Wednesday, April 30, 2008
Clues for the Clueless
The mortgage crisis may create momentum for improving our financial literacy. It's about time.
and Temma Ehrenfeld
Updated: 12:46 PM ET Apr 5, 2008
It is, or at least it should be, a simple question. You have $200 in an investment that's earning 10 percent a year. Assuming you let the money grow, how much would you have at the end of two years? If you answered $240, you've got plenty of company: in a 2004 survey of American adults, 34 percent gave that answer, which is incorrect, since it ignores the principle of compound interest. In fact, that $200 investment would earn $20 during year one and $22 in year two (on the larger balance). That totals $242—which only 18 percent of adults answered correctly. (The rest gave even worse incorrect answers or copped out.) While it may seem like a trivial exercise, research shows that people who can answer questions like these do better at planning for retirement, saving and managing their debts.
As millions of Americans struggle with mortgage payments they can't afford, there's new interest in helping close this financial IQ gap. This week a group called the Jump$tart Coalition for Personal Financial Literacy will release its latest survey of how much high-school and college students know about money. In past surveys, students have scored abysmally low, and no one expects much improvement this year. But there is hope that the subprime-mortgage crisis may generate momentum for change. In January, President George W. Bush announced the creation of the President's Advisory Council on Financial Literacy—a group that, with luck, will have a greater impact on Americans' well-being than the President's Council on Physical Fitness. "It's going to be a very teachable moment," says Ted Beck, president of the National Endowment for Financial Education.
Financial pros have fretted for decades over our ignorance about money. It's not that Americans' financial knowledge has declined, but that the need for it has increased. Until 30 years ago, people shopped mostly with cash, relied on company pensions for retirement and bought houses using fixed-rate mortgages. Today's world of credit cards, 401(k)s and exotic mortgages require more-sophisticated consumers, but there are few mechanisms to aid this transformation. Some high schools offer courses that teach students how to balance a checkbook or follow the stock market, but only 18 states require personal-finance instruction, and some principals resist adding the topic to schedules already crowded with really useful classes, like trigonometry. As a result, plenty of college graduates can psychoanalyze Hamlet and quote from the U.S. Constitution, but they don't know how an annuity works. "Even among highly educated people, a good proportion aren't financially literate," says Dartmouth economist Annamaria Lusardi.
Lack of education isn't the only factor—many of the roadblocks are psychological. Consider two basic items on most adults' to-do list: writing a will and buying life insurance. Both those activities require contemplating death, which we'd just as soon avoid. Financial decisions can also intimidate people because they often involve tangling with a commissioned salesperson. When cancer patients are deciding between chemo or radiation, they presumably can place more trust in a doctor than people choosing between a fixed-rate and adjustable-rate mortgage can place on their mortgage broker. Finally, when it comes to investing, behavioral economists put part of the blame on "loss aversion." That describes how the average person suffers more pain when losing $10 than pleasure from gaining the same amount; the phenomenon explains people's unwillingness to take risks. Since most investments that belong in retirement accounts (like stocks and mutual funds) decline in value at times, the possibility of loss scares some folks into staying on the sideline and making no choice at all.
Class and culture also play a role in financial-phobia. When Laureen Hudson, a 39-year-old technical editor, ponders why so many of her friends are clueless about money, she recalls how her crowd of left-leaning humanities and science majors held particular disdain for business students, who always had their noses in The Wall Street Journal. "It's considered noble to ignore money, and it's considered grubby or lesser to concern yourself with finance," she says. Noble or not, as an adult she's overcome that attitude; today she reads financial blogs, and she doesn't sign anything without asking tons of questions.
So far, the President's Advisory Council on Financial Literacy has held just a single meeting. As its work progresses, the result will likely be an array of new personal-finance tutorials—at schools, in workplaces and for people on the brink of big decisions, like buying their first home. While that's a good thing, consumers will also be better served if legislators and regulators continue taking steps to simplify the ways in which Americans save, borrow and invest. Instead of waiting for employees to sign up for a 401(k) on their own, some companies now opt for automatic enrollment and default investment choices. Likewise, as reformers scrutinize the mortgage industry, brokers may be held to higher standards, and closing documents may become more comprehensible.
