Chrissie asked the short question - here is the long answer.
Money management has always been a topic that has interested me. I subscribe to and read Kiplingers and Money magazine. My homepage is finance.yahoo.com. I use Quicken on an almost daily basis. I watch Mad Money on CNBC occasionally, ok Chris and the kids would probably say more than occasionally, can you say "Boo-Yah". I prefer an active role in managing our money instead of letting mutual fund mangers do it. And, I believe stocks are one of the best longterm ways to build wealth.
While I am an advocate of good money management, I certainly do not profess to be an expert nor do I always manage our money well. My money management skills are often not what I'd like them to be. It is a continuous learning process. I got a late start in money management. It wasn't until the mid 1990's that I started using Quicken and it wasn't until 2003 that I started actively managing our investments in stocks. But, even more important to me is to be able to teach our children the importance of personal finance. This is also an important part of my personal finance management. Because if we teach them to save and use money wisely, they are less likely to make mistakes that might require our resources as parents to recover from.
How do kids really learn to manage money? Most don't until they're adults and then they learn primarily as a result of their own successes and failures. There's usually no course at school, no helpful hints on TV, and observing parents can, in most cases, be confusing at best. The only way kids will learn to manage their money is through their own experience and the guidance we, as parents, may give them. In other words, kids learn from trial and error and role models just like the rest of us. And if they can't learn as children, the price of adult mistakes can be great in terms of money and relationships.
So how does one teach this to their children. For me, it has been trial an error, some ideas work and some don't. We begin with a monthly allowance that began when they started elementary school. They get half and half goes into longterm savings that they can't touch. At the beginning it is just a savings account, but as it grows, I will move it into an index fund, and then at some point we will move it to brokerage account. Also, they must read a book called "The Richest Man in Babylon" by the time they turn twelve to continue receiving their allowance. At this stage, we then offer a 401k type perk. Any money, not their automated allowance savings, that they put in their untouchable longterm savings, we will match up to a yearly limit. We open savings and checking accounts for them when their cash flow warrants it. I also give them a copy of Quicken to use in tracking their money. At one point I offered cash for short essays on various personal finance topics - this didn't work at all. Right now each child is at a different stage in this process. Mariah is just in the savings account arena. Gib still hasn't completed the required reading and, as a result, all his allowance goes into longterm savings. Taryn is in the index fund stage. Indy just this past year moved into the brokerage account and is currently a passive investor of stocks.
The goal is to eventually have Indy be the one calling the shots in the brokerage account, but we are not there yet. And now we get to the reason I post my stock trades. As a result of converting to a brokerage account the question Indy asks is: "How do you know what stocks to invest in?". To which I respond "Research, Diversification, and Speculation". At the same time, it is good to know what others feel are good investments. However, this does not shortcut the responsiblity to do your own homework on any stock. So in esscence my blog can be used as a resource to my children for stocks that I think are worthwhile. Hopefully, it will also serve as a reminder that money doesn't manage itself.
For my children, these posts are required reading. For everyone else, you are more than welcome to ignore these posts.But remember, personal finance is a responsibility that belongs to everyone. Whether or not you choose to ignore it, your personal finance is and always will be your responsibility. Many people ignore the fact that finances need to be managed. Bills have to be paid, family members have to be fed, and a lifestyle has to be maintained. Good Luck!!
