This dad decided to teach his 3 y.o. daughter early how to become a successful investor and sound financial planner. So he came up with a plan which worked perfectly. Here is how he did it:
“To be able to use this strategy, my kids need to understand the following concepts (not in any particular order):
1. How to save money
2. The idea that you can invest and spend the same dollar at the same time
3. How to take out a loan and pay it back
4. How compounding interest works
To start off, I randomly decided we would work on how to take out a loan and pay it back. I figured this concept can easily be built into one of the oldest of American traditions… the good old-fashioned lemonade stand. This also gave me the ability to teach my sweet, energetic, up-for-anything-three-year-old the main concept of loans and obviously, a ton of little lessons on the way. Here is our story…“
Step 1: Making the plan
This step was key. I wanted my daughter to see the money coming out of our bank account. She told the cashier how much money we needed (in $1 bills), then we counted the money out together. We talked about how we were borrowing the money and we would need to give it back.
Step 3: Buying supplies
As we collected our supplies, we would stop periodically to count our money (just the $1 bills). I wanted her to see the money we borrowed was slowly dwindling.
Step 4: All the hard work
We squeezed a whole lot of lemons and limes. Add some sugar, water, and a sprig of rosemary (let it sit overnight) and we were set to go.
Step 5: Selling in the shade
The next day we set up our stand and put the cuteness factor to the test. Due to state regulations, we needed to do a suggested tip instead of an actual cost. Thankfully no one took advantage of that and kept to our suggested tip.
Step 6: Paying back our loan
After we were done for the day, we went straight to the bank to repay our loan. It worked out perfectly. My daughter was a little sad, so we were able to talk about how we borrowed the money and now we were returning it. In the end she understood, but the reality hurt a little.
Step 7: Reaping the reward
Right after the bank, we enjoyed our reward, she bought herself a steamer and a game. The day was done and the lesson learned. Next step, now I have to figure out how to teach her that you can use the same dollar for investment and spending at the same time.
“To be able to use this strategy, my kids need to understand the following concepts (not in any particular order):
1. How to save money
2. The idea that you can invest and spend the same dollar at the same time
3. How to take out a loan and pay it back
4. How compounding interest works
To start off, I randomly decided we would work on how to take out a loan and pay it back. I figured this concept can easily be built into one of the oldest of American traditions… the good old-fashioned lemonade stand. This also gave me the ability to teach my sweet, energetic, up-for-anything-three-year-old the main concept of loans and obviously, a ton of little lessons on the way. Here is our story…“
Step 1: Making the plan
As parents we are goofy, silly, and spontaneous, but we try to emphasis the importance of making a plan. We planned out our day and then my daughter helped draw pictures of each step.
Step 2: Taking out a loanThis step was key. I wanted my daughter to see the money coming out of our bank account. She told the cashier how much money we needed (in $1 bills), then we counted the money out together. We talked about how we were borrowing the money and we would need to give it back.
As we collected our supplies, we would stop periodically to count our money (just the $1 bills). I wanted her to see the money we borrowed was slowly dwindling.
We squeezed a whole lot of lemons and limes. Add some sugar, water, and a sprig of rosemary (let it sit overnight) and we were set to go.
The next day we set up our stand and put the cuteness factor to the test. Due to state regulations, we needed to do a suggested tip instead of an actual cost. Thankfully no one took advantage of that and kept to our suggested tip.
After we were done for the day, we went straight to the bank to repay our loan. It worked out perfectly. My daughter was a little sad, so we were able to talk about how we borrowed the money and now we were returning it. In the end she understood, but the reality hurt a little.
Right after the bank, we enjoyed our reward, she bought herself a steamer and a game. The day was done and the lesson learned. Next step, now I have to figure out how to teach her that you can use the same dollar for investment and spending at the same time.
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