Some researchers worry how effective any of this can be in our spendthrift culture. "It's an against-all-odds environment," says Dallas Salisbury, president of the Employee Benefit Research Institute. "Every ounce of effort that's put into financial literacy is running up against the societal drumbeat to spend and borrow." At a time when those debts have become a major drag on the economy, it's an effort that seems essential, whatever the odds.
Wednesday, April 23, 2008
Tai Chi is an ancient Chinese discipline of meditative movements practiced as a system of exercises. Gentle deliberate movements refresh the body, revitalize the spirit and clear the mind. Tai-Chi improves the blood circulation, strengthens the cardiovascular system, massages the internal organs and supplies the entire organism with life energy. For the mind, it teaches concentration and visualization techniques. Both a self-defense system and a moving meditation, Tai-Chi develops peace and harmony in its practitioners. Win's classical form of 150 movements is the ancient Chinese way to health and longevity. As a martial arts discipline, it is not only a physical but also a mental exercise, a prayer physically performed, a dance, and, very much like the Hawaiian Hula, it was originally performed by men in preparation for going into battle. Yet still today, Tai Chi Win prepares body and mind for successfully dealing with whatever is ahead. Practitioners are strengthened becoming nimble and calm.
Students from all over the world travel to Hawaii or New Jersey when Win Straube is in residence to study under his tutelage. His courses are free of charge. Anyone can join, putting body and mind into balance for a healthier, happier, stronger man, woman, or child.
Admission to classes is by application on first come first served basis. Applications are received at email@example.com
DVD available from movie made for television in Hawaii, “Sunrise at Magic Island.”
Look at free 1.31 minute movie clip:
Windows Media Player
Download of complete 53 minute version available from Amazon for US$1:
Reported by Ginger Gertsch in Honolulu, Tai Chi Win student.
Tuesday, April 15, 2008
I have read several books on how to discipline a child and tried different techniques. We all understand and value the need for proper discipline in the child. Without discipline none of us would accomplish what we do. However it seems that every time we discipline a child we either do not do a proper job with a lasting impression or walk away feeling guilty.
After carefully considering this problem, I came across a technique which seems to not only discipline a child but it makes him reflect on what the punishment is for and which of his actions caused it. And best of all it is working and seems to have a lasting impression on the boys.
I thought why not get them to write a short essay about their thoughts, feelings and their understanding of the deed that got them the disciplinary action. So the next time my sons did something out of line, I sat down with them and discussed the problem. Then instead of sending them to their room and screaming at them or making them perform some other disciplinary action, I told them to write either a 300 or a 500 word essay depending on the nature of the infraction.
They weren’t too happy but after a few attempts, they finished. I asked them to read their thoughts to me that they had written. Here are a few excerpts from my oldest boy.
“Hello my name is…is…oh, no! I forgot! Yes, it’s true I am a very forgetful person. Forgetful to the point where I got 7 demerits in school over the past two weeks….My dad strongly emphasizes action and reaction. He always keeps telling me that for every action there is a reaction and sometimes it is good and some times it is bad…. My punishment for my forgetting is a hefty load of “no computer and no t.v. for a week.”
Here is another excerpt from my younger son who had not turned in his homework.
“Turning in your homework is important because when you turn it in you don’t have to think about how were you going to get into trouble…When you turn in your homework you turn it in with pride….I got into trouble and my dad told me to write this essay. I got three pins from my teacher.”
And here is another one that my son had to write when he lost his temper.
“My temper is very important, but when your temper gets too high it can get you in trouble…If you cannot control your temper it can lead you into something very, very bad. Like me. My brother was annoying me while I was talking to him. And guess what. My temper got too high and I ripped my brother’s science homework and I was punished of course. … Now your temper is not a body part, it’s a thought in your brain that tricks you.”
Several positive results have come out of this method. After the essay is completed and we discuss it, they frankly admit that it wasn’t too bad an ordeal. In fact one of them even admitted that he liked it. But I also noticed something else.
Their ability to write essays has become more fluent and their writing ability is improving. They do not fear the act of writing as a strange exercise. By having to write their feelings they are also examining them. However it is important that you discuss the finished product for its thought content and writing.
The next time you are about to reprimand your child with some type of punishment, consider the above mentioned technique. It will produce a more profound impression on the child. But don’t forget to save these little gems for later time and enjoy them as they grow up.
