Raising Entrepreneurs

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“A child of five would understand this. Send someone to fetch a child of five.”Groucho Marx was right on the money - it’s amazing what a child of five can understand. The importance of the early years in terms of learning and development is widely recognised through a number of studies. Also well recognised is children’s propensity to adopt that sincerest form of flattery: imitation.

As parents, we recognise the importance of setting a good example for our kids (even if we do let the occasional swear word slip out in the midst of the peak-hour traffic). One area of influence, though, that is easy to overlook in the hectic bustle of day-to-day life, is financial management. Yet children overwhelmingly refer to their parents to learn about finance. A report recently released by the Australian Government’s Financial Literacy Foundation highlighted this, indicating that a large proportion of young people nominate their family as their major source of financial information and advice.

Read the rest of Justine Davies’ article in Melbourne’s Child Magazine.

While the family remains the single most important point of reference for kids to learn about managing money, how many families are actually taking that responsibility seriously enough to devote even 15 minutes per week to the subject?

It doesn’t take a lot of time to teach your kids the basics - but you do have to know what the basics are, and how to explain them. And that’s what makes it all so hard for a large proportion of parents.

I know what it’s like - in the past 12 months we have had three major illnesses in the extended family, and two of our kids have had life-threatening conditions which have had them in and out of hospital for extended periods of time.

Life can get pretty demanding sometimes.

But you keep giving them food, and hugs, and getting them off to school, and reminding them to do their chores, music practice, or whatever else they are required to do. You keep the wheels turning on the essential activities.

So I’ll ask you to consider this.

Is learning how to manage money an essential activity?

Rich Schefren took a step into my world last week, when he went to talk to a group of five-year-olds about business - and according to Rich, he was “Shaking In My Boots”!

It can be daunting, trying to break down complicated business ideas into terms kids can understand. Especially if you have learned business through years of experience, or at university-level academic institutions, or both. The gap between your understanding and the world of a child seems almost infinite.

The truth of the matter is that it can be done. Parents are doing it every week, using the Cash-Smart Kids program.

I left a comment on Rich’s blog post, letting him know about the program - I wonder if he will come and check it out?

At his blog post, “Shaking In My Boots” you can download the gorgeous ads he had these 5-year-olds make to convince their parents to buy them things. Imagine how much more powerful it would be if they also included a business plan as to how they would earn the money to pay their parents back for the purchase?

We had another one of those “feel good” moments this week - you know, the ones where you sit back and marvel to yourself “they actually WERE listening, after all …”

In this part of the world, interest rates have been going up steadily. The twins came home from school the other day a bit confused because one of their friends had “gone off” at another of their friends for buying something from the canteen.

“You’re not supposed to buy anything,” this 13-year-old yelled at her friend, “Don’t you know interest rates are going up?”

“What’s that got to do with anything?” asked the confused ‘villain’.

“You can’t spend money at the canteen or our mortgage will cost more,” railed her accuser, “and then I won’t get new jeans for my birthday!”

This girl has been getting some messages about money from her parents, clearly, but she seems to have things a little muddled.

“Do you think her parents told her she couldn’t spend money at the canteen because their mortgage payments were going up?” one of my twins asked me.

“Probably,” I grinned.

At this point the older one, aged fourteen, who had been playing The Sims and apparently ignoring the whole interchange, suddenly piped up with “That’s silly. They should just get a fixed interest rate and then it wouldn’t matter.”

The twins nodded in agreement, and that’s when I realised that the whole thing has been worthwhile …

Well, the young internet entrepreneurs are tearing into it this week!

We were just at the World Internet Summit in Sydney - and I tell you, the quality of the content from stage was even better than I expected. Most speakers gave good, useful, NEW information, and the focus on mindset and having the right attitude (from all the speakers, not just one or two) was fantastic to see.

But that’s an aside - I may say more about that later.

While we were there, I was talking to last week’s guest blogger, Michelle Peterson Clark, who was there with her family. She was really excited - check this out:

Video footage of Michelle Peterson Clark and Cash-Smart Kid, Taylor Bamford Clark, at World Internet Summit, Sydney, 2008.

Taylor has since started his own blog - www.carskidslove.blogspot.com - and plans to produce an information product soon.

My daughter Rachael also talked to some of the speakers over the weekend, and I caught some of that on video, too - more in later posts.

But my point is that these days it is not unusual to have kids as young as ten sitting in the audience in these seminars with the adults, taking notes, asking questions - even ANSWERING questions that the adults there were getting wrong!

Right now, it is still enough to get the attention of a speaker when someone is obviously quite young, yet understands enough about business to follow the presentation.

