Hey Kid, Wanna Buy A Stock?

Friends of mine recently welcomed their first baby into this world. To lend a hand, family members and friends showered the beaming mama and papa with practical items such as blankets, clothes, diapers, bibs, bedtime story books, and toys. All fine and good and generous, right? I mean, babies cost money so why not lighten the load somewhat for loved ones by covering some up front costs.

Of course, while appreciated, this sort of welcome to our world financial contribution is measly compared to future costs. Because, as far as I know, babies morph into kids who develop into teenagers that mature into adults. And along the way, during this growth extravaganza, expenses keep coming at you. We’re talking about $230,000 for your average kid (of the no-frills, minimalist variety who attends public school, keeps extra-curricular activities to a minimum, and doesn’t have any special needs) from date of entry to age 18. Yikes!

Being a finance geek (i.e., like geeks of all manner of persuasion, somewhat out of sorts in a harmless, eccentric way), I saw no reason to give a traditional gift. One that would be short-lived, that the kid would outgrow within two, three or six months. Nah. I wanted to give something with staying power. Something with maximum long term benefit to both parent and child. So what did I give? Five shares of Bank of Montreal (TSE:BMO) (NYSE:BMO) stock.

bmo2


The Gift That Keeps On Giving

Laughing Friend. “You gave the kid bank shares?!”

BuddhaMoney. “That’s right.”

“How about a briefcase? You get the kid a snazzy leather briefcase to carry the share certificate?”

“Funny. You’re missing the point.”

“Okay, I’ll bite. Why are you the only person on this planet who gives stock as a baby gift?”

Here’s the thing: in the long run, those five shares are likely to pay for a whole lot more than blankets and toys. How so? Because share value will grow over time. Am I certain about this? Nope. Nothing is certain but the usual mainstays, death and taxes.

But here’s what I do know: (1) Canadian banks have been a stellar investment for decades; (2) I bought shares after BMO (Canada’s fourth largest bank) released negative news which caused its share price to drop (I only buy ‘on sale’!); and (3) at the purchase price, BMO pays a 4% dividend.

So at an initial cost of $450, The Mom and Dad will receive an $18 dividend check by the time the kid’s first birthday rolls around. At age 18, assuming share value and dividend payments haven’t changed, The Mom and Dad will have received about $461 in dividend payments alone.

But that’s not all. BMO typically increases its dividend payment once or twice per year. This means the dividend paid goes up and more money is distributed to each shareholder. And I’m confident that share price will increase in value too given the stock’s past performance (from 1992 -2012, BMO’s share price increased an average of 8.14%. If you include dividends, the average annual return was 12.58%. In raw dollars, $10,000 invested in 1992 would have been worth more than $107,000 in 2012).

Of course, in the stock market, historical performance does not necessarily predict the future. But given the outsized role that Canadian banks play in the domestic economy, as well as their business activity outside of Canada (i.e., BMO Harris Bank in USA), I’m confident that BMO will be profitable for some time to come (at $1.4 Billion of profit during the last quarter, BMO does bring home the bacon and then some). Related, ever wonder why your bank fees increase every year? Right, to further pad bottom lines. Another reason to become a shareholder paid BY the bank, not just a customer who pays money TO the bank.

images-1


And They Learn Too …

If The Mom and Dad know little about investing, well, receiving stock as a gift provides an excellent opportunity to learn. And when little Lily or Lenny gets older, they too may start learning the meaning of investing.

Seriously, I spent many years pursuing post-secondary education degrees so I know the importance of reading and writing and math, etc. But what too few schools teach, to society’s detriment, is basic money management.

So when Lily or Lenny becomes a software engineer earning six figures or more, they’re clueless as to what to do with their money. And they’re ripe pickings for becoming indebted, stressed, consumers. Because if they don’t learn something about saving, spending and investing from school or from Mom and Dad, it’s unlikely they’ll make the effort to learn on their own.

I’m not saying that the dream of any kid to become an astronaut, singer or firefighter will be replaced by the appeal of FINANCIAL ADVISOR. And really, nobody wants that as a dream. What I am saying is that learning about investing should be part of every kid’s education. Because they will deal with money in one fashion or another throughout their adult life. And this isn’t a case of a little bit of knowledge being dangerous. Rather, when it comes to finances, a little bit of knowledge leads to questions, leads to more knowledge, and so on, and this goes a long way toward constructing the tools to make sound financial decisions.

