In 2001 more young people declared bankruptcy than graduated
from college.
-The American Bankruptcy Institute
We teach our kids many subjects, some of which they will never use
again once they have graduated from high school. Money is the one
subject we can teach that will be used or misused every day for the
rest of our child's life. So if money is such an important subject,
why aren't we doing a better job of teaching our kids about its
creation and care?
The Problem
Bankruptcies in America for people under the age of 25 grew to a
record
94,717 in the year 2000, according to a Harvard Law School study!
Another recent article quoted the Federal General Accounting office
as saying that the average student graduating this past year, left
school with $19,400 in student loans plus about $3000 in credit card
debt. Couple all of this with credit card debt reaching unheard of
levels and unemployment hitting 10-year record highs, and it paints
a pretty dismal economic picture.
Most parents believe that they haven't done a completely adequate
job handling their own financial situations -- so they feel
ill-equipped to teach their children about money. If you feel
ill-equipped, that's GREAT!!!!
Money is something it appears cannot be TAUGHT, but it can be
LEARNED. What does that mean? It means that, "No lesson worth
learning can be taught." In other words, instead of just talking
about money, we need to provide opportunities whereby our children
discover for themselves the financial lessons that are important to
them, as they learn to create, care for, and spend their own money
from an early age. Naturally, entrepreneurism is the perfect vehicle
in which a child can learn many valuable lessons. Being the parent
of an entrepreneur is definitely NOT easy! Truthfully, it is much
simpler to hand your child the money that he wants and be done with
it!
Easier? Yes, and in the long run it will be both of you who regret
this lack of training (especially when that child is still living
with you when he is 40!).
Why Entrepreneurism?
The Social Security Administration released statistics indicating
that our graduating children will change employers on average of 11
times during their working lives and will also change professions 3
times. Consequently the corporate pension plan is almost valueless
to the average worker today because he generally isn't remaining
with his company long enough to receive his retirement benefits.
Even those who do become fully vested, would be wise not to rely
completely on the company's pension plan for the bulk of their
retirement income either. The Enron and Worldcom debacles recently
demonstrated the vulnerability of plans which people have counted on
as a sole means for their retirement income. Even Social Security
comes into question, and at best, our children will have to work
many more years before they begin to collect benefits than have
prior generations.
It is important our children learn the entrepreneurial mindset that
will allow them to take care of themselves financially even if they
are working in the employ of someone else. Please don't
misunderstand -- there is absolutely nothing wrong with working at a
job, but we must impress on our kids the necessity of developing the
entrepreneurial mindset even if they are employed. This way they
will not be dependent on an employer or a job to do anything more
than provide them with one source of income, recognizing that it may
be only temporary. Even while they are working for someone else, our
kids should be actively aware of opportunities to create income
independent of their jobs. This income may be from almost any source
at all like investments in stocks, businesses, or real estate. Or
they could concentrate on creating intellectual properties that
generate royalties from things like writing books, software, or
music. The income sources are limitless, but our kids need to be
trained first to see them and also to believe that the effort they
expend in developing them is also necessary!
Benefits of Entrepreneurism
Ok, so we have looked at the why's and how's of our children
learning the entrepreneurial mindset. Now let's look at the benefits
of doing so because there are numerous ways in which entrepreneurs
benefit themselves, their families, communities, and maybe even the
world.
One of the loudest cries among educators and parents today is the
need for programs to give children self-esteem. I disagree.
Regardless what the authorities say, one cannot "give" a child self
esteem. It is a commodity, which must be earned or it is of little
value. Studies conclusively demonstrate that there is no better
proving ground for the self than is found in gainful employment.
Steve Mariotti, founder of National Foundation For Teaching
Entrepreneurship (NFTE) demonstrated this to be irrefutably true in
his program's dealings with underserved youths in inner city
programs.
In starting a business, kids learn to set their own goals and then
find ways to work towards them, overcoming real problems as they do
so.
Decision-making skills develop that carry over into all other areas
of their lives. They also have to face issues directly, which
instills maturity quickly in our young entrepreneurs.
An added benefit, from our perspective as parents, is that some of
the things that were intangible "school" things to our kids before
they started a business, become indispensable tools for real-life
problem solving once they are in hand-to-hand combat of the real
world of commerce.
All of a sudden things like percentages and geometry have practical
applications when considering a bank loan or calculating how much
wallpaper it will take to cover a room. Math becomes a necessary
means to an end, a tool rather than an obstacle.
English becomes a way to communicate with a customer via a letter,
printed brochure, business card, or flyer. The importance of correct
grammar and flawless spelling become obvious very quickly to the
young entrepreneur. It is a way to achieve his goal of getting
customers!
Isn't that what school should be about? Finding a practical way to
apply knowledge is the only real reason to learn anything! As
adults, we choose to learn something when "not knowing" becomes
painful or it becomes an obstacle in our paths toward a goal. Why
should we expect children to be any different? If we can make their
school subjects have a practical application they will be much more
inclined to learn in an enthusiastic manner.
Another benefit, according to Money magazine is the preference that
some college admissions directors give to applicants who have had
the experience of starting their own businesses. In gaining entrance
to institutions of higher learning, the experience obtained even
from a failed business far surpasses that of a summer spent bagging
groceries. And perhaps more importantly, while running their own
enterprises, some young people gain important insights into career
fields that help to make their later employment choices much easier
to navigate.
Lastly and most importantly, entrepreneurship has once again become
the driving force of our economy. With corporate downsizings and
unemployment rates rising, entrepreneurship has become a necessary
mindset for all Americans. Sure, many of us continue to work at
jobs, but if we don't also begin to think about creating independent
income sources, we'll end up working hard all of our lives only to
make someone else wealthy!
By encouraging your child to develop his entrepreneurial skills, you
are helping him to become financially literate, self confident and
successful.
And while there are many definitions, my definition of success is:
We know we are a success when we have both the TIME and FINANCIAL
RESOURCES available to fully answer God's call on our lives. Our
children need the entrepreneurial mindset.
