AOA 007: Financial Education Tips for Teens and Kids of All Ages from an Expert Dad

Full Transcript

This transcript is from The Art of Allowance Podcast, Episode 7, featuring host John Lanza and guest Bill Dwight.

00:00:00,090 [John Lanza]
Hi, this is John Lanza, host of the Art of Allowance podcast, and welcome to episode lucky seven!

00:00:07,600 [Bill Dwight]
And, and I think that’s kind of a theme, actually, like, over and over again, which is you think the kids aren’t listening, [laughs] you think your messages aren’t getting through, and then they grow up and, and go off to, to college or the real world, and i- it, it’s all starts to click, and you realize that it was worth it. So, so keep up the good fight, uh, for sure. [upbeat music]

00:00:36,100 [John Lanza]
Hello, and welcome to the Art of Allowance podcast. I’m your host, John Lanza. I created this show so that I could have parent-to-parent conversations, and really tease out ideas of how we can all do a better job of raising money smart, money empowered kids. I hope you’ll find a few little nuggets in each episode that you can use on your own journey with your own family. In this episode, I talk to Bill Dwight, the founder of FamZoo, a virtual family bank that integrates prepaid card accounts with family finance software to help parents and kids develop responsible money habits through hands-on experience. Sounds like we’ll have a little bit to talk about. Well, Bill is a father of five, and he brings both his personal experience and that of many FamZoo users to provide a plethora of practical money-smart teaching tips that I think you’ll find useful. I hope you enjoy this episode of The Art of Allowance podcast, so let’s get started. [upbeat music] Okay, I have Bill Dwight on the line, and welcome, Bill.

00:01:46,340 [Bill Dwight]
John, delighted to be here.

00:01:47,960 [John Lanza]
Well, I am really excited about this, because I know how much knowledge you have, and how much you can share with our audience. And I think you’ve been on this youth financial literacy, literacy mission for, uh, about as long as I have, and I, I wanted you to-

00:02:04,000 [Bill Dwight]
11 years officially. [laughs]

00:02:05,600 [John Lanza]
[laughs] Yeah, it’s, it’s… Y- your, your mission has been pretty impressive, and I kind of wanted to get a sense of how you got started with this. So can you kind of take us through that?

00:02:17,580 [Bill Dwight]
Well, uh, Selena, my wife, and I have five kids, and, um, quite some time ago, when the oldest ones were in middle school, we kind of, uh, realized that nobody was teaching them anything about personal finance. And, um, [clears throat] so we, uh, realized that that should probably be us. And, um, that’s kind of when, um, you know, I got, got serious about, uh,

00:02:44,780 [Bill Dwight]
looking for tools to help teach the kids personal finance basics. And, um, so there really wasn’t much out there. It was kind of too much of a hassle to set up, uh, a checking account, uh, and any of that stuff. And, um,

00:02:59,080 [Bill Dwight]
so I started creating, like, a little bank of dad in a spreadsheet, very much like a, a book I know you’re familiar with, The First National Bank of Dad.

00:03:08,360 [John Lanza]
Sure. David Owen.

00:03:09,040 [Bill Dwight]
Which, yeah, which is great for moms, too, by the way. [laughing]

00:03:13,049 [John Lanza]
[laughing] Yeah.

00:03:13,730 [Bill Dwight]
A non-PC title there. But, um, so I, I was not aware of that book and, and, um, I started creating a little spreadsheet to, um, you know, maintain

00:03:26,040 [Bill Dwight]
mock financial accounts for the kids, because in a large family, if you’re keeping money in your sock drawer, there’s a pretty good chance that it’s gonna get pilfered. [laughs]

00:03:35,070 [John Lanza]
[laughs]

00:03:35,240 [Bill Dwight]
And so instead of them keeping cash, uh, at this point, I would just credit or debit their account, and it was basically an IOU. Like, “This is how much money you’ve earned, and this is how much you have to spend, and if you want to purchase something, I’ll make the purchase for you and deduct it from your account,” just so they have some awareness of the finite nature of money. And, uh, so it was just a simple spreadsheet, and over time, it kind of took on a life of its own. We started wanting to teach kids about the power of compound interest, for example, and created a savings bucket, and then a charitable bucket, when I got interested in teaching them about charitable giving. And, uh, you know, at some point, I just got tired of them coming into my office and saying, “Hey, what’s the balance in my account?” [laughing]

00:04:24,430 [John Lanza]
[laughing]

00:04:24,740 [Bill Dwight]
Right? Uh, [laughs] so I had, at this point, been in software for many, many years, since, um, 1984, when I graduated. And so I built them a little private website where they could sign in, kind of like their own little, like, online banking, so they could sign in and, and check the balance themselves. So that’s, uh, kind of where the journey started. And, um, and then, uh, I… About 11 years ago, I just decided to, to, that, “Hey, this tool is kind of useful, and maybe I’ll try to make a company out of it.” And I was kind of ready to move on from, uh, my Silicon Valley career with other startups and large companies, and, uh, form my own company-

00:05:11,320 [John Lanza]
[laughs]

00:05:11,330 [Bill Dwight]
-called FamZoo, which is short for My Family Is a Zoo-

00:05:15,060 [John Lanza]
[laughing]

00:05:15,450 [Bill Dwight]
-in case anyone’s wondering.

00:05:17,000 [John Lanza]
Well, that, that addresses one of my other questions, so [laughing]

00:05:21,010 [Bill Dwight]
[laughing]

00:05:22,180 [John Lanza]
I was gonna ask that question.

00:05:23,760 [Bill Dwight]
As a zoo guy, I guess.

00:05:25,580 [Bill Dwight]
[laughing]

00:05:25,610 [John Lanza]
[laughing]

00:05:25,840 [Bill Dwight]
You get the zoo thing.

00:05:26,980 [John Lanza]
Yes. So w- in your… [exhales] I would say w- when you’ve… uh, ’cause you’ve, you’ve done so many- I mean, you’re having five kids, and then having this business, what’s-

00:05:36,760 [Bill Dwight]
Well, my wife had five kids, actually. [laughing]

00:05:39,110 [John Lanza]
[laughing] That’s a, that’s a very smart and, uh, and wise correction.

00:05:44,350 [Bill Dwight]
[laughs]

00:05:44,400 [John Lanza]
What’s been the most… uh, if you can kind of identify, what would be the most surprising thing that you’ve learned in teaching your kids about money?

00:05:54,100 [Bill Dwight]
Well, I think that how non-uniform they are. Uh, as far as I can tell, Selena and I have-… been pretty much consistent and the same in our personalities [chuckles] over the years, maybe just a little more tired.

00:06:06,508 [John Lanza]
Mm-hmm.

00:06:07,008 [Bill Dwight]
Um, but the kids all have very different money personalities, and so what was surprising to me was, uh, that different rules applied to the different kids just because they had, um, ah, different personalities a- and kind of needed different systems that suited them

00:06:29,668 [Bill Dwight]
more appropriately. So, uh, being a kind of a computer scientist rules kind of guy-

00:06:35,587 [John Lanza]
Yeah

00:06:35,707 [Bill Dwight]
… I started out on this journey thinking everyone was gonna be playing by the same rules and have exactly the same system. And, um, like most things in parenting, I realized that I was an idiot. [laughing]

00:06:46,278 [John Lanza]
[laughing]

00:06:46,308 [Bill Dwight]
And, um, [laughing] that, uh… Yeah, I never felt so dumb until I became a parent.

00:06:52,368 [John Lanza]
It’s incredible.

00:06:52,768 [Bill Dwight]
And I always thought I’m kind of a smart guy-

00:06:54,788 [John Lanza]
[chuckles]

00:06:55,207 [Bill Dwight]
… and, and I realized that I’m really not very smart at all. But the kids really taught me that, you know, it’s okay to fashion a system around the kid’s personality, ’cause they have different needs. Um, and so what was good for the goose wasn’t good for the gander necessarily. And so I was, um, you know, started out being a stickler for, “Okay, everyone’s gonna follow exactly the same pattern,” and then, you know, turning to being completely unmoved when one sid- kid would say, “Hey, you know, Taylor gets this and I don’t.” And I’m like, “Well, you’re not Taylor.” [chuckles]

00:07:26,968 [John Lanza]
Mm-hmm.

00:07:27,468 [Bill Dwight]
So, uh, uh, or you know, Peyton or Will, I didn’t want to pick out anyone in particular, but the point is, they’re just very different. And, um, you know, I think that applies to adults as well.

00:07:40,608 [John Lanza]
Yeah, I think that’s very good advice, and I’ve discovered that same thing. It’s… When I was putting together my book, I, I, I, I felt that I, I, I took that same approach, which is just as a kind of a guide to other pe- guide to help people, because it’s so true, every kid is different, and there is no one system that’s gonna work for any one family or for one kid. You do have to have the flexibility, and you just want to have a framework. And I, I, I noticed that in reading your blog, you, you really do… You’re- you go into so many different details, and you, and your answers are very nuanced. You know, I, I notice, uh, I was noticing in some of the threads that you really, you really do have kind of very nuanced approach, and I think that is- it just makes the most sense, ’cause there’s, there is no kind of way you can kind of browbeat peop- people into saying, “This is the way that it’s gonna work.”

00:08:34,847 [Bill Dwight]
Well, what’s been really fun about FamZoo in the last 11 years is we have now worked with just thousands of families, and the, the blog is sort of a compendium of all these different techniques that we’ve seen families use. And it’s kind of neat because we have data, um,

00:08:55,388 [Bill Dwight]
you know, that kind of we can rely on. So it’s, uh, it’s not purely allegorical. Uh, but there are so many different ways that people use the tool, a- and, and one of the real design objectives was, “Hey, we just want to give you a platform, so you can take, you know, uh, your values on one hand, your money situation on another, your personalities, and kind of, uh, drop that on top of the platform and, and use it i- in the way that it’s appropriate for you.” So we, we tend not to be, uh, uh, telling people what to do. It’s more like, “Hey, here’s a bunch of… Here’s a collection of tools, and fashion them to suit your family.” Now, that’s a bit of a double-edged sword, because sometimes families are just like, “Just tell me what to do.” [laughing]

00:09:39,117 [John Lanza]
[chuckles] Right. Right.

00:09:39,748 [Bill Dwight]
Um, you know?

00:09:40,928 [John Lanza]
Yeah.

00:09:41,358 [Bill Dwight]
Uh, so there can be s- too many choices sometimes, but, uh, you know, that’s also why I like, you know, kind of collecting these years of little tips, like page-long tips, so that way people can pick and choose from a set of, uh, templates or tips and say, “Hey, that, you know, that might work in, in my family or whatever.”

00:10:02,408 [John Lanza]
Yeah.

00:10:02,528 [Bill Dwight]
You know, like, uh, you know, a good example would be

00:10:05,728 [Bill Dwight]
some people don’t realize that some kids have trouble spending. They have a, they have a, if you will, savings problem. They never want to let go of anything.

