How to Raise Financially Responsible Kids

Teaching Kids Financial Responsibility

First Published: May 9, 2010 ADawnJournal.com

Teaching kids about money and financial literacy is an ongoing process and it is as significant as teaching kids about general education and other life disciplines. Grasping the significance and value of money at an early age will help kids to realise the importance of being financially responsible and respect money, thus helping them navigate their life more smoothly in financial terms. Today, I will discuss some simple steps you can take to make your kids financially responsible in later years.

Understanding Why Money Is Important – The first important thing you can do to is to make kids understand what money is and why it is important to be responsible with it. Explain what money can do; for example, it helps to live a good life, support family and friends, and it helps to support those who are in need and their favourite charities.

Start Early – Children are able to recognise and show interest in coins when they are 4+ years old. Grab this opportunity; when they start showing interest, help them identify different types of coins and bills. When you go for groceries and money exchanging deals, start letting your kids interact with merchants. This will teach interactions with others in general and in terms of money.

Action is Louder than Words – Talking nice things about money is not going to do anything unless you show your kids that you do what you say – and you believe in what you do. Don’t just tell them to stop spending wastefully; set examples by doing the same. Don’t just tell them to invest for the future; do the same and show them how you are doing it regularly in your mutual fund or investment accounts.

Be Careful with Allowance – Do not pay kids an allowance without giving them proper guidance towards how to spend it. Break down their allowance into smaller parts, such as 10% should go to the piggy bank, 20% should go to science magazines, and so on. It is recommended not to pay kids for regular house chores that they would normally do. They can get paid for special projects for which you would normally hire outside people such as mowing the lawn, cleaning the backyard, etc. – if they can complete it successfully.

Bank Accounts and Credit Cards – Bank accounts and credit cards are a part of daily living in the 21st century and kids should be taught about it once they are 7 – 10 years of age. Explain to them how banks and credit cards work, how and why credit cards charge interest, what to do to avoid paying interest, and so on. Open savings accounts for them, give them credit cards (with lower limits and supervision over how they use it), and walk them through towards becoming a financially responsible adult.

The Importance of Saving Money Early – Once kids start earning, teach them the beauty of saving money. Encourage them to save 15 – 20% regularly and continuously as they enter adulthood. Saving is a virtue that needs to be practised from an early age. If kids can make saving regularly a permanent habit, they will be able to reach financial goals much earlier and will live a happy life.

Learning to Spend Less – If there is one financial tip that is considered the number one tip of all time this has to be it: spending less than you earn. Teach kids to understand this concept and tell them that if they can follow it religiously, they will be wealthy one day.

Learning to Appreciate What We Have – We are privileged to live in one of the wealthiest countries on earth where abundance is everywhere, including riches. Many other nations are not as privileged as we are. Teach kids to appreciate and to become grateful for what we have and show them the joy of giving and sharing.

Keep in mind that “children do what they see.” Parents and adults can be role models by taking sound financial steps. The onus is on you to secure your kids’ financial future by guiding their financial journey through a solid financial roadmap from their early days.

A Brief History of Gold

Gold History

Gold has had an immense impact on humanity. It has caused the fall of nations, pushed the Age of Discovery, made some men rich and others poor. It is something that we all cherish and we all want more of it. It has a bloody history at times and as Led Zeppelin once said, all that glitters is not gold. Gold is amazing, beautiful and valuable but it is also something that has helped to drive our civilization in various good and bad directions.

Archaeologists have dated gold artifacts to as far back as 4,000 BC in the Balkans but most estimates of when gold began to be used by artisans goes back a few thousand years further than that. Various items like golden hats and the Nebra disk have been found in Central Europe since around 3,000 BC.

The Ancient Egyptians were in love with gold and gold was quite common around the Nile. King Tushratta of Mitanni said that gold was more plentiful than dirt in Egypt and it was in Egypt where the first gold production and mining began. Even the world’s oldest map shows a plan for a gold mine in it, proving the power gold has had on our civilization for the past few thousand years. The Egyptians would get gold through methods like fire-setting and they set up gold mines all along the Red Sea in the current location of Saudi Arabia.

Gold was mentioned within the Bible several times, including in the Book of Revelations where New Jerusalem is described as a city where the streets are made of pure gold. Gold began to appear in more than decorative items by the sixth and fifth century BC, especially in China where a square gold coin was issued. While the Egyptians may have been the first to mine gold, the Romans were the ones who really turned it into a mass-production method. Using hydraulic mining methods in Spain from 25 BC onwards and in Romania from 150 AD onwards, the Romans mined vast amounts of gold from the Earth. One of the largest mines that the Romans had was at Las Medulas in Spain, where seven aqueducts fed water into the mine to help the Romans get at the gold.