Just ask your self this: do you consider your self financially literate? Are you confident making investments? How often are you stressed by money issues? Wouldn’t it be amazing if kids graduated high school and could answer: totally literate, totally confident, and not stressed because I’m fairly knowledgeable and know where to search for answers if I’m stuck.

images


Starting Young

There’s a company called Stockpile. They facilitate stock investing by allowing you to buy as little as $5 worth of stock (i.e., often buying fractions of shares) either for your self or as a gift in the form of an e-gift or gift card.

To increase appeal to skeptical kids, tell them they can own a piece of Hershey or Google or Nintendo, can track share price on Stockpile’s site, make trades with your approval, and learn why share price is moving up or down. Will that be enough to get kids interested in investing? Probably not. Kids (and some adults) have a hard time planning for the future and delaying gratification (why save for later when you can spend now?).

It all seems boring to most kids, and many adults. But that’s where you come in, either investing for your own kids knowing they (and you, if investing is not within your comfort zone) will benefit from gaining more knowledge about investing, and from successful investments.

As for me, I’ve been investing money for my kids since they were yay big. And from time to time I slyly bring up the topic, trying to peak their interest. Other times, I blab on about money matters, ignoring their stretching and yawning. Though my attempts rarely work, I figure I’m planting seeds in those mushy brains. And when the time is right, and the brains firm up, those seeds will sprout.

That said, my efforts are starting to bear visible fruit. Both my teenage son and daughter, who work part time jobs and pay for some of their own clothes, like to tell me when they buy a pair of shoes or jeans on sale. ‘The less I pay to someone else, the more money in my pocket, right’, they like to say. Hmmm. Wonder where they got that from? Eventually, I’m hoping to hear something like, ‘the more I save and invest now, the more I’ll have later and the less I’ll stress about money.’ In time. All in good time.

 

 

Teenager, His Phone, The Canary

When my first born son turned 12 or 13 (I really don’t recall his exact age – frazzled parent brain the likely cause), I caved to his relentless requests for a cell phone. Invoking the enormous power of rationalization, I convinced myself that although a phone at his tweeny age is far from necessary, as a matter of convenience and safety it’s not a bad idea.

As telecom companies continue to dismantle and remove public pay phones owing to lack of use (and the disappearance of superheroes needing a place to change into costume), I wanted to provide Teenage Son with a way to communicate with me should the thought ever occur to him.

Adding him to my phone plan cost about $40/month, including tax, for a talk and text plan. At close to $500/year, this was not an inexpensive solution and definitely pricier than dropping the occasional 50 cents into a public pay phone.

Still, rationalization again came to the rescue; this was a safety issue, I insisted to myself. (Upon reflection, the matter of convenience was not weighty enough to justify payment so I went with safety, an issue no parent charged with caring for a baffling, still-under-construction teenage brain could ignore).

nofood-no-texting

 


Must Have Data Plan, Must Have Data Plan

Then came more demands. Teenage Son said that his friends surf the web on their phone and he wanted to do the same, and that a talk and text plan is soooo yesterday.

“How much will it cost,” I ask? (my usual first question).

“I dunno.”

“How about you do the research and let me know what you come up with?”

“Dad, can’t you just get me a phone with a data plan.”

“It costs money.”

“So?” (translation: teenage brain believes Bank of Dad grows money on trees).

“Is it necessary to have data? Why isn’t the talk and text plan enough?”

“Because it isn’t.”

“Convince me why I should pay more money just so you can play on the Internet with your phone? Why isn’t it enough to use your computer for surfing the web?” (Granted, Teenage Son is presently at something of a disadvantage going up against Former Lawyer, me, who relishes constructive discussion based on sound reasoning, often interpreted by my children, as unfair argument. That said, my ultimate purpose was to have him think about his choices, to thoughtfully consider his own rationale for buying ‘stuff’ that he wants, and the price to be paid, whether financial, emotional and/or spiritual).

“All my friends have data on their phone.”

“You know the old, ‘everyone else has it so I should have it argument’, is nonsense, doesn’t work with me.”

“Why are you being so mean?!”

And he stormed out. Once I dusted myself off from the teenage accusation of meanness (translation: if you do not give me what I want, what I demand at this very moment, then you are at fault and you are mean), and once he calmed enough to remove his headphones so we could talk while he wasn’t listening to music, I offered to change his phone plan to include data on the condition that he pay for the increased cost.

As his eyes began the familiar bug out that precedes walking to his bedroom because it has the closest door that may be slammed (sound effects are hugely satisfying for teenagers), I gently explained why I dared to suggest he take financial responsibility. Though his facial expression and body language hinted of tuning out, he voluntarily chose to stay with me, physically anyway, so I continued talking about the importance of learning financial responsibility.

