Author Topic: Help me Rich Mom, Poor Mom my 5 yo with a Lemonade Stand  (Read 2593 times)

ElleCab

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Help me Rich Mom, Poor Mom my 5 yo with a Lemonade Stand
« on: August 02, 2019, 12:46:25 PM »
Hi! My son has a penchant for negotiation and money. It's weird but good. He wants a Nintendo Wii, and I am not going to be the mom who has him have 1 of each expensive toy at each of his parent's house.

So we're doing a lemonade stand, with lots of bonus "products", e.g. Superhero high-fives, Taekwondo demo, palm reading etc. Each service comes with a charge and I'll be there the whole time. He will also have a tip jar. I'm teaching him about marketing. We are doing signage, flyers and social media promotion.

My question is this: I'm teaching my son about raising capital first. Next, I'll teach him about savings and interest. Then, returns & risk.

I plan to teach him about savings & interest by offering a 3$/weekly contribution to whatever money he raises. The longer he saves it, the more he'll have.  Lesson one.

When we either take his money out of his mommy fund, I'll have him make a choice to re-invest it in another way, or to invest it in something else (teaching about risk and returns). In one scenario, I'll teach him that a high rate doesn't always mean a safe investment. In another, I'll offer a moderate return.

Thoughts on how to teach a 5yo about evaluating different investment options? The latter is a toughie. What are some simple scenarious that would help me show a 5 yo risk and return?

Tyler durden

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Re: Help me Rich Mom, Poor Mom my 5 yo with a Lemonade Stand
« Reply #1 on: August 02, 2019, 06:34:51 PM »
Hi- I thinks it’s admirable and a great idea to teach kids about money. I also have a 5 year old and for now we stick with chores and an allowance for her and her older sister. This helps greatly with responsibility and the value of a buck.

I could be wrong but I think investment risk and returns might be beyond the scope of a 5 year old

Tyler durden

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Re: Help me Rich Mom, Poor Mom my 5 yo with a Lemonade Stand
« Reply #2 on: August 02, 2019, 06:39:11 PM »
To your last question... not necessarily a suggestion but something I’ll never forget. When I was young my old man jingled a pocket of change in his jeans. The other pocket had no change but told me possibly something else in it. He said choose. I went with the sure thing and ended up with a few dollars in change. The other pocket ( the risk ) had a $100 bill. I was pissed but learned something...

Adam Zapple

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Re: Help me Rich Mom, Poor Mom my 5 yo with a Lemonade Stand
« Reply #3 on: August 20, 2019, 07:11:56 AM »
To your last question... not necessarily a suggestion but something I’ll never forget. When I was young my old man jingled a pocket of change in his jeans. The other pocket had no change but told me possibly something else in it. He said choose. I went with the sure thing and ended up with a few dollars in change. The other pocket ( the risk ) had a $100 bill. I was pissed but learned something...

I love this.

To the OPs question, as a parent of a 5 year old, I would say that they need bigger visual rewards for taking risk as opposed to simply getting an extra dollar or two.  Your child may be a bit more advanced than mine, but mine sees all money as equally valuable, even though they know that a quarter is worth more than a penny.  They value the reward of receiving money regardless of how much they actually receive.  Maybe you could make a pretend bank (or make an arrangement with a teller at your local bank) and he could "deposit" a beloved toy and his "return" is that toy plus an additional toy or accessory. 

Your high risk scenario could be a coin flip or other game with 50/50 odds where he risks a lesser toy and loses it (or wins and has the option to risk his winnings).  If he grows up to be a degenerate gambler don't blame me :)

This is a great thread.  Nice parenting!  You gave me some fun ideas.

noplaceliketheroad

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Re: Help me Rich Mom, Poor Mom my 5 yo with a Lemonade Stand
« Reply #4 on: August 21, 2019, 08:05:18 PM »
I've always thought kids would make WAY more money if they sold iced coffee instead of lemonade.

Adam Zapple

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Re: Help me Rich Mom, Poor Mom my 5 yo with a Lemonade Stand
« Reply #5 on: August 22, 2019, 01:41:41 PM »
I've always thought kids would make WAY more money if they sold iced coffee instead of lemonade.

This is brilliant.