances are all children with the basic knowledge of money will choose the higher "face" value money

Then ask them why they would prefer to have the quarter verses the nickel?
** Normally they will say that the nickel is worth less than the quarter.

Then take the time to explain to them why you would prefer the “Nickel” over the quarter.

Why would you choose the nickel over the quarter?

children and moneyThe reason why you would chose the nickel over the quarter is because in truth the nickel is worth way more than the quarter. This should start the jaw flapping and questions flying.

Answer: In simple terms when coins were originally made they were made from “GOLD” or “SILVER”. Money was not the paper we have today and money was not the coin - money was based on the amount of silver or gold and the weight as it was related to it’s value in gold and silver.

So after 1964 coins were no longer made of precious metals like gold and silver but of copper, nickel-plate and other non-value metals. So if I took this 1964 [ or later date ] nickel to the bank, they would say I have a nickel, only 5 cents. But if I took this 1964 or later dated nickel to be sold as silver, I would be told it is worth 97 cents - almost a dollars [ as quoted in silver prices during December 2009 ].

1942 - 1945 Nickel / silver value 0.97 cents
1946 - 1964 Roosevelt Dime / silver value $1.25
1932 - 1964 Quarter / silver value $3.12
1948 - 1963 half dollar / silver value $6.25

I don’t know about your kids, but when I explained this to my kids, their idea of money changed, the way they treated coin changed. They went for days first looking at the date on coins before they ever put it away in a piggy bank or to buy something at the store. They realized that money is not just money, that there is more to it. I believe that is a good lesson to start with. Plus, we now are storing our 1964 and later dated silver coins in a jar as Silver and not as coin.

* Since the dollar is debase and losing value, silver helps fight inflation and increases in value.

Below I have included my resources and I believe it will help you to better understand what I wrote about above so you can use it to help your children learn the true meaning and value of money.

90% silver cionage

Traditionally, all United States coins have been dated in the year of their production. This policy was interrupted, though, because of the coin shortage and the speculation in rolls and bags of coins that took place in 1964. As a result, Congress passed legislation so that after the calendar year 1964 coinage was produced, the United States Mint could still use the 1964 date. Starting in 1965, therefore, all denominations of United States coins continued to be struck with the 1964 date.

When the Coinage Act of 1965 was passed, it became mandatory that the Mint continue to use the 1964 date on all 90 percent silver coins (half-dollar coins, quarter-dollar coins, and 10-cent coins). Therefore, all of the 90 percent silver coins that the Mint manufactured in 1964, 1965, and 1966 bears the date 1964. The last of the 90 percent silver quarter-dollar coins was struck in January 1966, the last of these 10-cent coins was struck in February 1966, and the last of these half-dollar coins was struck in April 1966. The Coinage Act of 1965 also made it mandatory that the clad coins be dated not earlier than 1965. Therefore, all of the clad coins actually manufactured in 1965 bear the 1965 date. All of the clad coins made through July 31, 1966, bear the 1965 date. The first clad 10-cent coin was struck in December 1965, the first clad quarter-dollar coin was struck in August 1965 and the first clad half-dollar coin was struck in December 1965. In December 1965, the decision was made to change the 1964 date on the five-cent coins and the one-cent coins to 1965, as one step in catching up on normal coin dating. From December 1965 through July 31, 1966, all one-cent coins and five-cent coins were struck with the 1965 date.


The Mystery of Banking

How debasement profits the State can be seen from a hypothetical case: Say the rur, the currency of the mythical kingdom of Ruritania, is worth 20 grams of gold. A new king now ascends the throne, and, being chronically short of money, decides to take the debasement route to the acquisition of wealth. He announces a mammoth call-in of all the old gold coins of the realm, each now dirty with wear and with the picture of the previous king stamped on its face. In return he will supply brand new coins with his face stamped on them, and will return the same number of rurs paid in. Someone presenting 100 rurs in old coins will receive 100 rurs in the new.

Seemingly a bargain! Except for a slight hitch: During the course of this recoinage, the king changes the definition of the rur from 20 to 16 grams. He then pockets the extra 20 percent of gold, minting the gold for his own use and pouring the coins into circulation for his own expenses. In short, the number of grams of gold in the society remains the same, but since people are now accustomed to use the name rather than the weight in their money accounts and prices, the number of rurs will have increased by 20 percent. The money supply in rurs, therefore, has gone up by 20 percent, and, as we shall see later on, this will drive up prices in the economy in terms of rurs. Debasement, then, is the arbitrary redefining and lightening of the currency so as to add to the coffers
of the State.6

Money: Its Importance and Origins 11
6This enormous charge for recoinage is called “seigniorage,” payment to the seignieur or sovereign, the monopoly minter of coins.

A Game can Change a childs life Financially

A Game can Change a childs life financially

A game can change a life; it can be a window to the future, a portal to a fairytale world or a downward spiraling staircase leading you to destruction. Or atleast that is what people believed when you talked about the dungeons and dragons game.

I remember the first time I played the board game “The Game of Life”; it gave me the sense, the hope of a better future. Growing up in poverty living in the ghetto, apartments upon apartments filled with hopeless people all dependant on the government and the welfare system. The game of life board game taught me that my future could be different, could be better. Then ofcourse I moved on to Monopoly and then on to video games, but in the end – these games were more than just games to me.

Games as a Teaching Tool

Because of these games like “the Game of Life” and “Monopoly”, I knew that there was more to life than what my eyes could see in the projects I lived in. When I played these games I hated losing because it meant that my hope for a better life could be impossible.

Today my children have a better life compared to what I had as a child, but I still believe that they can learn to do more, be more, by playing games.

I try to have a family game night atleast once a week. It’s the best way I know to insure that the family has fun family quality time, but I also use it as an opportunity to teach my children about finances, about thinking outside of the box. If you have read some of my blog post, you’ve read how I have been reading “Rich dad Poor dad” with my twelve year old. How I’ve been encouraging her to start a business with her home made jewelry hobby.

money and kids games
You have read in my blog how I purchased the “Cash Flow Game” for kids. It’s a big hit at my house, we’ve even had some of my daughters friends play the game and my son who is only five years old simply loves it. Recently I purchased the Monopoly city board game, even though it is a hard game to play and not intended for ages under eight, it’s all my son wants to play. Cash Flow or Monopoly city, that is all this five year old wants to play.

Yes, my son plays video games, with his toy soldiers and runs around the house pretending to shoot enemy soldiers. But if you ask him what does he want to play for family night: the answer is always cash flow or Monopoly city.

Changing the mind with Games

If you want a simple way to reach your children, a way that engages their minds and captures their imaginations – play a game.

I know that with all the technology we have today it is very hard to sit with your kids and play a board game, especially when they would rather play the Nintendo Wii or there Xbox 360. And while there are video games out there that can teach them about business and so much more – nothing compares to a board game, the interaction of playing a game face to face with other people.

money kids gamesMy daughter wanted me to buy one of the other monopoly games because it came with a credit card machine so she wouldn’t have to count out the cash and do the math – but I said no. Why, because the point of the game [ from my point of view ] was to involved her brain, cause her to think, to exercise the biggest muscle she needs - brain matter.

I have watched as my five year old who could not stay still for two seconds to read a book, can sit still for two hours to play cash flow for kids. I’ve written in my blog posts how my son has a desire to learn to read because he wants to read the game cards from the game on his own. As we play my twelve year old and my five year old are secretly learning about finances, budgeting, leverage and other business principals, while playing a game.

