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'The First National Bank of Dad' Book Review

June 25, 2011 | Comments: 0 | Views: 80

This book is sub-titled, "A Foolproof Method for Teaching Your Kids the Value of Money," and to my mind it delivers on that promise. At 190 pages it is an easy read, written in a very relaxed and humorous style, and full of personal anecdotes.

As parents, we are often conflicted about teaching our children to handle money. We want to give them practice at it, but we usually accomplish that by taking away their responsibility and forcing them to save. Large birthday or festive gifts of cash from generous relatives get whisked away from them and deposited in their savings account, out of their control, because we don't believe they will spend the money wisely. A child finds it hard to appreciate the need to save for college or a car or some other event way in their future, and the amount of money they earn on their deposits is so small as to be irrelevant (why is it called 'interest' when it is so uninteresting?).

It was while thinking about these problems that the author hit upon the idea of The First National Bank of Dad. This bank pays its depositors 5% interest a month on unused cash balances, which when compounded would equate to a 70% annual return (he does make it clear that he doesn't accept deposits from adults, or from anyone who didn't receive half their chromosomes from him!). The children's accounts were funded with an initial $25, their allowances were deposited on the first of the month, and after that they were completely in control, to spend or save, no questions asked. Not surprisingly, once they could see the advantages of letting their money 'charge up for a while', they voluntarily saved a good part of their income. They realized that, if they deferred consumption for a while, they would eventually be able to consume more.

As the children became older, the author eventually opened the Dad Stock Exchange to teach them about stock market investing. Once again, the 'rules' were easy to understand and implement but they were very effective in achieving their learning objectives. However, I won't spoil the plot by explaining them here - you'll have to read it!

Do whatever you have to do to get your hands on this wonderful book. My only regret is that it was published too late for me to use the excellent, easy-to-implement ideas on my kids. However, now that they're grown and have kids of their own, this book will be top of my present list for them to read and, hopefully, put into practice.

Mick Brooks is an educator, a public speaker, and an avid stock market investor. As a UK-qualified CPA, he thought making money in the stock market would be easy, but his 'education' cost him around $30,000, so now he makes it his goal to help others to avoid replicating the more obvious mistakes. Visit his website, for more advice and information, and don't forget to pick up your FREE copy of the 'Investing Secrets - Day Trading' report! If you would like to teach your children how to invest, and give them a gift that will last them a lifetime, visit for information and resources.

Source: EzineArticles
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