Raising Cash Smart Kids

A friend of mine recently asked a 13-year-old what he was going to do when he left school. He said “nothing”.

“What do you mean ‘nothing’?” she asked.

“I’m going on the dole (unemployment benefits)” he said. “When you work the government takes all your money in tax, so there’s no point.”

She was dumbfounded. And when she told me about it, so was I.

This kid has reached high school without even the most basic understanding about how the world works.

Somebody needs to let him know that when you’re in business, you get significant tax advantages, for a start. And that where he lives, the first few thousand dollars of income, even if you are an employee, are tax-free. And that giving up one’s right to do things of value for other people and be rewarded for it is so psychologically damaging that it is better to work for no money at all, just for appreciation, as a volunteer, than to give up on working!

My friend pointed the boy’s mother to the Cash Smart Kids website (www.cash-smart-kids.com). I hope she succeeds in educating this kid before he becomes yet another lost soul.

I’m still astounded. In this day and age, with all the resources we have at our fingertips, how are kids slipping through the system with such self-destructive beliefs?

There has been a bit of a buzz this year in the “blogosphere” – the community of bloggers in a given industry who read and comment on each other’s blogs – about young Carl Ocab, from the Philippines, who started a pretty well-written blog with decent content at the age of just thirteen.

Some have suggested that Carl’s blog is a hoax, or at the very least unethical, and that the posts are really being written by an adult, perhaps his father. Others have even used the word “exploitation”.

I think this is an example of the kind of age-related prejudice which keeps kids out of most offline business communities.

If Carl’s bio said he was 24, would anyone wonder or care whether some or all of the posts on the blog were ghost-written? Of course not.

Subcontracting content is a time-honoured method of getting time leverage, whether the content is articles, eBooks, sales letters, or website pages. There’s a whole industry in private label rights, where people legally claim the work of others as their own.

Do you think that Donald Trump or Robert Kiyosaki personally sat down at the word processor and banged out all the words in their latest books? Of course not. If it’s quality content, that’s all that matters.

Unless you’re a kid.

If you’re a kid and you do what the adults do, somehow that’s morally wrong?

I don’t think so!

For the record, it’s merely an assertion that Carl doesn’t write his own stuff. The authoritative Philippines blogger, Yuga, went as far as to meet with Carl and his father for several hours to assess whether the thoughts in Carl’s blog were his own. His verdict?

Yes, Carl isn’t a very eloquent speaker. He talks like a 14-year old – a 14-year old who knows how to reverse-engineer some WP templates, or prowl the DigitalPoint forums and bid out some simple projects to Indians. That does not mean he can’t write better than a regular 14-year old. He’s a bit shy, yes, but if you treat him like a mature person and not look at him as a kid, he’s very open and candid. I actually learned a thing or two from the stories he shared.

Read the whole Yuga-Meets-The-Kid-Blogger post.

OK, so having dealt with the question of writing the posts oneself vs outsourcing, let’s move on to the question of “exploitation”. We’ve all seen “activity parents”, haven’t we? Stage parents, pushing their kids into tights and forced smiles, or sports parents screaming “Kick him in the knee, Johnny!” or “Scratch her eyes out, Daisy!”

We all know this kind of parental pressure is not good for kids. If parents are pushing their kids to gratify the parents’ own anxieties and desires, then it doesn’t matter what the activity – performing arts, music, sports, volunteer work, paid work, business, or even religious outreach work – it’s not right. The child has to be the initiator and an active director of their life.

One of the most unfair things about this whole debate has been the assumption that someone Carl’s age couldn’t possibly write so intelligently, or if he does, that he’s a genius, one in a million.

Many, many kids aged between 11 and 15 are highly intelligent, deep-thinking, articulate people with a real contribution to make in the adult world. But the adult world is not listening. It’s the tragedy of our current system that in trying to protect kids from real exploitation, and channelling them into the school system instead, we have marginalised them and their capabilities so much.

Take kids seriously! Coach them on how to present their ideas well. Listen and engage with them. Think about it – if nobody had ever coached you on how to formulate an argument, write a report, or speak in public, how well would you be able to do those things now?

It’s not deceptive, morally wrong, or manipulative for kids in business to get guidance and mentoring – it’s smart. More adults should do it, because every successful adult I have ever met is very up front about the assistance they have had to get them started, learn what they needed to learn, and stay on track through the difficulties.

So, in summary, I’d say even if it’s all true – if Carl Ocab has outsourced the writing of his blog posts, if he has made use of his father’s knowledge of marketing to get traffic to his blog, or outsourced the marketing of the blog entirely to his father or anyone else for that matter – then he has been smart, resourceful, and entrepreneurial.

He uses his age as a marketing hook – is that any different from the cancer survivors using their recovery as a hook? It would be scandalous if he was just pretending to be a kid – that would be like someone claiming to have cured themselves of cancer who has never actually had it all. But that’s not the case here. Carl really was 13 when he started blogging, and he really is only 14 now. He’s telling the truth about his age, and how he runs his business internally, what tasks he chooses to do personally and what he outsources, well, that’s entirely up to him.