Making The Game Real

Now I know that just playing a game is not going to change the life of a child. But it’s an opening for a parent, an educator to teach a child more because the game sparks an interest for things a child would customarily find uninteresting.

A few days ago I was talking to my wife about some of our finances and like all children my daughter was listening in, she just jumps into our conversation and says “yeah mom, just like the game …” and started explaining what she believed we should do based on the principals she learned from the game. Mom was not happy she rudely interrupted us, but I was proud that she was thinking, learning from the game.

When I take my children out, when I talk to them or when the opportunity for me to show them that what happens in the game happens in real life – I make it a point to teach.

I remember when we were driving to my son’s flag football practice and we drove by this small community, my daughter asked me “why would someone build homes way out here?” I took the opportunity to explain to her about basic real estate principals, renting, location, and city building planning. How builders see what the future plans are of a city and build accordingly, in order to take advantage of a cities growth today.

I am sure that most of it went way over her head, the name of the game is to teach. Little by little she is learning, as long as we keep them interested and learning - the sky is the limits for our children.

Social Securities: Hidden problem for your kids future

The tricks of congress - those who wish to get their way with no concern of the rights or choice of the people - is to work on dragging the process of "law making" out so "we the People" get tired or bored and leave the issues alone. You take health care reform right now - as much as the Democrats say and push to rush this, they also do everything to drag it out [ who goes on vacation when you believe that there is a life and death emergency happening - congress does...]

But if you think that big government is good, that your children do not need to learn more about money because the government will be there to help - please read the article below about some of the things "congress" our leaders have done for you, me and what they are doing for your kids.

Social Security: the hidden problem
There is much debate today about how solvent Social Security is, but most of the debate is over when the trust fund will run out of money, not about whether or not the trust fund actually holds real assets. The conventional wisdom, prior to the economic downturn, was that the trust fund had enough money to pay full Social Security benefits until about 2041. That date has now been revised to about 2037.

In order to understand the true status of the trust fund we need to go back to 1982, and then examine the events that have taken place since that date. In 1982, the Presidential Commission on Social Security, chaired by Alan Greenspan, warned that Social Security would face serious problems when the baby boomers began to retire about 2010, unless Congress took immediate action to begin building up a reserve in the trust fund that could later be drawn down in order to pay full benefits to the baby-boom generation.

In 1983, Congress enacted the legislation recommended by the Greenspan Commission, which included a hefty hike in payroll taxes. In essence, the legislation required the baby-boom generation to pay enough taxes to fund the benefits of the previous generation, as was customary, plus enough additional taxes to prepay most of the cost of their own benefits, which was not customary.

children money social security futureThat payroll tax hike has generated about $2.5 trillion of surplus Social Security revenue to date. If the money had been saved and invested, as it was supposed to be, Social Security would be in good shape today. But the money was neither saved nor invested in anything. Instead, it has been used as a giant slush fund to pay for tax cuts, wars, and other government programs for the past 25 years. The government has "borrowed," or "stolen" every dime of the surplus Social Security revenue. If the government eventually repays the looted money, we can say that the government "borrowed" it, but, unfortunately, no provisions have been made for repaying the money. Furthermore, it may not be politically feasible to raise taxes for the purpose of replacing tax revenue that was misspent in the first place. If the looted money is never repaid, it will have clearly been "stolen" from American workers who paid the extra Social Security taxes.

This is the hidden Social Security problem. The trust fund holds no real assets. This was made clear by David Walker, Comptroller General of the GAO, in a speech given Jan. 21, 2005. Walker said, "There are no stocks or bonds or real estate in the trust fund. It has nothing of real value to draw down." On April 5, 2005, President George W. Bush shocked many Americans, during a speech at West Virginia University at Parkersburg, when he openly admitted, "There is no trust fund, just IOUs that I saw firsthand that future generations will pay -- will pay for either in higher taxes, or reduced benefits, or cuts to other critical government programs."

The government was successful in keeping this dirty secret from the American people for a long time, but, little by little, the secret is slipping out. Even the 2009 Social Security Trustees Report acknowledges the problem with the following words. "Neither the redemption of trust fund bonds, nor interest paid on those bonds, provides any new net income to the Treasury, which must finance redemptions and interest payments through some combination of increased taxation, reductions in other government spending, or additional borrowing from the public." Because of the empty trust fund, in just seven years, when the cost of Social Security benefits begin to exceed payroll tax revenue for the first time in a quarter-century, either benefits will have to be decreased, or taxes will have to be increased.

Dr. Allen W. Smith, is professor of Economics, Emeritus, Eastern Illinois University. The author of seven books, Smith has been researching and writing about Social Security financing for the past 10 years. Visit his Web site at www.thebiglie.net.

Friday, November 20, 2009 - www.newssun.com/col-1120-social-security

Cultivating a business - 4 necesary steps for kids

Cultivating a business with your eyes wide open ?

People are always telling how me impossible it is to make money. I mention to them how they should teach their kids about money, how they should change their own way of thinking about money - and I get all these stories how impossible it is. Well, here is a story in the newspaper how a gentleman found a new way to make money simply by opening his eyes and his mind.

The gentlemen I am speaking about is Mr. Bill Kurek, apparently he has driven the same road and route for over forty years and one day he simply opened his eyes, saw something [ in this case signs that have been there since the town was founded ] and his mind finally woke up and said “maybe I can do something with this “. It’s a short synapses of his success but you get the point.

Quote : LAKE PLACID - Bill Kurek had been coming here from Broward County for 40 years, and he kept passing the sign that boasted Lake Placid was the caladium capital of the world.
And even though he retired in July 2002, Kurek said to himself, "I ought to be able to do something with caladiums."
cultivating a business for kids He wasn't a salesman; he was a project manager for a company which installed fire alarms. "I managed crews that installed systems in high rises and hospitals," he explained.
But he went to the Internet and typed "caladiums."
"I almost fell out of my chair when I realized how much people were paying for caladiums," he said. "I've got to be able to sell bulbs cheaper than this."
Cultivating a business” By GARY PINNELL / Highlands Today

Open your eyes [ mind ] or be open to opportunities

Sometimes it sounds like a whole bunch of hogwash - the rich guru person telling you that you have to envision wealth first because you have to believe it first before you can become a success. Yes it sounds ridiculous but in part it is truth…

Many people go thru life never noticing the obvious, that which is right in front of them. They lose opportunities for love, joy, happiness and even prosperity because their simply oblivious to what is right there before their very eyes. Others simply can’t seem to believe that the opportunity of love, joy, happiness or prosperity in front of them is possible because they some how refuse to believe they can achieve that love, joy, happiness or prosperity. Then again, some simply wont take the step, work or risk to reach out and grab for that opportunity.

So in part - all those “gurus” selling the principal of “think and believe it” first speeches are in part - correct.

Teaching kids about money means more

My post are mostly about teaching kids about money, that as parents we have the responsibility to teach our kids about money. Teach them how to make money, how to manage money, how to think about money and all the different things that go along with it like investing, starting a business and so forth.
cultivating business children ignorant about money
One of the most important things I try to teach my kids about money is that it all starts in their mind first.

