to make 2010 the Year of Earning More. The past 7 months have been dedicated to helping people earn more money by earning more on the side, and the response so far has been massive. Hundreds of thousands of people read, commented, and Tweeted and otherwise chimed in on earning more. Everyone wants to make more money.

Great enthusiasm — but there’s just one thing wrong with this…

Most people who say they WANT to earn more… never will.

I have been as guilty of this as the next person. Take a look at this blog – it has been almost six months since my last post! This is a project to earn and learn (as my daughter would say – that’s a programme she is doing at school this term!) However I have managed to spend six months waffling about a new webhost, which plugins should I run and even questioning the very name of this project! All well and good points to consider for an hour or two, but this is silly.

My challenge to you, to all of us, is to get started on earning those extra dollars that mean our children can have regular pocket money! What are you going to try first?

What the, Fox?

There is a reason that Obama has legislated against some of the predatory practices of credit card issuers in the US. Kids and credit aren’t a good mix. Hell, credit and just about everybody isn’t a really good idea, but we jump in anyway.

What’s the problem you ask? Try this statistic out : “84 percent of college students have at least one credit card, with their average balances totaling more than $3,000″ – reports The Cavalier Daily. How did they get these cards into the hands of most college students? By giving away free stuff (like tshirts & pizza), which is always a honeypot for a student.

The Credit CARD act :

“prevents people below the age of 21 from getting credit cards without proof of a stable income or an employed co-signer 21 years-old or older” – New University, Obama Creates Credit Card Regulations, Affecting Students

Back to the story – who is the expert? Mellody Hobson of Ariel Capital Management. According to this Forbes profile she is a director at Dreamworks, Estee Lauder, Starbucks as well as being the work at investment management firm Ariel.

Mellody Hobson

From her perspective, I can imagine she meets many people of above average financial intelligence. For those who can responsibly use credit to build a good credit score it may be sensible to start on credit as early as sixteen years old.

For the rest of us, which means you and I, my feeling is that we are better off without the temptation. Read
this article on the cost of weddings from Ramit’s I will teach you to be rich blog, it is a great read on how we really are likely to be part of the majority who do not have our finances in order. In this case, remember, fully 84% of college students are carrying an average balance of $3,000 on their cards. Are you certain your 16 year old will be able to stay so far under that average three thousand dollar debt load?

As a parent I feel the urge to ‘do something’ to help my kids along. Fortunately mine are not near 16 yet, so the credit card isn’t an issue. What would I do instead? Perhaps along the lines of the ‘Bank of Dad’ (where you create your own high interest bank at home on a spreadsheet to encourage savings) but allowing the kids to borrow money at punishing interest rates. In this way they can experience how fast the debt can spiral out of control without ‘real world’ consequences of starting adult life with a maxed out credit card. The book The First National Bank of Dad: The Best Way to Teach Kids About Money is available at Amazon.

Credit cards for kids? Just say “No!”

This is a noble cause, to be sure, and there’s no shortage of people out there with all manner of advice. There is advice on how to make money, invest like a pro, beat the market, hedge, trade and imitate others who’ve made it big. It can all get a bit confusing.

A case in point – here’s an article from the respected financial journal Forbes magazine:

A Recipe For Riches
Want to become a tech titan or hedge fund tycoon? Up your chances by dropping out of college or going to Harvard [...]

Can you see the problem here? The very first paragraph of this article suggests in their recipe for riches two simple steps. One – drop our of college (university) and Two – go to Harvard (a college, or university!) What? So to make it onto the Forbes 400 Rich List all you need do is simultaneously drop out of college and get a degree from one of the top institutions in America.

To be fair Forbes were analysing the list looking for trends. What they found were groups on the list who had either dropped out or gone through Harvard. Nonetheless it serves me as an example of the many pieces of conflicting advice that are offered to the novice investor.

All this brings me to the number two person on the rich list. Warren Buffet, who is known as the Oracle of Omaha. Warren is clearly the most successful investor in the world, given the next investor on the list is George Soros at number 15!

