When it comes to money, the only long term thinking my kids seem to know how to do is borrow deep into the future. I’m not saying that long-term, un-repayable debt is not a good idea for some people (i.e. Federal Governments), but for young kids I have found that encouraging this behavior can be detrimental. My son came to me the other day and asked, “hey dad, can I have my allowance for the next fifty years, so I can buy the Lego Death Star?” On hearing this request, I realized two things. 1. His allowance might be a bit on the low side and 2. My son has no concept of the power of long term investment planning. The basic problem is that both my children are very alive and well in the present, but the future is a concept that they are fairly unaware of.
When Heidi and I first decided to offer the kids a small weekly allowance, we had in mind it would be a good way to help the kids learn about money and give them some independence. I told the kids that whatever they saved of their allowance, at the end of the quarter they could earn five percent interest on the saved allowance money. Mostly I think they just heard quarter, and then decided to invest a quarter in a rubber ball machine outside the Mexican restaurant (when we still lived in Washington).
As a good father, I realize that my children are much more inclined to use money in the short term to satiate present appetites, rather than think ahead to future needs or possible investment opportunities. Going into a toy store with them is like taking a pack of wolves into a butcher shop. Their instinct takes over, and they are salivating at all the goods wrapped in colorful packaging with pictures of happy children everywhere. I think if tobacco companies have to put disgusting pictures of blackened lungs on their boxes of cigarettes, toy companies should be required to put pictures of spoiled children throwing fits on the back of their products as well.
Surgeon General Warning: This toy will give user an initial surge of enjoyment, but can result in greater desires for more toys, bigger toys and general ungratefulness. Parents may lose the desire to have more children when around users of this toy.
All this short term financial thinking has caused me to rethink my long term financial planning. Because my children are willing to spend other people's money recklessly with no consideration of the future for short term gains for themselves, I have decided to take their college fund and begin a campaign fund. I figure they are both on their way to becoming politicians.
Advice: Invest money in LEGOtm. They are an amazing company.