Not that I am trying to teach them some fancy guru’s belief of “see it and you can achieve it “ nonsense. I want them to understand that just like Mr. Bill Kurek , an opportunity could be passing them by simply because their not open to it. I try to teach them 4 basic principals that they can use in everyday life:

1- never say you can’t - no, always say; how can I do or achieve this
Too many people say they can’t without even trying first. If you train yourself to think that everything can be done, that you simply need to find the solution to “how” then your less likely to give up without trying. Everyone knows the story of Tomas Jefferson - how many tries did it take for him to invent the light buld - 2, 3, what 1,000. But what we really should consider is - what if he would have thought: "light bulb, that is impossible. Why even try. "

2- it’s too late, it’s already been done - no; say, how can I improve this or benefit from this
Mr. Bill Kurek could have easily thought, hey this is an old idea, to many people are already doing this and kept on driving, but he thought to himself, how can I sell this cheaper [ meaning - how can I improve on this ]

The Bible is more than two thousand years old and it says “there is nothing new under the sun” - trust me nothing is new. I heard someone describe the Iphone as just a touch ipod that makes calls. Which came first the iphone or the ipod ?????? … the ipod.

3- I give up, no; say - I need help or I’ll come back to this
Many people get excited about this or that and when they run into trouble they soon give up - it doesn’t matter how close you come to success, if you don’t accomplish success - failure is still failure.

How many stories have we heard about millionaires who become rich because they took someone else’s efforts and made millions while the creator of that product or idea is still poor. Microsoft - it’s said that Bill Gates didn’t create the program he bought it from someone [ do you know that mans name ??? No… ]
McDonalds - Ray crock bought the rights to franchise the McDonalds concept [ with fast hamburgers ] McDonalds is worth billions - and what happened to the McDonald brothers ????

My life, your life, everyone has a story about an opportunity they let slip by because we gave up, because we couldn’t capitalize on an opportunity. We will always say - I almost, I tried, but we fail to say - I never went the extra mile, I didn’t seek out help. We failed because we gave up. We failed because we thought it just couldn’t be done.

4- I don’t understand, no; say - I’ll take time to learn
My children come to me and always say the same thing -”dad, help me with this. I don’t understand it”. Like most children, what they really mean is - dad can you do this for me.

I always try to teach my kids through hands on approach [ meaning they have to do it in order to learn ]. It does not matter if it is homework or life’s lessons - they have to process it, learn by thinking and doing - they will not learn from me giving them the answers.

The reason people lose money in the stock market is because we just don’t take the time to learn. Why do people fall for email scams about some unknown face saying they will give you 10 million dollars if you send them $400 dollars to transfer money from Africa to America…. We do not stop to think, investigate, learn - we just react.

Most people have car insurance - they don’t know why they have it, some even hate it, but they have it. Did you know that even though the stock market is risky, you can buy insurance on your risky investment [ I bet your mutual fund advisor doesn’t tell you that ].

The next time you see your child struggling with homework, or you have an opportunity to teach that child about money - help them open their eyes and their minds. Because believing is not enough, but if you keep an open mind, look to find answers, never give up, ask for help and learn what you need to learn to be a success - your chances of success are a lot greater than you think.

Down market is best time to teach children about investing

Down market is best time to teach children about investing

The market is down; stocks are lower than they have ever been before - that means it is the best time to teach children about investing. That is right; the best time to teach children about investing is now – with hands on trading!

The market is low and some stocks have been beaten down to almost incredibly cheap prices – that means you can open an account with little money and use this as an opportunity to teach the kids how to invest. Why… You ask?

Why teach children about investing now

Because it is cheap!
The reason why “Now” is the best time is because stocks are so low. You can open a free account online [ I did it with sharebuilder from NIG ], you deposit a $100 dollars that your not afraid the kids will lose and go at it. My daughter bought 300 shares of CITGQ for $65 dollars [ not my best choice but hey, she’s learning and she wanted a high risk with high return – probably thinks the govrn’t will bail them out ]

The next best reason is because they are young – they have time on their side. Even if you just teach them how to play it sensible, safe and just take advantage of good companies who are making money but their stock suffers only because of the current market claimant. Take for instance AIG, it dropped down to $6 dollars and then 1 year later it was up to $47 dollars. They [ children ] have time to ride out the nonsense.

Why you should consider “penny stocks”

teach children about investingAnother reason why this is the time to teach your children about investing in stocks is because they can generate greater returns with “penny stocks”. Penny stocks basically means stocks that are trading below the five dollar mark. Some may be $4, $2 or even .56 cents – but they are all classified as penny stocks.

You can leverage more with your money, low stock price and your child’s luxury of time with penny stocks.

Here is the reason why I let my daughter make her crazy stock pick of CITGQ:

If she bought 3 shares of stock that totaled $100 – the odds of her making money is small. Even if each stock rose a $100 dollars at most she makes $300 dollars profit.

But if her 300 shares that she bought at 0.23 cents each rose by:

Each share up $1 x 300 = $300
Each share up $2 x 300 = $600
Each share up $3 x 300 = $900

Do you get the picture? The stock 52 week high was $6 and 52 week low was 0.17 cents. If her risk pays off and the stock only goes back up to $6 she can sell and make $1,800. Now that’s a big risk [ bet ] but a really hefty return; plus she has the youth [ time ] to wait for it to bounce back [ that is if it doesn’t crash and burn ].

The ultimate reason to teach children how to invest now

The ultimate reason to teach your child to invest now, with hands on teaching is – because it’s the best way to teach. Reading and talking about investing can only take you so far. When your child has real money, real world experience and an opportunity to get a real return on that investment - they are motivated, more interested in learning.

My daughter plays online games about business but in her mind she knows that it is not real, she takes big risk becuase it is a game. But with real stocks, market conditions and real money at stake – she has to put her emotions in check and has to actually think about what she is doing and why.

kids money investing

Learn about money, kids learning math

Learn about money, kids learning math ?

While some may say that teaching my kids about money, building a business, investing for the future is a way of teaching my kids to be greedy - that I should be teaching them better qualities like giving, sharing and etc… to them I say [ *&%$#@! ] no just joking…

I would like to let them know that while I have been teaching my kids about money I have noticed that their learning about math. Yes math. Not just learning about math, but an appreciation of math and how “ boring math “ can be applied to every day life. My son calls it “Fun Math”.

" Fun Math " being fun causes desire to learn

My 5 yr old son has a bit of trouble staying still. When it comes to learning - lets say he has a low attention span. But since we started playing "cash flow for kids" where we have him count the dice so he knows how many spaces to move. Or when he counts out his moves or counts his money - it has given him a desire to learn more about math. He sits around the house, takes a book with him in the car and he practices math. Currently he only does adding, but he is only in kindergarten and I already showed him how to solve adding equations of up to three numbers.

Imagine that, a five year old who is solving how much is 300 plus 300 or 250 plus 200.… and he thinks that math’s fun! I love it, it just tickles me pink. Today he asked me if I had the day off, when I said yes he shouted "great, we can play the money game today…. Right?" What parent doesn’t want to see their child interested and excited about learning.

Math can be used in everyday life

When math gets complicated [ like algebra ] people usually lose interest because after all - when will we ever use it in average everyday life? Really - how do you convince a child that one day walking down the street he/she will need to take time to find out what "X" equals???

teaching kids mathBut while I was online with my daughter playing this game about running your own business, I ran across something that helped me show my daughter that yes, you can use complicated math in everyday life situations. There we were trying to solve how we can figure out how to make a profit from selling ice cream. All of a sudden they were asking us for percentage, how to solve the problem of profit ( X = sale minus cost ). Can you imagine that - the math most kids hate and say they will never use in ordinary average everyday life being used to solve an everyday situation.

