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Tag: parenting (Page 9 of 14)

Teaching your kids about money

August 13, 2018 /

Recently, I listened to an episode of the Rich Dad podcast centered around teaching financial literacy to our kids. Here are my notes on the episode.

In the opening monologue, the host ascribes as “garbage” the convention to:

“…save money and get out of debt and invest for the long term in a 401k. So if you’re teaching your kids to save money, go to school, get out of debt, buy a house, and invest for the long term in a 401k or trust that your company pension or your state pension plan is going to be there to save you, this program is for you.”  (Robert Kiyosaki)

Hmm. So saving money and getting out of debt are not good things? I can certainly understand how putting your complete faith in 401k and pension plans is probably ill-advised and that home ownership as an investment is a dubious proposition. But saving and being debt-free is bad? I think what he really means is that it’s bad to save in US Federal Reserve notes, as the Federal Reserve seems to increase that supply with seeming reckless abandon, eroding the purchasing power of those notes over time.

Cash Flow

The crux of the episode focused on the husband-and-wife team of Andy and Marcy Tanner and how they’re raising their two young boys to be financially literate. Mr. Tanner is the author of two books: 401(k)aos and The Stock Market Cash Flow. 401(k)aos seems to be a book describing deceptive practices in the 401k industry while The Stock Market Cash Flow appears to be more of a prescriptive book about how you can take advantage of the stock market.

The Tanners seem to do a lot of international public speaking and take their boys with them to speak in front of thousands. Learning to speak in front of crowds of adults by itself is certainly a great experience for their children. The family are also avid players of a game called Cashflow–I assume it’s this “Cashflow” game from the Rich Dad franchise, which they say is a chief instructional tool they use with their boys.

Infinite Returns

The episode then detoured from tools and techniques to teach our children about money to “those bums in Washington” and Wall Street. One term that kept coming up was Infinite Return. The best I could gather, Infinite Return is a technique, largely achieved in real estate investing, where you somehow invest no money in an asset and then turn around and sell the asset for an “infinite return” on your initial $0 investment. Tanner did make one observation that never occurred to me before: with 401ks, and probably most other investment vehicles, people invest their own money in these instruments. The 401k managers call this money “assets under management.” Those managers take a fee from the investors. Thus, this is a form of Infinite Return for the managers: they make no investment of their own capital and take none of the risk yet they make a return off the transaction all the same.

Taxation without representation

The conversation then shifted to the age disparity between the host and the two young guests. The host claimed that pension programs use, I guess, incorrect actuarial tables that expect most participants to die at age 70. Since people are living longer these days, retirees are drawing on these programs longer and shifting more and more burden on the young for support.

“One of the questions that was a real epiphany for the boys was: ‘David, are you old enough to vote?’ ‘No.’ ‘And Zach, are you old enough to vote?’ ‘Nope.’ So you guys didn’t get to vote for all this spending. You didn’t get to vote for these policies and, yet, you understand clearly that you’re going to have to pay for it.”  (Andy Tanner)

“So if you didn’t vote for it and yet you have to pay for it, David, what’s that called? ‘Taxation without representation.'”  (Andy Tanner)

Cashflow Quadrant


Mr. Tanner off-handedly mentioned another tool, The Cashflow Quadrant, that he used as an initial teaching device to show the four different roles the kids could assume as they enter the workforce.  Just this image alone seems like a powerful teaching tool I can use today.

Learn how to sell

“The most important skill of an entrepreneur is sales.”  (Andy Tanner)

The Tanners raised their children to hone and enjoy the skill of sales. Lemonade stands advertised on Facebook became the boys’ training ground. With their profits, the boys invested in Disney and McDonalds stock. Then, after learning about the detrimental effects of inflation on their cash savings, they began purchasing silver. Lately, they’ve gravitated toward investing in real estate.

“One of the thing’s that’s fun is Mom and Dad will invest in bigger projects and you get to be part of that….We do have some real estate as a family–in a family trust–but you really want your own, don’t you?”  (Andy Tanner)

Real estate in a family trust. Might be something good to remember.

The biggest asset of the US federal government

In closing, the host mentioned an astonishing statistic that, at first, I just couldn’t believe: at $1.3 trillion, student loan debt is the biggest asset of the United States federal government. What?! How can that be?  How depressing!