Our kids have watched our transition from scarcity to abundance, and have understood remarkably well where we were at each step of the way. We give them some extra things, like more lessons in music, languages, and other extra-curricular activities, and we’ll be offering them all a chance at a student exchange in high school, but apart from educational opportunities we are giving them pretty much the same start in life that their friends have. They have to earn the money to buy the doodads they crave, just as their friends do. At www.cash-smart-kids.com you can read about one of their early business ventures.

We will also be ensuring that our girls are involved in teaching these money ideas to others, so that they learn not only how to be entrepreneurs, but how to explain money and business to other people. That’s not actually for our kids’ benefit – rather, we consider it our first and most important legacy to our grandchildren.

History shows time and again that the first generation builds the business, the second generation maintains the wealth, and the third generation blows it.

By focusing on transmitting knowledge and skills, rather than cash itself, we are planning to be the exception to that particular historical trend!

After all, we have already demonstrated to ourselves that just about everything that is “common knowledge” about money and business is fundamentally wrong. Why on earth would we start following the herd when it comes to leaving a legacy?

Is making money on the internet really child’s play?After all, thousands of adults are paying tens, hundreds, even thousands of dollars for products and training packages to help them become internet millionaires … and how many of them are actually succeeding?

If adults are failing, you’d think kids would do even worse.

However, a child’s circumstances are very different from an adult’s, and that gives them a number of advantages when it comes to making money online. For that reason, we introduce internet marketing very early in the Cash-Smart Kids program.

1.      Kids have low expectations

Adults looking at making money online are thinking about replacing their full-time income – thousands of dollars per month. If they make just $50 per month for the first 12-18 months, it seems like a failure. To a child, on the other hand, that much money is a roaring success and an incentive to learn more!

2.      Kids get help

Adults worry about looking bad if they ask the wrong questions or admit they are confused about something. Kids, on the other hand, are usually happy to ask for help, and in fact people fall over themselves to offer help when they see kids reaching for a big goal.

3.      Kids follow their passions

One of the beauties of the internet is the possibility of earning money from one’s passions. Most kids will quickly drop anything that’s not interesting, which means their internet activities quickly centre around things they find exciting, and would do whether they were making money or not.

Enjoying the journey makes the learning into play, and takes the pressure off for instant financial success.

4.      Kids are comfortable in the online world

Many adults have a steep learning curve once they decide the internet is their passport to financial independence. Most kids, on the other hand, have lived and breathed in cyberspace since they were tiny, and are just as home online as they are in the streets of their real-world neighbourhood.

5.      Kids don’t have easier alternatives

It may sounds strange to suggest that having a regular job is easier than having an internet business. After all, there’s the bitchy co-workers, the horrible commute, the soul-destroying environment, and the feeling of being trapped, having to turn up five days a week, week in, week out, all year round.

On the other hand, a job has one big advantage – it comes AT you. If you have a job, you don’t have to be proactive each and every day. If you’re feeling lousy, you can turn up and do your best, and you still get paid. In most places, they aren’t even allowed to penalise you for performing poorly when you are sick.

Starting a business, any business, requires putting in a lot of energy before you start to see rewards. The lure of just turning up, doing what you are told, and getting an instant paycheck is fairly seductive.

Kids don’t have that option until they are teenagers. Before then, everything they do to make money is self-generated. Catch them at that stage, steer them in the direction of something that can grow with them, and produces passive income to boot, and you are setting them up for life.

6.      Kids are used to learning new things

A new business venture in a new industry will require a significant investment in learning. Many adults are uncomfortable with the awkwardness of being a beginner, and try to avoid it. This can result in spending years pretending to succeed at something, or quitting before they even get going, rather than visibly struggling to master new skills, and enduring the emotional roller-coaster of making mistakes and starting over.

Kids spend their whole lives starting new things – learning to ride a bike, multiply fractions, cook pasta, or train the dog to catch a Frisbee mid-air. The skills of internet marketing are just one more new thing in the endless parade of new things that make up a child’s life. Living is learning for kids – they are yet to experience the restful sameness of a year when nothing challenges them to reach beyond their current limits.

7.      Kids have a future of possibilities before them

Some adults are jaded. Life has disappointed them. They have tried and failed. They have lost things that were important to them, or never quite found them and now think they are too old.

The internet is a place of boundless possibility. It’s a place where you can give things away for free, and I mean literally give them away, without even asking for an email address in exchange, and as a result make thousands of dollars. (Don’t believe me? Check out Harvey Segal’s free eBook, and read through it until you understand where the money comes from.)

The internet can be counter-intuitive. Try talking to a traditional publisher or author about giving away half the cover price of a book as a commission to an affiliate!

Kids are open to the wider possibilities. They are not yet cynical, not yet limited in their thinking, not yet wedded to traditional models of business, not yet locked into their own personal “winning formula”. They try things, sometimes crazy things, and then go with what works, no matter how much it flies in the face of convention.

Want to succeed on the internet? Become a kid again. Start small, learn constantly, ask for help, follow your passions, and open your mind to what’s possible.

I am writing this post on the sunny Gold Coast in Queensland, Australia. I’ve come here to hang out with my friends, Daryl and Andrew Grant, and get the very latest strategies for internet marketing using eBay from eBay power sellers Matt and Amanda Clarkson.