Yes, I took the opportunity to point out to my daughter that math is important - learning how to solve for X, learning percentages and all the other boring math kids hate. It can help you in your business, in making you money, making you rich.

Why teach your kids about money

Why teach your kids about money, how it works, how to make it, manage it and invest it - well because you want a better future for them. And if that is not a good enough reason for you and you need a more noble just cuase… then because it’s an interesting fun way to teach your kids math. An excellent method to build interest in math and how learning math can help them in everyday life.

Even if they start learning because they want to be rich - atleast that interest in being rich will fuel a desire to learn more.

Simple way to teach your kids how & why to Invest

You can make money with stocks in the long run - your children have the time.
I was speaking with an older gentlemen the other day and he was explaining to me how he was retired from AT&T before it was broken up by the government. He explained to me how he now owns stock in AT&T, Verizon, Sprint and many other “phone” companies because he was smart enough to put his retirement fund at his job to buy stocks.
After the years went buy and the government broke up Ma Bell [AT&T] he just keep getting stocks every time a new company was split off. Now he is 65 years old and receives high devidens from all these companies. He laughed as he said that several times he received checks for $2000 dollars on several occasions in the year because the companies were merging and splitting and merging again... He advised me that I should buy good stocks and hold on to them.

How do you teach your children the importance of investing?
In a simple fashion they can understand?

The goal is not to invest for them, but teach them how to manage money, make money and how to invest thier money. So when thier grown they can do it - and take care of you when your old :)

Here is how I started:

How Does Money Grow?

how to teach kids how to invest
Investing is a way to make money with your money. First, you have to earn money. As a kid, you get money from allowance, gifts, services, or from selling goods such as lemonade or small business. Try to save some, if not all of this money. The next step is to make your money grow through investing. The chart illustrates this process.

Why Should I Invest?

There are two main reasons why you should invest:
* To stay ahead of inflation
* To achieve financial goals
Inflation causes the increase of prices. When a Big Mac goes up from $1.20 to $1.50 or when gas goes up from $1.30 to $1.70 a gallon, we say that is inflation. You need to make more money just to keep up with the rising cost of living.

Financial goals can be separated into two types:

* Short-term goals - Things that you need or want now or within the year, such as a bike, a computer, or a video game. Generally, it takes less money to reach these short-term goals.

*Long-term goals - Things that you need or want in a few years or more, for example, going to college, buying a house, and even starting a business. Generally, these goals are expensive and require some planning.

When Should I Invest?

The earlier you start investing, the sooner you can reach your financial goals. Investing is like "planting" money. A small amount of money invested will often grow to a larger sum over time. You’ve heard the phrase, "Time is money." With investing, time also makes money.

What are the Risks?

Although investing can make money with money, the downside of investing is that there is a risk of losing your money.

The key to investing is to minimize the risk and to maximize the financial reward. For this reason, it is important to understand the many ways to invest money.

save money and invest children
There are hundreds of ways to reduce risk - which have to be learned. That is why it is very important to always be learning and to work with smarter people than you are. People that are in the field you need to learn and understand, like stock brokers, day traders - all complicated terms for people who know and make money with stocks, bonds and all sorts of investing.

But the technical stuff comes later - first lets start small because learning also comes from doing. Also - only invest what you can afford to lose. Don’t bet the grocery money or the mortgage payment.

To start investing first save.. Save your income [ allowance, gift, earned income thru chores and etc.] and split it into three saving banks [ pools ].
1- saving long term [ can be split in 2 - short and long ]
2- saving charity, giving
3- saving money to invest [ money that can be lost with out you going hungry ]

While your investing money [ #3 ] grows, learn about the companies you like, are interested in, how to invest, become friends with brokers and day traders and etc.. When you reach that specified number [amount] open an account and start investing.[ you may lose money - but that is part of the learning process ].

The importance of money, business & investing Early

The Importance of Money, Business & Investing being taught to children early

I was sitting with a few friends at a group picnic that my local church was having. The sun was shinning, the weather was mildly cool for Florida and people were having fun. Then a friend of mine started complaining "I have to leave early, I have to go clean my house - I haven't had time to do anything at home." Another friend sitting by us asked her why - so she went on to explain that she runs a cleaning service and she's been real busy cleaning other people’s homes and hasn't had anytime to do any of her own things.

I couldn't help it, I just had to chime in and ask why didn't she expand, grow her business, have people work for her? She went on to explain "it's too much work. I tried it before and I can't find the right people that can do it as good as I want or like me. Besides my clients trust me and only want me - I would have to do commercial business to do that." At first I tried to explain to her that hard work [ working by herself ] and hard work managing people [ having people working for her ] is still hard work, except that she would have more free time and she would be able to enjoy days like this picnic rather than wasting it doing more work at home. It didn't work.

She politely said she appreciated the advice and that I was right, but - "it's just too much work" for her, she went on to give me a long list of excuses. That's when I realized that no matter what I said to her - she was not going to budge or change her way of thinking. Even though she was tired, over worked and complaining that she had no time for herself and family - she didn't want to put in the extra effort to improve her situation.

Why teach your children about money, business, investing at an early age

Children have something that most adults don't have - it's called options. Once your set in your ways it's hard to change. Once your an adult with bills, children, a dead end job - it becomes very difficult to make changes to your life or to take [ what adults consider ] risks.

But children have options because their young, they have time and freedom on their side [ mom & Dad pay the bills ]. While most parents are busy asking their kids "what will you do when you grow?" we forget to teach them that they have a world of opportunities. Opportunities they can take advantage of if they simply learn how to manage money, invest money and time in a business. No one says there is a set rule on how to do anything in life. If your child wants to be a doctor - fine, great, learn and prepare to be a doctor. But does that mean a doctor can't also have a business?

What of instead of a doctor only working for a hospital, the doctor opens his own office? Then that same doctor opens other offices and has new doctors needed experience to work in those offices? Then that same doctor buys a coffee shop, a gas station and then after 15 years with several businesses, the doctor retires. Then that same doctor just spends his days managing the business from a golf course he enjoys to play at?

It's not wishful thinking; the above mention hypothesis is real. It's a short synopsis of a doctor I know in my home town in Florida.

Teach your kids about their opportunities not get rich dreams

My daughter is currently twelve years old and I've been talking and teaching her about her options. That she could do more, be more, achieve more than her old man [ me ]. That is if she wants, she doesn't have to be just an employee, she can be the boss - that being an owner gives you more freedom, liberties, opportunities.

When she came home last summer from New York, she came back with a jewelry making hobby - we've tried to convert that hobby into a business [ opportunity to teach ]. This weekend she had her first sale, she was excited. It was her first tangible lesson about business. Her work had paid off; her struggle to push her shyness aside, to show her jewelry and actually make a sale cemented in her that what she was doing was not just wishful thinking. She could make money with her business, it was no longer just a hobby - it's an opportunity.

I am not trying to teach my child that being rich is better. I do not want her to look for the next "get rich scheme" only to be scammed. What I want is for her to understand that she has options, opportunities that are hers. That because she is young she has time to learn not just a profession but the knowledge necessary to be more than just another employee in a see of millions - but a business owner, an investor. That because she is young she can learn to make money, manage her money, build or buy a business, invest wisely and take calculated risk that will give her more opportunities and more options in life.

