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Cheat Sheet Q & A:
Today’s topic: Teaching children to invest
What is the best way to teach my children about the stock market and investing? My kids are preteens, but would have no problem understanding the info if I had a good lesson plan to teach them.
Bottom Line: Earlier in the week I addressed the question of how to being teaching children the value of money and saving. I thought it might lead to the phase two question for those who are a little bit older and indeed it did. I love this question – it’s also a some what difficult one to answer. I’ve found that there isn’t a one size fits all answer.
Some children will naturally be more interested (those who excel in math for example). Children who have demonstrated entrepreneur like tendencies are also excellent candidates to be early adaptors. There are also those who either aren’t wired that way or simply will lack the patience to want to truly learn how to research investment options. So let’s get to the question itself.
What excites them may vary but a tactic that I’ve found to work is the million dollar mark. Most people old and young respond to the idea of having $1 million dollars. For most people it seems like an impossible dream. The reality is that with wise planning, hard work and solid investing it’s attainable for almost everyone.
The reason that most don’t become millionaires is that they look at the big number and don’t realize that it’s just a lot of small consistent success and planning that gets them there. A million dollars is only this formula:
Investing $1000 per month for 25 years. That’s it? Sound too simple? The average historic rate of return in the stock market is 8.4%. Investing $1000 per month for 25 years at that average compounded rate of return will get anyone there.
Now clearly your pre-teen children aren’t likely to be able to earn enough money to begin saving at those levels but you may capture their imagination and demonstrate the power of investing. Just saving $1000 per month for 25 years will result in only having $300,000 rather than 1 million.
Overtime they’ll begin to soak in more and more and eventually will begin to understand the value of a P\E ratio, dividends (from which 2/3rd’s of all stock market gains are derived) & maybe one day will understand how to read a balance sheet. Learning how to self-invest requires patience and diligence but it can be the most valuable lesson your children ever learn.
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Wal-Mart expanding iPhone scan & go program:
Bottom Line: We are one step closer to only needing a smart phone to go shopping today. Wal-Mart had been operating a test program using iPhones and self-checkouts in
Yesterday Wal-Mart announced that they are expanding the program from 70 to 200 stores and they’re adding Android to the test program. If Wal-Mart, the largest retailer, gets onboard with this scan & go system, you can count on it becoming standard at many retailers very quickly. The future of shopping is nearly here.
There aren’t any
Home equity is back:
Bottom Line: The latest research on underwater mortgages reveals just how much progress has been made over the past year of the housing recovery. Millions of home owners that were underwater a year ago no longer are.
In January of 2012 about 26% of all mortgages in the
Bottom Line: What’s over the line for an employer sponsored plan to demand of you without significant consequences? I think we’re about to have that national argument.
A decade ago there was a debate when smokers began to be treated differently by employer sponsored plans but eventually it was societal accepted.
Effective May 1st
Additionally if any of the tests show that you’re not where “you should be” employees will be expected to show progress until they are in an acceptable range. The penalty for not doing so - $50 per month… Something tells me this won’t go away quietly.
The latest hack attack strategy – take out the firms that product us online:
Bottom Line: So what better way is there to compromise companies and Governments online than taking down those who protect them? That’s the latest tactic being communicated by security firm Mandiant.
Mandiant described a daily assault their networks are facing – largely denial of service attacks to try to prevent their network and software from being effective. Mandiant is significant for two reasons. It’s a large online security firm and it’s the one who identified that it was the Chinese Government and military that was behind many of the most significant hacking taking place. So who is it that’s trying to shut down Mandiant? Guess who… yes the Chinese. Now is at least someone out there worried that our signal biggest debt holder is
YouTube hits major milestone & asserts itself as the most powerful online product:
Bottom Line: So YouTube has reached the 1 billion monthly user mark. Super impressive sure (after all it’s more than 3 times the
We’re on the brink of the smart TV age in which the standard TV will be internet ready and TV distribution will be all online. Take a look at the audiences of the TV networks. They pale in comparison to the YouTube user base. YouTube is set to the biggest player in the future of TV viewing worldwide.