More tools, please

So, this podcast episode was decent, I just wish the host and guests would have detailed more tools and techniques they use to educate their kids–particularly tools that aren’t part of the Rich Dad brand.

What’s the return on a college investment?

July 19, 2018 /

In a previous post, I took lots of notes of a short podcast series I found on planning for college. I think I’m going to continue doing that as the host drops valuable nuggets of information in each episode he’s recorded. Here are my notes on his “Return on Investment” episode.

The first part of the episode seems to be a recap of his previous one–which I haven’t listened to yet. He speeds through a number of questions the student should ask himself when deciding on college and career:

1. For what you want to do, is a degree even necessary?

The host references a finding by The Center for College Affordability and Productivity that asserts 48% of 2010 graduates are working in jobs that don’t require a four year degree. Later in the podcast, he points out efforts by Mike Rowe and others to sway people from the “credentialist arms race” that college has become to less debt-riddled paths.

2. What will the job pay?

As I’ve told my child, consider your current circumstances: nice house in the suburbs, a couple of cars, summer vacations and so forth. Do you like that lifestyle? Do you want an even better one when you’re on your own? Then you’ll need to find a job that can support such a lifestyle. The host suggests visiting Payscale.com which apparently has tools to help you find a college that meets your budget and will even give you a projected income for when you graduate.

3. Will your income support the cost of your student loans?

Sure, you have lifestyle expectations that your future career will need to support, but you’ll need to add to that the cost of paying back your student loans. Will your career support both? To get an idea of what those student loans might look like, the host recommends visiting FinAid.org which has a calculator to help you estimate your potential, monthly student loan bills. He also mentioned two other tools for estimating your potential costs that look to be pretty good:

4. Is your chosen degree too general?

A degree in “business” may be too general for your intended career. Here is where more research is warranted where you start with your chosen career and work backward toward the degree(s) that best feed that career.

5. Does the brand name school really matter?

Occasionally, attending that elite school may be the path you need to take for your chosen career, but, chances are, the degree is more important than the stationary it’s printed on. Again, your research should bring such points to light.

6. Does the college itself have a lot of debt? Will it stay in business?

I thought this point was interesting and one I’ve never considered. What would happen if you received a degree from a college that went out of business? Would that negatively influence your standing with potential employers? I have no idea. As I think about it, I recall hearing about some for-profit colleges going out-of-business, but I don’t recall ever hearing about a traditional school closing its doors.

7. Inquire about the college graduation rate, the average number of years to graduate, the percentage of students that graduate, and the student loan balance.

All great questions you should ask of a potential college. He also mentioned Wallethub’s 2018’s Cities with the Most & Least Student Debt as a good resource for identifying what States (and likely State schools) pose the most risk for high student debt.

After his recap, the host then dove into the main points of thinking about your Return on Investment for the cost of your degree. He called out four important considerations:

  1. What’s the total price of your intended college?
  2. How much student loan do you plan on obtaining?
  3. Consider the income potential of your chosen career field. Is it worth the investment?
  4. Consider if the income you make will cover your loans and expenses.

You can increase your ROI by decreasing your up-front costs. Consider these ways to save “thousands” on your tuition bill (for both parents and student):

  1. Parents should set limits. Set a limit to the total amount you’ll contribute each year. Set a limit to the total number of years you’ll contribute to your child’s college journey. He noted, sadly, that due to the fact that parents are the usual co-signers to federal and private student loans, people in their 60s are now becoming the largest demographic paying back student loans.
  2. Apply to the FAFSA
  3. Explore scholarships and grants
  4. Get in-state tuition. Even if the student attends an out-of-state school, there are ways to still pay in-state prices.
  5. Look into CLEP exams and test out of subjects you’re already familiar with to reduce your costs.

Great series of podcasts for those of you, like me, looking at that bright light at the end of the tunnel.

The struggle to staying fit

July 11, 2018 /

Across my gym’s parking lot sits a great American icon: McDonalds. Twenty feet to the West is Burger King. Every time I leave the gym after a hard workout, I look across the parking lot and see the drive-throughs of both establishments stacked four-to-six cars deep. What irony.