Do you want to work hard or work hard ?

As I said, I was trying to explain to my friend that there is no difference between working hard and working hard. What I mean is - that if she works hard to get by and complains that she is tired, overworked and has no time - it's no different than her working hard to build a business, manage people to work for her and dealing with all the hardships of being an owner.

The only difference between "hard work" as an employee [ or slave to a job ] and "hard work" managing a business that has others working for you, is that you have options.

If you’re trapped in a job your boss tells you when you work, how much you work and how much you will get paid. If you work hard to build a business that grows to where people work for you - you decide when you work, how much you make and if you even want to work...... to quote the bible: Jesus said "The poor you will always have with you" .

Now you may have a good job, lots of bills and feel like your doing ok. If that's what you want, good - as long as your happy. But if you want more and feel trapped and can't seem to get anywhere... like if you don't have any options. Why not teach your child that they do have options, opportunities and start today?

your child needs to learn how to read a cash flow statement if they want to be rich?

Cash Flow and the need to teach kids about money

Last night was more of a lesson to me about the need for children to learn about money, cash flow and how to make money than it was to the kids? I was really surprised.

Last night my daughter had a friend who was sleeping over - we didn't get a chance to play cash flow for kids last Wednesday night so I told her we were going to play this Friday night [ friend or not ]. Which she didn't mind.

After a few minutes of simple instructions on how to play the game - her friend, my daughter and my five year old started the game. After a few rolls of the dice my "girl' excited son was spilling the beans... "the way to win is not to get debt and get money" [ his interpretation of passive income ]. At first I was surprised how my daughters friend who we will call "silly" did not seem to understand the basics of the game. I kept jumping in to help her understand that the name of the game was to create income [ passive income ] thru building business' and other financial venues. It took a while but she started catching on.

It's so easy a caveman can do it
I love the Gieco commercials where they make fun of the caveman - you know: "it's so easy a cave man can do it". Well, even though silly was not yet understanding the concept of the game, she applied the time tested tradition of "monkey see, money do" method. Once she saw that by buying a business or investing can generate extra money - see cuaght on to the game.

teach children about money and cash flowIt surprises me to see how when you compare what these kids are learning today - buy this, get it now and "credit" is the answer to everything - no wonder we have so many people facing poverty. The sad thing is - "silly" my daughters friend said - "If I go broke when I grow up I'll just marry a rich old dude"... I couldn't tell if she was joking or not?

Granted my daughter has read most of "Rich Dad Poor dad" and has played the game atleast 8 times by now - it still disturbed me how this young girl had no clue how to manage money or why building a business was better than just working at a job.... Ofcourse once she saw how fast her cash pile was growing when her "assets" [ meaning "business & Investment" ] were making her money - that even though she didn't understand the principal - she had no problem applying the principal in order to make more money in the game.

Easy way to teach kids about money [ cash flow ]
While reading the book "Rich Dad Poor" did make it easier for me to teach my daughter about money and to give her a simple understanding of how a "cash flow" statement works - you may want to take a different approach. Here is a basic simple definition I use:

Cash flow: is a report that shows how you make money and how you spend money. Plus it also shows you if you spend more than you make [ profit, break even or get further in debt ].

Why Cash flow is important: if you want to be rich or just live comfortable [ kids prefer "being Rich" theory ] you have to learn how to track your money so you know how to manage it. You need to know what makes you money so you can duplicate it. [ you can later teach about passive income verses earned income ]

teach children money cash flow businessCash flow - Asset or liability: I prefer to stick with rich dads definition - "an asset puts money in your pocket, a liability takes money out of your pocket".

[ it's not about not buying nice things - it's about building a steady passive income first so your passive income pays for your nice things. We poor & middle class people work hard to buy nice things first and are overwhelmed by all our debts from our nice things... car, boat, furniture we soon replace a year or two down the road and we're still paying for...ten years later???]

** Even though I am an adult, like most parents I get a bit overwhelmed with trying to understanding all the complexities of finances, income statements, balance sheets and cash flow statements. My suggestion would be to teach thru a method that best suits your child. My daughter loves reading more than games - so I started with reading a book. Your child may be more hands on and may learn more easily through "interaction" with a game - use your judgment - but above all, their children so remember to keep it simple and at their learning pace.

Here is an adult version of the definition of the importance of cash flow:

Importance of Cash Flow Statement
A cash flow statement is a document that shows how much cash (or cash equivalents) comes into a business and how much goes out. A cash flow statement is considered a necessary companion to an income statement and a balance sheet when evaluating the financial condition of a business. A cash flow statement can be presented in several different formats. However, complete, concise and clear disclosure of the movement of cash is the only true requirement for a cash flow statement. Cash flow statements commonly cover periods of one year or more, with more or less detail, depending on the intended use of the cash flow statement. How to prepare a cash flow statement

Blank Cash Flow statement
here is a link to a blank PDF file of a cash flow statement for you to play with and use.

Online Games That Teach Kids About Money

Online games that teach kids about money

Teaching your kids about money can be fun - it can also be a long process but thankfully there are some board games and online games that can help you make it a more interesting and fun subject, especially for the younger kids that easily get distracted.
** If you know of any online games to help children learn about money, please feel free to share them with us.

Online Games That Teach Kids About Money

The internet is filled with fun games that teach kids about money. Below are links to some of our favorite games.

Planet Orange Discover Planet Orange, and open your eyes to the world of money! Brave the desert, climb mountains, and dodge alligators while you explore everything there is to know about earning, spending, saving, and investing. Source: Planet Orange

online games teach kids moneyPractical Money Skills Games A number of addictive games from Visa that teach kids about money. Source: Practical Money Skills

Reality Check What kind of lifestyle does your child want? Have them answer these few basic questions and they'll be given a Reality Check. Source: Jump$tart

Savings Quest Interactive online budgeting game that tests kids' ability to save for the things they want while paying for all of the things they need. Source: Wachovia - Savings Quest

It All Adds Up Online games and simulations that teach kids about credit management, buying a car, paying for college, budgeting, saving and investing. Source: National Council on Economic Education

Escape From Knab Travelers stranded in the Cyberspace world of Knab must earn money and invest it wisely to get back home. Source: US Bank

FedVille Welcome to FedVille, a friendly town built just for kids where there is something to learn around every corner! Source: Federal Reserve Bank

H.I.P. Pocket Change A number of games from the U.S. Mint that teaches kids about currency and managing money. Source: US Mint

Fraud Scene Investigator Welcome to FSI: FRAUD SCENE INVESTIGATOR, an online interactive investor education program that teaches and empowers students how to detect and stop Source: NASAA

Bad Credit Hotel Have your child visit the Bad Credit Hotel, where a one night stay will teach them to control their credit. Source: Department of Treasury

The Financially Intelligent Parent

The Financially Intelligent Parent
by Eileen and Jon Gallo

“Mom, I need money for the dance. Money for the book fair. Money for my best friend’s birthday party. Money to go to the movies with my friends.”

For a parent, this conversation never seems to end. At what point do we have a solution to this problem of the desire by our children to receive an endless supply of money? At what point do we turn this demand for money into a lesson about money? Are you tired of trying to figure out how to teach your 14-year-old to manage money? Or, are you worried about how you are going to teach your 6-year-old to manage money as they grow older? If you are a parent and you have these concerns, then the lesson plan has arrived. The Financially Intelligent Parent is more than just a book. It is a collection of resources designed to teach parents how to educate their children to be responsible money managers.

