After reading two articles on Baby Boomer and Millennial money travails, my prescient 13 year old daughter asked, “Do money management skills skip a generation?” It would appear so. US Boomers are woefully unprepared for retirement and still awash in debt compared to the “Great Generation” that preceded them. And while I appreciate the mountain of college debt burying some Millennials, I don’t understand the mindset of a young adult – spawn of the Baby Boomer – who thinks themselves independent because they figured out how to mooch off mom and dad long enough to save money for status holidays.
Having recently been asked by a school to create a “money” curriculum for high school, here’s a multidisciplinary primer for kids (of any age) to get hip to this whole money thing before it’s too late.
Lesson 1. PE and PHILOSOPHY
Thinking For Yourself 101: 10 minutes of Yoga and silence. If you can breathe properly, you can think. If you can think, you can think for yourself ergo you can make money management and investment decisions that are in your best interest. Required Reading: Mind Over Money, Dr. Brad Klontz.
Homework Extended Essay: Write 500 words on the following – The last time I made a major decision that went against the crowd/popular kids/conventional wisdom OR the last time I followed the crowd and regretted it.
Lesson 2. POETRY and NEURO SCIENCE
Don’t Waste Money on Cr@p You Can’t Afford Even if Your Peers or Parents Do.
Discussion: Wants vs. Needs
Homework: Analyze any two of the following songs: Money by Pink Floyd, Material Girl by Madonna, Forget You by Cee Lo Green, Royals by Lorde, The Pretender by Jackson Brown.
Lesson 3. HOME ECONOMICS – The Power of Sticking to a Budget.
Required Reading: Habits by Charles Duhigg
College Prep Homework – For one month you are a migrant worker living in Singapore and making $500/month. Only your rent is covered. You send $200 home to feed your children, which leaves you with $300 or $10 a day. You have no debit or credit cards. Write down every single expense for the month down to the dollar. Here’s my recipe for Spaghetti Bolognese.
Lesson 4. HISTORY – Shall Set You Free: Politicians, Lobbying, Banks and Inflation.
Required Viewing: The Inside Job.
Required Reading: Nomi Prin’s It Takes a Pillage and Matt Taibbi’s Why Wall Street is Not in Jail
Discussion: How US laws are written to benefit institutions and people who own assets, why credit cycles are often expanding and how you too can benefit.
Homework: Make two lists from the past 20 years:
- US members of Congress and Presidential candidates who have received money from the finance and real estate industries; and
- Every member of the SEC who left the SEC to join the finance industry.
- Extra Credit: Chart credit expansion and contraction cycles from 1928 through to the present and US$ relative strength or weakness during these cycles.
Lesson 5. MATH and PSYCHOLOGY – Emotional Fortitude 101: Long Term Investing for Capital Gains, Income and the Beauty of Compounded Returns.
Required Reading: Own Your Financial Freedom (Chapters 6-11), Andrea Kennedy
Lesson 6. BUSINESS – Why You Need To Invest Your Own Money.
Required Reading: Liar’s Poker and The Big Short by Michael Lewis
Homework: Choose a country or region you want to invest in and research what percentage of mutual fund managers outperformed that country or region’s equity index over the last 5 years.
Lesson 7. ADVANCED PSYCHOLOGY – Why What You Do with Your Time and Money Matters More to Your Happiness than Anything Else.
Required Reading: The Soul of Money by Lynne Twist.
Homework: Commit a Random Act of Kindness for someone outside your immediate social circle every day for a month (this need not involve money). Please keep a journal of your activity.