“Working to help parents raise money-smart kids.”
Hello, friends!
I’m coming to you from Palm Springs, where my wife is selling my sister’s beautifully redesigned desert oasis.
Late January is a wonderful time of year to venture into the high desert. The air’s crisp, the sky’s a beautiful azure and, because we’ve had copious amounts of rain this winter, there’s a lush blanket of green covering the hills on the drive from Los Angeles.
Still, surrounded by the astounding natural vistas we are so fortunate to enjoy on a Southern California drive, there is one man-made wonder we can’t miss: the recently renamed Yaamava’ Casino.
Yaamava’ juts up abruptly from the sandy floor and, on this trip, happens to serve as inspiration for this week’s “3 Ideas to Share & Save.”
— 1 —
Ignore Gambling at Your Own Peril: Taking big risks with your money is becoming easier and easier. For instance, sports betting apps like DraftKings and FanDuel are so pervasive that it’s easy to forget that only in the last decade has gambling outside of environs like Vegas become ubiquitous and frictionless.
Of course, betting on sports is as old as the games themselves. And though I’ve never been a big gambler, I enjoy running fun, informal family sports pools. Heck, I’ve even told my kids that there’s no point playing poker if there’s no money on the line.
So, I’m not anti-gambling.
Still, there are two key concerns that we as parents need to prepare our kids for when it comes to betting. The first is the aforementioned frictionless nature of getting started. And once you’re in, gambling companies are encouraging dangerous behavior. Here’s a quote from a good primer on the growth of sports betting by Wendover Productions:
“Gambling companies use risk-free bets to form habits and keep players, despite research showing it encourages problem gambling, and governments allow them to be tax-exempt.”
Since risking money is so easy, we almost certainly want to provide our kids with some food for thought when they inevitably encounter online gambling. Because although we might be able to ban betting when they’re under our collective wings, they will at some point leave the nest. I hope you agree that we’re better off not sticking our necks in the sand and instead engaging our kids in conversation.
We might consider repurposing the advice Jason Zweig provides in his book Your Money and Your Brain: If you’re going to engage in risky money behaviors, like stock picking, day trading or cryptocurrency investing, then use a “mad money” account. In short, only gamble with money you’re prepared to lose. Of course, each behavior carries varying levels of risk.
We can also contrast the “mad money” concept with less risky boring investing, or the notion of putting a majority of your money in index funds. Either way, talking to our kids about gambling is like giving them another tool for their money toolboxes. 🛠️
— 2 —
The Money Toolbox: As it turns out, we just released the last video in our “Good Money Habits” series for tweens and teens:
Our kids need to learn to use money as a tool to craft the lives they want. For though we all know money can’t buy happiness, we also know that not having enough of it is very likely to bring us some modicum of misery.
And even if there are some rare folks who have quit money entirely, this newsletter is for the rest of us. We are on a journey to help our kids live in a world that includes money. To do that, we want them to learn to use it wisely. This is why I advocate starting an allowance when our kids are young, so they begin to learn through their own experiences. Doing so also helps open up the lifelong conversations we want to have with them about the green stuff. 💵
By talking to our kids about money early and often, we’re providing them with a toolbox, not unlike the one my dad gave me as I headed out into the real world. He knew I’d need a full set of tools so that when something around my apartment (and eventually my house) needed fixing, I’d have options.
Not talking to our kids about money is like not providing them with a toolbox or just handing them a hammer. For as the saying goes, “A hammer turns every problem into a nail.” The hammer isn’t going to help our kids fix a sink, just as only talking to them about “saving for a rainy day” isn’t going to provide them with other ways to think about and use their money.
Like when a friend introduces them to Jackpocket …
— 3 —
Lotto for Digital Natives: You sharp readers might be wondering if I forgot about the second key reason we need to be concerned about gambling.
Nope! That other reason is targeting. Because unfortunately, our kids are the primary focus for new, frictionless gambling opportunities.
Mark Cuban-backed Jackpocket makes lottery gambling much, much easier. And while buying a scratcher from time to time can be fun and won’t break the bank, potential problems increase as companies reduce the friction of having to visit a 7-Eleven to grab a ticket.
In the Forbes article “Mega Billions: Inside The Battle To Capture America’s Lucrative Lottery Market,” the CEO of Jackpocket’s competitor, Lotto.com, laid bare his aspirations:
“I’m not trying to take one dollar away from the traditional retailer, and the guy that likes going to the store in the morning and buying his cup of coffee and his Pick 3 ticket; I don’t want to convert him to being a customer.” […] “I want the Millennial or the Gen Zer, the customer who is completely digital native.”
– Tom Metzger
Yep. Those are our kids. 😬
Of course, it only makes sense that these companies are targeting the next generation. That’s their prerogative.
It simply makes it our prerogative to ask the question: How do we talk to our kids about gambling?
I hope these ideas inspire you to think about how to have age-appropriate conversations with your children. So please let me know if there are any other topics I can share with our community to help us have more and better money discussions.
Thanks for reading, and, as always, 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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