Authors, Eileen Gallo, Ph.D., and Jon Gallo, J.D. are a husband-and-wife team who are experts on children, families and money. Eileen Gallo, Ph.D. is a licensed psychotherapist who works with individuals and families dealing with the psychological and emotional issues related to money, children and family wealth. Jo Gallo, J.D. is a nationally known estate-planning attorney. Their book, The Financially Intelligent Parent, identifies the eight key behaviors of financially intelligent parents:
Financially Intelligent Parent

1- Encourage a work ethic.
2- Get your own money stories straight.
3- Facilitate financial reflection.
4- Become a charitable family.
5- Teach financial literacy.
6- Be aware of the values you model.
7- Moderate extreme money tendencies.
8- Talk about the tough topics.

Each of these behaviors is the topic of one chapter in the book. Each chapter provides you with interactive exercises and checklists. You will be challenged to think about parenting and money in all new ways. The Gallo’s have worked with countless parents and, as a result, have many valuable stories to share. They will introduce you to parents that have made money mistakes with their children and parents that have managed money success with their children. You will find their stories touching and funny, but most of all identifiable. By recognizing yourself in one or more of the stories you will be able to relate to the tasks that must be accomplished as you seek to become a more financially intelligent parent.

The Gallo’s will not preach to you about what you should or should not do. Instead, they have a unique talent for allowing you to travel with them on this journey to becoming a financially intelligent parent. You will feel like you have found a friend who truly understands your desire to raise your children to be successful and responsible. A friend who not only understands, but is able to guide you in the right direction.

One of my most favorite chapters in the book is Chapter 8 – Teach Financial Literacy.
This chapter will teach you:
* Three Great Ways to Make Allowances Work for Your Kids
* The Art of Saving and Checking: How to Teach a Present-Oriented Kid to Think About the Future
* Introducing Your Child to Credit Cards
* Money-Management Opportunities for Children
This chapter is a perfect example of the entire book.

The Gallo’s don’t just tell you that you should teach your children to save money; instead, they tell you how to teach them to save money. They provide step-by-step instructions to guide you on your journey.

The Financially Intelligent Parent website is a tremendous resource and a great compliment to the book. You can sign up for their newsletter, participate in the community forums, and read articles written by the Gallo’s. For a small monthly fee, they offer a Financially Intelligent Parent membership which includes an allowance advisor, a chore chart, and more. For a limited time, use the promotion code NEW3 and receive 3-months free trial membership.

Read an excerpt from the book: Chapter 1 - The Money Beliefs of Financially Intelligent Parents

Talking about Debt to my five year old?

Talking about Debt to my five year old?

It’s funny, but talking about money with my kids is not as hard as I thought it would be. Teaching them about money, making money, managing money, investing and debt – has turned out to be kind of simple and fun. Even my five year old understands that debt is bad for you.

We were eating lunch this last Saturday and I mentioned to my wife about some money issues and my son just jumped into our conversation and said: “dad I don’t want debt, debt is bad right?” he was so cute. I was glad that the game [ cash flow for kids ] was having a positive effect on him.

Yes he is only five and he doesn’t understand that sometimes you can’t buy things without using debt [ home , car, etc ] or that there is a difference between bad debt and good debt – but the goal of teaching him sound financial knowledge at an early age seems to be a success [ even if it’s a small step ].

Teaching children Financial knowledge [ about money ]

teaching kids about moneyWe have been talking [ my daughter and I ] on the subject of money, how to manage it, not just how to save and budget but on how to make it. She already has a jewelry business she is trying to start. We play cash flow for kids as a family, so my five year old has a chance to learn some basic principals as we the family share some time together. But the goal is basically to teach my kids about money – the first step being that I change how I handle money and learn more on the subject in order to teach them how to manage and make money.

I guess the basic thing we as parents who want to teach our kids about money have to remember and learn is that it is a life long process. It took me years to get where I am; it’s going to take years to teach my children how to manage money correctly, make money and to be financially savvy. After all, I have been messing up financially for 30 years – can’t expect to change over night – can’t expect them to learn everything over night.

That is why I think using games as teaching tools and using family life experiences as an opportunity to teach is a better way than just letting my child sit alone reading a book on finances and making money.

Learning thru games cash flow for kids and new Monopoly City

monopoly cityI was reading some blogs on how to teach your child about money – many simply focus on teaching your kids about money thru budgeting, spending wisely – but very few hit the subject of building a business, finance. I did run across an article about a teacher who has a high school class that he teaches them about stocks, investing, building a business – but I think you have to start at an earlier age.

I am actually excited about the new monopoly game – my daughter turned me onto it. It looks fun, a bit more complicated than the old version and a good way of teaching thru playing games.

It is fun but also hard work to teach kids about money

Now I know I make it sound simple – teaching kids about money – wow it’s so easy – not so. It takes as much work as everything else in life. You have to learn the subject, find interesting ways of teaching the subject, find the time to prepare and find the time in a busy families day to sit an actually teach the subject of money to a child. Plus on top of all that you struggle with distractions from yourself, your children who always have a knack for putting things off and your own self insecurities.

I can not tell you that it is easy and I don’t want to give that impression – but if something is important to you, you push yourself forward, you do what you have to – to get it done.

On a side note: Remember the post on “paying yourself first” – I started doing just that last month. So far I have $500 dollars put away for investing or starting a business - $500 dollars I thought I didn’t have before. Ofcourse it does obligate you to choose what is more important and if necessary – find a way to make extra cash to pay for bills and luxuries – instead of thinking “hey I ran out of money at end of month so no savings “….

Teaching kids about money is Fun !

I just finished a two hour session with my kids [ 5 yr old & 12 yr old ] - I was teaching kids about money. In fact it was a fun experience & the kids seemed to learn more than I did.

It all started with a simple game called "Cash Flow for Kids". I've been posting about my endeavors to teach my kids about money, how it works, hot to make money, manage money and most of all have money work for you.

Tonight [ Wednesday Oct. 7, 2009 ] at 5 pm I cracked open the game for the first time and started playing. It was me, the wife and the two kids. I quickly read over the rules and off we went.

The first life lesson from the Game

The first lesson my daughter learned from the game is that "life is not fair".Oh, she was happy and excited when she heard that she was receiving a salary of $1,000 dollars - "man that's a lot of money!" she blurted out in glee. But the shocker was when she learned that she had bills and expenses to pay as well. Every time she is paid she gets $1,000 dollars and then has to pay $700 dollars in expenses [ mortgage, electricity, etc...] She didn't like that.

"What, that's more than half my money! That only leaves me with only $300 dollars - that's not fair!?"

I explained to her that, that is life. "Don't forget, the minute you get paid in the real world, your uncle Sam taxes money away from you in government taxes. Then comes the bills and expenses - that is just how life really is." After a few minutes of hysteria and explaining the concept of the game - we started playing.

Second life lesson of Game - small adds up to a lot over time.

kids allowanceAfter a few turns my daughter learned her second life lesson - my wife was taking her turn, and she picked a card that gave her the opportunity to buy an investment. The investment would cost her $600 dollars but it would give her a recurring income of $10. Now I was the bank and my 5 yr olds helper so I simply watched the game and observed much of what was going on. My daughter quickly blurted out to her mom: " don't buy that investment it cost too much and you get only a little bit of money!" My wife was quickly taking the advice of my daughter so I explained to my was that it was her choice if she wanted the investment or not, but that every time she was paid her salary, she would also get an extra $10 dollars. My wife thought about it and then said " sure why not, it's not real money."