 

images-2

 


Planting Seeds

When Teenage Son was six, I took him with me to a local bank branch and opened an account in his name. While the account was connected to mine so I could monitor future transactions, I wanted to give him a sense of empowerment through having an account in his own name, knowing he would eventually manage his own money.

When the ABM card with his name on it arrived in the mail, we went to the bank the next day. Having quickly learned how to deposit funds through the ABM, he deposited $20, starter money from Dad. At this stage of the game, the point was not the money. The point was to teach him about money … it’s value, what it’s used for, how it’s managed responsibly, how to retain control over money so it is not a source of stress, or worse.

I figured that if we kept an open dialogue about money matters through childhood and teenage years, about what ‘stuff’ costs, about the fallacy of money trees (no, the Bank of Dad does not enjoy unlimited funds and, even if he did, strict withdrawal limits would be implemented), about choices we make in spending and saving, and the consequences of both, then little by little he would learn well the lessons of money management. And, in the process, he would retain a sense of freedom throughout his life when it comes to money matters, thereby avoiding the fate of becoming a Noble Consumer and Holder of Too Much Debt.

Then the cell phone fiasco hit. And I feared that Teenage Son would be turned into a consumer pod, the attachment to his cell phone being like the proverbial canary in the coal mine, portending a life where he was programmed to wanting the latest and greatest toy.

Still, difficult as it was, I kept the faith, choosing to believe that seeds planted way back when would sprout in time. Because the best I can do as a parent is to be patient, generous, and loving, and this includes setting boundaries.

images


Buds Flowering

Teenage Son is now seventeen and attached as ever to his phone. They go everywhere together: to school, out with friends, on bus rides, to the movies, and to bed (the mobile phone having replaced the blanket as a source of security). That said, I insist that he power off before falling asleep so as not to expose his still growing brain to a constant stream of radiofrequency energy.


Chewy Bit

Children may be more susceptible to cancer causing agents owing to a growing nervous system. As well, owing to their smaller heads compared to adults, children are subject to greater proportional exposure to radiofrequency radiation.

Though data from studies done to date do not clearly support higher cancer risk, when it comes to my kid’s brain, I prefer to minimize risk and err on the side of caution, especially knowing that at least some of these studies are funded by telecom companies who, shocking as this may be, could have been tempted to juice results in their favor.

For an exhaustive, hugely informative, eye-popping discussion of this issue, sit down for a lengthy read of Disconnect: The Truth About Cell Phone Radiation, What the Industry Has Done to Hide It, and How to Protect Your Family, by Devra Davis – http://www.amazon.com/Disconnect-Radiation-Industry-Protect-Family/dp/0525951946.


And yes, Teenage Son has a data plan. The bonus for both of us is that he pays for it himself from wages earned working part-time at a grocery store during the school year and working full time during the summer.

Not only that but he has learned to live within a budget, knowing that I won’t bail him out. If he blows his paycheck on a cool leather jacket, and has drained his savings, then he has to wait until he receives his next paycheck before bouncing into a local café and ordering a giant, humungous caffeine and sugar laden concoction tailor made to mess with teenage mood swings.

Sure, I encourage him to set aside 25% of every paycheck into a savings account but he doesn’t always do so. That’s his call. And he has regretted his lack of savings each time his account dwindles close to zero. And that’s just fine; he’s still learning and he’s still a kid so no major harm done.

Eventually, he’ll get into the habit of saving. Eventually he’ll understand that just because he has money doesn’t mean he has to spend it. He’ll get that saving and investing money feels good and helps us take care of the practical necessities of life.

Though his lack of impulse control (read: under developed teenage brain Executive Functioning) may frustrate him at times, Teenage Son has been stepping up and trying to take responsibility. He’s learning that work has its rewards beyond the financial (not only getting out from under Dad’s thumb, but also the sense of controlling his world, the freedom to make independent decisions), that it takes effort to earn money so it’s best to value that effort and give good thought to how you spend, save and invest money. I’m proud of Teenage Son and ever more confident that those seeds planted years ago are taking root.

 


 

Parents: Discuss Money With Your Kids

I was fortunate to grow up in a middle class home with parents who cared for my needs and occasionally indulged my wants. The cost of stuff, what we could afford, the value of a budget, however, was rarely a topic of discussion.

Was their approach right, in the sense of being helpful, in preparing me to responsibly manage my own finances, and maybe pass along a nugget or two to my kids? Before answering this, let me express my unequivocal gratitude for the foundation of love, comfort, and security provided by my parents.