00:10:14,367 [John Lanza]
[chuckles]

00:10:14,867 [Bill Dwight]
And that doesn’t occur to us parents. Usually, where it’s like, “Okay, the kid’s got a spending problem.”

00:10:18,908 [John Lanza]
Right.

00:10:19,127 [Bill Dwight]
But some kids have a saving problem and need to kind of let loose a little bit, and so, um, I kind of like this technique of having a use-it-or-lose-it allowance specifically for that. Uh, where you might have, uh, okay, here’s a, here’s a, um, a modest allowance that has to be spent during the week. So maybe you go out with Dad for ice cream or whatever, and at the end of the week, if there’s some leftover, it doesn’t roll over to the next week, it just goes away. So it’s kind of conditioning your kid who can’t let go of any money to, to realize, “Hey, this is a, a tool that can be used for fun or something that we, uh, value or whatever,” and kind of get them loosened up around, um, spending.

00:11:05,568 [John Lanza]
Um, explain that. Uh, that’s, that’s, uh, it’s different concept to me. So, so I understand what you’re talking about with regard to having kids, uh, you know, personalities are different, and you will have those kids, and I’ve run into those, those same questions from other parents, where they will say, “Well, my kid just either…” I, I remember talking to one parent who said, “My kid just wants to give all their money away,” uh, which is another problem, or… And, and some people might even say that’s not a problem, but it is an issue. And so explain, like, in practice, how that would work, this allowance that is kind of, um, a t- a temporary, that has to be used.

00:11:43,508 [Bill Dwight]
Well, in our case, we can just create another little bucket or account. Uh, um, now, the, the FamZoo system has evolved to have these prepaid cards that represent, uh, just like your jar- money jars, right? It’s like the equivalent of a jar.

00:11:58,877 [John Lanza]
Yeah.

00:11:58,887 [Bill Dwight]
And so you might have a jar that’s sort of-… uh, we’ll put it in your terms, you could have a separate jar that was sort of the use it or lose it jar.

00:12:06,204 [John Lanza]
Mm-hmm.

00:12:06,644 [Bill Dwight]
And so each week you could put, you know, maybe three bucks in there or something like that, or five bucks, whatever’s appropriate.

00:12:13,474 [John Lanza]
Yeah.

00:12:13,504 [Bill Dwight]
And just say, “Hey, this is for, um, you know, spending this week. You spend it, uh, great. If you don’t spend it, the money gets pulled out back, you know, back to the bank of Dad-

00:12:26,744 [John Lanza]
Yeah, yeah.

00:12:26,834 [Bill Dwight]
-back to the Bank of Mom.”

00:12:27,544 [John Lanza]
Yeah.

00:12:28,214 [Bill Dwight]
“Uh, and, and here are some suggestions for how we might use it. Maybe we go out and, um, you know, have an ice cream together, or, uh, you know, go to a movie together,” and you don’t necessarily pay for the whole thing, but you pay for part of it. Uh, so they’re participating in this notion of connecting, spending with a, uh, a joyful or, um, you know, meaningful activity, and just getting comfortable with that. Now, again, this would be for, for kids who just can’t seem to part with any dime, [chuckles] you know?

00:12:57,804 [John Lanza]
[chuckles] Right. Right.

00:12:59,074 [Bill Dwight]
Uh, it’s kind of when they’re, when they’re crossing that boundary from, uh, frugal to stingy.

00:13:05,304 [John Lanza]
Yes.

00:13:05,824 [Bill Dwight]
And, you know, what is that line? And those are good conversations to have, too.

00:13:10,264 [John Lanza]
Sure.

00:13:10,564 [Bill Dwight]
And so I’m just saying, “Hey, this is a neat little tool that you could try if you have this scenario.”

00:13:16,644 [John Lanza]
Mm-hmm.

00:13:17,164 [Bill Dwight]
Uh, and those are the types of little techniques that we kind of pick up in talking to customers and families for 11 years. Um, you know, ’cause we talk to our customers on the phone all the time.

00:13:29,184 [John Lanza]
And you could also probably work in something where… ’cause I know you’ve- uh, saw this on your blog as well, where you’re talking to kids about kind of bill paying. Um, so introducing them to that. So it could be, you know, if they’re- if the- if they’re at the point where they have a phone, that could be something that’s worked in, so they know that, you know, certainly it’s a, it’s a good habit to be saving, but you do have to… There, there are gonna be bills. There is a certain amount of spending that you are gonna have to do, and this is a good way to maybe introduce that to them as well, right?

00:14:00,884 [Bill Dwight]
Yeah, that, that’s a funny one because that, that came about when I read this article years ago in The Wall Street Journal, that was talking about how many grown adults were having their phones still paid for by their parents. [chuckles]

00:14:13,693 [John Lanza]
[chuckles]

00:14:14,584 [Bill Dwight]
And, um, and so I was like: Oh, man, you know, I wonder if I’m raising that next generation.

00:14:19,464 [John Lanza]
[chuckles]

00:14:19,844 [Bill Dwight]
And so

00:14:21,444 [Bill Dwight]
we created this thing called an auto-debit, where, you know, the Bank of Mom and Dad could take a sort of auto-debit from their account each month. And then, uh, so for example, I could say, “All right, well, uh, kids, you are responsible for $20 of the data plan each month.” And the nice thing is they get used to the idea… Well, first of all, they realize, “Oh, you mean these things cost money?” [chuckles] “Yes, they do.”

00:14:48,424 [John Lanza]
[chuckles]

00:14:48,964 [Bill Dwight]
Um, and, uh, and also they have to kind of think ahead. It’s like, “Oh, I got to have 20 bucks in my account at the end of the month,” right? Uh, so you get them, um, used to the notion of what a regular bill is, keeping a, a above zero balance, and stuff like that. Now, in our system, we can even… If they go negative, um, which we kind of keep track of in our accounting system, we can charge them an interest fee, too, so they get, they get, um, socialized to the notion of a penalty. So all these things are, I think, useful concepts for kids to experience in the small, before they leave the nest and, and, uh, can do some real damage.

00:15:31,804 [John Lanza]
Yeah, I noticed another thing in getting into these kind of real-world concepts. You had a blog post about, uh, doing microloans, and I thought that was-

00:15:40,544 [Bill Dwight]
Mm-hmm

00:15:40,674 [John Lanza]
… interesting. Can you tell us a little bit about how that might work?

00:15:44,884 [Bill Dwight]
Yeah, because so many folks’ kind of default logic is, never loan your kids money, right? Because, um, you don’t want your kid to become accustomed to, to, to taking loans, right?

00:15:57,624 [John Lanza]
Right.

00:15:57,984 [Bill Dwight]
And, um,

00:15:59,604 [Bill Dwight]
yeah, and I think that’s kind of nonsense. I, I would say never loan your kids money without expecting to be paid back. [chuckles]

00:16:07,504 [John Lanza]
Yep.

00:16:08,124 [Bill Dwight]
And I think that there’s a lot of value in them experiencing

00:16:12,464 [Bill Dwight]
the pain of, of, of paying something back, and the trade-offs that are involved. So if I’m, um, garnishing my kids’ wages, if you will-

00:16:22,324 [John Lanza]
Mm-hmm

00:16:22,524 [Bill Dwight]
… every, every week to pay back a loan for, say, a, a laptop computer, that was a common thing in our house, where if they wanted to get a laptop, then, um, you know, they would have to pick up, say, $500 worth of it and pay it back from their a- allowance each, each week. And so they’re seeing, “Oh, yeah, you know, I’m still paying for that thing.” And it has a bunch of benefits. One is they realize that lending is not free. Uh, so you, you might charge an interest rate, or you might not, that’s… either way.

00:16:52,444 [John Lanza]
Mm-hmm.

00:16:52,864 [Bill Dwight]
Um, but a- at least they’re seeing, “Oh, well, I can’t get, you know, pizza this week ’cause I’m still paying off that loan.” [chuckles]

00:16:58,954 [John Lanza]
[chuckles] Right.

00:16:59,384 [Bill Dwight]
So they have to make some accommodation. The other thing is that, uh, that wh- that whole arrangement came out of when, um, one of my sons, I won’t say who, uh-

00:17:10,314 [John Lanza]
[chuckles]

00:17:10,714 [Bill Dwight]
… got- uh, was really into music and, um, you know, “needed,” I’m putting in air quotes-

00:17:16,904 [John Lanza]
Yes

00:17:17,034 [Bill Dwight]
… GarageBand. Um, which I thought was really cool, and of course, I was enamored with the notion of raising a rock star, since I was so musically un- untalented. Uh, and so I went out and foolishly bought, uh, him/slasher- [chuckles]

00:17:32,654 [John Lanza]
[chuckles]

00:17:32,984 [Bill Dwight]
Everyone in the family knows who. Anyway-

00:17:33,964 [John Lanza]
So he, so he convinced you that this program is going to teach him to-

00:17:38,334 [Bill Dwight]
Yeah

00:17:38,504 [John Lanza]
… yes, be the next-

00:17:39,364 [Bill Dwight]
So I bought him the, you know, this real fancy pants, uh-

00:17:41,664 [John Lanza]
[chuckles]

00:17:42,704 [Bill Dwight]
… uh, laptop, and he proceeded to trash this thing in, uh, not a very long period of time. I would say a period of months, and I was furious. And, uh, and then, you know, he comes back and says: “Well, my, you know, my music teacher says I, I need, you know, another laptop.” [chuckles]

00:17:59,534 [John Lanza]
[chuckles]

00:17:59,764 [Bill Dwight]
I was like: “Are you kidding me?”

00:18:01,224 [John Lanza]
[chuckles]

00:18:02,224 [Bill Dwight]
So anyway, that was when the, uh, dad loan-… uh, came into, to play, and so I’m like, “Uh, I will purchase this under one condition, which is you’re gonna pay me back.” And he took very good care of that once he was getting his wages garnished to, to pay it back, ’cause it, it, it really sunk in. And it really dawned on me, you know, every kid or teenager should have that experience of, of what it means to, you know, pay back a loan just so- well, first of all, they’re gonna probably be engaging in one of the biggest loans of their life, which is student loans.

00:18:34,896 [John Lanza]
Right.

00:18:35,636 [Bill Dwight]
Uh, and, and they just need to get that experience under their belt. So i- i- it’s so common in this area for parents to willingly or unwillingly, quote, “protect” their, their kids from these things. “Let him be a kid.” Ah, really? [chuckles]

00:18:52,096 [John Lanza]
Right.

00:18:52,236 [Bill Dwight]
I mean-

00:18:52,916 [John Lanza]
Yeah

00:18:52,976 [Bill Dwight]
… they’re gonna be dealing with these things in pretty short order. In fact, they’re gonna be making some huge financial decisions as older teens, and I just think it’s goofy that we don’t give them the guidance, uh, and the practice before making these really large financial decisions. And it’s not just college, it’s like, um,

00:19:12,416 [Bill Dwight]
you know, even investing, because the huge benefit that a young person has in investing is time.

