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Jenny Ford

Expert Guru
Jenny Ford is an expert educator and coach, specialising in wealth creation. She holds an Honours Degree in Psychology, an Advanced Diploma in Business Management, and a Diploma in Training and Assessment Systems.

Jenny has taught Masters students at university, provided executive coaching to CEOs, business owners, and senior managers, and run a training organisation which specialised in investment education.

Her current passion is financial education for kids, and she is one of the founders of the award-winning Cash-Smart Kids program. You can find her blog at www.raisingentrepreneurs.org/blog.

Jenny is the co-author of the 2008 Charity Book Project, a book on teaching kids about money and business, which will raise funds for microfinance charity. The book is due to be released in early 2009.




10 Tips from Jenny Ford

How To Teach Your Kids About Compound Interest

Kids have a short attention span, so it can be difficult for them to grasp the notion of compound interest through the normal day-to-day process of banking money, watching the statements, and seeing the annual deposit of interest.

Overcome this difficulty by staging a demonstration, using concrete visual aids, and a very accelerated timeframe.

Take a large glass jar, and place it in a prominent place in your home. On the first day, deposit a dollar in coins into the jar. Each morning, help your child to calculate and count out interest of 50% (half) what is in the jar.

After a week, the dollar will have grown to be worth over ten dollars!

It's a dramatic example, and by using coins and counting them each day, you will be engaging your child physically as well as mentally, increasing the "sticking power" of the lesson.

Money-Making Ideas For Kids

When you are too young to have a regular job, life can get very frustrating. There are lots of consumer goods and interesting activities, all of which cost money, and begging it from the parents definitely has its limits.

However, there are many ways for kids to make money. The traditional stand-bys of lemonade stands, babysitting and lawn mowing are still as popular today, along with walking dogs, washing cars, and household chores.

Stretch your mind just a little further, though, because modern technology offers a world of opportunity for kids. They can make money by helping people to upload and edit digital videos, for example, or set up pages in MySpace and other social networking sites. Kids as young as ten can
learn HTML and design web sites!

Anything kids can do for themselves, they can do for someone else, and earn an income.

Allowances - Should You Advance?

An advance against an allowance is basically a loan. Before you reach into your pocket to give your kids a dollar or two in advance of allowance day, think very carefully.

One of the advantages of setting up an allowance is that it teaches kids how to plan and budget. Do you really want your kids to develop the money habit of "spending until it's gone, then borrowing to bridge the gap"?

Imagine what sort of situation that habit would create for an adult!

Between cell phones and credit cards, many young people are deep in consumer debt before they graduate from college. Immunise your kids against the financial woes of living on debt, by saying "no" to the advance on their allowance.

Today's tantrum is a small price to pay for having financially responsible teens and twenty-somethings tomorrow.

Teaching Kids To Invest

A big challenge in today's "instant gratification" world is teaching kids to save for the long term.

You can encourage their saving habit by making a routine of banking a certain proportion of their income, whether they have an allowance or earn their income, and by banking matching funds, so that money saved in instantly doubled.

If they ever withdraw that money, make sure they hand back the half that was matching funds. Having to lose twice the price of the doodad they "need" will give them pause, and you will find that often they decide "it's not worth it" - which is exactly the effect we were aiming for!

A savings habit is the greatest gift you can give your child. It is worth investing your time - and a little cash - to help develop a valuable success habit in your child.

Business For Kids

At first glance, many people think that business is "not suitable for children". The cut-throat world of suppliers, creditors, competition, and the struggle to make payroll are not what anyone would wish on a child.

Business doesn't need to be this way.

If you think about it, when kids are too young to have a regular job, business is their only way to make an income (other than begging, of course, but we don't want to teach them that habit). Mowing lawns, babysitting, and having a lemonade stand are all child-sized business opportunities.

Of course, they will start out as a "one-man-band", which means technically they are self-employed, rather than running a business, but that distinction lies a few years down the track for most young entrepreneurs!

Do You Really Want An Entry-Level Job?

When kids reach a certain age, they become eligible to have regular jobs. Whether it's fast food, retail, or something more exotic, you can pretty much guarantee that the work will be fairly dull, repetitive, and poorly paid.

Contrast this with the kids who bypass traditional "jobs" completely, and start their working lives as business owners. Cameron Johnson started doing desktop publishing at the age of nine, and was a millionaire before he graduated high school. Ben Casnocha started a software company at thirteen, and was the CEO of a Silicon Valley start-up before he graduated high school. Ashley Qualls started a hobby website offering her MySpace backgrounds designs at fourteen, and by seventeen was earning $70,000 per month from advertising and promotions on the site.

It is worth considering whether an entry-level job is really a good investment if your child's time and energy!

Teen Bankruptcy

It sounds bizarre, but we are seeing an increasing number of young people declaring bankruptcy.

The main culprits are post-paid call phone contracts and credit cards.

It is just too easy for kids to get access to credit, at an age when they have poor impulse control and a strong need to "belong". This is a recipe for disaster. Before long, the credit cards are maxed out, and the minimum monthly payments are more than the teen's part-time wage can cover.

If a parent isn't around to take over the debt, some kids see no option but to declare bankruptcy. Others are told, and want to believe, that it is easy, and carries no consequences.

The financial mark may disappear from your record after seven years, but the psychological impact of dodging responsibility for one's actions will last a lifetime.

Kid Bloggers - The New Generation of Entrepreneurs

The internet is a great leveller. Software makes it easy to create new content, there is a growing audience hungry for information, and the new marketplace where all this energy meets is known as the blogosphere.

Bloggers write short articles, and publish them online using free blog software. Readers find the articles via search engines or referral links, and often come back to the same blog week after week to read the updated content.

Bloggers make money from advertising on their blogs, and by promoting products on which they are paid a commission.

Carl (The Kid Blogger) Ocab and David Wilkinson started their online businesses aged thirteen and twelve respectively, and within months were earning a few hundred US dollars per month.

If your child is comfortable writing, then blogging is a good way to try out the world of online business.

Cashflow 101

No sequence of tips about kids and money would be complete without a mention of Robert Kiyosaki's now-classic Cashflow 101 board game.

I was one of the first people to play this game, back in 1997 when it was released, and I have played it with my kids since they were old enough to throw a die and move a counter.

We started by playing a simplified version, and gradually increased the elements we included until they were playing the full version at 8-11 years of age.

The game's greatest feature, in my estimation, is that it gives them a concrete understanding of what passive income really is, and what it means to earn it.

All my kids refer to "the rat race" with complete understanding of what it means, and they all understand that going around and around, earning wages and spending them, will not get you an exciting life of freedom and adventure.

Why Send Kids To College?

Most people think of college as part of the "get a good education, get a good job, work hard, get promoted, save for retirement" model. In this model, college is a calculated sacrifice of several years of income in order to be able to get a better job and earn a higher income for the rest of your life.

It's also a chance to get a less boring job.

If this is the main benefit of college, then why do young entrepreneurs like Ben Casnocha and Cameron Johnson, both of whom made millions during high school, bother with going to college at all?

I enjoy reading Ben Casnocha's blog, because he regularly points out the value of being taught to think, to question, to understand how we came to be here, and to predict where we might be going.

Not because we need this knowledge to make more money, but just because exercising one's intellect is FUN!





 
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