That said, ahem, parents of all stripes would be wise to reconsider the benefits, or lack thereof, of this non-constructive approach, otherwise known as ‘our-parents-didn’t-discuss-money-with-us-so-we-don’t-discuss-money-with-our-kids-although-we-don’t-really-know-why-it’s-just-the-way-it is.’

download


Behavior Modeling

As kids, our primary behavior models are our parents. Like ducklings, we imprint upon them, copying their behavior simply because this is what we’re wired to do.

Whether we know it or not (usually not), we learn their values, internalize their ideas, even subconsciously choose a mate resembling, in appearance and/or character, one or another parent (possibly scary, but often accurate). So why shouldn’t we also copy their relationship toward money and the silly silence and secrecy surrounding money issues?

The thing is, we do. Other than telling the teenage me that I spend too much, and that money doesn’t grow on trees (an oldie but a goodie), my family didn’t have money conversations.

Even as an adult, well into my forties and my parents in their seventies, a time when estate planning issues should be front and center, lips remained sealed. Their net worth, who would assume responsibility for their investments should one or both of them become impaired, plans for distributing assets post departure for the purely spiritual world, none of this was shared.

Thankfully for me and my kids, I don’t accept that imprinting is permanent. If you want to change your ways, with persistence and effort, you can escape generational hand me downs.

download-1


Break The Mold, Bear The Fruit

Here’s the question to ask your self: in staying silent about money issues, who benefits? And the answer is … no one.

As for kids and teens, they are wayyyyy savvier than you may credit them. It’s not difficult to connect the dots, piece together how much dough the parents have. I mean, if they’re so inclined, kids can go online to check your assessed home value, determine the cost of family car(s), piece together how much you’re dropping on family vacations, furnishings, clothes, etc.

And the middle-aged adults with aging parents? If it’s easy peasy lemon squeezy for kids to roughly calculate family wealth, then the +30, +40, +50 folks can do it that much easier. The point being, your wealth isn’t really much of a secret. And if you insist on staying the course, buttoning up money issues because you get all twitchy and squirmy and sweaty when even thinking about having THE TALK with your kids, oh boy, you’re missing an excellent opportunity not only to help them break the money taboo cycle, but to teach your kids about money.

Of course, talks should be tailored to a kids age. For example, more than once my 11 year-old son has asked how much money I have. In kidspeak, this means, ‘hey Dad, tell me how much you’re worth and I’m hoping you toss over a big fat round number because that would be so cool’.

So I tell him, $1,000. But he doesn’t buy it. Eventually, because I see no harm in playing the game, I go up to $50,000. He still doesn’t buy it but this is a huge number to him, one he can’t really place in any sort of perspective, and he’s thinking I may be getting close to the truth. Regardless, this isn’t information I share with my kids because in no way would it benefit them at this point in their life.

In addition to the cost of groceries, clothes, and restaurant meals, I do share the cost of a family vacation. And I share all of these expenses because I want them to know that life costs money, that I work hard for money, and that I do my best to make responsible spending choices, ones that enhance the value of our lives.

Ultimately though, it’s not about me. I want the kids to know that independence, grounding and self-esteem come from personal accomplishments, from work, not from being on the receiving end of gifts.

And when we work and earn money, our job is to then consider choices that life has to offer. To make good choices. To factor cost into our choices. And to know that we don’t get everything we want, that we don’t necessarily benefit from ‘having it all’, and that we’re successful when we learn to compromise and maintain healthy perspective on money issues.

Besides, one day, the Bank of Dad will close, or at least significantly reduce its operating hours, and the kids will be adults earning their own way and responsible for making their own money related decisions. And if I can help them along the way, encourage them to weigh the pros and cons of an intended purchase, and reflect upon how each purchase ties into their personal values, then I’ve done my job well. images


Down The Line

I have two theories as to why older adults, those +70, avoid money talks with their kids. First up is the money taboo, ingrained, not changing. Second is the fear of mortality. The thinking goes something like this: ‘if I talk about my will then I’m talking about my own death and that’s just too much for me to handle because I don’t want to believe I’ll die’.

From a nuts and bolts viewpoint, if you want to minimize stress and headache for your kids, then find a way to look mortality in the face. Because, like the song goes, ‘we’re here for a good time, not a long time.’ And when we get our house in order in preparation for our unavoidable departure, we’re doing our kids a huge favor.

Once kids know approximately how much (if any) money they will receive as beneficiaries, they can plan how to make use of these funds. That said, there’s the common concern that some kids will place their lives on hold, waiting for an inheritance. Or that an unequal distribution among the kids will cause resentment and family discord. These are real concerns, no doubt. And that’s where open discussion comes into play.

It may be tough having talks like this, for parents and children alike. But hey, that doesn’t mean they shouldn’t happen. The talks serve to remove the destabilizing element of surprise, give voice to all concerned, clarify issues, and support realistic expectations all of which make for a smoother transition of wealth from one generation to the next.