00:19:21,316 [John Lanza]
Mm-hmm.

00:19:22,056 [Bill Dwight]
And so if we don’t get them accustomed to the idea of investing, I think they’re losing out on an enormous opportunity. Uh, and, um, even small amounts saved early can make a tremendous difference if placed in a, you know, if invested in companies. And this gets to a very interesting area where parents are intimidated. Um, and so, uh, so it’s a tricky area, ’cause a lot of, a lot of parents are not comfortable with investing, right? And, um, and so I- I’ve always been a huge e- evangelist for when that teen gets that first summer job, to help them set up a Roth IRA, and to, uh, help them make contributions to that Roth IRA. And, um,

00:20:13,695 [Bill Dwight]
y- you know, there’s a, there’s a term called a Family 401[k].

00:20:17,356 [John Lanza]
Mm-hmm.

00:20:18,116 [Bill Dwight]
Um, and, uh, that’s basically where you set up this Roth IRA, and then, um, you or, or relatives might help gift some money to contribute to that. So if, for example, your teen makes $800 during the summer, then… Uh, and by the way, consult your tax attorney [laughing] before-

00:20:40,506 [John Lanza]
[laughing]

00:20:40,506 [Bill Dwight]
… but, um, this is what we did in my family. Your mileage may vary. But, uh, so our teenagers got summer jobs, and so they have W-2 income, and if you make W-2 income, you know, you are eligible to contribute to a Roth IRA.

00:20:54,516 [John Lanza]
Mm-hmm.

00:20:55,096 [Bill Dwight]
And so but what if your kids go out and spend that 800 bucks on, you know, movies and, and pizza? Well, maybe, uh, Uncle Mark or Grammy Jane might, uh, contribute or gift them a couple hundred bucks or something, with the, uh, sort of tacit agreement that they’re gonna put that their, in their Roth IRA. Because they’re allowed to contribute up to what they earned, up to a cap.

00:21:22,936 [John Lanza]
Mm-hmm. Mm-hmm.

00:21:23,696 [Bill Dwight]
And, um, and so there’s just a great opportunity to, instead of just randomly y- you know, giving your relative or your child money, giving it with a purpose, and putting it in this Roth IRA account. And the beauty of it… I, I think this is a beautiful way to, to gift kids money, because they can’t qualify unless they work, so there’s a work angle.

00:21:45,036 [John Lanza]
Mm-hmm.

00:21:45,996 [Bill Dwight]
Um, it’s a tax-advantaged account, so they kind of learn this concept of, of, uh, you know, putting something in a tax-advantaged vehicle-

00:21:54,356 [John Lanza]
Sure

00:21:54,366 [Bill Dwight]
… which they’ll get to when they get to, like, a 401[k]. It has this idea of kind of matching, so maybe you have an arrangement where, “Okay, you put in a couple hundred, we’ll, we’ll- we the family or the rich uncle or [chuckles] whatever, will match.”

00:22:06,876 [John Lanza]
Yep.

00:22:07,596 [Bill Dwight]
And it has this notion of long term, so if you want to pull out the funds without penalty, then you’re gonna keep it until you’re, you know, whatever the weird age is, 68-and-a-half or [chuckles] it’s difficult-

00:22:19,896 [John Lanza]
[laughing] Right.

00:22:20,696 [Bill Dwight]
… some random age, old. [laughing] Until you’re very old, from a teen’s perspective-

00:22:26,096 [John Lanza]
Yeah

00:22:26,106 [Bill Dwight]
… so you’re thinking long term.

00:22:27,405 [John Lanza]
Yes, unfathomably old from their perspective.

00:22:30,656 [Bill Dwight]
Right. And, and then you have the opportunity to talk about investing, because you don’t just keep it in cash, ’cause that’s not gonna grow. “So what are we gonna do with this?” And, uh, this is a perfect opportunity to teach your kids about what, uh, say, Warren Buffett would suggest, which is put it in a low-cost index fund. So you’re not having to pick and choose individual winning companies, you’re investing in the overall US stock market, for example. Like for example, I choose the, uh, Vanguard’s, uh, VTI-

00:23:01,316 [John Lanza]
Mm-hmm

00:23:01,636 [Bill Dwight]
… the total stock market index-

00:23:04,276 [John Lanza]
Sure

00:23:04,286 [Bill Dwight]
… it’s an ET. [chuckles] And, uh, and that way you’re basically, you’re betting on the US economy.

00:23:10,116 [John Lanza]
Mm-hmm.

00:23:10,916 [Bill Dwight]
Uh, and, and it… Just keep it simple, right? You don’t have to, like, guess or whatever, [chuckles] uh, what company’s gonna make it. Some companies are gonna make it, some aren’t, and you own a piece of all of them. Uh, now, or initially this will be very abstract to them, but if you do this every year, then you get that wonderful benefit of repetition, where you’re having that conversation year after year. And I can guarantee you, by the time they’re in their 20s, they really get it, and they’re appreciative. [chuckles]

00:23:39,236 [John Lanza]
Yeah.

00:23:39,836 [Bill Dwight]
At first, they’re like, “Uh, what is this index thing,” right? Um, but over time they’ll learn. And then the last huge benefit is, you know, 40 years from now, they’re gonna be like, “Wow, thank you, Mom and Dad.” [chuckles]

00:23:53,716 [John Lanza]
Yes.

00:23:54,366 [Bill Dwight]
“Thank you for getting me started. Thank you for teaching me about low-cost, diversified investing. Thank you for not just leaving it in cash. Thank you, thank you, thank you.”

00:24:03,296 [John Lanza]
Mm-hmm. Well, I, I think you really touched on an important point, which is that you’re opening up conversations by, by having these conversations. ‘Cause that, that, that… The investing one is a very-… it is, uh, it’s, it’s problematic, ’cause a lot of parents-

00:24:17,964 [Bill Dwight]
Yeah.

00:24:18,014 [John Lanza]
I, I pr- I myself am not a particularly good investor, but we have already started talking to our kids. You know, we set them up with a program called Stockpile, so they can just kind of-

00:24:27,264 [Bill Dwight]
Mm-hmm

00:24:27,464 [John Lanza]
… just dabble in the idea. And I’m, and I’m not… You know, we get nothing from Stockpile, I’ve just- that’s, that’s the-

00:24:33,484 [Bill Dwight]
Oh, yeah, yeah, I’ve used that with, uh, my son, Quentin.

00:24:35,444 [John Lanza]
Yeah. And, and it’s a good way… What’s nice about it, is it makes it easy to find, you know, brands that are, that are meaningful to you, and invest in those companies.

00:24:44,724 [Bill Dwight]
Right.

00:24:44,864 [John Lanza]
And it makes it simple, and you can invest, um, fractional shares. So it’s, it’s a simple way for kids to kind of get into-

00:24:51,424 [Bill Dwight]
Yes

00:24:51,473 [John Lanza]
… investing. But your idea-

00:24:53,054 [Bill Dwight]
Now, this is the grand irony-

00:24:54,624 [John Lanza]
Yeah

00:24:54,694 [Bill Dwight]
… right? Because, um, to make it interesting, we tend to have them choose a stock that they know, like Nike or-

00:25:02,764 [John Lanza]
Right

00:25:03,244 [Bill Dwight]
…

00:25:04,424 [Bill Dwight]
uh, uh, or Disney or whatever.

00:25:06,704 [John Lanza]
Yeah.

00:25:06,884 [Bill Dwight]
And the irony is, that’s a horrible investment strategy for 99.9% of the people on the planet, that they’re better off going very diversified. And so one trick that you can use is you can set up like a little… You can call it a competition.

00:25:20,864 [John Lanza]
Mm-hmm.

00:25:21,104 [Bill Dwight]
And so what we did, uh, what I did with, uh, Quentin, my youngest, is we set up a little competition between one stock that we chose, Chipotle. [chuckles]

00:25:30,884 [John Lanza]
Mm-hmm, mm-hmm.

00:25:31,454 [Bill Dwight]
Oops.

00:25:31,924 [John Lanza]
Yep.

00:25:32,084 [Bill Dwight]
Oops. [laughing]

00:25:34,324 [John Lanza]
[laughing]

00:25:34,334 [Bill Dwight]
Uh, ’cause we thought for sure, you know, they’re only gonna have this E. coli problem once, right? [laughing]

00:25:38,004 [John Lanza]
Right, right. [laughing]

00:25:39,824 [Bill Dwight]
Stock’s gonna rebound. [laughing]

00:25:41,234 [John Lanza]
[laughing]

00:25:41,304 [Bill Dwight]
Uh, but it apparently is the gift that keeps on giving.

00:25:44,034 [John Lanza]
[laughing]

00:25:44,084 [Bill Dwight]
So, uh, [laughing] so we, uh, we chose Chipotle, and then we chose VTI, and this was with, uh, Stockpile as well.

00:25:51,614 [John Lanza]
Yeah.

00:25:51,624 [Bill Dwight]
It was called something else by then, but I think it was, uh, bought by someone.

00:25:55,024 [John Lanza]
Got it.

00:25:55,364 [Bill Dwight]
Um, and so that way, you could kind of have the interest factor of choosing some stocks that they, they understood, uh, what they were, and were kind of excited about, and then this boring, like, index thing on the right. And then over time, you get to see how those perform, how volatile they are, and you get to have these conversations, right? Um, and, and that’s a good way of sort of easing into

00:26:20,044 [Bill Dwight]
or combining

00:26:22,024 [Bill Dwight]
a lot of concepts here, volatility, what an index fund is, why an index fund is sort of, you know, a less risky… It’s less- it’s not so much of a bet. And, um, y- you know, again, repetition is so key. So when you start out, don’t get discouraged that when you start out, the kids are rolling their eyes to the back of their head and, and yawning. Uh, give it time.

00:26:44,324 [John Lanza]
Yeah.

00:26:44,334 [Bill Dwight]
You know?

00:26:45,424 [John Lanza]
I, I love the idea of the competition, because then, then he or she is seeing directly, like they see-

00:26:53,884 [Bill Dwight]
Exactly

00:26:54,634 [John Lanza]
… exactly what happened, and so that, that, that is something they’re not gonna forget. And that, that’s, that’s a terrific lesson. And you’re right, I mean, the f- the fact is, the idea of picking a stock is really just a matter of, um, generating some interest.

00:27:08,454 [Bill Dwight]
Mm-hmm.

00:27:08,484 [John Lanza]
It is not- it is certainly not a great strategy, [laughing] and, uh, and I-

00:27:12,784 [Bill Dwight]
Not for most of us. [laughing]

00:27:13,524 [John Lanza]
Yes, and I, and I, and I will, I will, uh, reiterate what you said, which is, please don’t make any decisions based on any of the- [laughing]

00:27:21,134 [Bill Dwight]
[laughing]

00:27:21,134 [John Lanza]
… investment advice that’s being given-

00:27:23,344 [Bill Dwight]
Right

00:27:23,634 [John Lanza]
… in, in this, in this podcast, but-

00:27:25,304 [Bill Dwight]
But the neat thing about the, uh, the Roth IRA, which is really only gonna be an option for when your kids get into those teen years-

00:27:31,884 [John Lanza]
Mm-hmm

00:27:32,064 [Bill Dwight]
… and start working. There are some people that are more aggressive about their tax interpretation and do it with, uh, chore income, but I do not personally recommend that. I like to see, like, a W-2 [chuckles] from your employer-

00:27:42,364 [John Lanza]
Mm-hmm

00:27:42,444 [Bill Dwight]
… and be able to put that in my tax file.