What advice does Mr Buffet give to aspiring investors? You can read this many times in his letters to shareholders, but it is very simple.

Invest regularly in low cost index funds.

Simple.

In fact this message is worth hearing, so I’ve made it a favourite on the GoldenGoose8 YouTube Channel as well as making it the Featured Video for this blog.

On my personal blog I wrote a couple of years ago on this topic, Coffeehouse investor in Australia which was really some links to information on index funds and their cousin exchange traded funds. Some good reading is available at the ASX http://www.asx.com.au/products/etfs_etcs/index.htm; also Neerav has a long running post called Index Fund: lower fees, reliable growth, less volatility.

So in summary our strategy to grow our own Golden Goose is to :

• Save money (spend less than you earn / pay yourself first)
• Invest regularly in low cost index funds
• Teach your kids how to do the same
• Repeat

Join me on this journey – I’ve been buying the ASX 200 SPDR this year for my Golden Goose. My kids have been investing in a high yield bank account and are nearly ready to buy the SPDRs as well. What will your next step be?

Our North American friends have just celebrated (or survived!) another Thanksgiving holiday. This is one tradition from that part of the world that we could all take to heart.

Why is this idea so important? Why talk about it here on the Golden Goose? (Aside from making the Goose nervous in case this is the year someone decides to switch from turkey!)

This is what I think. When you live your life with this so called “Attitude of Gratitude” it means that you take a moment, from time to time, to really appreciate what you already have.

That can be hard to do, especially at this time of year with a tidal wave of retail catalogues pouring in the door. It is all too easy to get lost in a mindset of “I’ll be happy when I get a new [gadget, pair of shoes, car, TV or whatever else.] Very quickly that path leads to being envious of people around you who have those things themselves. That is a dangerous path indeed, doomed to end in resentment at the world for not giving you ‘what you deserve’. That is not the sort of person anyone wants to be around!

Developing that habit of feeling thankful for what is around you, be it family, friends, a roof over your head or a flower in full bloom, is a wonderful antidote to the ‘by more stuff’ pressure of the Christmas season.

A couple of years ago my brother in-law started a tradition at the Christmas table. He asks each person to take a moment and share what they have been thankful for in the past year. At first it was a little awkward and most definitely strange, but we settled in to the idea fairly quickly. I’m looking forward to it this year, though I haven’t a good idea of what I’ll say just yet.

Almost certainly kids around you are working hard putting the pressure on for what they want for Christmas. Our certainly are. Twilight. Barbie. Transformers. PS3. Wii. The list never seems to end. How do you combat the hundreds and thousands of advertising messages that children will be exposed to in the next few weeks?

That is where the gratitude attitude comes in. It is never too late to take some time with your kids to find a few things to be really thankful for. In the process you may even find a few things that could be passed on to goodwill and make someone else’s Christmas more happy.

One way to help put kids in a good frame of mind to realise how well-off they are is to look around the world at how little most people have. A great book that explains this (and plenty more) is If the World Were a Village – which presents the whole world as a village of just 100 people.

When you feel thankful for being alive, having people around you to love and be loved by, your mood takes an immediate lift. Share this with those around you!

Kids clean up in a billion-dollar industry [SMH]: AUSTRALIAN parents are spending more than $1 billion on pocket money a year but children are expected to do far less around the house in return … experts say [chores] are important in developing life skills

This story illustrates the problems when parents don’t consider the philosophy of pocket money. Take the time to think and discuss your own philosophy to handing over the cash.

Curiously in the week following that article, I had two encounters with my son to do with performing housework. The first was early in the week – after a couple of loads of laundry had been done, the clean clothes were piling up on the lounge-room’s couch. Awaiting sorting and packing away by the owners. A few tense words of suggestion were aimed at Mr 12, encouraging him to do his part. The reply? A great big sigh. Fairly typical of a proto-teenager perhaps, but it didn’t go down very well as you can imagine!

