The Hindu Business Line : Empower children with financial lessons

It may not be easy getting children to believe that they can grow up to be millionaires, but tougher than that is persuading parents to believe in their children, rues Troy Dunn. “I’ve found that while most kids are innately confident, their parents discourage them, beginning at an early age, from acting on their natural optimism and believing in their abilities, especially when it comes to money,” he writes in ‘Young Bucks’ ( www.landmarkonthenet.com ).

“Parents do wonderful jobs nurturing their children’s academic, athletic, personal, and spiritual development, but when it comes to teaching their sons and daughters about financial success, these same parents are victims of out-of-date and even bogus myths about the financial world,” Dunn frets.

His ‘how-to’ book, therefore, on raising a future millionaire, opens with ‘millionaire mentality.’ Think like a future millionaire’s parent, the author exhorts. The most common path to great success, he says, is not ‘getting into the right college or landing a job at a big corporation’ but is instead ‘developing one’s unique talents to create thriving businesses.’

Many parents wrongly believe that children should not have to ‘worry’ about money when they’re young, and that there’s plenty of time to focus on finances when they’re adults. Dunn explains how such a notion assumes that money is scary, which is also why so many adults are uncomfortable with their own finances.

“Teaching your child that she is capable of earning her own money is one of the most positive and empowering gifts you can give her,” he assures.

Rich tips.

Brownian motion in the bourses

The values of the shares of publicly traded companies should grow as companies make money and the economy grows. While that is what economic theory tells us, the movement of stock up or down is given to the vicissitudes of chance, writes Amir D. Aczel in ‘Chance’ ( www.thundersmouth.com ).

“Chance is a major player in the markets, so even during periods of market growth, the daily movements, the hourly movements, and the instantaneous movements of the prices or stocks are random,” he explains, in a chapter titled ‘random walks and the gambler’s ruin.’

Aczel observes that the markets are an example of Brownian motion; the model, borrowed from physics, “describes the motions of dust or smoke particles in the air as they’re constantly hit by air molecules and recoil in a random direction by a random amount.”

A graph of the movements of a stock over an hour, a day, or a week, will reveal to you this pattern, advises the author. “Complex mathematical models that exploit this description of stock movements, the most successful of which is the Black-Scholes Option Pricing Model, have been used with some success.”

For the avid investor.

Stare adversity in the face

Take blips in stride, urges Donald J. Trump in ‘Trump Never Gives Up’ ( www.wiley.com). “Instead of trying to deflect problems or obstacles and send them off in another direction, try to embrace them. Turn them into something positive,” he says. “You can often disarm people this way and get them on your side. Don&# 8217;t get too attached to your ideas. Adjust, adapt, and take things in stride.”

Feeling negative should be a very temporary state of mind, insists Trump. “Discouragement should not be tolerated for very long. It’s okay to get fed up a bit and maybe gripe for a minute or two,” he counsels. “Having confidence in yourself is key to being resilient and staring adversity in the face.”

Separate yourself from the complaining crowd, commands Trump in one of the chapters. “Don’t dwell so much on a problem that you’ve exhausted yourself before you can even entertain a solution. It just doesn’t make sense.”

He argues that going negative is the easy way, the lazy way. “It takes brainpower and energy to think positively and creatively, and to see creatively and positively.”

Powerful messages.
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D. Murali

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