So all you parents out there, me included, know that the responsibility to talk with your kids about money remains until the sun sets because the job of being a parent isn’t over til’ it’s over.

 

 

 

Ride Your Way To Wealth

Ride Demon (new name for my 11-year old son) recently bought a hoverboard. If you’re asking, ‘what’s a hoverboard’, well, know that you’re not alone. Because that was my immediate response when Ride Demon excitedly told me of his intended purchase. And my ignorance was cause for him to look at me as if I were from Mars. Or just really, really old and out of touch. I told him to go with the Mars theory.

Then Ride Demon proceeded to tell me all about hoverboards, starting with: they’re soooo much fun, move fast, and carving the streets on a board is awesome. It’s kind of like an electronic skateboard but wayyyyy more cool because they’re battery powered, come with Bluetooth speakers to play music while riding, and are controlled by body motion. Meaning, you lean slightly forward or backward to slow down or speed up, and steer right or left by placing more weight on one foot or the other.

After learning everything I always wanted to know about hoverboards, I asked Ride Demon about the cost (a few hundred dollars).

“I have it covered.”

“Oh?”

“I’m not asking you to pay.” (interpretation: it’s my money and I can do what I want).

“Okay.”

“I know it’s a lot but I’ve been saving my money for a long time and this is something I want.” (interpretation: I’d like to buy this without your opinions and analysis, Dad).

“Absolutely, your call.”

“And I’ve done all the research (the kid knows me; this would have been my next question), and this is the best board for the best price.”

“Totally trust you. Go for it.”

images-1


Money Can’t Love Buy But It Can Buy Experience

So Ride Demon buys the board. And he’s having a blast. The added bonus is that a friend of his is into hoverboard riding as well. So the two boys venture out daily, doing their thing, no helicopter parents around to tell them to slow down or be careful.

Whether he’ll remain interested for a few days, weeks or months, who knows. And whether the expensive price tag was worth it, well, that’s a matter of judgment and perspective.

The way I see it, the kid is learning about money management. On his own, he reviews his bank balance, tally’s up the expense and consequent hit to his savings account, and makes the executive decision to forge onward with the purchase.

Sure, he gets a kick out of watching his balance grow. But, really, the three digit number only gives back so much in the excitement department. Ride Demon calculated that riding the board throughout the summer is worth a whole lot more than any squishy feeling he might get from hanging tight to money.

And I, the Dad in this equation, encourage the kid to jump through these mental hoops. To weigh the costs and benefits to any purchase. And when he makes a mistake, regrets a purchase, all the better. Because he’s learning, and what better time to learn than when you’re a kid, when life is generally free and easy (little does he know!), without financial responsibility, and no money mistake will end in any sort of enduring hardship.

images-2


Self-Balancing

There’s another name for a hoverboard: self-balancing scooter. Yet, while the board does its best to facilitate balance, it won’t work unless you find your own center of gravity, bring your own balance to the board.

Ride Demon was a natural. He quickly learned how to stay upright and comfortably navigate. And as I watched him savoring one sweet ride after another, I’m thinking I’d like to try. So he lets me have a go at it. I step on, shake and wobble for a few seconds, then fall off. Again and again. It’s not as simple as it looks.

Neither is money management for many of us (you knew that, eventually, I was going to bring this around to more talk about money!). I mean, even when someone like Yours Truly passes on a wealth of knowledge (ahem), and you absorb that knowledge, decision making may nonetheless start from a place of discomfort (‘is this the right investment for me? Am I spending too much?) and end with a sense of uncertainty (‘I sure hope the investment works out because I really don’t want to lose money’; ‘it was fun going out for dinner four times this month but now I may not be able to pay off my credit card balance in full’).

So what do you do? Well, this is where I’m going to deliver one of those ‘sounds easy in theory but challenging to implement’ notions. You get comfortable with discomfort; you cozy up to uncertainty. You do your research, acquire information needed for wise decision-making, then make your call. And you do so with conviction knowing that the future is inherently uncertain. And if it works out, good! If not, that’s okay, you learn from it, adjust, and move forward. Not so different than life.

images


Kid Rules

I love being around kids. We adults can learn so much from them. When Ride Demon falls down and scrapes his knee, bangs his elbow good, he doesn’t hesitate to get right back up, place himself in the proverbial saddle and get back to carving the streets. He seems to have an innate sense of balance, one that keeps it all in healthy perspective, one that doesn’t harshly self-judge, one that’s accepting, that exudes spirited enjoyment of life.

