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Sunday, March 25, 2012

Ways Kids Make Money

There are many lists out there that give kids ideas on how to make money.   They mostly include “work for hire” or “jobs”, such as do more chores, mow the grass, wash cars, sell your toys, etc.  While these are good suggestions on how to work for money, I want you to think bigger!  I want you to think about how to make money work for you!  It is a lesson that most people never learn, but if you can learn it early in life it could be the greatest skill you acquire. 

I have listed some ideas that are outside of the typical lists.  Some of the ideas my not work for you but the goal is to get your creative juices flowing.  I want to help you recognize there are opportunities to make money all around you.  You just have to look for them. 

1.     Put gumball, toy, and candy vending machines in local businesses around town. The machines can range from about $100 for a simple gumball machine to several thousand for the toy crane machine.  Where do you get the first $100?  That is where you do more chores, wash cars, and use your birthday money.  Or even better, ask for it as a birthday gift!

2.     Being a country girl my mind often thinks that way. Buy some egg laying hens and ask if you can keep them in a friend or family member’s hen house then sell the eggs each week.

3.     Know someone with a garden? Ask if you can have their extra fruit and vegetables in exchange for helping pick them. Then sell the fruit and vegetables at the local farmers market each week.

4.     Buy small inexpensive fish, grow them into larger healthy fish and sell them to local businesses with fish aquariums in their store.

5.     Have a knack for coming up with funny sayings or slogans? Approach local schools, community organizations, or companies and ask if you can design and order the shirts for their next event.

6.     Love reading books? Ask the local bookstore owner if you can review books on his website for a small fee. Develop the best teen book review forum in town or heck, in the country.

7.     Great at computer graphic designs with a great imagination? Contact me. I need someone to help illustrate my blog, books and website!

8.     Love creating videos and posting them on the internet? Contact local business owners in town and offer to make videos about their business every week so they can have their own YouTube channel tied to their website. Tell them how this will help others find their business on the internet. Many kids know more about technology than most adults. Leverage that knowledge and your passion to make money.

9.     Have a lot of computer savvy with friends that are looking to make money too? Create a forum where your friends can post their products and services for sale. KEEP IT SAFE!  If the service being sold requires the kids to be present at the customer’s house or business, only sell to people they know and never go alone or without an adult.

10.  Create a local teen review forum and have all your buddies review restaurants, clothing stores, arcades, local hang outs and other businesses in town then approach businesses in town to advertise on your forum.

11.  Great at recognizing fashion and dressing? Become a personal shopper for friends and classmates.

12.  Love taking great pictures? Post them on istockphoto.com or similar sites for others to buy. This also works for illustrations and graphic designs.

If you came to this page it is probably safe to say, you are looking for ways to make money or you are a parent looking for ideas for your child. I love your initiative, passion and effort put forth just to locate this page. You came for the list so I gave it to you, but I want you to look past your desire or need to make money and challenge you to understand what money is and how it works.  I want you to stop chasing after money and let money chase after you! There are opportunities all around you to make money but if you do not educate yourself you will not recognize the opportunity much less act on it.

The most important thing to understand is that getting rich is NOT about how much money you make, but how you SPEND the money you have.   For example, if you get a job and make $20/day and each week you go to the store to buy a game or toy for $100 YOU WILL ALWAYS BE BROKE!

It will be up to you to be disciplined because your friends, family and society will innocently tell you to spend the money on things that make you happy. You have worked hard for it and owe it to yourself. Once you adopt this philosophy you are destine to spend your life working for money and living in the rat race just like the friends, family and society that taught you that.

So what should you spend your money on? Assets. Assets put money IN your pocket, even when you are not there. For example, let’s say you get $10 for your birthday. Even though you just got a load of toys you will still have an all-consuming desire to go buy another toy. You go to the store and buy your favorite action figure. You have your toy, but your $10 is gone forever. What if, instead you fought your all-consuming desire to buy a toy and instead ask your grandpa if you can buy 2 or 3 of his chickens and keep them in his chicken coup? Each week you sell the eggs to friends and family. Let’s say you get a dozen eggs each week from your 3 chickens and sell your homegrown organic eggs for $2/dozen. Sure it will take $5 weeks to get your $10 back. The good news is, in 5 weeks you will still want a toy! The even better news is in 5 more weeks you will have another $10 to buy another toy! You can take $10 and easily turn it into $100. That is the true opportunity! That is how money works for you!
I will continually add ideas for kids to make money as I think of them so check back in periodically.  And when you go out and make money, let us know what you did by sharing your story here.  We would love to hear from you!

Monday, March 19, 2012

The Gift of Disney

Having young children, we are in a season of life where we are invited to many birthday parties. Kid parties are much more complicated than they use to be. What happened to the days of having your best buddies over to the house and playing for a few hours? Now days it involves renting a venue that can keep the kids entertained for a few hours, providing food and paying for the entertainment, and supplying gifts to all the attendees.

This is the perfect recipe for large birthday parties. What kid wouldn't want to play games at Chuckie Cheese, brave the foam pit trapies, or defend their lazer tag title? On top of that the birthday boy goes home with more toys than he or the parents know what to do with!