00:27:44,384 [John Lanza]
Mm-hmm.

00:27:45,454 [Bill Dwight]
Um, uh, so I will urge caution there. But, um, you know, the neat thing about the Roth IRA is that, um, you know, it’s a tax-advantaged account. So your, your money- you’re putting money that’s already been taxed into this vehicle, and then it grows, uh, tax-free, and the withdrawals are not taxed. And it’s, it’s, um, [clicks] it’s perfect for teenagers because they don’t make a lot of money. So they’re not gonna make more than the limit, uh, y- you know, ’cause not everyone can contribute to a Roth IRA. You have to make under a certain amount, and unless, um, you know, you’ve got a little young Mark Zucker- Zuckerberg at home or something-

00:28:22,804 [John Lanza]
Sure

00:28:23,604 [Bill Dwight]
… you’re, you’re, you’re in the clear. [chuckles]

00:28:24,854 [John Lanza]
[chuckles]

00:28:24,944 [Bill Dwight]
Uh, a typical summer job is gonna be very, um-

00:28:28,324 [John Lanza]
Yeah

00:28:28,824 [Bill Dwight]
… amenable to this. And, um, then you can, um, you can tell little white lies to them, like, “You cannot pull this money out till you’re, um, you know, near 70.”

00:28:39,304 [John Lanza]
Yeah.

00:28:39,644 [Bill Dwight]
The fact is, you can actually pull out contributions, but I never tend to share that little factoid.

00:28:44,544 [John Lanza]
Yeah.

00:28:45,264 [Bill Dwight]
So even, even to this day, the kids in their late 20s are still thinking they can’t get their paws on that. [laughing]

00:28:51,434 [John Lanza]
[laughing]

00:28:51,484 [Bill Dwight]
The, the, uh… [laughing] But the, the Roth is actually very flexible, too, because, um, you know, you can pull out those contributions, and so if, if there was really a need situation, you’d be able to, to access at least some of those funds.

00:29:05,104 [John Lanza]
Right.

00:29:05,404 [Bill Dwight]
So it’s, it’s a neat vehicle.

00:29:07,564 [John Lanza]
That’s great. That is-

00:29:08,444 [Bill Dwight]
And again, I’m just a computer science dude. [laughing]

00:29:10,864 [John Lanza]
Right. Yeah, right. Now, but this is… Yeah, no, that’s, this is-

00:29:13,624 [Bill Dwight]
Consult your, your professional. [laughing]

00:29:16,214 [John Lanza]
[chuckles] Yes, consult-

00:29:16,444 [Bill Dwight]
And don’t come after me if it goes south on you. [laughing]

00:29:18,204 [John Lanza]
Yes, don’t, don’t come after either of us. But I think it’s- this is good advice for people to explore, and actually-

00:29:24,064 [Bill Dwight]
Consider it.

00:29:24,084 [John Lanza]
Yeah, consider it. I wanna go back to, um, you mentioned before that, you know, you talk to a lot of people, uh, when they’re using your service, about f- about money tips. And you mentioned that there’s a, there’s this kind of paradox of choice that sometimes happens to parents. You know, there’s just so many op- options of what you can do. So you have data that you refer to, and, and, and y- what, what would you go back and say… Let’s just step back away from the investing. I love the investing info, but let’s go back to, like, the basics. Like, what are the top tips, it could be top two or three tips, that you think would really help parents when they’re getting started with a program in teaching their kids money smarts?

00:30:10,244 [Bill Dwight]
[dog barks] Well, uh, you know, one thing I’m a huge believer in, in is automation. And so, uh, you know-

00:30:19,544 [John Lanza]
Oh

00:30:19,554 [Bill Dwight]
… getting really basic here, both you and I are big fans of p-… bucketing money for purposes, right?

00:30:25,856 [John Lanza]
Mm-hmm.

00:30:26,176 [Bill Dwight]
This notion that, uh, every dollar has a purpose. You don’t have to get super granular there. We can keep it real simple: spend, save, give, right?

00:30:33,796 [John Lanza]
Yeah.

00:30:33,816 [Bill Dwight]
Just a basic concept that this dollar comes in, and I split it between purpose-driven buckets. And, um, you know, I believe that the earlier you show a child that can be automated, the better. Uh, because then as soon as they get their paycheck, and they’re with that HR rep, and they’re like: “Hey, do you wanna put some of this towards, um, you know, saving for your retirement?” Like, “Yeah, I’ve been doing that since I was eight, of course.” [laughs]

00:31:02,986 [John Lanza]
[laughs]

00:31:02,996 [Bill Dwight]
You know, instead of like, you know, total blank face.

00:31:06,696 [John Lanza]
[laughs]

00:31:07,756 [Bill Dwight]
Uh, so, um, at the moment, my dachshund is howling-

00:31:11,656 [John Lanza]
[laughs]

00:31:12,226 [Bill Dwight]
… uh, and I am gonna take a quick break-

00:31:14,876 [John Lanza]
No problem

00:31:15,026 [Bill Dwight]
… and give him something to chew on-

00:31:16,366 [John Lanza]
[laughs] Okay

00:31:16,786 [Bill Dwight]
… and I’ll be right back. So, um, any event, so th- this notion of purpose-driven buckets, uh, automating it, and, um,

00:31:27,316 [Bill Dwight]
you know, that, that’s a real, a basic thing that we wanna, uh, get across to, to people, that, that money has a purpose. And then, um, the next thing is that, you know, that your money can be put to work for you. So this idea of… And I, I think you have this in your book, too. I think you call it enhanced interest or whatever.

00:31:46,366 [John Lanza]
Mm-hmm.

00:31:46,376 [Bill Dwight]
But, um, if you put it in the savings bucket, then you’ll get compound interest, in our case, or a matching. Um, and so we have the parent define an interest rate

00:31:59,856 [Bill Dwight]
that, uh, that they decide is interesting, and a frequency that’s more rapid than what you would find in the world, uh, in the real world. So I’m trying to build a habit here, and I want them to be constantly bombarded with the message that if I put money in my savings bucket, it will grow.

00:32:16,476 [John Lanza]
Yep.

00:32:17,116 [Bill Dwight]
And I don’t really worry too much that my savings interest rate from the Bank of Dad is, you know, pretty awesome.

00:32:25,656 [John Lanza]
Mm-hmm.

00:32:26,256 [Bill Dwight]
Uh, because I just want them to get in the habit of thinking, “Hey, I should put some of this money to work.”

00:32:33,556 [John Lanza]
Right.

00:32:34,416 [Bill Dwight]
And I’m not- I’m unconcerned that at some point they’ll get a crappier interest rate from someone else. [laughs] I want them just to be thinking, when money comes in, “I should put some of this to work,” and, and it, and it, it… That money can grow on its own. And I think that, um, you know, like so many… Th- this is gets into the nature of, you know, forming habits and things like that, but that sort of repetition, uh, I think that the, the habit will stick even once the interest rates become less attractive in the real world or whatever. Uh,

00:33:10,996 [Bill Dwight]
and, uh, and of course, you get to choose the interest rate, so you can decide how much that is and play around with it until you think it, it sparks the interest of your child. But it, it takes something that’s very abstract, because think of the difference, right? The difference is,

00:33:24,276 [Bill Dwight]
you open up a bank savings account that’s squirreled off somewhere that your kid never sees,

00:33:31,596 [Bill Dwight]
and at the end of the year, they yield maybe a penny or two. I mean, that, that is simply not compelling for anybody.

00:33:38,876 [John Lanza]
Right.

00:33:39,036 [Bill Dwight]
Now, on the other hand, if they have this account, uh, that they sign into, and they see their, their spending, saving, and giving buckets right next to each other, and every week they get a text message saying, “You earned 10 cents in interest. You earned 20 cents in interest,” uh, they’re constantly being sort of plunked on the side of the head that, “Hey, your money is working for you.”

00:33:59,336 [John Lanza]
Mm-hmm.

00:33:59,496 [Bill Dwight]
And so that’s what into the kind of, um, you know, the environment we’re trying to create. And then the beautiful thing is, um, you know, when they go off to college or whatever,

00:34:12,316 [Bill Dwight]
the, the most- one of the most beautiful text messages I get is, “Hey, Dad, can you transfer… ” You know, “I just got paid for being a bouncer at the bar,” it’s my son, Will. [laughs]

00:34:22,605 [John Lanza]
[laughs]

00:34:23,056 [Bill Dwight]
He was a bouncer at, uh, at the bar, and, um, “I just got paid. Paychecks on- went onto my spending card. Can you move, you know, 300 bucks to my saving-

00:34:32,646 [John Lanza]
Mm

00:34:32,646 [Bill Dwight]
… ’cause I wanna get your interest rate?”

00:34:34,436 [John Lanza]
Yep.

00:34:34,616 [Bill Dwight]
That is the most gratifying text. [laughs] ‘Cause I can tell you, most of the texts are not that. [laughs]

00:34:40,056 [John Lanza]
Right, right, right.

00:34:40,796 [Bill Dwight]
Most of the texts are, “Uh, I need money.” So, um, you know, that, that’s, th- that’ll pay off sort of over the long haul. And, and I think that’s kind of a theme, actually, like, over and over again, which is, you think the kids aren’t listening. [laughs]

00:34:54,186 [John Lanza]
Mm-hmm.

00:34:54,296 [Bill Dwight]
You think your messages aren’t getting through.

00:34:56,096 [John Lanza]
Yep.

00:34:56,836 [Bill Dwight]
And then they grow up and, and go off to the college or the real world, and i- i- it’s, it’s all starts to click, and you realize that it was worth it. So, so keep up the good fight, uh, for sure.

00:35:11,376 [John Lanza]
Yeah, because this is… It gets to this concept of nudge, you know, that, uh-

00:35:15,946 [Bill Dwight]
Mm

00:35:15,946 [John Lanza]
… Richard Thaler and Cass Sus- Sunstein wrote about, and that’s the idea that you’re opting these kids into choices that you think are beneficial for them.

00:35:25,276 [Bill Dwight]
Yes.

