Teaching kids about money.... (how to handle it, and hopefully how to save)

A while ago I wrote a BLOG post describing how my wife Cheryl and I tried to teach our kids the value of saving...and how to put money away for later purchases. (or a rainy day)

The idea was to make them see the value of saving, and the value of interest paid for doing so.....I just had to exagerate the interest so that they would "see" how it works in a short time.....vs over 20 years.

Well, there are plenty of other aspects of handling money that we need to teach our kids....and I remembered that when I read this article that was written to explain just that.

But let me say this about all of that.....I truly believe that money is but a tool. We must not let it rule us.....but we MUST rule it, or at least respect the place it has in our society. (and take responsibility for ourselves)

My dad used to say, "Money doesn't make the world go around, but it sure greases the wheel." I believe that, and it means we at least have to make it a part of our sphere of responsibility. We don't want to worship it, but need to take responsible of it in our lives.

So teaching our kids about it is important if we ever expect them to do the same.

Tax time is rolling around....count down!

"Watch the pennies and the dollars will take care of themselves." - Ben Franklin

I think everyone has heard both of these Ben Franklin quotes, and I suppose I might have taken them to heart in my life.

I don't think I'm a miser by any stretch, but I have tried to save....for a rainy day and for retirement.

I have taken to feeling a little worried about my savings....I'm not a millionaire (certainly not in this market) but I have saved a fair bit....and it worries me that I will be a bad influence on me....sort of harden me or make me less good. (in some way)

But the more I think about it the better I feel about ay money I have saved. I mean I didn't rip anyone off....I didn't extort it. I worked of my own (and my wife's) sweat and we simply lived within our means. We could easily have spent up to our wage.....but we lived a fairly simple and modest life. No dishonor in that.

I'm not sure this is much of a personal finance post....more of a navel gazing one I suppose.

Market and Economic Meltdown? Keep things in perspective.....

I am not excited about what is happening in the economy right now.....but if you read my BLOG for a while, you know I have been jittery about it for a while.

But not everything is doom and gloom.....we have to appreciate the gains we still have from our past positions. I have an example below of some stock I bought after my Vonage Meltdown.

I bought $3000 in Vonage stock thinking it was the next best thing since sliced bread....and Vonage just kept messing up the parade......the result....it's value fell to $2000 where I got out.

I bought the stocks below...and even after a 10% fall yesterday alone, I still have a hansome profit. (if i sell that is)

Check it out: (I wish the rest of my 401K did this well though)

Unrealized Positions for *******

As of: 01/21/2008

Created: 1/22/2008 8:12:39 PM

LONG INVESTMENTS		SHARES	COST/ SHARE	TOTAL COST	CLOSING PRICE	CLOSING MKT. VALUE	SHORT TERM GAIN/LOSS	LONG TERM GAIN/LOSS	% CHANGE
CHINA UNICOM (CHU)		99	10.8707	1,076.20	22.49	2,226.51		1,150.31	106.89
ISHARES FTSE/XINHUA CHINA (FXI)		11	95.3864	1,049.25	156.94	1,726.34		677.09	64.53
			Total	2,125.45		3,952.85		1,827.40	85.98

Bottom Line......I'm losing about 5% of my investments already this year!

The bottom line for me so far this year is that I am currently losing 5% of my invesmtment money at this point......and we are less than a month into it!

I'm not even counting the value loss of my house......I have been told that this would be upwards of about 15%...but that isn't really "real" until I sell it. My investments are "real" in that I pay taxes on some of the gains I made last year.....so while I don't have the cash in my hot hands, I will have the check to pay for it soon.

But the big question.....what to do, how to defend.....I'm not sure.

So I suppose this BLOG isn't all that useful.....plenty of warnings and "sky is falling" with little in the way of solutions.

Maybe next time.......

Is The Stock Market Catches Up With The Economy?

I suppose if you look back at my posts for the last year or so, you can see see that I have been a sort of economic pessimist. I have been seeing lots of things from housing sales/prices collapsing, to people going bankrupt and even my brother in-law who is in the middle of a house development struggling to stay afloat.....oil prices upwards of $100 per barrel and even watching gold going through the roof.

I think I even commented that I was surprised that the stock market continued to go up....past 13,000 at one point, and almost not caring about the state of the economy.

Now it looks as though inflation and unemployment is on the rise, and most daming of all, consumer spending for December was DOWN by 0.4%. (apparently only discount stores like Walmart showed an increase)

Well, the last week or so the stock market has been sliding, slowly on some days, and more quickly on others. But will it continue or for some reason rebound? I don't know.....it has been a total mistery to me so far.

Warren Brussee's BLOG (the guy who wrote the book suggesting a "Second Great Depression" would occure in 2007) has started to comment that things are really beginning to notice the downturns....and since much of it is in the various money centers of focus...like banks and mortgage companies....it is all getting proper focus.

So do I believe the current market moves, or not. If I do, what do I do.....putting money into CASH doesn't make sense if you believe that inflation will be the "release" for our economic pressures. If he resulting "escape" is deflation.....cash is the way to go....but deflation would be so very bad for the whole situation and would make our problem a very long term one indeed.

I'm no economist, but I would say that inflation will be the poison pill we take because printing money is well within the governments power and it would "solve" our world debt problem by simply diluting the debt.....of course, it will also mean our very valued dollar would become as valuable as toilet paper........so it might be time to invest in wheelbarrels like the German people needed after WWI....we might need them to pay for bread at the store.

Credit Card Debt problem "pile on" top of Housing Refinance Debt problem.....what next?

Why is it that my person BLOG (Journal) is fairly upbeat, and my personal finance BLOG can be so worried and negative.

Well, there are plenty of troubling signs in the economy....and this is yet another. Credit card debt is mounting as noted in this article.

Apparently as the home refinance crisis clamped down on home mortage refi's, and as house prices fall (making pulling money out impossible) people seem to go to the NEXT well (albeit a high interest source) their credit card! (do you suppose the next stop will be the corner loan-shark?)

This was sort of outlined in Warren Brussee's book about the Depression of 2007.....and then in his BLOG. But while the economy seems to be slowing and sputtering at times, the stock markets seem to stay high.....which makes me think a little about March 2001.....remember the High Tech NASDAQ bubble?

Oh well, there I am being negative again.

What to do, what to do......the ride up over the last year has actually been pretty good......I did go from 70% Stocks/ 30% bonds down to a 50/50 split.....so I did pull-back a little.....but should I pull even further into safer investments? I just don't know.....

So perhaps being a Millionare is a matter of being Frugal.....gee, what a shock!

This is pretty funny......an article that describes the path to wealth as one where you "save" and basically spend less than you make.

Hmmm....this is what my parents said to me every single day of their life! What a shock.

All you had to do was talk to anyone who was the product of the great depression, and I suspect you heard the same tome. My parents didn't know anything about leveraged investments......or buying on margin......or any other fancy financing. (debt) In fact, what they knew about that sort of this is that THIS is the thing thta created the depression......investors buying stock on margin and not having the ability to cover what they owed!

So this Motley Fool article seems so funny to me....because they seem to think they have discovered some new truth.

Don't get me wrong.....I'm far from the perfect saver.....sure, I try to be frugal, but I'm not sure I match my mom and dad in so far as their saving and still being generous....but I can see that this "live within your means" stuff isn't some sort of new personal economics....it is back to the future stuff for sure! (lets hope we don't go all the way back by having a depression though)

Live and learn.......