Now, all that said, the kid doesn’t have money issues and adult responsibilities. Okay, fair enough. But since you and I do, it’s even more important to find and embrace a healthy balanced perspective on money, and all other facets of life. Because it’s when we’re in balance that we’re healthy, wealthy, and just plain old feeling groovy about this gift of life.

 

 

 

 

 

Imprinting Generosity On Kids

You know the saying that goes something like, ‘they have so much money they don’t know what to do with it’? I’ve come across folks like this. Folks who are wealthy, who have more money than they’ll ever need, and who are at a loss as to what to do with their good fortune.

Invariably, these people pose the same confused question: ‘what’s the point of having money just sit there? If I have it I should spend it, I should buy stuff, right?’

When I come across this sort of self-indulgent, inward focused, Me, Me, Me thinking, my insides instinctively seize up, judgment floods my airways, and my tongue prepares to peel a strip or two off this kind of attitude.

But before saying anything, I calm myself. I breathe deeply. And I remind myself that everyone is on their own life path, and it’s not for me to TELL someone about the benefits of adopting a generous mindset.

bmEnter Buddha

The practice of generosity liberates you from feelings

of separateness or alienation.


Measuring Wealth

Instead of trying to direct someone’s behaviour, I tell them stories in an attempt to lead them to water.

The first story is about Bill Gates, Microsoft founder (NASDAQ:MSFT), the man with the most money in our world. Not only preposterously rich in monetary terms but also spiritually rich, here’s what Gates says:

“Money has no utility to me beyond a certain point. Its utility is entirely in building an organization and getting the resources out to the poorest in the world.”

With Gates and his wife having established the Bill and Melinda Gates Foundation, an organization that recognizes the equal worth of all lives, helps people and communities lift themselves out of hunger and poverty, combats infectious diseases, and devotes hundreds of millions of dollars annually to supporting the Foundation’s objectives, his words are far from empty.

The second story involves my two eldest kids, The Teenagers. They have had the good fortune to learn about, and participate in, the WE MOVEMENT, a phenomenal organization that is all about giving back.

Here’s a few highlights of WE taken from their website:

  • WE is a movement that exists for one reason: to make the world a better place.
  • Anyone can make a difference and there are myriad ways to participate both through giving back and our daily choices.
  • We are defined by our daily efforts; small things add up to great change.
  • Our lives take on a deeper, transformative meaning when we impact the lives of others.
  • We believe in giving of ourselves to help raise a compassionate future generation that looks for any opportunity to make a difference.

In relating these stories, my hope is that the Don’t-Know-What-To-Do-With-My-Money-Crowd will at least ponder why some people choose to give back. And consider the possibility that their heart may just smile and go thumpity thump thump simply by shifting their focus, if ever so slightly, away from ME and toward sharing with others less fortunate, impacting their lives in a positive way.

Because the point of having surplus money is not just to hoard it or spend it on stuff for your self. Far from contributing to your personal happiness and sense of well being, clinging to money, allowing money to possess you, makes you miserable.

Giving, however, is what contributes to a sense of fulfillment. Giving is what makes you wealthy.

This from Anne Frank, the young girl with the wise philosopher soul:

“No one has ever became poor by giving.”

 

images


Giving The Gift of Generosity To Kids

My kids love receiving gifts. Six months before their birthday, I’m being told what’s on their wish list. Often, I respond by rolling my eyes, and issuing a reminder that I’m open to receiving b-day lists no sooner than one month before the magical date.

But, wow, I think to myself, they get so excited! The anticipation, the mystery, the fact that people are giving you stuff that you’ll probably like a lot and use for at least one week … it’s all heady stuff for a kid.

That said, the two teenage creatures in our home seem to be evolving. Having passed the halfway mark of their second decade, they’re no longer kids in many ways.

And while they still enjoy receiving gifts, they now understand the joy of giving too. They understand the satisfaction that comes with watching someone receive your gift and express true appreciation for your thoughtfulness. They understand that Giving is the Gift they give to them self as much as to the other person, one that is worth so much more than money or stuff.

Most of us get to this place sooner or later, the one where we get that we’re wired to help, support, and give to others. It’s part of feeling connected, acknowledging that we’re social animals, that we’re at peace when we show love and care for others, that giving is as essential to our well being, if not moreso, as receiving. It’s our natural disposition, our fulfilled state of being. And when we inhabit this state, we feel good, knowing we’re making a positive difference.

unknown


Why Should I Be Generous?