But not for long.

Two or three years from now, there will be dozens of kids at these events. Several people told me at this event that after watching the Cash-Smart Kids participants in action, they were going to bring their own kids next time.

Two points to note:

First - get your kids to these seminars!

Second - before long, it won’t be enough to just show up. To get the attention of a speaker they will need to have started an internet business.

Grab yourself a copy of “Finding The Right Niche For Your Cash-Smart Kid” and get it happening with your kids THIS YEAR, or they will be lost in the crowd in years to come.

I am thinking of creating “The Parent’s Guide To Taking Kids To Internet Marketing Seminars”. Who would find that useful?

Today’s post is a guest post from Michelle Peterson-Clark, the creator of Raising Gifted Kids, on the role of money and business in the lives of gifted kids.

As the mother of two gifted boys and a business woman (www.RaisingGiftedKids.com )I was interested in finding out what I could about teaching kids to run their own businesses and to grow up being entrepreneurs.

There is no doubt that most gifted kids need extra activities to keep them stimulated. Much has been written about what makes them “tick” and how mainstream schooling often doesn’t do enough for them.

So are they any different to the average child when it comes to the ability to set up and run a business? My research took me to the website www.cash-smart-kids.com and my husband and I began to think of ways in which we can help and encourage our gifted boys to start their own business and to begin to understand the role money plays in our society at a young age.

After following the first few lessons from cash-smart-kids, we realized we were trying to “manufacture” the outcome of what we were trying to teach them. When it comes to getting things done quicker we are no different than the parents of the average kid. The tendency to “help” is overwhelming, but we have to stop ourselves from doing that.

One of the good things we do for our boys is play cash flow kids by Robert Kiosaki. The author of the “Rich Dad- Poor Dad” fame has a special kid’s version of the adult “Cashflow 101″ game.

It took about 2 months of playing the kids version of the game before our boys wanted to play the adult version. It took them another 5-6 games before they “got it” and really started playing the games with a serious determination to beat the adults at making money.

There is a lot of research that shows that the parents of gifted children tend to have higher representation at higher education and business levels. They are more likely to own their own business, or hold high managerial positions in large companies. In my role as

The research also shows that this does rub off on the children. We are in the process of working through options with our boys on what they might like to do for their first business venture.

Our youngest got a milk shake maker for Christmas. His original idea was to start charging us all to make milk shakes because he was making 3 or 4 of them a night for free…taking up all of his free time for no financial reward hhmmm sounds like being a parent!!! Lol What we had to talk to him about was the fact that he would have to pay for the ingredients and deducted that from the price he charged to work out how much he could sell them for and there for make as a profit.

We offered to be his joint venture “JV” partner, where we would supply the ingredients for 50% of the revenue he collected.

Our eldest thought this was a “rip off”..he offered to finance his brothers milk, syrup and ice cream purchases for les than half the talkings!!. The last we spoke about it Daniel was still trying to work out if our family members would be prepared to pay $2 or $2.50 a night for a home made milk shake J

But what options are there for them to start a small business besides a milk shake business?

Here are a few we are considering that you might like to think about

Ebay selling: - they may have lots of stuff around the house (old toys and books) that they might want to sell to get some money for. Plenty of children move on from that to setting up actual EBay stores to sell products that they buy to fill orders.

They could do what Jenny Ford’s girls did and set up a business breeding rats for pet shops.

If you run your own business, there is no reason why they shouldn’t be able to help you do some aspect in that business, even if its filing papers or sending faxes or packages.

Filling orders for my paper business (www.notjustpapers.com) is an easy simply task the boys are able to do. So is counting stock when we do our stocktake.

As a result of what we are learning at www.cash-smart-kids.com , we have talked to our children about the importance of saving (and not just for the latest Playstation game) but for their longer term future. We have instituted at 25% savings plan on ALL money they receive, even for birthdays and Christmas, and making them bank the money themselves. From as soon as they could write properly, we have made them fill in their own deposit slips and stand in the line at the bank and pass their book over to the teller. The older ladies in the line at the bank love seeing 5 and 6 year olds standing there with their bank books and money saving their money.

There is no doubt that as we progress with our program at www.RaisingGiftedKids.com, we will be able to help our members more, from the knowledge we have learnt at www.cash-smart-kids.com but more importantly for us, we are gaining important personal knowledge that will help our boys grow with a better understanding of money and the role it plays in our society. If that leads to them being entrepreneurs or not remains to be seen, but they will certainly have a head start.

Michelle Peterson Clark

Director, mother of 2 gifted boys

www.RaisingGiftedKids.com

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