Yes, you heard me correctly. Internet marketing using eBay. Perhaps, like me, you thought that Google was the largest search engine on the internet. Think again. More people search eBay every day than search on Google.

What’s more, when they search on eBay they have their credit card in their hand, ready to buy. What a marketing opportunity!

But more about that later.

When we were waiting for the doors to open on the first day, I met this young man, Logan Edwards. Just fourteen years old, and in the past three months he has made $1320 on eBay. He hasn’t been raiding his parents’ shed for old junk to sell, not this sharp young entrepreneur. He has been selling hard-to-find computers on behalf of a supplier who didn’t know how to find the hard-to-find enthusiasts of that particular computer brand.

I interviewed Logan for our Young Entrepreneurs gallery on www.cash-smart-kids.com, and I’m looking forward to doing a phone interview with his parents next week, so they can share their secrets with other parents who want to raise their kids to be equally bright young entrepreneurs.

Oh, and the thing that really impressed me was that Logan paid his own airfares from Melbourne to the Gold Coast to attend the eBay seminar – a big chunk of his business earnings, reinvested in his further education.

That kind of long-term thinking at such an early age is a sign of great things to come, I’m sure!

As I regularly point out to the parents in our Cash Smart Kids program (www.cash-smart-kids.com), opportunities for business education are everywhere.

I was out with one of my girls, aged 11 at the time, waiting for our pizza to cook in a small, family-owned pizza store by the beach.

She looked around, thought for a bit, and then asked “Does a shop like this lose money, or make lots of money, or just sort of balance out?”

“Well,” I said “They have to spend a certain amount of money on things like rent and wages, whether they sell anything or not. And they have to buy the ingredients, and if they don’t sell enough pizzas, they have to throw ingredients out.”

“Because they go mouldy?”

“They got too old to use, one way or another” (Discussion of Health Department requirements can be saved for another day!)

“But if they have too many customers they run out of ingredients.”

“Yes, they need to balance the ingredients so they don’t run out and they don’t have to throw too much away.”

“And if they sell lots they make lots of money?”

“That’s right.”

“So they have to get lots of people to come in and buy things?”

“Yes.”

“But we’ve been here for ages and only two other people have come in.”

“That’s true. But it’s still early – I’m sure lots of people will come in later tonight because it’s Saturday.”

“Still,” she said thoughtfully, “it’s hard. You can’t go out and get people to come in.”

“I’m sure they advertise, and put coupons in the newspaper,” I said.

She frowned.

“I think I’d rather stick with having an internet business,” she said. “It doesn’t cost rent to have a website.”

She finds that thought process just as interesting as the other thing she learned that same day, which was that the beach we were on was part of a sand spit joining an island to the coast. At one point you can stand on one beach, facing inland, and look down the street to see the other beach at the other end. She was fascinated.

All I did was to answer her questions (about both topics) in words that she could understand.

She still doesn’t have the vocabulary of an accountant – she couldn’t tell you the definition of fixed and variable costs, ROI, or expected return – or isthmus (the sand spit), or bombo (the island).

But she has the concepts, based on her own experience. Business concepts are so simple that a child can understand them, as readily as they understand islands and sand spits.

Now, it doesn’t happen by accident. Our mainstream culture doesn’t explain business ideas to kids in the normal course of events. However, once children have grasped the basic idea of how business works, learning more advanced business concepts is fun and interesting for them, so it’s worth getting the conversations going early in their lives.

One of the main ways that kids learn about money and business is from watching their parents, and listening to them talk. Often, what they listen to most is not the carefully planned teaching conversations their parents have with them – it’s the conversations that take place between adults when kids don’t even appear to be listening.

I remember learning as a child that sales is horrible. It’s a horrible thing to do, done by horrible people, in horrible ways.

Now do you think my father ever sat me down and said those things directly to me?

Of course not.

I picked that up from listening to what he said to my mother about sales and salespeople. Even more important than the words he used, I listened to the emotional tone of what he was saying.

At one stage in his career he was forced to work in sales, and he was miserable the whole time. He spent every Saturday in bed with a migraine headache, recovering from his awful week “in sales”. At other times, we were making a major family purchase, like furniture or a car, and he had things to say about the salespeople as we left the showroom. They will say anything to get a sale, I heard; they are all liars.

As you can imagine, having such negative attitudes about sales caused me some problems when I started out in business for myself!

My point is that we all pass on our beliefs to our kids, whether we intend to or not. If those beliefs are limiting, your kids will have to work doubly, triply hard, as I did, to reprogram themselves, before they can succeed.

You can give your kids a giant head start in the game of life if you deliberately explore and take apart any limiting beliefs of your own, while your kids are still young.

In the “Resources” section of the Cash-Smart Kids Members Area (www.cash-smart-kids.com) is a comprehensive checklist of limiting beliefs about money and business. You can give yourself a quick once-over, choose your favourite (or least favourite) limiting belief, and then simply apply one of the dozens of available self-help processes for shifting limiting beliefs. Repeat as many times as you choose ….