00:35:25,346 [John Lanza]
And just exposure to that. It’s all of this is really the building blocks for future financial literacy because we just wanna th- th- they’re getting-

00:35:35,116 [Bill Dwight]
Right

00:35:35,126 [John Lanza]
… they get from the age of two, if not younger, that spend message. So we’ve got to work hard from that point to get other messages in their head, and I, I love what you’re talking about, like your idea of the competition to see which type of investment works better, and then obviously this idea of the enhanced interest because it’s, uh… [clears throat] My dad’s a banker, and he just cannot believe, he, actually, he’s, he’s just galled at how little interest the banks… He’s, he’s a retired banker now-

00:36:04,366 [Bill Dwight]
Right

00:36:04,366 [John Lanza]
… but how little interest that financial institutions pay people to keep their money there, and no kid is gonna look-

00:36:10,936 [Bill Dwight]
It ain’t the ’70s anymore. [laughs]

00:36:12,216 [John Lanza]
No, it’s not. [laughs] Right. Right. And, and we, and these kids are-

00:36:16,586 [Bill Dwight]
Plus, we had inflation, too, so. [laughs]

00:36:18,816 [John Lanza]
Right. Right. And, and, and interest rates were sky-high. But the, the kids, like you said, the k- the kids are not gonna learn a lesson that savings is gonna yield them anything from a bank, whereas doing this enhanced interest is gonna teach them that they can actually make some money. And like you said, I’m not worried either, that by doing that, [clears throat] they’re going to later look at a savings account and say, “Pfft!”… phooey. What they’re gonna do-

00:36:43,576 [Bill Dwight]
Right

00:36:43,586 [John Lanza]
… is they’re gonna look at an account, and they’re gonna say, “Well, maybe I, I’ll keep some money in a savings account, but I’m gonna look for other investment opportunities where I can see some potential growth

00:36:53,636 [John Lanza]
in-

00:36:53,796 [Bill Dwight]
Yeah

00:36:53,966 [John Lanza]
… that money.”

00:36:54,015 [Bill Dwight]
No, no, not to, um, I, I don’t wanna sort of diss hard on the banks here.

00:36:57,886 [John Lanza]
Yeah.

00:36:57,955 [Bill Dwight]
Um, if, if you have a savings account set up for your kid, you can do this still, right? Like, just, um, you could set up a little thing where you credit your kid’s savings account an, an enhanced interest rate, right?

00:37:09,756 [John Lanza]
Mm-hmm.

00:37:09,955 [Bill Dwight]
And then you could meet with them every week or every month and sort of say, “This is how much, you know, was credited to your savings account.” You know what I mean?

00:37:17,636 [John Lanza]
Yeah.

00:37:17,716 [Bill Dwight]
So, uh, it, it- the vehicle doesn’t matter. It could be a jar, and you could be, uh, doing the math on the side of the jar and plunking pennies in. Almost all of these techniques are doable either manually or with other technologies. We, we, we’re just trying to make it as simple as possible, but, but, uh, you can run with any of these tips.

00:37:38,475 [John Lanza]
Well, the other thing is that parents should look for accounts. They have… There are a lot of youth accounts that have this kind of enhanced interest that are-

00:37:46,466 [Bill Dwight]
Mm-hmm

00:37:46,856 [John Lanza]
… su- surprisingly strong percentages up to a certain amount.

00:37:51,096 [Bill Dwight]
Yep.

00:37:51,205 [John Lanza]
And so, you know, look for an institution, um, that would have that kind of account. They do exist, and that’s a great way to, to keep your kids’ money in a, in a, in an institution, which is a good idea. Like you said, we, we- they, they, they should get used to that.

00:38:04,986 [Bill Dwight]
Yeah, the one area where, um, you know, I kind of bristle a little bit is in the sort of checking account arena-

00:38:13,296 [John Lanza]
Mm-hmm

00:38:13,346 [Bill Dwight]
… because a lot of these, um, checking accounts just simply aren’t immunable to kids and the mistakes that they’re gonna make.

00:38:19,705 [John Lanza]
Yeah.

00:38:20,015 [Bill Dwight]
And, and a classic example, and some- something where we can pull data, [inhales] we see tons of declines on our cards because of insufficient funds. So classic example, kid will sign up for Spotify or some subscription service, and, you know, month after month, they’ll get declines. You know, [chuckles] they’ll try to bill the card. And, um, if you, if you had that on a bank debit card, you’d be racking up 30-plus bucks a pop.

00:38:48,035 [John Lanza]
Mm-hmm.

00:38:48,375 [Bill Dwight]
And you’d even be racking that… Uh, now, here’s a very interesting loophole, uh, in, uh, Reg E, for all you bank nerds out there. Uh, even if you have cleverly figured out how to avoid overdraft fees or opt out of them, which is no small feat, by the way, um,

00:39:05,136 [Bill Dwight]
if you have a repeated billing service like Spotify, the bank can still charge you, um, an overdraft-

00:39:12,136 [John Lanza]
Mm

00:39:12,276 [Bill Dwight]
… because that is an exception to the, uh, the rule-

00:39:15,856 [John Lanza]
Mm

00:39:15,866 [Bill Dwight]
… an automated, uh, charge to your account. So you have to be really careful.

00:39:20,596 [John Lanza]
Yeah.

00:39:20,845 [Bill Dwight]
And, uh, that’s, that’s one of the, uh, the things that, um, you know, I, I, I particularly like about our, our cards or are proud of, is that you can’t get an overdraft fee.

00:39:31,216 [John Lanza]
Yeah.

00:39:31,616 [Bill Dwight]
Now, what we do recommend is that if your kid is… Well, first of all, we kind of have the Spotify test, right? Like, if your kid’s angling for a credit card, an older teen, for example, and they can’t go without a, um, a, uh, insufficient funds situation on their prepaid card, where there are no penalties, if they can’t do that for, like, six months… Have a trial period, right? It’s like a contest.

00:39:57,106 [John Lanza]
Mm-hmm.

00:39:57,356 [Bill Dwight]
If you can make it six months with, you know, never getting a decline on your prepaid card, then you might be ready for a, for a credit card.

00:40:04,375 [John Lanza]
Right.

00:40:04,495 [Bill Dwight]
You know what I mean?

00:40:05,316 [John Lanza]
Right.

00:40:05,336 [Bill Dwight]
So you can kind of use it as a training wheel or, uh, wheels or test [chuckles] And, uh, and furthermore, if, if you want, what you can do as a parent is you could tell your kid, “Hey, every time you get a decline on your prepaid card, I’m gonna move- I’m gonna ding you a dollar, and I’m gonna move that money back to the Bank of Dad.” You know, so you could be the bank. You could be the bad guy, and, um, and that way, it’s not 30 bucks, but it’s a dollar. You know, you’re sending a message.

00:40:29,576 [John Lanza]
Sure. Yeah. No, I mean, and [clears throat] this is interesting ’cause we’re talking about… So we’re talking about, uh, digital money, and you’re actually the one who convinced me, ’cause I- we obviously went with the tried-and-true, uh, banks for my, uh, my oldest. She was in doing that for, I think, about six years, and then we trans- then we, uh, went to the, uh, the debit card and the digi- the digital system. And do you have any… So s- ’cause, and, and it was based on a conversation that we had, you know. Uh, and you said to me, you, you know, “You have, you have to teach these kids that digital money is real money.”

00:41:05,536 [Bill Dwight]
Right.

00:41:05,696 [John Lanza]
And that made a lot of sense, ’cause I was kind of holding on to these, to the jars. And so when do you think that transition, uh, is appropriate? ‘Cause we’re talking a lot about debit cards and such, and so that’s obviously gonna be in the, in the kind of tween and teen years. But where do you think that transition works? So you have the parents, some of the parents who are here, and they’ve got their jars, and there’s- they’ve got them set up. When is a good time to make that transition?

00:41:31,736 [Bill Dwight]
Well, if you were to plot the, uh, the ages of all of our cardholders-

00:41:35,816 [John Lanza]
Mm-hmm

00:41:35,926 [Bill Dwight]
… like we do on an axis, you would see the apex of the curve of usage right around the, uh, 13-

00:41:42,636 [John Lanza]
Mm-hmm

00:41:42,935 [Bill Dwight]
… uh, age of 13, which is- makes a lot of sense, ’cause that’s kind of when kids are transitioning from, uh, middle school to high school, and, and they start becoming more independent, uh, or, or at least wanting to be [chuckles] more independent. Um, and, uh, so that’s the data answer, which is, you know, 13-ish range is the most popular, um, uh, usage age. Uh, my experience is that, that kids are tremendously savvy, that they can figure out anything, and that’s why they’re showing you how to use your own phone. Um, so if we take the time to explain to them how a card works, they can get it at an very early age. I mean, it doesn’t take long. They’re, they’re… The kids are all, uh… Most, most kids have exposure to phones early on, and they know what it means to sign into an app, and then they very quickly understand that, “Hey, this number on the screen represents my balance, and when I, when I swipe the card, I get this text message that says, ‘You just spent, you know, $5, and you have $15 left.'”… Th- they get that. And, and this is, by the way, we’re trying to kind of put the, the mindfulness back into spending, with digital spending. So, you know, we, we recommend that everyone turn on the text messages so that when the kid swipes the card, they get an immediate message that says, “You spent this much, and you have this much left.” That, that second part is the key part-

00:43:12,156 [John Lanza]
Mm-hmm.

00:43:12,176 [Bill Dwight]
-and that’s the part that often is missing from products, because they don’t want you to know how much you have [chuckles] left, right?

00:43:16,636 [John Lanza]
Right. Right.

00:43:17,336 [Bill Dwight]
Like, you know, our whole mission is financial literacy, so we’re like… You know, that, that, that is, like, the simplest killer feature in our product. [chuckles]

00:43:25,116 [John Lanza]
Yeah.

00:43:25,396 [Bill Dwight]
And some- and other products have it, too-

00:43:26,956 [John Lanza]
Right

00:43:27,066 [Bill Dwight]
… by the way. Um, just that reminder, uh, that you spent and you have this much left.

00:43:32,976 [John Lanza]
Mm-hmm.

00:43:33,416 [Bill Dwight]
And I think that’s very powerful. And, um, so we have, you know, the whole spectrum of ages. Uh, and it’s really just a matter of when the parent is kind of willing and comfortable to have those conversations. And I think starting with physical money is totally appropriate, and just when you cut over is really up to you. Probably when you get tired of, um, going to the bank and getting $1 bills or 25 cent pieces or doing your own calculations [chuckles] for interest.

00:43:59,896 [John Lanza]
Sure.

00:44:00,436 [Bill Dwight]
But, um, you know, it, it, it reminds me of, uh… We were talking before the show about, uh, how to start a podcast, and, and one of the recommendations that both you and I have heard is, “Do everything yourself first.” And, uh, for kids, it’s, it’s great for them to do everything sort of manually first. You know, this is money, and this… You calculate the interest, and you write down your spending, right? It’s kind of like doing it all yourself.

00:44:23,996 [John Lanza]
Mm-hmm.

00:44:24,216 [Bill Dwight]
Then you can move on to automation, right? And, um, and you, you know, we do this with lots of, uh, teaching concepts, where you start with the very basic fundamentals and then, uh, move on from there.

00:44:35,976 [John Lanza]
Yep.