Over 1,000 years later, the European exploration of the Americas would be fueled by the quest for gold. Gold was very common in South and Central America, so much so that the Aztec called gold “god excrement” because it was a product of the gods. Sadly, the large amount of gold and the gifts of gold for the Spanish conquistadors only fuelled their lust for more. Gold was a big reason why the Aztec Empire fell and if it was not for gold, world history may have been very different.

In the 19th century, various gold rushes helped create some of the most famous cities in the world including San Francisco.

These days, while platinum metals are usually worth more than gold, it is still widely regarded as the most desirable of precious metals. For centuries it was the standard of currencies around the world and even today it is the symbol of purity, royalty and prestige.

Today, gold is mined on an incredible scale and 75 percent of all the gold ever produced was extracted in the past 100 years. Gold is so valuable that much of the gold mined throughout history is still in use, simply recast into different shapes and products by subsequent generations.

It is estimated that some 170,000 tons of gold are now available above ground and if we were to take all the gold ever refined it would form a cube that is only 66 feet on each side.

Malaysia Travel Blog: Hotel Hilton Kuala Lumpur

Kuala Lumpur Travel Blog: Part 3

DoubleTree by Hilton Hotel Kuala Lumpur

After reaching DoubleTree Hilton, I gave the taxi driver a very good tip and entered the hotel building.  DoubleTree by Hilton is located in an office complex and a shopping mall building called The Intermark. Located in the heart of downtown Kuala Lumpur, its location couldn’t have been better. Everything was within walking distance, including Petronas Twin Towers.

Hotel reception was on the 2nd floor. The check-in receptionist acknowledged my Hilton Honors elite status and welcomed me to the hotel. Upon checking in, I was offered a welcome cookie that was huge. I found the lobby area spacious and impressive. Artworks adorned the walls and the lobby arrangement of lounges and various sitting sections were eye-catching and gave a sense of tranquility.

DoubleTree Hilton has one dedicated floor only for Hilton Honors members. I liked that it gave us special treatment, but I had one more surprise waiting in my room.

My stay was based on points redemptions and this was my best Hilton experience by far. My room was spacious and I had a full city view out the window. Even the bathroom area was huge. There was a motorized rolling screen to open or close the shade.

The king-size bed was luxurious and its mattress, pillows, and everything else stood up to the standard of Hilton. I had difficulty finding anything to complain about.

I finished taking videos for review on YouTube. After settling down and finishing my shower, I’d have to go out to eat. The advantage was that this was inside a mall, so I could just go to the mall food court to eat.

What Is Micro and Macro Economics?

Difference Between Macro and Micro Economics

First Published: ADawnJournal.com May 16, 2010

In our day-to-day lives, the news will often mention the concept of microeconomics and macroeconomics. These two schools of economics are not as complicated as some people believe, but the concepts are extremely important for the economy of the planet. So, why not learn about microeconomics and macroeconomics? Here are some things for you to learn about these interesting economic policies. Before we start, here are some main ingredients of Micro and Macro Economics – Microeconomics: The Law of Supply, The Law of Demand, Opportunity Cost etc. Macroeconomics: Monetary policy, Fiscal Policy, Gross Domestic Product, Consumer Price Index, Unemployment, Inflation etc .

Microeconomics

Microeconomics is a branch of economics in which there is the study of how the individual parts of the economy, made up of households and firms, make decisions in order to allocate a limited amount of resources. These decisions are usually done in markets where goods and services are being bought and sold.  Microeconomics examines how all these decisions on the individual part have an impact on the supply and demand of goods, which in turn determine price and which itself determines the supply and demand of these goods and services.

Microeconomics is in contrast of macroeconomics, which looks at the total of economic activity rather than the individual parts of the economy. Microeconomics is not just about how individual parts affect the economy, but it is also about the effects of economic policies like taxation on the economy. Microeconomics also has the goal of analyzing market mechanisms in order to establish prices among goods and services and to allocate limited resources through alternative uses. Market failure is also analyzed through microeconomics, which is when markets do not produce efficient results, which allows microeconomics to describe the conditions that are needed to create the concept of perfect competition. Some places of study for microeconomics include:

·   General equilibrium

·   Asymmetric information

·   Uncertainty choices

·   Game theory

·   Elasticity of products

Under microeconomics, there are four categories in which a firm’s profit may be considered since it is assumed that all firms are following a decision making process that is rational and will produce the maximum profit output.

