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Joined: Jul 2012
Posts: 423
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Joined: Jul 2012
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I'm not so sure that the particulars of handling money are so important as the message, the important message being...
Work=Getting paid No work=Not getting paid
After that lesson, teaching that debt is dumb and robs the vast majority of people of their earnings shifting them to those who have learned to manage their money well.
There are a lot of effective methods to do that, so long as the lessons are actually learned.
Dave Ramsey's book, "Smart Money Smart Kids" is a good resource for common sense about teaching kids about how to handle money.
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Joined: Oct 2011
Posts: 2,856
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After that lesson, teaching that debt is dumb and robs the vast majority of people of their earnings shifting them to those who have learned to manage their money well. Generally speaking, this is one of the biggest differences between wealthy and not-wealthy parents. The wealthy tend to teach their children about debt using the positive term "leverage," and instruct them in how to use it to their advantage. Among other resources, the book "Rich Dad, Poor Dad" expounds on this difference in depth. Debt for acquiring liabilities is bad, debt for acquiring assets is good.
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Joined: Feb 2014
Posts: 337
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We just did a refi to reduce our rate and DD12 had a lot of questions about it. It was a great opportunity to talk about owning versus renting, debt (both bad and better), and the details of the mortgage industry.
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Joined: Apr 2013
Posts: 5,261 Likes: 8
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These points may generally be true in a free society and a capitalistic economy, however many are witnessing pressures to change our country's culture and economy to one of socialism. For example, paradigm shifts in classrooms may report equal outcomes regardless of number of repetitions to mastery, and may provide collective punishment. Some schools seek to minimize the role of parents in educating and rearing their children. Similarly, teens may accept federal "financial aid" loans for college, not fully realizing their job prospects, likely salary range, and years to repay this debt upon graduation. Parents may wish to acquaint their children with as many different theories of personal financial management as possible. Like many risk-taking strategies, leveraging debt may be controversial with strong views on both sides.
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Joined: Jul 2012
Posts: 423
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Generally speaking, this is one of the biggest differences between wealthy and not-wealthy parents. The wealthy tend to teach their children about debt using the positive term "leverage," and instruct them in how to use it to their advantage. Among other resources, the book "Rich Dad, Poor Dad" expounds on this difference in depth. Debt for acquiring liabilities is bad, debt for acquiring assets is good. We'll have to agree to disagree on this one. Everyone I know who is very wealthy labels staying out of debt as the number one priority to get there.....but we live in different areas no doubt too. The other grand thing about teaching your children to stay out of debt is knowing they won't be shouldering the stress of it. Great thing about being out of debt....you don't have to be in a hurry to do anything and you make wiser choices.
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Joined: Jun 2012
Posts: 517
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Generally speaking, this is one of the biggest differences between wealthy and not-wealthy parents. The wealthy tend to teach their children about debt using the positive term "leverage," and instruct them in how to use it to their advantage. Among other resources, the book "Rich Dad, Poor Dad" expounds on this difference in depth. Debt for acquiring liabilities is bad, debt for acquiring assets is good. We'll have to agree to disagree on this one. Everyone I know who is very wealthy labels staying out of debt as the number one priority to get there.....but we live in different areas no doubt too. The other grand thing about teaching your children to stay out of debt is knowing they won't be shouldering the stress of it. Great thing about being out of debt....you don't have to be in a hurry to do anything and you make wiser choices. I think you both have valid points, Dude is pointing out the steps to wealth creation which if course comes with risk, Old Dad looking at financial stability which may not come with the reward of "great wealth" but does have many other benefits. Which way you go depends strongly on your own family's social/financial viewpoint. Personally I'll be teaching my kids to treat their money with respect and learn to speculate when they have proven they can manage what they already have. Of the few wealthy families I know, they have all been bankrupted at least once and would have been ruined if they did not have they skills to drag themselves out of debt. Nor would they be where they are now without some element of risk taking.
Last edited by Mahagogo5; 06/23/15 04:26 PM.
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Joined: Jul 2012
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If one takes stock in the Bible, perhaps using it to educate their children, although there are about 2500 passages that discuss money, debt, and possessions, not a one of them has God using debt to bless his people, in fact, rather the opposite, instead it states:
Proverbs 22:7
The rich rule over the poor, and the borrower is slave to the lender.
Proverbs 22:26-27
26 Do not be one who shakes hands in pledge or puts up security for debts; 27 if you lack the means to pay, your very bed will be snatched from under you.
Romans 13:8
Let no debt remain outstanding, except the continuing debt to love one another, for whoever loves others has fulfilled the law.
Last edited by Old Dad; 06/23/15 06:57 PM.
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Joined: Oct 2014
Posts: 37
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Exodus 21:7
If a man sells his daughter as a female slave, she is not to go free as the male slaves do.
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Joined: Jul 2012
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Exodus 21:7
If a man sells his daughter as a female slave, she is not to go free as the male slaves do. This relates to teaching your children about money in what way? You'll have to educate me on this, I'm missing the point.
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Joined: Feb 2010
Posts: 2,640 Likes: 2
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Here is a Financial Literacy Quiz with results that have been found to correlate with wealth. One can take the quiz and have it scored at http://www.usfinancialcapability.org/quiz.php and also read about research employing the quiz. I wonder where a more advanced quiz can be found. A good site for savers and investors is Bogleheads. Suppose you have $100 in a savings account earning 2 percent interest a year. After five years, how much would you have? (A) More than $102 (B) Exactly $102 (C) Less than $102 Imagine that the interest rate on your savings account is 1 percent a year and inflation is 2 percent a year. After one year, would the money in the account buy more than it does today, exactly the same or less than today? (A) More (B) Same (C) Less If interest rates rise, what will typically happen to bond prices? Rise, fall, stay the same, or is there no relationship? (A) Rise (B) Fall (C) Stay the Same (D) No Relationship A 15-year mortgage typically requires higher monthly payments than a 30-year mortgage but the total interest over the life of the loan will be less. (A) True (B) False Buying a single company's stock usually provides a safer return than a stock mutual fund. (A) True (B) False
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