00:44:37,976 [John Lanza]
Great points. Okay, so now I, I want to talk about, uh, [chuckles]… This is always the elephant in the room when it comes to allowance, and that is the, the chores/allowance debate, and-

00:44:49,616 [Bill Dwight]
Right

00:44:49,976 [John Lanza]
… you know, and I, I, uh, I know that you’re- that FamZoo supports chores, and I wanted to know, you know, where exactly do you come down on the, on the chores/allowance debate?

00:45:02,016 [Bill Dwight]
Yeah, if you’re asking my personal opinion, I love a hybrid approach.

00:45:04,996 [John Lanza]
Okay.

00:45:05,416 [Bill Dwight]
So I love this notion of… Uh, first of all, I like to call an allowance a budget, because as soon as you call it a budget, it really takes the edge off of it. In other words, there’s um… Think of the difference emotionally between, “I get an allowance,” versus the statement, “I manage a budget.” [chuckles]

00:45:22,505 [John Lanza]
Mm-hmm.

00:45:23,616 [Bill Dwight]
So it, it has a totally different feel to it. So a budget feels like a constraint, uh, and something you, uh, intelligently manage. So when I give my, uh, teen, w- then teen daughter a closing budget, that’s a very positive thing. Like, who doesn’t want to teach their kid how to manage a budget?

00:45:42,156 [John Lanza]
Right.

00:45:42,166 [Bill Dwight]
They’re going to do it at a company.

00:45:43,676 [John Lanza]
Right.

00:45:44,116 [Bill Dwight]
Um, no one ever talks about, “Oh, you’re getting a handout from the company to manage the, uh- [laughs]”

00:45:48,836 [John Lanza]
[laughs]

00:45:49,796 [Bill Dwight]
… Yeah, the so-and-so budget. It’s like, no, [chuckles] the company, you know, planned a budget, and I’m managing it responsibly. And, um, so I, I love… I’ve got no qualms with, uh, a, an allowance that’s really a, a budget-based allowance. Like, “You’re expected to cover these expenses with this thing-

00:46:08,156 [John Lanza]
Mm-hmm

00:46:08,256 [Bill Dwight]
… and we worked together to work them out,” and that’s a great exercise.

00:46:11,556 [John Lanza]
Mm-hmm.

00:46:11,636 [Bill Dwight]
You know, learn how to construct a budget, and make a really bad budget, and then remind your kid that, you know, underwear should actually be part of the budget. [chuckles] You know, stuff like that.

00:46:19,656 [John Lanza]
[laughs]

00:46:19,766 [Bill Dwight]
And, and be, be willing to, um, to modify it. And, um, you know, do what they did back at Oracle Corporation when, uh, you submit a budget, and then the management cuts it in half and said, “There you go.” [laughs]

00:46:33,926 [John Lanza]
Yeah.

00:46:33,996 [Bill Dwight]
Right? You don’t need designer jeans every week. Um, so-

00:46:36,856 [John Lanza]
No, that’s a good point-

00:46:37,576 [Bill Dwight]
Yeah

00:46:37,586 [John Lanza]
… because when we did our negotiation, our first larger, we call it the breakthrough allowance, but the larger scale-

00:46:43,076 [Bill Dwight]
Yeah

00:46:43,276 [John Lanza]
… allowance, one of the th- you know, sh- my, my daughter came to us with, uh… I think she wanted $25 for, for each gift, and she had calculated-

00:46:52,316 [Bill Dwight]
Mm-hmm

00:46:52,326 [John Lanza]
… she was gonna have 20 gifts that she’d buy during the year. And we said, we’re like, “There’s no way we’re giving you that for 20, for 25,” and we negotiated down to 20. Um-

00:47:02,416 [Bill Dwight]
Right.

00:47:02,436 [John Lanza]
Maybe we should have ne- negotiated it down a little bit less, but the, the point being that that opport… Again, this, this gets to this kind of the overall theme of this conversation, which I think is exposing your kids to all these kind of s- good financial behaviors: negotiation, understanding-

00:47:18,816 [Bill Dwight]
Right

00:47:18,846 [John Lanza]
… investing, making money choices. All those things are just that, the exposure to those messages are… That’s, that’s one of the most important things that we can do for them.

00:47:29,336 [Bill Dwight]
And I like to emphasize that you can keep it simple, too, right? Like, I like to, on the budgeting front, you know, you could boil the ocean and sort of say, “Hey, you’re gonna, you’re gonna be in charge of s- you know, all your purchases.” I think that’s a little overwhelming for both the parents and the kids. So I love this idea of choosing a category of spending, or at least starting with a category of spending, that’s something they really care about. Like, my daughter cared about clothing. Um, and my son, uh, one of my sons cared about, uh, sort of a, a music-related allowance, um, for drumsticks and stuff like that, right? So, um, I like to start with a category that they really care about.

00:48:06,916 [John Lanza]
Yeah.

00:48:07,036 [Bill Dwight]
Because, like, for, uh, you know, for most of my sons, like, a clothing budget, meh, they’d just as soon go naked and take the money, right?

00:48:13,136 [John Lanza]
Right. Right. [laughs]

00:48:13,436 [Bill Dwight]
They don’t care. [laughs] Um, and so, uh, so that, you know, I, I have no qualms with a, an allowance as long as it’s sort of thoughtful and dis- uh, discussed. And, and like you, you know, in, in reading your book, which is, which is excellent, uh, you know, you talk about with younger kids, it’s okay to just go with America’s favorite formula of, you know, maybe a dollar times their age in years, because it’s, it, it’s really… It’s an allowance for stuff, and it’s, it’s very modest, and if they want something, they have to wait several cycles to save up for it…. I, I think it’s as simple as that. That’s okay. And then when they get older, you can be like, “Okay, and now let’s, let’s, um, carve off a, a, a category of spending or two, and put you in charge of that,” then it’s more sophisticated. It’s like, you know, like with my daughter, it’s like, “Okay, uh, propose a spreadsheet where you’re doing the math, and I’ll, I’ll review it. Um, and then I’ll give you half of that.” [laughs]

00:49:11,508 [John Lanza]
Well, and the other-

00:49:12,988 [Bill Dwight]
[laughs]

00:49:12,998 [John Lanza]
… the other, uh, big plus when you do that, and you, we, you, you had listened to the episode I did with, uh, Melissa Disharoon, and she was-

00:49:21,107 [Bill Dwight]
Mm-hmm

00:49:21,118 [John Lanza]
… talking about, you know, i-i, people don’t get it, but your allowance, when you have these categories, can get, can go higher. So in her case, it was $100 for, for a month. And-

00:49:33,058 [Bill Dwight]
Right

00:49:33,158 [John Lanza]
… when you don’t understand the context, like her sister didn’t, she looks at her and thinks, “That’s crazy.” But-

00:49:39,928 [Bill Dwight]
Right

00:49:39,978 [John Lanza]
… when they understand the responsibility that, that’s there, they had to buy their own clothes, they had to buy their… You know, the… Then, then what you realize is you’re actually saving yourself money, because-

00:49:51,087 [Bill Dwight]
Exactly

00:49:51,518 [John Lanza]
… now it’s their money. They take control of it, and this goes back to what you were talking about before.

00:49:56,147 [Bill Dwight]
That is the grand irony-

00:49:57,488 [John Lanza]
[laughs] It is

00:49:58,417 [Bill Dwight]
… is that, that allowances, when done properly, save money-

00:50:01,988 [John Lanza]
Yeah

00:50:02,147 [Bill Dwight]
… because you’re creating a constraint or a budget-

00:50:04,748 [John Lanza]
Mm-hmm

00:50:04,908 [Bill Dwight]
… where before you were most likely, if you went back and analyzed the transactions, were being willy-nilly about forking stuff over to your kids.

00:50:11,468 [John Lanza]
Right.

00:50:11,548 [Bill Dwight]
And that’s why these allowance surveys are so ridiculous. It’s, it… The average allowance amount is a dumb concept.

00:50:21,928 [John Lanza]
Yeah.

00:50:22,208 [Bill Dwight]
It’s, it, it’s completely divorced from what the child is expected to pay for. A, $100 allowance could be comp- could be wildly under what it should be-

00:50:34,067 [John Lanza]
Yeah

00:50:34,268 [Bill Dwight]
… if a kid is require- if, if the kid is being asked to cover certain expenses, and it could be wildly over what it should be if they’re not being asked to cover any expenses. So it’s only when you get down to the transaction detail and look at what the kids are, are spending on, that you could make an assertion as to whether an allowance was too much or too little.

00:50:51,948 [John Lanza]
Yeah.

00:50:52,607 [Bill Dwight]
Um, and so that’s why it’s really interesting for us, ’cause we, we actually have all that data. Um, you know, uh, we don’t really analyze it to that degree, but the point is that the parent can go through that with their child and sort of say, “Look, you know, this is what you’re spending on here,” and the child can do it themselves. And furthermore, engaging the child in, in setting the budget, proposing the budget themselves, is a fabulous tool, because you’ve just eliminated a lot of complaining. You know-

00:51:22,348 [John Lanza]
Yeah

00:51:22,357 [Bill Dwight]
… you, you came up with this figure, not me.

00:51:24,357 [John Lanza]
Mm-hmm.

00:51:24,377 [Bill Dwight]
It wasn’t Dad. [laughs] You came up with this figure. We can adjust it if you messed up, but this sense of ownership is so crucial to, um, well, to life really.

00:51:34,748 [John Lanza]
Yeah. Well, you talked about it with your son and his second computer, which, you know, he had-

00:51:39,008 [Bill Dwight]
Yep

00:51:39,057 [John Lanza]
… some skin in the game. Um-

00:51:40,627 [Bill Dwight]
Exactly

00:51:41,018 [John Lanza]
… getting to this, I, I noticed on your-

00:51:42,848 [Bill Dwight]
Let me finish your, your, the, the question, though. So I like this kind of combination of-

00:51:47,288 [John Lanza]
Oh, yeah

00:51:47,567 [Bill Dwight]
… allowance and chores. Uh, a three-part combination, so allowance, and then chores I tend to think of things that are expected because you’re part of the family, so I’m not gonna pay you to make your bed. Come on now.

00:51:58,688 [John Lanza]
Yeah.

00:51:59,087 [Bill Dwight]
Uh, step up. Uh, unless you’re really young. Um, uh, but then I love the idea of extra stuff, like, “Man, if you clean out the garage, which I’ve been avoiding doing for the last three years, uh, then I’ll pay you.” [laughs]

00:52:14,008 [John Lanza]
Yeah. [laughs] Yeah, those, they call them, uh, the-

00:52:15,528 [Bill Dwight]
Uh, odd job opportunity.

00:52:17,808 [John Lanza]
Right. Karen Hodgins called those, uh, above and beyond chores.

00:52:21,607 [Bill Dwight]
Yeah.