I was surprised, that after all the reading my daughter and I have done and talked about - that she would so quickly turn down passive income. The funny thing is that the moment she notice that every time her mom got paid she received an extra $10 dollars - she changed her mind quickly about small investments. She realized that even though her initial investment was big $600, her long term returns added up over a long time would be great even if it was only $10 dollars at a time.

Yes it's just a game, but you can learn a lot from a game

Now yes, the game is for kids and it doesn't factor in stock market crashes, business failures and the reality of life’s "up & down's". But it does teach you a lot, the moment my daughter realized that she could make extra money by spending cash [ money on hand ] to purchase an investment that created a long term income - she couldn't stop buying. None of them could, even the 5 yr old who had very little knowledge of what he was doing. All he knew was that the green cards meant he could make more money if he agreed to buy them.

money and kidsIt's funny how the mind works, when it's a game, paper money, it is not that hard to step out and invest. But once your in the real world, some how paper money has more value, fear of loss attached to it and a completely different sense comes over you.

The reason we fail in life is because we put so much pressure on ourselves and we allow fear of loss to take over logical thinking. But in the game - hey there is no real threat of loss, so we just act. During the game my wife said that we could do this because it was a game - but that in real life you need money to make money.

It's a lie: Need money to make money

When real estate was booming in 2005 & 2006 I learned a little bit about contracts, real estate and let's say - the art of a deal. I went out on a limb and placed a contract on a residential lot with no money for down or to purchase the lot. My wife thought I had gone mad. She was frantic with fear, concern, she just kept asking me "how are you going to pay for it, we have no money..." Swallowing my fear, I found a buyer that would take over the contract and at the end of the sale I ended up with $10,000 cash in my pocket. I did this two times in a span of 60 days - with no money, I made $20,000 dollars. Ofcourse now my wife wasn't asking me "how are you going to do this?" But now she wanted to know when I was going to do my next deal.

Then came the real estate bust and the credit crisis of banks - but I only mention this because I want to show you and remind my wife that "You don't need money to make money" - what you need is knowledge, opportunity and action.

Dealing with Kids is easier than Mom !

A few days after our family business meeting I found a leak in the master bath sink, it was small but enough to do damage to cabinets and walls. After assessing the situation - then figuring out exactly what was wrong and what I needed to repair it [ two months back I tried to replace the water heater - that was a mess, wont repeat that again ] … I told my wife I was off to home depot.

I’m not sure how or even why - but the conversation went from needing to fix a leaking pipe to - “Why don’t you love me the same anymore?”
I was confused and had to ask… What the….?

“You don’t love me the same any more. Before, If I asked you for something you would find a way to get it for me. Now you don’t… “ she replied.

Say what? Is all I could think of…

In all honesty, it is true that when we first were married I did do what ever it took to get her everything she wanted, the same for the kids when they were born - that is if it was possible.

What is the true reason behind it?

I explained to my wife that my love for her has not changed - infact the reason I do what I do is because I love her. We’ve been married 17yrs and I have given her most of all she has asked for [ and she never forgets to remind me of what I haven’t given her ] and after 17 years, we have nothing….

Our finances are a mess, savings are dismal, retirement plan is a virtual joke - unless you really believe social security will be enough for us to retire on [ if it’s still there that is ]. If I were to die today - who would take care of my family? Even if I lived to a ripe old age - who would take care of us?

children allowancesThe reason behind saving, trying to build wealth [ mainly assets that will create income for us to live on ] is because I love her. Because I want to supply her needs, even some of her wants, today, tomorrow and for as long as she lives. Because I save or cut down on waste doesn’t mean I don’t want to buy her things - it just means I have goals, priorities and I want to achieve those goals for us, the kids, for her.

I am a Material Girl in a Material world

Madonna said it best when you describe the mentality of this generation: “I am a Material girl in a material World”. I am not sure how my wife equates the level of my love by how much stuff I buy her - but I sure hope the kids don’t have that same mentality.

I love my wife and my kids - while I try to turn my finances around, change the way my kids think about money and hope I can help them have a better life than I did…. I hope they realize that I do this for them. I strive, I work, I struggle and sacrifice for them. The only difference now compared to then is - instead of working pay check to pay check hoping I can afford all they want, I am working to build them a future, a business, a way of life.

I have been there done that.. 17 years of paying taxes, working hard, buying trinkets and I have less today than I had 17 years ago [ financially ]. I have more debt than I’ve ever had in my whole life today and my paycheck is not growing. In 1987 when the stock market crashed I said “I’m going to buy stocks and make some money" but I was afraid so I did nothing. The market bounced back and I kicked myself. In 1992 the stock market slumped again and I said "I’m going to buy stocks this time…" this time I had no money to invest. In 2007 the stock market crashed and AIG stocks were at $6 dollars. I told a friend I’m going to buy some AIG stocks… I did nothing, in Aug. 2009 AIG stock jumped to $40 dollars and I’m kicking myself again. Next time I will be ready and have the mentality and the free cash to invest.

If I could change the World

money and kidsI think that song from Erick Clapton, where he sings “ If I could change the world “ sums it up best for how I feel about my family. I can’t change greedy corporations or the men that run them. I can’t change corrupt government or the over baring taxation we face. I can not change the cruelty of this world, but I can change the way my kids think. How they work with their hands, money and teach then how to have their money work for them. My kids can do what ever they want to do in life, but I know that they can’t say that dad didn’t try to teach them a better way. Instead of being an employee be the owner. Instead of buying junk, buy a business. Instead of being a slave to taxation - play by the governments rules and pay less taxes?

There is only so much I can do with my life now, but I am hoping to give my kids the information, the mentality, the courage and the opportunity to do more, be better, enjoy the prosperity this great country promises everyone.

Work all your life for nothing ?

Work all your life for nothing ....

I sat my family down, even the five year old and announced - “it’s time we had our first family business meeting.” My wife looked at me as if I were crazy, my daughter gave me an excited expectant gaze ( we have been reading “Rich Dad Poor Dad” together for several days now ) and of course my five year old son just played with his toy cars at my feet.

Taking a page from Robert T. Kiyosaki’s book, I decided we the family should mind our own business. I have been working on improving my financial situation and to teach my children about money - So being a big believer in " a family that works together, stays together" I decided to involve the whole family. To be honest I have doubts when it comes to my wife and money [ terrible spender and money manager ] but I figured I would give her the benefit of the doubt and that this would helped to involve my children in the family financial process.

“ There is a big difference between your profession and your business. Often I ask people, “what is your business?” And they will say, “oh I’m a banker.” Then I ask them if they own the bank? And they usually respond. “No, I work there.”

teaching kids about moneyIn truth, my business is to teach my children about money, parents often never teach children about money - they leave it up to the school or life in general to teach children about money. I don’t want that for my kids. I want to teach my kids about money - I want them to know how to manage money, make money, make money work for them, even how to create money from nothing.

Our first Family business meeting

Like I said, our first family business meeting was called to order. I turned the TV off, gathered them around and went over some of the things I have been doing.