I’ve taken my kids to several birthday parties where parents of the birthday girl/boy send an invitation asking for a small donation, say $1 or $2, and no other gift. And I’ve done the same with my kids. I get it. I mean, some kids have enough stuff. And parent thinking is that this is an opportunity to teach the kid about giving to those less fortunate. So parents take the donations and, together with the kid, decide upon a charity worthy of donation.

It’s the rare kid who doesn’t see this type of parental scheme as nothing short of diabolical. Sure, the kid hears what the parent is saying but the will, the desire, to forego a truckload of cool toys just isn’t there. And that’s fine because Lily or Lenny is still a kid and the Giving Gene hasn’t yet been activated.

Still, how can you be sure that Lily or Lenny won’t want toys all to them self for their entire life time? How do you make sure that the giving gene is activated one day, and that children, teens, and late blooming adults eventually understand that generosity is a good thing for them self and for others?

  1. Make Giving Personal. Tell them your story. Tell them how you or family members were given a hand up.

Maybe you received a student loan from the government or a generous aunt and these funds allowed you to attend university, graduate with a degree, get a well paying job and now provide for your family.

Maybe you had a grandparent who risked leaving their home country to settle in the USA or Canada, and their doing so meant that you grew up in a political system supporting rights and freedoms, and providing opportunities.

Maybe your mother was struck with breast cancer, survived owing to a skilled physician working in an advanced medical system, and as a result you grew up with two caring parents instead of only one.

There are countless ways, small and large, in which we’ve been helped by others. The thing is, no one gets to where they are without someone setting the foundation for you, without someone helping you or your family or friends along the way. So tell your kids all of your stories, over and over again because what you say and do matters, specifically in terms of imparting the value of generosity.

  1. Give Together. Your kids may not know how they want to give back or what they want to give. So take this journey together.

Consider different forms of assistance such as charitable giving, being a friend to a recently arrived immigrant family, or volunteering at the local Alzheimer’s Foundation because a family member was stricken with the disease.

Whatever cause you choose is not as important as joining your kids on their giving journey, sharing your enthusiasm, and displaying your own sense of generosity. Because awakening their own sense of generosity would likely be your finest gift ever.

  1. Giving Circles. Charitable giving circles involve a group of people pooling assets and then deciding how, and to whom, to give those assets.

In my family, we have five people in our circle, including my kids and spouse. And each year we make a collective decision about which charities to support financially and which causes will receive our time and energy.

This year we’ve spoken to several friends, inviting them to join the circle. Without pressuring them (because giving is best when it comes from the heart not because you feel pressured by family, friends, culture, religion, etc.), we’ve received positive replies from seven people.

And we’re excited about this larger circle that’s being created. Because with more people sharing of them self to make an impact on other lives, with more giving, and more generosity, we all feel better.

And like the WE Movement says, giving paves the way for our lives to take on a deeper, transformative, more satisfying meaning when we positively impact the lives of others. And it’s really, kinda amazing that our kids our learning the value of giving, the value of compassion, and in the process making themselves as rich as they could possibly be.

 

 

 

 

Teaching Kids About Money

When my daughter (let’s call her Sunshine because, hey, she brings the light in every day) was 6, I started her on the path to savvy money management. Her first step was to accompany me to a bank where we opened a savings account. The account was in her name but connected to my personal account so I would be able to monitor all transactions.

Next, she was given an allowance because, as Sunshine so astutely pointed out to me, what’s the point of having a bank account if you do not put money in the account. Owing to her tender age, and the fact that the Bank of Dad would be bankrolling her for some time to come given sky-high unemployment numbers among five to ten year olds, we agreed upon $2 / week.

At this stage of life, how much money I gave to her was not hugely important (that said, I kicked around the numbers, vacillated between $1 and $2, and eventually settled at the upper end, knowing the exorbitant cost of candy these days).

The purpose of the allowance was to teach her, little by little, about handling money. I figured that she knows how to floss her teeth, tie her shoes, and count beyond 100 … so its time to start learning another practical skill that will benefit her throughout life: saving and spending money.

And I wanted Sunshine to learn with her own money, exercising her judgment, taking responsibility for decision-making, learning from her mistakes. Sure, I was there to help out as needed but she needed to “do” for her self. Because that’s how we learn best: by doing for our self. And when we take care of our self we empower our self. Not only does personal empowerment make us feel good and competent and strong, it sure helps with navigating the corners, straightaways, and ups and downs of life.


unknown

Enter Buddha

Empowerment means not simply gaining power, but continually orienting one’s life in the most positive direction.

A self-motivated positive change in one’s inner life creates a change in one’s destiny. This in turn beneficially impacts the destiny of one’s family and, ultimately, one’s community.