The second was a far more positive interaction. Later in the week my wife was due out at band practice, but had lost track of the time. As I arrived home, she was heading out the door having put some rice on to cook for dinner. Here’s where the fun begins : I took this as a chance to get the kids helping out in the kitchen. Quickly enough we began to pull ingredients out to see what we could make. Directing traffic, I involved both Mr 12 and Miss 9 in washing, peeling, chopping and preparing bits and pieces. The whole operation took around 20 minutes, producing an acceptable fried rice dish with bacon, chilli chipolatas, snow peas, corn, carrots and so on.

What really made my night was, after dinner, Mr 12 spontaneously said “that was really fun, when we were cooking!”

My point? Sure, pitching in with the household chores isn’t always fun, but when you get a chance to make it a communal activity it really can turn a dull chore into an opportunity for family fun (and a little bonding to boot!)

Sometime in the next week create an opportunity to involve the kids in a household chore. You may even all enjoy it.

This article examined a number of philosophies, or systems of pocket money. From reasons why some may choose to shield their kids from money through ideas about sharing the family income to the traditional chore-based schemes.

‘Featured Video’ is there to highlight great videos from around the web. This first one is from UBank, who have a great series of short videos that explain and demystify financial markets. ‘Recommended Reading’ is there to point you in the direction of some great books for you and your kids to learn more and yes, there are the ‘Sponsored Links’ that will help me pay for running this site.

Onward and upward, as the saying goes!

the charities concerned have defended the practice, saying it happens worldwide and is just part of doing business [...] But 95 per cent of money raised through street marketing in its first year is not going to the charity.

Wow. Ninety-Five percent of your first year’s donations are going to the marketing company who signed you up on a regular donation plan. That sounds plain crazy to me. Who are we really donating to? Speaking personally I’d rather as much of my hard-won money as possible ends up in the hands of those who really need it!

One of these marketing companies is Cornucopia Fundraising, who run campaigns for Oxfam, Redcross Australia & New Zealand, Save the Children and more. In a statement provided for the ABC story they say

“the commercial arrangements between Cornucopia and its clients are available publicly”

However no such information of the sort appears on the Cornucopia website. The only way to know is to dig into the financial statements of the various charities concerned – although many will reveal their fundraising costs if you dig deeply (or ask sweetly) enough.

So what can we do? There is a ‘peak body’ called the Fundraising Institute of Australia who are supporting the creation of a National chart of accounts for charities. That would allow us to more easily compare one to the next and have a much better idea of where your money goes.

For now, take the time to discover the fundraising costs of your favourite charities. One great charity that is very open about costs is Kiva.org (loans that change lives.)

At Kiva you make micro-loans to people who really need some help. You can send money out through PayPal, loans are made $US 25 at a time. When you make a loan, you can choose to give a little extra to Kiva themselves to run the service. Other than that, all your money goes where it is needed. With the exchange rate so high between the Aussie and US dollar now is a great time to start making a difference.

As we talked briefly about developing my blog, the conversation turned to how (let’s call him ‘Barry’) Barry used to earn money as a kid. He spoke of interminable summers of being dragged along to regional test cricket games (which take, literally, days) – which gave Barry a healthy dislike for all things cricket.

To get away from the very slow pace of test cricket, Barry and his mates would catch snakes for Eric Worrell. They would get paid twenty dollars for each snake, but only ten dollars for the non-venomous ones!

My jaw just about hit the table when I heard Barry talk about this. So it made me wonder – what is the craziest way you ever earned money as a kid?

The official description : “hour long television special hosted by Al Roker, Deborah Roberts and Elmo, with financial expert, Jean Chatzky, and clinical psychologist, Joshua Coleman, to help families with children, ages two to eight, experiencing difficult economic challenges.”

Sesame Street: Families Stand Together

As I commented over on Lifehacker Australia – “Deploy the Muppets” indeed! It really is very important to talk to kids about these situations – keeping them in the dark isn’t really possible (they’re kinda smart better to have an open and frank discussion about your financial situation. This video looks to be a brilliant ice-breaker to get the talk happening in your home. Way to go Children’s Television Workshop.