1.   When a firm has an average total cost that is less than the price of each additional product, then the firm is said to be making an economic profit. In this, the economic profit is equal to the quantity of the output when it is multiplied by the difference between the total cost and the price.

2.   When the firm’s economic profit is equal to zero, which occurs when the average total cost equals the price of the product or service, then the firm is making a normal profit.

3.   If the price is between the average total cost and the average variable cost, then the firm is in loss-minimizing condition. The firm produces, but if the firm stops producing then its loss would be larger. Firms continue production to offset the variable cost.

4.   When the price is below the average variable cost, the firm is in the shutdown condition. Losses are therefore minimized by not producing anything. The reason for this is that production would not generate any returns that would be large enough to offset the fixed costs and a portion of the variable cost.

Macroeconomics

In contrast to microeconomics, macroeconomics deals with the performance, behaviour, decision-making and structure of the entire economy. This can be the national economy, the regional economy, or even the world economy. Typically, macroeconomics will look at GDP, unemployment rates and price indexes to determine how the economy is functioning. Macroeconomists will create models as well that look at the relationships between:

1.   National income

2.   Output

3.   Consumption

4.   Inflation

5.   Unemployment

6.   Savings

7.   International trade

8.   International finance

9.   Investments

Macroeconomics, by definition, is very broad in its scope and study, but there are two areas where macroeconomists will research. These are the attempt to understand the causes and consequences of short-run fluctuations within a business cycle and the attempt to understand the determinants of the increases in national income.

Macroeconomics will help prevent depressions and recessions by allowing governments to make adjustments through changes within the macroeconomic policies. These policies are typically the fiscal policy and monetary policy of the country.

Within macroeconomics, there are two primary schools of thought; Keynesian tradition and neoclassical tradition.

·   Keynesian economics is a theory that was essentially created by the economist John Maynard Keynes. Through this policy, it is believed that fluctuations within the business cycle can be reduced through fiscal policies where the government spends less or more, and the monetary policy. Early Keynesian economist supporters wanted the regular use of policy to stabilize the economy of capitalist countries. Currently, in what is called Post-Keynesian Economics, there is emphasize on the importance of demand in the long run, and the role of uncertainty, preference and liquidity of the economy.

·   Neoclassical tradition challenges Keynesian tradition to ground the theory of macroeconomics in microeconomics. With this type of macroeconomics, the main policy difference is the increased focus that is put on monetary policy, like the money supply of the country and the interest rates. It was during the 1970s that this school of thought emerged.

There is one more underused form of macroeconomics school of thoughts is monetarism, which was created by Milton Friedman which says that inflation is always a monetary phenomenon. It does not include the concept of fiscal policy as it is the belief of supporters of monetarism that fiscal policy crowds out the private sector. Monetarism does not combat inflation or deflation through active demand management.

Macroeconomics and microeconomics help to influence the economy of countries around the world and many economists are not only divided between the two concepts, but the schools of thoughts within each. However, whether you understand macroeconomics and microeconomics, or you have trouble with the concept, both policies have a big impact on our lives and the economy of countries like the United States.

While there are many things to understand within economics, but if you have to choose two things to research and learn about it should be macroeconomics and microeconomics.

Malaysia Travel Blog: KUL Airport to Hotel Hilton

Kuala Lumpur Travel Blog: Part 2

DoubleTree by Hilton Hotel Kuala Lumpur

Airport immigration was smooth and fast; the immigration officer did not ask a single question. Once I was out, it was time to arrange my taxi.

I researched before going from the airport to the hotel and I decided to take a coupon taxi. The process is fairly simple. I went to the taxi counter located right before the airport exit. At the counter, they asked for my address and what type of taxi I needed (luxury, budget, etc.). Once I paid for my budget taxi, they gave me a coupon and asked me to go to the transportation hub-specific gate to get the taxi.

Somehow, I ended up waiting at the wrong gate for the taxi. One nice lady helped me and pointed out the right gate. Once I was there, an attendant asked me to wait while he sent a cab from the queue.

I didn’t have to pay or even tip the taxi driver anymore. I still gave him a good tip, though.

The drive was about an hour long and it was raining a lot. Still, I noticed right away that Kuala Lumpur was very green. It’s hard not to notice. It looked like Malaysia cares about the environment and wants to decorate the whole city by nature’s way – lots of green trees everywhere as much as possible.

And they succeed. To maintain the greeneries everywhere, the city definitely had to continue ongoing maintenance for these trees.

The closer I was reaching my destination in downtown Kuala Lumpur, the roadside scenes were changing to citylike with lots of skyscrapers and highways. But still, the presence of green was everywhere, even in the heart of downtown.