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A book that can pay for itself
By Stephen M. Lilienthal
A few weeks before the events of September 11th, an ominous headline appeared on the front page of the business section of the Los Angeles Times declaring personal and business bankruptcy filings had hit a record level.
Bankruptcy filings soared 25 per cent during the spring of 2001 compared to the same period last year. The executive director of the American Bankruptcy Institute called the surge "borderline shocking."
What he considered shocking should have come as no surprise considering the way that many Americans have been living and spending these past few years. Simply having a pair of jeans is no longer good enough unless it has the right label. That desire to promote status via consumption applies widely, ranging from cars to children's clothes.
Few people including this writer can fully resist the constant temptation. Too many have clearly discovered that a reckoning will come when the value of consumption overtakes common sense.
It is not only parents who have fallen victim to this trap. Some of the most willing victims have been young people, particularly those on college campuses, who have been able to run up large debts through their credit cards.
The qualities of thrift and restraint once valued by many Americans have been overtaken by a relentless push by the credit card industry and manufacturers and advertising, not to mention the gullibility of many consumers who believe they can achieve a "better you" through designer labels. We are urged to "live for the moment" and "just do it" with no serious thought given to the consequences.
Horatio Alger had to work hard to rise in life. Today, too many Americans can purchase the blessings of the material life without having the assets or the willingness to do the hard work needed to truly afford them. Though, of course, as all too many have discovered, purchasing the good life on credit does come with a price tag. And that which is purchased on credit can be repossessed.
That is why it is refreshing to see a book in which the exact opposite lifestyle is being urged upon parents and their children.
It bears the unfortunate title "How to Teach Kids to be Millionaires." After the dot.com bust, a title like that can easily leave one thinking the book is urging us to bring up the next generation of young dot.com "brats" who will expect and receive easy money and perks hawking products without any proven market value. But don't be misled for the book contains some lessons that Horatio Alger himself would find satisfying.
Cuttie Bacon, a former school superintendent, and his son, Cuttie Bacon IV, an analyst who works at the Department of Housing and Urban Development, wrote the book. Written in clear, easily understandable prose, the book makes the case that adults need to teach financial responsibility to children.
Some of the lessons are ones heard too rarely in both the homes of our most affluent and poorest citizens.
For instance, the Bacons say parents are allowing too much money to be spent on designer clothing and other items pushed by television advertising. The difference between the "unwise spending" for their children done by most parents and the "wise spending" that the Bacons advocate could run in the hundreds of thousands of dollars by the time your child is 21. They advocate little or no money being spent on junk food or on designer toys or clothes. Instead, the money that is saved by avoiding those purchases should be used for investments. Hence, the great difference in the totals between the different approaches.
Similarly, the Bacons caution against the use of credit cards, with their added interest payments and yearly fees that, if saved, could also yield substantial investment income.
The Bacons believe that children should start working for money at age three, viewing it as a valuable, early lesson in life. Then, a few years later, children should start learning about the dangers of credit cards and high interest rates.
The emphasis on investing as opposed to saving may draw some frowns, particularly in light of the stock market's recent fluctuations. The value of education might be stressed more too for children so that they come to realize the need to achieve a proper balance between work and school. After all, receiving an education from a good college is in itself a good investment. But these are mere quibbles.
The most admirable quality of the book is that it clearly does not want to turn children into a bunch of Ebenezer Scrooges. The last chapter has a section devoted to "giving, tithing, and prospering" that draws the distinction between sheer material prosperity and spiritual prosperity.
The Bacons declare children should start learning about "giving" early in life. The gifts do not have to be anything purchased with money. It is the thought that counts.
Andrew Carnegie and John D. Rockefeller are held up as examples for children to emulate as they grow older and, presumably, wealthier when it comes to giving and tithing.
The world has changed dramatically since September 11th. But even before then, there were Americans who realized that more spending did not necessarily equate with leading more satisfying lives. Some say there is a "simplicity" movement underway.
As we push on after September 11th, trying to live as normal lives as we can, a book like "How to Teach Kids to be Millionaires" will be a good and useful guide to leading more productive, more satisfying lives. At the cost of ten dollars, this book should be considered one of the wisest investments the parents of a young child can make and a purchase that can reap significant dividends provided that the knowledge contained within it is applied. Parents can prosper from it as well, if only to be reminded that living in a free market system entails responsibility, something that is frequently forgotten.
No one can predict what the economy of our country and world will be like in forty of fifty years. If it flattens, many kids may not be able to become the millionaires that the title suggests. Perhaps the more admirable goal is that we teach children how to live wisely and to become financially secure. Those who are raised living the lessons contained within this book will be placed on the path toward more spiritually and financially secure lives and have something more to show for their lives than just debts and some pairs of designer jeans.
Stephen M. Lilienthal is director of media relations for the Free Congress Foundation.
Buy How to Teach Kids to be Millionaires at Amazon.com for only $11.95
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