00:52:21,938 [John Lanza]
Uh, yeah, and that’s… That makes sense. I even- I still even think, though, even for the younger kids, you, you shouldn’t even be paying them for the, those little chores, just because, you know, they, the- you know that at some point they’re not ever gonna be able to opt out to that, to the choice to make their bed, for example, and there will become a time where they might be making enough money to theoretically opt out, and you’re just not gonna let them. So it’s-

00:52:46,768 [Bill Dwight]
Yeah, so what we did [chuckles] was, um, we had a, um, a chore fail chart. So-

00:52:52,488 [John Lanza]
[laughs]

00:52:52,497 [Bill Dwight]
… uh, when they got to be teenagers, uh, my wife and I could go in and check off penalties for not making the bed. So if we get sufficiently irritated with our teen for, like, leaving their stuff on the floor for the thousandth time, we just go check off a couple of those, and, and they, they get a text message just to rub it in. But, you know, we’re kind of hardcore. [laughs]

00:53:10,388 [John Lanza]
Well, yeah, uh, the- now, this is… I have to ask you this, because this comes up with us a lot, just not even on the money side, since we’re talking about chores that are not tied to money. What penalties do you impose, if you’re comfortable talking about them? ‘Cause I, I’m actually asking this-

00:53:23,798 [Bill Dwight]
Well, I was just-

00:53:24,198 [John Lanza]
Yeah

00:53:24,198 [Bill Dwight]
… playing a game with, uh, one of my teenagers. I kept, I just kept upping the penalty until he cared. [laughs]

00:53:29,808 [John Lanza]
[laughs] Well, what, what are those penalties? ‘Cause I’m looking for advice.

00:53:32,357 [Bill Dwight]
I think I got up to, like, a buck 50 or something.

00:53:34,207 [John Lanza]
[laughs] Okay.

00:53:35,488 [Bill Dwight]
I’m trying to do-

00:53:36,207 [John Lanza]
I’m trying to not do monetary, so I was, was wondering what else it was.

00:53:39,548 [Bill Dwight]
Yeah, and, and it totally varies. We didn’t do it with all the kids, and, and it was more the conversation.

00:53:44,067 [John Lanza]
Yeah, yeah.

00:53:44,848 [Bill Dwight]
It was way more the conversation. It’s just like-

00:53:47,147 [John Lanza]
Okay

00:53:47,548 [Bill Dwight]
… “Dude, come on,” you know?

00:53:48,788 [John Lanza]
[laughs]

00:53:49,748 [Bill Dwight]
And what cracks me up is this kid, he’s in the Army now.

00:53:53,328 [John Lanza]
Yeah.

00:53:53,618 [Bill Dwight]
[laughs]

00:53:54,098 [John Lanza]
That’s funny.

00:53:55,147 [Bill Dwight]
And, uh, you can bet he makes his bed in the Army.

00:53:56,877 [John Lanza]
[laughs]

00:53:56,888 [Bill Dwight]
But you know what? When he comes home, he doesn’t make his bed still, so-

00:54:00,468 [John Lanza]
Yeah

00:54:00,688 [Bill Dwight]
… I guess the-

00:54:00,707 [John Lanza]
Well, the pen- the, the penalties-

00:54:02,058 [Bill Dwight]
He needs a drill sergeant. [laughs]

00:54:02,768 [John Lanza]
The… Right, the penalties in the Army are [laughs] much stronger.

00:54:06,698 [Bill Dwight]
Pretty clear. [laughs]

00:54:08,357 [John Lanza]
[laughs] Well, I ask because j- even just last night, my, uh, oh, I, uh, my, uh, uh, older daughter just, uh, I mean, she broke, like, three dishes, because she’s un- she’s just trying to whip through her emptying of the dishwasher.

00:54:22,897 [Bill Dwight]
Right.

00:54:23,618 [John Lanza]
And, you know, you just think, “What, what can we do to try to address this issue?” And so, so I, I’m, I’m always looking for ways to address the, the get the chores done issue. Any advice that people have, um, write me about it, because I’m looking for advice.

00:54:37,988 [Bill Dwight]
So I, I think that, um,

00:54:40,928 [Bill Dwight]
the, the value is in the messaging. Like, even if she continues to break dishes, and even if you continue to have consequences for it, by the time she’s in her 20s, I can tell you that, that the message gets in.

00:54:53,428 [John Lanza]
Yeah.

00:54:53,548 [Bill Dwight]
Because-… I mean, I’ve seen my kids, they just mature. I mean, you know, they’re teenagers, and their frontal lobes aren’t fully developed. [laughing] And, um, y- y- you know, it’s astounding. And, and one of my, um… My oldest son is a father now, and, um, and, you know, he’s like, “Oh, Dad, I’m so sorry.” [laughing] “I’m so sorry what I…” You know, they get- they, they get it, and I just think it’s important to sort of keep consistently sending the message that you think is appropriate. Stick to your guns. Even if you think it’s not seeping in, it actually is, and, and, you know, just stick with it. Don’t be discouraged. I think that’s one of the values that, that, that books like yours and Ron Lieber’s The Opposite of Spoiled-

00:55:38,256 [John Lanza]
Great book

00:55:38,856 [Bill Dwight]
… and, uh, Ramsey and Cruise with Smart Money, Smart Kids, The First National Bank of Dad, what they do is they give you a peek into the future.

00:55:46,716 [John Lanza]
Mm-hmm.

00:55:46,916 [Bill Dwight]
You know, they’re basically, “This is what other parents experienced with their kids.” You know, keep the faith-

00:55:53,816 [John Lanza]
Yeah

00:55:54,016 [Bill Dwight]
… because, uh, and stick with it. It, it, it, you know, at minimum, um, you’re hedging your bets. Like, there’s no downside to sending these messages and being consistent.

00:56:05,246 [John Lanza]
Yeah.

00:56:05,576 [Bill Dwight]
And, um, i- in most cases, they will get through, and i- in, in rare cases, maybe they won’t, but you c- you’ll, you’ll never feel bad about yourself. You’ll look back and say, “You know, uh, you know, I, I did my best, and, um, I delivered those messages,” and maybe it just takes a little bit longer in some cases.

00:56:21,956 [John Lanza]
That is the wisdom of a dad who has seen his kids move out of the teenage years, that-

00:56:27,536 [Bill Dwight]
Grandpa Bill.

00:56:28,416 [John Lanza]
Yes. [laughing]

00:56:28,496 [Bill Dwight]
I’m grandpa. [laughing]

00:56:29,576 [John Lanza]
You’re grandpa. I don’t… I, that’s, that’s your- that’s exactly right. I, I have not gotten to that point with them, and, and I’m… I, I’m in no rush to some extent, but I, I think that that wisdom is, is great. And that’s a great way to, I think, move into our, uh, I still have to come up with a name for this, but I call it the-

00:56:46,766 [Bill Dwight]
Our lightning round?

00:56:47,336 [John Lanza]
… I call it the fast and fun round. Um-

00:56:49,896 [Bill Dwight]
[laughing]

00:56:50,396 [John Lanza]
The, the, the, the, the sad part is I have so many other questions that I want to ask you that are not our fast and fun round, so I may have to bring you back on. But-

00:56:58,096 [Bill Dwight]
The long, the long and dull round?

00:56:59,556 [John Lanza]
Yeah. [laughing]

00:56:59,846 [Bill Dwight]
[laughing]

00:57:00,716 [John Lanza]
So, so, so these are the questions that we ask, and, uh, and I, I, I kind of prep our guests for these. So I’m gonna go through these, and, and, uh, you, you give me the answers. So Bill, what does the term money empowered mean to you?

00:57:16,896 [Bill Dwight]
To me, it’s that

00:57:19,336 [Bill Dwight]
you’re controlling money and its effects, not vice versa. Uh, that you’re sort of confident in either making money decisions or, almost more importantly in my mind, seeking counsel. So, um, you know, I, I feel really good about sort of the transparency that we’ve had in, in handling money with our kids. I want them as comfortable… My goal was for them to be as comfortable as possible coming to me with a money problem, and, and to try to be as non-judgmental and just helpful as possible so that, you know, when they’re adults, they’re being transparent with their, their spouse or partner or whatnot. Uh, I just think that’s such a, a positive thing, uh, and can really nip potentially large problems at the bud if you’re comfortable having that conversation. So, so, so to me, money empowered is just that you’re, you’re not intimidated by money and that, um… And it really has nothing to do with how much money you have. It’s more how you approach money, that, uh, a- and you’re open to, um, discussing it with the, the people you deem appropriate.

00:58:28,616 [John Lanza]
Wonderful answer. Thank you. So what’s the, uh, best investment of time or money you’ve ever spent on your kids?

00:58:38,036 [Bill Dwight]
By far, for me, being home for dinner, uh-

00:58:43,136 [John Lanza]
[chuckles]

00:58:43,926 [Bill Dwight]
… was the, the investment I’m most proud of, and, um, and not, not a s- not an easy investment in Silicon Valley.

00:58:54,556 [John Lanza]
Yeah.

00:58:54,956 [Bill Dwight]
Uh, I had the luxury of always being, uh, in the, uh, engineering side of things, so I didn’t have to travel a ton, although I did have teams, you know. When I traveled, it was usually for long stints, uh, in India or Australia or UK. But, um, generally, I was home, and, um, and ultimately, uh, being a, an engineering executive, I was able to basically say, “You know what? Uh, if you’ve got a family, get home for dinner-

00:59:21,516 [John Lanza]
Yeah

00:59:21,916 [Bill Dwight]
… and that’s what I’m doing.”

00:59:22,916 [John Lanza]
Yep.

00:59:23,176 [Bill Dwight]
And I had a lot of people thank me for setting that precedent. Um, it even got to the point where… And coaching as well, uh, for, uh, the kids’ soccer teams. Um, I’m, I’m no, no soccer star. I was a tennis player. [laughing]

00:59:39,306 [John Lanza]
[laughing]

00:59:39,386 [Bill Dwight]
But, um, the idea of coaching, I think, is one of the most gratifying things that you can do for kids. And, uh, you know, one point, Larry Ellison, who was the CEO o- of Oracle, was very notorious for being extremely late to meetings and leaving us all sort of wondering, waiting in the room. And, um, you know, one, one day I had to coach practice, so as soon as he came in, I got up and said, “Larry, gotta go. Got, uh, 12 girls waiting on a, a soccer field for me, or will be s- shortly, and, and I owe them to be there.” And, um, to his credit, he said, “I totally get it.”

01:00:10,496 [John Lanza]
Nice. That’s, uh… Those are both wonderful answers. I’ve coached my kids, too, and I agree wholeheartedly with that.

01:00:19,256 [John Lanza]
What, um, advice to your kids do you kind of most hope that they will heed? Financial advice.

01:00:26,596 [Bill Dwight]
Uh, well, I guess it’s, it’s sort of fine. It’s just, be grateful. Um-

01:00:32,016 [John Lanza]
Mm.

01:00:32,816 [Bill Dwight]
Y- y- you can always find somebody who’s worse off than you. [chuckles]

01:00:36,916 [John Lanza]
Yeah.

