DENISE: Hi, there. I’m Denise Richardson for howdini.com. Teaching kids the value of a dollar seems to be passé for many families. Maybe it never even happened, in fact. It’s probably true that it’s never been more necessary than now. We want our children to have the best we can afford, but are we spoiling them in the process? Here to guide us through this thorny issue is bestselling author David Bach, whose new book is called Go Green, Live Rich. And everything is, I guess, these days, go green, live rich, and also teach your kids about the environment, teach your kids about money.
DAVID: Absolutely. I mean, where do kids learn things? You know, we send them to school, but the things that are really important, like money, is usually not taught in school. In fact, it’s almost never taught in school. So if you look at my life, my life was really shaped by my grandmother. And my grandmother taught me about money starting at the age of seven. And my first lesson happened in McDonald's. So McDonald's, she said, I want you to walk up to the manager, and I want you to ask the manager if, if this company’s publicly traded. I said, c’mon, what do you, how do you, what are you talking about? And I literally walked up to the manager, and the manager came back to the table with me, and said to my grandmother, yes, you know, introduced himself, said, yes, the company’s publicly traded. And she said I know that, but I wanted him to learn how to ask. Now I get chills thinking about that, because that was my first experience at being somewhere, my favorite restaurant in the whole world, and learning to think about what that meant, that you could invest in that company.
DENISE: These days, and I think it’s been going on for years; people don’t address the issue of money in front of children. They don’t know what anything costs, they don’t know – all they know is that I want more, I want more. So the bottom line is start with something as simple as that. But you have to know what it is, too
DAVID: It can start with as simple as taking the change out of your pocket when you come home, and you, I give it to my son, Jack who’s four and three quarters, as he would tell you. I give him my change, and he puts it in his piggy bank. Now what we’re starting to talk about is how, when we fill up that piggy bank, we’re going to give some money to charity, and he’ll help make somebody’s life better with that money. We’ll go buy a present or a gift for somebody to help somebody else. And then we’ll take that money down to the bank, and we’ll open him up a savings account. So I’m starting to teach him about the value of money, but also that money’s for you, but money’s also for helping other people.
DENISE: What about stocks for children? I mean, how do you teach them at a young age, in their early teens or even pre-teen?
DAVID: So simple. You, just like my grandmother got me into buying McDonalds stock, ‘cause that was my favorite restaurant in the whole world at the time, you give, you buy a company, you buy a stock for your kids in a company that they’re already into.
DAVID: So if your kids are playing video games, Electronic Arts makes the video games. That’s a great example. Maybe they’re into some kind of cool shoe. What are the, maybe it’s Nike. You buy them Nike. Or maybe they’re into Disney. You know, one of the first stocks I ever owned was Disney. It should be something that the kids are excited about. Not that you’re excited about, but that the kids are excited about.
DENISE: How much information do you give a child about the expenses in the home?
DAVID: I think it comes down to the, the appropriate age. I know that growing up, my parents always talked to me about money. Now my father was a financial advisor, I became a financial advisor; my sister’s a financial advisor. At the dinner table at night we talked about finances. And when my dad was doing well, we got to see him do well, we got to experience him do well. And when my father’s business was not doing well, we got to go through that process. And my parents always shared with us what was going on. And I think that that’s really important. I think too many parents try to shield their kids form what’s going on financially.
DENISE: You’re amazing. I would love talking, I could talk to you forever. David Bach--
DAVID: Denise, you’re the best.
DENISE: You’re a treasure to our nation, and to parents and to family – you really are. Thank you so much for being with us.
DAVID: Thank you, I really appreciate it.
DENISE: I’m Denise Richardson for howdini.com; isn’t he great.