My family has busy schedules and lots of needs, financially and otherwise. To be as supportive as possible, I know I must be as healthy as possible. Gym, yes. Fast food, no. Now, I’m no Jim Jupiter and I’ve had my share of health concerns, but I try to place a high priority on staying healthy. Here are some of the ways I try to maintain and improve my health:

1. Weightlift

The book, The Abs Diet, places a high premium on weightlifting to promote fat burning and overall health:

“It turns out that while lifters didn’t burn as many calories during their workouts as the folks who ran or biked, they burned far more calories over the course of the next several hours. This phenomenon is known as the afterburn–the additional calories your body burns off in the hours and days after a workout. When researchers looked at the metabolic increases after exercise, they found that the increased metabolic effect of aerobics lasted only 30 to 60 minutes. The effects of weight training lasted as long as 48 hours (p46).”

With our schedule, I’m lucky to weightlift about 3-4 times per week. I try to practice a four-day split so I can give each body part appropriate attention and break my workouts down into “warm up” sets (3-5 sets of 20 repetitions each of a lower, warm-up weight) and “working” sets (3-5 sets of 4-8 repetitions of a much higher weight).

2. Run

Aerobic work is still important–your heart is a muscle, after all–so I try to run or use one of the elliptical machines at the gym as much as possible. I do wuss-out a bit if the temperature is under 40 degrees, but otherwise I try to get 2-3 three-mile runs in per week.

3. Eat right

In a recent interview, renown physicist Michio Kaku discussed his interest in the paleo diet. While I think that diet makes a lot of sense, I haven’t quite committed to it. Instead, I simply try to keep the carbs low and protein high.

4. Drink water

I have an app on my phone to remind me to periodically drink water. Admittedly, I tend to turn it off after a few annoying reminders, but one part of my diet I’ve been fairly successful at is nearly eliminating drinking sodas. For me, it’s water, tea, and coffee.

5. Garden

The fitness industry loves to talk about developing a healthy diet, but I rarely hear them discuss where the foods that compose a healthy diet come from. What sort of pesticides were sprayed on those foods as they were grown? What sort of preservatives coat those foods to give them longer shelf life in the grocery store? Why does no one in the fitness industry talk about growing your own healthy food–at least a fraction of it, anyway?

Cultivating a garden is a great way to grow foods you like and know for a fact what pesticides you apply, or withhold, from those foods. Every year, I plant a small raised bed and several containers with tomatoes, peppers, lettuce, strawberries, and other plants. I also grow raspberries, blackberries, pears, and even paw-paws on my small suburban lot.

With gardening, not only can I grow the food I like and keep it chemical free, but I find it a bit of a stress relief, as well.

6. Mow my own grass, take the dog for a walk, and other sundries

Mowing the lawn can be grueling in the hot summer sun, but I consider it a small workout. It also helps me keep in touch with my property, noting if that side hedge needs trimming or if there’s some trash under one of my pine trees. Also, it affords me another opportunity to listen to my podcasts!

Another necessary choir is taking the family dog for a walk. I struggle getting the kids to take on this responsibility, so I often find myself and my four-legged friend out for a stroll, but I count that as a small workout, too, and I know he appreciates getting out of the house a little.

7. Martial Arts/Boxing

In my younger days, I participated extensively in martial arts and boxing–great forms of exercise that provide the added benefit of teaching self defense. These days, I’ve had to back away from that regimen, but I still do occasional bag and shadow boxing work and will hopefully get to someday pass on some of my knowledge to my children.

8. Train my brain

Staying healthy isn’t entirely about the physical body. I love to learn and always try to learn something new everyday. Podcasts are great in this effort. Also, I often attend both free and pay training sessions such as those at EdX and DataCamp.

9. Sleep?

Experts seem to suggest 7-9 hours of sleep for old dads like me. Unfortunately, I’m more in the 5-6 hour camp. So, this is definitely one point of fitness I need to improve upon.

10. Stretch

I tore my calf a few years ago playing soccer with my boy. The recovery was long and painful and directly impacted our schedules. Since then, I’ve tried to be more thoughtful about stretching, but certainly need to do a better job working this into my daily routine.

11. Meditate

A lot of people I listen to are big advocates of meditation. Meditation was a part of my martial arts experience, but I could never get the hang of it. I really want to give the practice another go, I’m just struggling to figure out a proper time and place amongst the hustle and bustle that is my home life.

Whatever you do, try to do some form of physical activity every day. If you’re like me, a lot of people are depending on you to be at top performance now and years to come!

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