01:00:37,806 [Bill Dwight]
And it’s just, i- it’s just the ability to put things in perspective and be grateful for what you have. Um, you know, I remember, uh, my mom always telling my, my brother and I when we were growing up, “You boys don’t know how lucky you have it.” [laughing]

01:00:51,186 [John Lanza]
[laughing]

01:00:51,196 [Bill Dwight]
And we’d be like, “Ah, Mom.”

01:00:52,496 [John Lanza]
Right.

01:00:52,596 [Bill Dwight]
You know, whatever.

01:00:53,136 [John Lanza]
Right.

01:00:53,636 [Bill Dwight]
And then when, later, when I was a executive at Oracle, I-… uh, took several trips to India, and I would come home and tell the kids, “You don’t know how lucky you have it. [laughing] You’re not dead, whatever.” [laughing]

01:01:03,480 [John Lanza]
The circle of life.

01:01:05,060 [Bill Dwight]
[laughing] Yeah.

01:01:05,340 [John Lanza]
[laughing]

01:01:05,780 [Bill Dwight]
But, uh, you know, I just, uh… You know, uh, life is just so amazingly wonderful, and I’m grateful for it. And, uh, and I admit to being a big fan of the Life is Good apparel, and-

01:01:19,510 [John Lanza]
[chuckles]

01:01:19,510 [Bill Dwight]
… I admit to my parents- uh, my kids, uh, giving me the nickname Captain Optimism. Uh, and I’m, I’m unashamed, so I hope that they, uh, they don the cap of Captain Optimism.

01:01:32,960 [John Lanza]
You know, and I, I will jump in here, I have to say, because I’ve been to a number of conferences, uh, with you, and that you, you just, you exude optimism. You always have a smile on your face, so this is, this is not just an answer that you’re giving to a question that makes you sound good. It really… You do live it, so, uh-

01:01:52,280 [Bill Dwight]
It’s super annoying, isn’t it? [laughing]

01:01:54,950 [John Lanza]
[laughing] It’s not. I, I actually find it-

01:01:57,440 [Bill Dwight]
[chuckles]

01:01:57,760 [John Lanza]
… I, I, I find it really refreshing, so… Because like you said, what, what do we really have to com- have to be complaining about? If we’ve got our health, and our kids have got our health… Got their health. So-

01:02:10,540 [Bill Dwight]
Yeah, I just don’t see any downside to optimism-

01:02:12,800 [John Lanza]
Yeah

01:02:12,820 [Bill Dwight]
… so I’m, I’m gonna stick with it.

01:02:14,180 [John Lanza]
No, I think you-

01:02:14,510 [Bill Dwight]
I think it’s a winning, winning strategy.

01:02:15,660 [John Lanza]
You should keep up the strategy. Don’t-

01:02:17,400 [Bill Dwight]
[chuckles]

01:02:17,590 [John Lanza]
… don’t let anybody-

01:02:18,270 [Bill Dwight]
Works for me.

01:02:18,760 [John Lanza]
Yeah, don’t let anybody, uh, sidetrack you for that- from that, and I know you won’t. So if you could transmit a message that everyone would see, this is my, this is my billboard question from the-

01:02:30,240 [Bill Dwight]
Mm-hmm

01:02:30,480 [John Lanza]
… Tim Ferriss Show. [laughing]

01:02:32,040 [Bill Dwight]
Right. Yeah.

01:02:32,960 [John Lanza]
Um, what would that message say? You know, whether it’s a billboard or whether it’s flying through the sky on the back of an airplane, what would it say?

01:02:41,160 [Bill Dwight]
Uh, well, it would say, “Create something today.” And, uh, I, I just have born and raised in Silicon Valley, and my dad was an entrepreneur, and I just think there’s so much good that comes of, of creating. Um, and, uh, good things follow when you create something that you believe is valuable. And, uh, you know, if, if I were able to flip the verb every hour on the billboard, it would say, “Serve somebody today.”

01:03:11,580 [John Lanza]
Yeah.

01:03:11,730 [Bill Dwight]
‘Cause I think those, those two things are, um, you know, very related. And, uh,

01:03:18,260 [Bill Dwight]
and then if, um, if someone said, “Well, you’re gonna need more than three words,” then, uh, I like that whole notion of turning your have tos into get to.

01:03:27,720 [John Lanza]
Yeah.

01:03:27,760 [Bill Dwight]
So anytime you tell yourself, “I have to do something or other,” uh, just tell yourself, “I get to do something or other.”

01:03:34,730 [John Lanza]
Yeah.

01:03:35,060 [Bill Dwight]
It’s an amazing-

01:03:35,260 [John Lanza]
Or I want to

01:03:35,550 [Bill Dwight]
… thing.

01:03:35,980 [John Lanza]
Yeah.

01:03:36,660 [Bill Dwight]
Yeah.

01:03:36,870 [John Lanza]
Yeah.

01:03:36,920 [Bill Dwight]
It’s an amazing mental Jedi trick. [laughing]

01:03:40,760 [John Lanza]
[chuckles] It works.

01:03:43,180 [Bill Dwight]
So-

01:03:43,640 [John Lanza]
Yeah

01:03:43,669 [Bill Dwight]
… if it was one message, create something today.

01:03:45,580 [John Lanza]
Yeah. Great. I love that.

01:03:48,140 [John Lanza]
And final question, um, how… What’s the one parenting and/or book about money smarts that you go back to or that you gift most often?

01:03:59,220 [Bill Dwight]
Well, there’s this book, The Art of Allowance, that I’ve given-

01:04:01,860 [John Lanza]
[laughing]

01:04:01,940 [Bill Dwight]
… a million people. Uh-

01:04:03,780 [John Lanza]
The ch- the check’s in the mail. [laughing]

01:04:07,590 [Bill Dwight]
[laughing] So if I, if I have to disqualify that book-

01:04:10,620 [John Lanza]
[laughing]

01:04:11,190 [Bill Dwight]
… uh, I mentioned, um, three already, The Opposite of Spoiled-

01:04:14,520 [John Lanza]
Yeah

01:04:14,680 [Bill Dwight]
… by Ron Lieber, First National Bank of Dad by David Owen, and then, um, even if you’re not in the Ramsey tribe, I’m, I’m, I’m not-

01:04:23,680 [John Lanza]
Mm-hmm

01:04:24,040 [Bill Dwight]
… but, uh, uh, Rachel Cruze and Dave Ramsey’s Smart Money, Smart Kids, those are kind of my top three. But, you know, I don’t really gift books. Um, what I like to do, which I think is kind of fun, is uh, I happen to read the Wall Street Journal, and people typically have whatever their favorite media is.

01:04:40,580 [John Lanza]
Mm-hmm.

01:04:41,169 [Bill Dwight]
But, um, I like to… If I find an article that I think is tangentially related to a kid’s, one of my kid’s interest, I, I take a picture of it with my camera, and I text it to him.

01:04:51,420 [John Lanza]
Mm.

01:04:52,340 [Bill Dwight]
Uh, and it’s just a fun way of, um, having a, you know, a conversation with, uh, with your kids, and, um, sometimes it’s fun. Uh, often with the Wall Street Journal, it’s financial.

01:05:03,680 [John Lanza]
[chuckles]

01:05:03,860 [Bill Dwight]
You know, like, they’ll have an interest in, um,

01:05:06,560 [Bill Dwight]
say, gaming or something like that, and so if there’s an article about, uh, one of the game companies or NVIDIA or something like that, I’ll, I’ll snap a picture and-

01:05:14,239 [John Lanza]
Yeah

01:05:14,919 [Bill Dwight]
… and engage them in some conversation. The one book that I have given to one of my sons, uh, that I love, is Tuesdays with Morrie.

01:05:23,580 [John Lanza]
Mm.

01:05:24,080 [Bill Dwight]
And, uh, that is a fantastic book, um, about serving other people really and, and being a human.

01:05:32,420 [John Lanza]
Yeah.

01:05:32,780 [Bill Dwight]
So that, yeah.

01:05:34,180 [John Lanza]
That’s… I, I, I, I read that book a long… when it came out, and, uh, that’s right, that’s a great book. That, I might have to put that on my re-read book list, ’cause, uh… Thank you for reminding me of that.

01:05:44,160 [Bill Dwight]
That was a good one.

01:05:45,040 [John Lanza]
Yeah, that really was excellent. Well, how can, uh, people find you on social media and the web? I know you are very active, so how can, how can people find you, Bill?

01:05:55,000 [Bill Dwight]
Uh, type in FamZoo in Google, and you will find me. There aren’t many FamZoos out there. [laughing]

01:06:02,930 [John Lanza]
[laughing] Yes.

01:06:03,420 [Bill Dwight]
There was this… You know, some people say, “Your name is ridiculous.”

01:06:06,740 [John Lanza]
[laughing]

01:06:07,309 [Bill Dwight]
But the good thing is it’s so ridiculous that you can’t help but find us-

01:06:11,060 [John Lanza]
That’s right

01:06:11,500 [Bill Dwight]
… if you type it in. [laughing]

01:06:11,940 [John Lanza]
No, that’s… You, you have got that, you’ve got that area of the web is yours.

01:06:16,700 [Bill Dwight]
It’s either ridiculous or genius or both.

01:06:19,080 [John Lanza]
Yes. We’ll, we’ll go with both. That sounds good.

01:06:21,530 [Bill Dwight]
[laughing]

01:06:23,060 [John Lanza]
And is there anything else you’d like to say before we wrap things up?

01:06:28,740 [Bill Dwight]
Stay positive.

01:06:29,680 [John Lanza]
Excellent.

01:06:29,760 [Bill Dwight]
Stay the course. The messages will get through.

01:06:33,120 [John Lanza]
Excellent. Well, Bill, I really appreciate you taking the time. I am very grateful that you were able to give us some of your time, because you have so much knowledge. Like I said, there’s so many other questions that I want to ask you. Might have to have you back on the podcast. Appreciate the time, and, uh, good luck.

01:06:50,520 [Bill Dwight]
It’s my pleasure, and I’d be delighted to be back anytime.

01:06:53,700 [John Lanza]
Sounds good.

01:06:54,240 [Bill Dwight]
Thanks, John.

01:06:54,740 [John Lanza]
Thanks, Bill.

01:06:56,100 [Bill Dwight]
You bet. [upbeat music]

01:06:58,040 [John Lanza]
I hope you enjoyed this episode of The Art of Allowance podcast. Please subscribe to our show to help me have more conversations with parents and get more ideas to help us all raise money smart, money empowered kids. Of course, please consult with a financial or investment professional before engaging in any decisions that might affect your own financial well-being, and find out more about our movement at theartofallowance.com. You can download a sample or get a copy of my new book, The Art of Allowance, and use the checkout code PODCAST to spend smart and save yourself a few bucks. The book is also available on Amazon. You might want to check out the Money Mammals, our program to get your kids excited about money smarts when they’re young. And until next time, I wish you and your family well on your own journey to money empowerment. Thanks for listening. [upbeat music]