Our challenge and opportunity should be to find a meaningful gift. Disney is an amazing company that has made millions of movies and toys for kids for many generations. They have made one gift that never goes out of style, provides an opportunity to teach kids financial concepts they are otherwise not exposed to, and can provide ongoing income. I am not talking about Mater, a Disney Princess, a movie or some other toy that will be broken, duplicated or soon forgotten about.

The best gift Disney ever made is Disney stock. Next time your shopping for a birthday gift, think past toys, dolls, and remote control cars. Leave those gifts up to the others and think about giving a gift that amidittedly may be underappreciated at the time but can set a child on the right path of achieving financial freedom.  

Sunday, March 11, 2012

Is that an Asset?

Which of the following is an asset?
a.       Lemonade Stand
b.      Gumball Machine
c.       Your House
One of my favorite definitions of asset is it puts money in your pocket even when you’re not there.  It is easy to remember and easy to apply.  Let’s walk through each of the options listed above.  Let’s start with your house.  Many American’s consider their home their greatest asset, but according to our definition, your house is not an asset.  As a matter of fact, it is a liability.  Every month it takes money out of your pocket.  Even if debt free, you still have maintenance, utilities, and insurance to pay for.  While your lemonade stand can make you money, it only makes you money if you are present working it and selling lemonade.  Your lemonade stand is a job, not an asset.  The gumball machine puts money in your pocket whether you are there or not.  It is the only asset of the three.
So how do you turn your home and lemonade stand into an asset?  Rather than running your lemonade stand yourself, you set up several around town and hire employees to run them for you.  This converts the job into a business.  The house can be a little trickier, but personally we have made an attempt at it. We rent out our barn apartment and some of our horse stalls to bring in monthly income.  While it doesn’t cover all the expenses related to the house it does reduce the impact of the liability.
Brainstorm with your child how she can turn things around her into assets.  To get the creative juices following, here are some things we have brainstormed in our house to help our son build his assets:
1.     He used his earning from last year’s lemonade stand on National Lemonade Day to purchase a gumball machine, which he then placed in a local business.
2.    We wrote and self-published an eBook on Amazon.com to teach children the concept of income.  You can check it out here A Day At The Carnival
3.    He has taken proceeds from his vending machine business to buy baby goldfish and grow them in our horse troughs to about 6 inches long and then sells them to others to put them in their water trough to eat the mosquito larvae and keep algae down.      
Do you have examples you can share?  I would love to hear them! 

Sunday, March 4, 2012

Welcome to Financially Savvy Kids

Welcome to Financially Savvy Kids.  Our goal is to equip parents and kids with knowledge about how money works.  Public education does not teach our children what they need to know about money.  Society teaches them to buy what they want through debt and then work hard to pay for it. This vicious cycle typically starts before they are out of college and unfortunately, once in this cycle it can be very difficult to climb your way out, much less get ahead.  Breaking the cycle, once in it, takes great discipline.  Again, a concept counter intuitive to society’s teachings.    We want to educate kids about money BEFORE they fall into the trap.

For instance, you were probably raised with the idea that you should work hard to get good grades, go to college and get a high paying job. I would venture to say most of us want that for our kids today.  This path jump starts the cycle mentioned above and puts our kids at a great DISADVANTAGE. 
1.  As a reward for all their hard work and for securing that high paying job, they will buy a house, get a new car, and acquire a new wardrobe that will make them look and feel like a million bucks.  They are feeling pretty good about their money management skills because they have two new “assets” in their house and car, and they even throw a little money into the company 401K.   In a matter of a couple of months their entire paycheck is allocated to expenses, many of which they wrongly believe are assets, to support their new found and richly deserved lifestyle.  And so the cycle begins.  The ground work is laid for a lifelong pattern of dependency. 
2. They are thrown into the highest tax bracket and once the impact of that is realized, they begin spending money on things they think are assets to reduce their tax bill, such as golf clubs, boats, R.V.s and a second home.
3. All creativity and any entrepreneurial spirit is squelched by the realization that without the pay check they have grown accustomed to, they will  drown in their own expenses, and they are lured into believing working for a paycheck equals security. 
I am getting cold sweats writing this, because it is the exact path that I took.  About 7 years into my professional career and shortly after I had my son, I decided to take on the daunting task of breaking the cycle and replacing w-2 income with investment income.  It has been a long, slow and at times scary process.  I am not seeking a path of lavish luxury and wild riches.  What I am after is even better...financial freedom.  The ability to spend my time with my family, doing the work that I want to do, having the financial capacity to give to my church far and above my ten percent tithe, and to give my son a different example than what he sees among  most of society.  I want to teach him how to make money work for him rather than being a lifelong slave to money!
Through this blog we will share fun and easy ways to teach our kids about making money, spending money, creating wealth and giving back.  We hope to create a forum where you will share what you are doing to teach your kids about money for the benefit of our readers and together we can pull out the entrepreneurial genius in our children!