Kick Start The Kids

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The following quote is from The Economist Magazine

 

“Everybody wants it. Nobody understands it. Money is the great taboo. People just won’t talk about it, and that’s what leads you to the subprime mess. Take the greed and financial misrepresentation out of it, and the root of this mess is massive levels of financial illiteracy.”

 I’m one of the famous “Baby Boomers” (born between 1946 and 1964) who, if you listen to the mainstream media, are both the cause and the solution for everything wrong with the world. This is a very simplistic view, but it in one very important area I totally agree. PERSONAL FINANCE.

Our parents are children of two World Wars and a major depression. Personal finance was not a complicated issue. The Boomers are the first generation to grow up in a financially complex world while having more money to invest than their parents. They are bombarded with conflicting opinions on how best to spend and invest their money. The vast majority of the advice comes from sources which have more interest in how to separate you from your money than from increasing it.

How did they learn to navigate this brave new world? Some have been fortunate enough to choose parents who were knowledgeable enough to educate them. A few will have recognized the weakness and taken the time to educate themselves. Unfortunately the large majority did not even realize there was a problem. These are the “Goldfish” referred to in my earlier blog entry.

My concern is with the next generation, hence the title of this item. The Kids.

How are financially uneducated parent going to teach their kids how to survive in the increasingly complex financial water we are swimming in.

Here’s a suggested starting point for those who acknowledge the problem but need help with the solution.

Buy and read “The Only Investment Guide You’ll Ever Need” by Andrew Tobias, then try to make sure your kids read it before they ever receive a single dime of their own to spend. if necessary pay them to read it and discuss it with them.

You may well find the whole topic more interesting after this, so here are a couple of other books which will prove it can also be very entertaining.

  1. “Freakonomics” by Steven D Levitt & Stephen J Dubner.
  2. “The Undercover Economist” by Tim Harford

In addition, here is an excellent web site www.mvparents.com/ dealing with this topic and many other issues regarding our children

In my opinion, if your kids can both read and understand how money works you have given them the best gifts any parent could ever give.

Recommendations’ for other books etc will be welcome.

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