1- life insurance, how much, who is beneficiary.
2- Bank accounts, beneficiaries.
3- opened new account for kids
[ * goal to save $10,000 for each child by the time they turn 18 yrs old. I want more but lets start with a simple goal and work from there. ]

4- Went over my Daughters goal of creating and raising $1,000 by Oct. 31, 2010.
[ * she has to start a business, make money, manage it and save it. ]

5- My wife has to make extra money……..
“ ??? What….Why ??? ….”

Yes, that is when the business meeting really got lively. Emotions took over, fear lead my wife into panic mode. She started complaining that we can’t just save money, we have to live life too. She went on to say that she already works, that she can’t spread her money out any more. Then she cracked and started talking about “when are we going on vacation? What about the things I want, how will I buy my things?…”

Once the meltdown subsided I explained to my wife that the money she currently earns at her job will not be touched - But like my daughter and myself - if she wants extra things…. She’s going to have to come up with the extra money to get it. Plus - the goal is to make money, save and manage our money to buy assets that in turn make us more money.

Golden Years - Work all my life to have nothing ?

parenting, kids and moneyEarlier that morning we were watching the news before taking the kids to school and going off to work. There was a report on a special event in Tampa Florida that many banks were holding in order to help families who were losing their homes to Bank foreclosure. They talked with one particular sweet looking elderly woman and her husband… the elderly woman said “I worked all my life to get my dream home and retire… it looks like I worked all my life for nothing….” Between health problems and the bank foreclosure - this sweet elderly woman was losing everything she worked hard all her life for.

I reminded my wife of the news report, of that sweet old woman and asked her… “Do you want to end up like that one day?” Her response was no. I know that life is full of unexpected disasters and misfortune… I can’t control that. But I can control how I work, manage my money and how I create my wealth. Do I buy a business and take a chance at the business failing or succeeding…. Or do we sit back and pray that Social Security will be enough to keep us happy in our golden age of life. Can you say - “Welcome to Wal-mart”… Because that’s where many are today who believed the government would take care of them when they retired.

Fighting against fear that stops Improvement

When the meeting was over and my wife and the five year old dispersed - I turned to my daughter and asked her “did you see what happened?”. I explained to her that Moms reaction was exactly what Robert speaks about in his book. That no matter how logical or smart a person may be - fear can trap them from doing what they know is right and best for them. That instead of being concerned about “How can we better prepare for our future?” Mom was more concerned about the fear of not buying extra shoes or not going on vacation. That fear caused her to have a defeatist attitude and she could not see a way out. That the minute she said “I can’t” her brain closed off to finding a solution to her problem.

When it comes to money or life in general - do not allow fear to consume you. To stop you from acting, changing, taking a chance [ logical thought out opportunity ]. I tried to convey to my twelve year old child - that life is full of adversity and challenges. Fear will cause you to freeze, cause you to avoid the hardship of overcoming a challenge to the soft comfort of the norm [ what you always do ].

I tried to to help her understand, like all parents should - that you should never say you can’t. Leave your mind open to opportunity - don’t say you can’t, ask yourself: How can I do this….

Pay yourself first - What?

Pay yourself first - What?

We [ my daughter and I ] were sitting and talking, of all things - about the subject of money. We had just finished reading the last part of chapter 4 of “Rich Dad Poor Dad”. My twelve year old was asking questions that proved she may not completely understand but had a deep interest in the subject.

I was trying to encapsulate what we had just read so far and go over some of what we’ve discussed these last few days. I tried to keep it very simple so she could understand.


Q. What is an Asset?
A. Something that makes you money and you own.

Q. what is a liability?
A. Something that cost you money… expense monthly..

Q. Example of an Asset?
A. Business you own.

Q. Example of a liability?
A. House, car - your always paying out.

She had that concept pretty much down but I wanted to help her get a better understanding of what and why I was teaching her all this.

Government Taxes you to Death !

So we spoke a little on the subject of “Taxes”. I didn’t go into the details of when taxes started or how taxes effect the poor more than the Rich. The book did a good job of that - I was more concerned with her getting the concept of “Paying yourself first”.

teach children about money
When I explained to her that the minute an “employee” gets his/her paycheck he/she already loses money [ in taxes]. She was shocked. When I explained to her that she will be taxed to death, she was puzzled.

Federal tax, state tax, social security, medical, County tax, city tax, sales tax, gas tax and even hotel bed tax - there is even a federal tax for cellphone use….

I could see she was confused & blurted out as only a child can - “ But that’s my Money”. I explained to her that even in death - the government taxes you. “how unfair” was her response.

The reason behind Paying yourself FIRST.

I tried to explain to her that as long as she only works for someone else - she will never be in control & will be overwhelmed with all these taxes. So I tried to condense what we’ve been reading, discussing and putting into practice in short form.

money and kidsThe reason people are poor, can never truly get ahead is because they always pay everyone else first and by the time they are done - they have nothing left for themselves. Nothing ….

Using myself as example:
1- I work
2- taxed by government before paid
3- pay mortgage
4- house ins. & car ins.
5- taxed when I buy gas, clothing, do things….
6- at the end of month, I barely have anything left of my money to save much less invest.

So I asked her: “What should I do?”
My daughters response: “Make more money…?”

She has the right idea but missed the real crux of the principal. So I tried to explain - it’s not about how much money I make, but how you make & manage that money.

Simple out line

1. Make Money
A. work my job [ make money]
B. find ways to make more money
C. save to buy “Assets”

2. Manage Money
A. Save money [ pay yourself first ]
B. Budget your money
C. Protect your money [ a fool & His money are soon parted ]

3. Invest Money
A. buy assets [ start small ]
B. learn how to make money work for you [ buy bigger assets ]
C. Multiply your efforts [ re-invest, grow ]

* above is just an outline of my speech .

I’m not sure if she totally understood it all, but it did peek her interest. I explained to her that Google is a business - every search, every click makes them money. Now that really got her asking questions. I explained to her that she has to decide what she wants for her life tomorrow, make a plan & a goal today, and work towards that goal everyday of her life.

Ofcourse she wanted to know more about Google - so I explained to her that there are millions of ways to make money. Just take for example her FREE interactive online penguin game she and her friends play with online everyday. The penguin is an imaginary thing [ does not really exist ] but thousands pay that website “Real” money to place virtual [ fake, imaginary] clothing on non-existing penguins. She defended herself & her love for her online penguin - but I could see she understood what I was saying.

Creating a goal to Pay yourself first

Understanding that the best way to learn is by doing - we came up with a small goal [ a year long goal ] as a lesson. Starting October 31, 2009 - my daughter has one year to earn $1,000 dollars on her own [ I can help but not do work for her or any allowance ]. So by Oct. 31, 2010 - my duaghter has to create, make, earn or work to build up $1,000 dollars.

To her last a lot of money.
To her it may be a game.
To her it could just be a test.

She has until Oct. 31, 2009 to think up of a way to earn income to reach that goal. I can see she is not really into it, yet. But I am hoping that once she gets started she’ll want to reach that goal and more. Then the real lesson begins.

Side Note: I just ordered “Cash Flow” for kids board game. I brought my family together and showed them the game online - I wanted them all to be interested in playing it [ learning ]. The kids were stoked, the wife…. She just gave me a funny look and said: “ what ever you say honey.”

I’ll tell you how it turns out… I can’t wait to try it. At minimum I spend time with the family - best case scenario - my kids learn how to manage money and invest.