Rolling in Dough

So once a month Sunshine and I trekked to the bank to deposit her allowance money. Most often, she hadn’t spent a cent. Turns out she was, and still is, a natural saver. Of course, Sunshine was also wily enough to know that she didn’t have to dip into her pocket because Dad is a sucker for buying her candy and toys.

When she had accumulated more than $50 (her balance buffed up by cash birthday gifts from relatives), I said to her,

“Now what?”

“What do you mean?” answered Sunshine.

“You’ve got all this money, right? Well, what are you going to do with it?”


Parental Guidance

As a parent, my role is not to dictate. I’m not here to tell Sunshine what to do with her money. But I do try to give guidance. Because my goal is for her to be comfortable with managing all aspects of money, meaning saving, spending, investing and sharing. And the only way she’s going to become comfortable is by taking responsibility for her decisions.


Buckets

In the guidance department, my rule of thumb works like this: money is apportioned among three imaginary buckets (for adults, a fourth bucket, investing, is added):

  • Saving
  • Spending
  • Sharing

When money is received, it’s placed into each of the three buckets, ideally in equal parts. This is a simple way to provide money management parameters.

That said, the amount to be deposited in each bucket may be a conversation waiting to happen. For example, if Sunshine were saving up to buy a scooter, then we would talk about her savings goal, how best to get there, and how contributing more to the savings bucket would impact available spending and sharing.

The benefit of setting savings goals is huge. It helps kids ‘buy in’ to the value of savings, and has the positive effect of limiting spending and reinforcing the notion of becoming a conscious consumer (i.e., thinking about each purchase and the effect spending money will have on savings, sharing, the environment, etc). If kids start thinking this way about money at a young age, they will most likely carry this perspective forward into adulthood.


Money Lessons

#1. When To Start Teaching

The sooner the better. Kids are more receptive to your ‘lessons’ before adolescence strikes, a time when growing brains tend to go wonky and haywire, and those lessons you used to teach are now perceived as nagging, boring lectures. Still, regardless the age, it’s never too late to start.

#2. Saving

The little ones should learn that money is a tool. It’s used to satisfy needs and wants. And distinguishing between ‘wants’ and ‘needs’ is essential if you want to achieve financial freedom one day. (http://buddhamoney.com/money-and-happiness/day-two-enter-the-buddha/)

#3. Spending

Thinking in terms of wants and needs when deciding whether or not to make a purchase sets the stage for minimizing impulse buys and, at the same time, encouraging delayed gratification (http://buddhamoney.com/money-and-happiness/willpower-leads-to-wealth/).

The fewer impulse buys, the more you stick to spending on ‘needs’, the more money you have to put toward savings. Kids who learn this sort of self-discipline morph into adults who realize that freedom comes from living within your means.

#4. Sharing

My daughter absolutely adores animals so she’s been making charitable contributions to local animal shelters. Knowing that her gift helps to provide food, shelter and care for animals makes her feel amazing. And she’s learning not only the value to others that comes from giving, but also the intrinsic reward she receives through the act of giving.

#5. Mistakes

Let your kids fall down. And teach them to get back up. Because there are no mistakes, only experiences from which we may learn. And when we’re talking about money, it’s best that mistakes be made when kids are young, still under parental care, when damage will be minimal. They will learn from their mistakes and become better money managers as adults.

#6. Credit Cards May Be Dangerous

When young, say under 10, most kids don’t immediately grasp how credit cards work. They don’t get that three or four weeks after your purchase is made, you have to pay the lender. And they certainly do not know anything about exorbitant interest charges so kindly added to your account when payments are overdue.

Kids should be taught about the perils of credit cards, of spending money you do not have, of the price you will pay for buying what you cannot afford in terms of debt, stress and, owing to interest payments, stopping your self cold on the road to financial freedom.

#7. Pay To Play

When Sunshine was six, her $2/week allowance was tied to making her bed on the weekend and clearing her dishes from the dinner table. Because I didn’t want her to grow up with a sense of entitlement. And I wanted her to experience the reward that comes from giving back, of being a good citizen of the BuddhaMoney family.


Teenage Balance

Today, my daughter is fifteen and remains a conscious saver. I’m guessing that part of this is a result of what I’ve been teaching her over the years and part owing to who she is, i.e., someone who appreciates what she has and doesn’t crave ‘stuff’.

Still, she spends money on clothes, movies and music … typical teenage things. She does so knowing how much is in her bank account (she has access to her account online), how much she wants to retain in savings, and what is a reasonable amount of spending.

Sure, she’s still young but she’s on track to becoming an adult who will not dig debt holes for her self; who will manage money responsibly and enjoy the peace of mind that comes from maximizing savings, limiting spending, and giving back.