“Working to help parents raise money-smart kids.”
Hello, friends,
I hope you’re enjoying Money-Smart Month!
To kick things off, I want to remind you I will be teaching my Art of Allowance Academy short course (courtesy of Patelco Credit Union) this Wednesday at 5:30 pm PT.
You can register here.
I’ve reworked the course a bit, so I think you’ll find plenty of value even if you’ve participated in the past. I hope to see you there.
Now onto this week’s “3 Ideas to Share & Save”!
— 1 —
You Got This!: I’m training for the inaugural Hollywood to the Sea, my first running relay. Though I thoroughly enjoy the solitary intensity of long-distance running, I’m looking forward to the “camaraderie of suffering” this experience is sure to bring. For the friend who organized this race did so because he’s a fan of similar events, like Oregon’s “mother of all relays,” the popular “Hood to Coast.”
Yesterday, I headed to Los Angeles’ massive Griffith Park to train. While it was admittedly crowded — it was Easter after all — the park was sparsely populated past the landmark Griffith Observatory.
Beyond the observatory lies the “back side” of the park, where I encountered more serious runners, intrepid folks who seemed to run uphill faster than I ran down. And, of course, there was more of that “camaraderie of suffering”: knowing waves and head nods from runners pushing themselves through difficult training. In fact, as I was climbing a steep hill, one guy even shouted, “You got this!” His words felt like a little turbo boost. 💥
All this to say that running parallels parenting. While raising kids has many fulfilling moments, we parents also all share some facet of that “camaraderie of suffering.” I often write about these difficulties and the importance overcoming them in this newsletter. For example, teaching our kids there’s a cost to anything that’s free.
So it’s useful to remember that you are still in the minority. You join me on the “back side” of the park, where we’re working hard on our training. Most parents aren’t actively teaching their kids money smarts. And while it’s certainly easier to decide not to lace up our shoes today, we do because we know the effort will pay off.
So this newsletter is my head nod and knowing wave to you.
“You got this!” 💪
— 2 —
Keep It Simple: This post on WordPress founder Matt Mullenweg’s blog gives us a useful framework from the uber-insightful educator Adam Robinson about information and decision-making:
“Beyond a certain minimum amount, additional information only feeds — leaving aside the considerable cost of and delay occasioned in acquiring it — what psychologists call ‘confirmation bias.'”
We’re taught that more information is better. However, this short post makes it clear that this is not always the case. We musn’t be ignorant when making decisions, but we should be alert to the fact that more information just might make us more delusional. Because the more information we have, the more certain we feel we’re right.
For example, I often hear people say that investing is complicated. Not surprisingly, many of these folks are trying to sell you something.
For almost all of us, hearing that investing is complicated misses the point. Investing is complex, but it need not be complicated.
So we might take Warren Buffet’s advice to help our kids recognize that we are amateurs and to go with the simple approach to investing, low-cost index funds:
“People who have set it and forget it tend to be pleasantly surprised.”
-Margaret Hartigan, Founder & CEO, Marstone
— 3 —
Experience Matters: I enjoyed reading essayist Nat Eliason’s “40 Lessons from 30 Years.” I’m always looking for interesting perspectives, and Nat’s writing is surprisingly wise for such a young guy. For instance, the following nugget stuck out:
“Advice only works in retrospect. You usually have to have experienced a failure or loss to understand the relevant advice. Hearing some piece of advice will rarely stop you from making the related mistake.”
These words pair well with those of The Psychology of Money author, Morgan Housel:
“Reading or watching something makes you feel like you understand it. But you don’t until you’ve experienced it.”
Speaking of experience, I make the case for the importance of this type of learning in this short podcast episode and accompanying essay.
Experience matters, and Money-Smart Month is a good time to give your kids some hands-on involvement with the green stuff. Here are some suggestions:
- Open up a Roth IRA for your working teen if you haven’t done so already. 💰
- Help your daughter set a S.M.A.R.T. goal for something she’s been asking for. ✅
- Give your son an unexpected reward. 🤩
To that last point, here’s an example excerpt from my book, The Art of Allowance:
“One mom recalled a time when her daughter was agonizing over a purchase decision. She knew her daughter had only enough money to purchase one of the two items, yet her daughter didn’t try to whine her into submission. Mom sympathized with her daughter’s thoughtful consideration and appreciated her money-smart attitude. Mom felt compelled, in this one instance, to purchase the second item for her daughter. She felt this one-time reward wouldn’t impede her daughter’s progress toward money empowerment. Mom’s action was such a rarity that the look on her daughter’s face was priceless. Seeing that kind of appreciation is a wonderful thing to behold.”
Whatever you do, remember, “You got this!”
And don’t forget to enjoy the journey.
John, Chief Mammal
P.S. Please consult with a financial or investment professional before engaging in any decisions that might affect your own financial well-being.
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