Sunday, April 13, 2008
Saturday, April 12, 2008
first state to mandate that public schools offer Internet safety classes
for all grade levels -- and it's one of many measures being taken nationally
to protect young Web users.
Saturday, April 5, 2008
There is one chapter missing in Win’s best selling book, and I am going to provide it here:
Everybody knows it, but few do anything about it. PARENTS are the key motivators for their childrens’ success. PARENTS need to be taught how to motivate their offspring and set examples for them. This chapter tells you how.
Let’s start with creating “The Month of The Child.” Select a month to celebrate as a time to reignite the beauty and magic of childhood for children of all ages from birth to 100 years old. Underneath our gruffness and cynicism, we are all children at heart even if we have forgotten it. In our mad dash to survive and eke out a living, many of us forget the charm and mystery of “childness.”
So let’s make one month special in which we “talk with” children and “with each other” instead of “talking at” each other. If our own children are grown, then share the joy with our grandchildren.
For one month, let’s show and tell our children what our childhood was like. Dust out photos of when we were young with all the mementos. Yes, even talk about the report cards you received in the same grades they are in now. I often take out my photos of childhood and with my children laugh and giggle at how I looked at say seven or 12 years old and at some of the crazy styles of clothing I wore. I point out my classmates to them, and the children ask where they are. I also wonder where they are and what they are doing.
Hand in hand, let’s play and sing the joys of youth. Let’s recapture over the month the magic of a time dear to all of us. Create a time to take out some of our favorite books of childhood stories. Who of us doesn’t stop whatever he is doing when he hears the magical words: “Once upon a time…”
Together read with them or view a video of the old classics “Alice in Wonderland,” “The Wizard of Oz.” Perhaps you may also enjoy some of my favorite stories about that silly Winnie the Pooh. Grab a book of Mother Goose, the grand lady who never grows old, and sing and clap your hands with the children in reckless glee. Don’t forget Peter Pan and his boyish adventures. Don’t forget to sing “Follow the Leader.” And how can we ever forget the delightful fairy Twinkle Bell with her magic wand! Join in the frolics of the Seven Dwarfs as they sing and play with Snow white. After all these years will the Prince still come and save Snow White from the curse of the Wicked Witch? The list goes on and on. Yes, those were the magical days. Relive them with our children.
Tell the children that they have choices in life. Explain how the choices they make will turn them into winners or losers. Tell about the competition that awaits them in the cold world and teach them the secret to success in life—education. Help them to understand how their schoolwork is planning and molding them for their future in society. Guide them step by step in their crucial state of growing up.
Take time to tell and show the children how beautiful the world is. Open their eyes to the loveliness of a setting sun or the majesty of a rainbow as it sprays itself in a splendid arc across the sky. Ask the child to pick a flower, smell it, stroke its petals and admire its beauty.
Show them that the world also has a dark side and how to cope with it. Stop denying children the wholeness of life. Let them experience and savor the good and the not so good. Don’t build walls around them. Help them to experience all the sights, sounds, smells, and feelings that life offers.
When is the last time we listened to our children? I mean really listened. Ask them to tell what they feel happy about. What do they fear? We have to get into their world and explore it together. An amazing thing happens as we listen to them, we begin to listen to ourselves better. The idea is to explore their world together.
We must start early in letting our children know about the wondrous gold mine of imagination that is strictly their own. When did we lose ours? We must teach them that they are the only “they.” No one else is like them. They are unique with unique qualities. It is our duty to help bring those qualities out.
We should explain about death and stop protecting and giving them concepts that we are all immortal. They have to understand that death is a normal part of the cycle of life and of the life force that ever flows through the universe. Let us share with our children that life is not only pain, misery and despair as so often seen and heard on daily television shows or in the newspapers. Instead balance those images with the daily
miracles and fantastically beautiful things that happen around us.
I am reminded of the words of Frederick Moffett: “Thus a child learns more through trial and error, more through pleasure than pain, more through experience than suggestion and telling, and more through suggestion than direction. And thus a child learns through affection, through love, through patience, through understanding, through belonging, through doing and through being.”
During this special “month of the child,” let’s guide the children in their choice to become winners. Let’s help them to keep burning in their breasts the wonder and mystery of “childness.” At the same time let us rekindle the flicking flame still alive in ourselves. Too soon the child becomes the parent. Why not make every month The Month of The Child!