I have a very ambitious goal. To expose as many young people as possible to the principles of entrepreneurship, as often as possible, as early as possible.
The challenge I have is that I don't have any children of my own. Fortunately, I married a woman who does. So I decided to embark on a mission to teach Omari, the 15 year old, everything that I wish I knew at her age.
Last week Thursday, I picked Omari up from school and took her to my office. We talked about school and life. I decided now would be the best time to begin to prepare her for life in just a few year.
Omari is a freshman in high school. She's been attending a magnet school because her mother and I believe it gives her the best chance to get ahead later in life. Initially, she wanted to attend another school because that is where most of her friends that she's known since 2nd grade are going. Sometimes, as adults, we have to make the tough decisions because we can see the road ahead better than they can.
If you have a young tween/teenager, you would be well advised to begin prepping them for the real world as well. Know that high school will NOT do an adequate job of preparing your child to be an adult. Here are 4 lessons I shared with her in our first session.
85 - 90% of What You'll Learn in High School Will Be Worthless
Now, that is not a scientific number. But the point is valid nonetheless. A majority of what high schools currently teach will not prepare a student to graduate and function as an adult. I've already dealt with that issue at length in my post Hustlenometry 101: 5 Critical Things You'll NEVER Learn In School .
These are the only things that she MUST learn that she will be taught; The ability to write and read with comprehension; Mathematic principles; Scientific principles.
Pretty much everything else will serve little to no use in the real world.
Don't believe me? When was the last time you used the Pythagorean theory?
The PRICE Of Something VS The COST Of Something
This lesson is especially important because Omari likes nice things. But she has no concept of what it takes to acquire nice things. Up until this point, she's been able to ask myself, her mother, her grandmother or her grandfather. Because she's actually a pretty good kid, she deserves to be rewarded from time to time.
But while she knows the PRICE of things, she isn't aware of the COST of things (no those two things are NOT the same). She shared with me that she had done a one-day Junior Achievement program that was suppose to help teach students how to manage money. But the only thing they were being taught was how to pay bills.
I had to explain to her, "They taught you how to spend the money. Did they teach you what it takes to MAKE the money?"
She answered, "No."
And therein lies the rub. Our children are not being taught that if they trade hours for dollars, then the true COST of an item is how many hours they have to work in order to be able to afford to buy that item. So while the PRICE of an item is measured in dollars, the COST of that item is measured in hours of life.
THIS lesson is especially difficult to teach children because most of us as adults don't understand it yet.
The Time Value of Money
One of the concepts I know I will have repeatedly impress on her is the Time Value of Money. This is a concept that just doesn't intuitively make sense to many people.
I began by explaining that a dollar is worth more today than it will be a year or more from now (No, we haven't gone into the concept of inflation yet, but its coming). Because our economy runs on fiat currency, the value of a unit of purchase will lose value over time.
To help illustrate this point, I used the US Inflation Calculator to show her how a dollar was worth more in 2001, when she was born, than it is today. One dollar in 2001 is worth $1.34 today.
In my opinion (and hey, its my space), it is borderline negligence that this simple principle is not being taught to high school students.
This is important because as I work with her on the concepts of Saving and Investing, she has to have a basic understanding of why a dollar saved and/or invested today will be worth more than a dollar made tomorrow.
Speaking of investing...
Introduction To The Concept of Investing
Omari has a fascination with Jordan branded sneakers. Actually, most kids her age have that fascination. Which is interesting, because they've never actually ever seen him play.
I started by asking her, "How many Jordans do you own?"
"How much do they cost?"
"About $140 each."
"How much do you think it costs to make them?"
"I don't know. A lot?"
At this point, I Googled, 'How much do Jordans cost to make'
The response: 'About $16 a pair'
The look on her face as she did the math in her head was priceless. I could almost see the wheels turning.
Then I pulled up the price of the Nike stock ($58.87), "You can own almost 3 pieces of Nike for the cost of 1 pair of Jordans."
"You see, a stock is a piece of a company that you can own, and if that company does well, you can do well."
I showed her how to look a month back (Nike stock was higher then), 3 months back, a year back and even 5 years back. 5 years ago, Nike stock was $16.10.
So I made her do the math:
The answer was as expected.
The principle is simple, I told her, "Only buy what you can and do own."
I understand that rewiring a teenager's mind is no small feat. But I refuse to allow Omari to grow up without learning early the lessons that came much later for me.
She has the potential to be and do anything that she wants. But it is on myself and her mother to give her the tools and knowledge to chase those dreams.
Over the course of this year, I'll be sharing this journey, the wins and the losses with you. It is my hope that if you have high school aged children, maybe something that I share with you will resonate and help you in your mission.
Feel free to leave feedback on any principles you feel she should be introduced to.
Or just leave an encouraging word. Lord knows I'll need it.
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