How Celebs Are Cashing in as Social Media Influencers


In 2016, marketers and brands spent $570 million on Instagram influencers. And that was long before Instagram hit 1 billion users. But Instagram is only a small piece of the influencer marketing pie.

If you’re a celebrity or you simply know how to leverage social media to gain followers, the cloud is the limit. Where there is an audience, brands will pay to get exposure.

But how much do influencers actually make? And what brands are most likely to utilize an influencer? Let’s talk about that.

1. Who Are Influencers? Not Just “Celebrities”

One misconception I want to squash right now is the idea that only high profile celebrities can be influencers. This is complete B.S.

In fact, if you can gain even 10k followers on Instagram, brands will flock to you. The same goes for platforms like YouTube and Twitter. I wouldn’t even discount Facebook although it’s rapidly becoming a pay-to-play arena.

But why do brands go for influencers with smaller audiences? Wouldn’t they reach more people by focusing mainly on the celebrities with millions of followers?

The problem with high profile celebrity influencers is depersonalization. When you have a million followers or more, you’re likely not going to engage those people in a personal way. While smaller influencers might have a marketing consultant deal with their social media, it’s easier to engage a smaller audience and maintain the engagement.

From the Beginning

Smaller influencers maintain a loyal following of engaged individuals from the beginning. When a person starts following someone on Instagram or YouTube, they get to ride along with them. And when the future influencer becomes a current influencer, they’ve brought with them an extremely loyal fanbase.

And in an age where 42% of Americans find brands “less truthful than 20 years ago,” connecting with an audience at a more personal level is even more important and valuable.

When an audience feels connected to an influencer through real engagement and interaction, they’re more likely to trust what the influencer promotes. And many influencers won’t promote a product they don’t believe in.

Matthew Santoro, a YouTube star and influencer, vowed early on to never promote a product without being honest about it with his audience. He won’t promote anything he wouldn’t use himself.

Santoro is the definition of a smart influencer. He not only consistently built his brand through informative listicle videos, but he started another channel to record and vlog about his life as a YouTuber.

Fans could both enjoy his regular informative content and plug into his personal life. The more personable an influencer is, the more likely they are to have a loyal, devoted, and trusting fanbase.

Why Do Celebrities Get Less Engagement?

It’s true, major celebrities actually get less organic engagement than some smaller influencers. And there is a point at which a brand will make get more for their dollars if they choose a lower tier influencer.

While the smallest influencers still can’t beat major influencers like Brittany Furlan for a brand’s ROI. They will strangely beat out top influencers like Jada Pinkett Smith.

Now, a smaller influencer still won’t make nearly as much as anyone in a top-tier influencer category. But that’s not due to ad budget but has more to do with the hundreds of other gigs that pay even more for these actors and celebrities.

What Do Influencers Actually Make?

If you’re starting out as a social media personality, you’re probably wondering if it’s worth your time. I can’t attest to whether it’s worth your time. But I can give you a snapshot as to what’s possible if you’re successful at building an audience and achieving influencer status.

First, we’ll start out with what an A-List celebrity makes to give you a dose of sobriety. Unless you go viral, get a film deal, or your band gets picked up by a major label, you most likely won’t make this much as an influencer. And that should be ok with you.

Selena Gomez

If you grew up in the aughts, you probably watched Hannah Montana. You also probably wouldn’t have guessed that some of the stars would go on to become major celebrities.

Selena Gomez is one such celebrity. She is now the top influencer on Instagram.

But what does it mean to be the top influencer on Instagram? How does 133 million followers sound?

And this woman makes bank on each promotional post. Her posts are worth $550,000. Each post is worth that much.

If she were to make that much on a post twice a day, she would be making $200 million a year on Instagram posts alone.

That’s some mad cash right there. And nobody can touch her numbers right now.

Forbes Top Entertainment Influencer: Lilly Singh

Here is what it looks like to truly optimize and grow online. When you network and get the attention of slightly bigger influencers, you can become one of the top influencers in social media.

Lilly Singh graduated with a degree in psychology. The only way she could use her degree: more school. But instead, she became a YouTube star.

Once she met Jenna Marbles, her life exploded on YouTube. She is now a full-time comedian.

What is her estimated YouTube income? Oh, only a paltry $10.5 million a year. Nothing to bat an eye about, of course.

Lilly’s comedy and singing career is set if she continues to grow as she has as well. According to Forbes, her overall social media reach is 246,920,000 people. You can guarantee that she is making bank as a social media influencer with those kinds of numbers.

Maybe It Is Worth Your Time

It’s entirely possible to make a living as a social media influencer. And if you’re looking to invest in an influencer, you can reach a mass of people.

It pays to gain a loyal and trusting audience. And if you play the influencer game right, you’ll attract brands and make thousands if not millions of dollars.

If you enjoyed this article, check out more awesome info on influencer marketing at shoemoney.com.



Source link

Thoughts on systemic poverty, fault, and responsibility ~ Get Rich Slowly


I write a lot at Get Rich Slowly about habits that foster wealth and success.

Like it or not, there are very real differences between the behaviors and attitudes of those who have money and those who don’t. This isn’t me being classist or racist. It’s a fact. And I think that if we want ourselves and others to be able to enjoy economic mobility, to escape poverty and dire circumstances, we have to have an understanding of the necessary mental shifts.

The problem, of course, is that it’s one thing to understand intellectually that wealthy people and poor people have different mindsets, but it’s another thing entirely to be able to adopt more productive attitudes in your own life.

In fact, sometimes it’s downright impossible. If you’re poor, you’re often too busy struggling to survive.

The Plight of the Poor

There’s a seductive myth that poor people deserve what they get. If poor people are poor, it’s their own fault. If they wanted to be middle class (or wealthy), if they wanted to be successful, then they’d do the things that lead to wealth and success.

Look, let’s get real. Nobody wants to be poor. Nobody wants to struggle from day to day wondering where they’re going to get money for food, for clothing, for medicine. And studies show that if you give poor people cash, they really do tend to use the money to improve their lives instead of squandering it on alcohol and cigarettes.

Yes, there are absolutely people who do dumb things that keep them mired in debt and despair. No question. Some people are poor because they’ve made poor choices.

But far more people live in poverty due to systemic issues and/or historical legacy than due to a pattern of financial misbehavior. Most poor people were born into poverty and don’t have the knowledge or resources to escape it.

What’s more, poverty actually alters the way people think and behave. It’s great for us to have discussions about the mindsets of millionaires, but the truth is it can be difficult (if not impossible) for poor people to make sense of some of the things we talk about. Here’s a quote from a 2015 article about the psychological effects of poverty (from the magazine for the Association for Psychological Science):

Decades of research have already documented that people who deal with stressors such as low family income, discrimination, limited access to health care, exposure to crime, and other conditions of low [socio-economic status] are highly susceptible to physical and mental disorders, low educational attainment, and low IQ scores…

[…]

Studies also show that poverty in the earliest years of childhood may be more harmful than poverty later in childhood.

Poverty breeds poverty. Economic mobility does exist and people do manage to make it to the middle class, but it’s not easy. On an individual level, people become trapped by a “poverty mindset”. On a societal level, there are systemic and historical issues that exacerbate poverty and make it difficult to escape.

This morning, Kris (my ex-wife) sent me a long Twitter rant from Linda Tirado about how poverty changes your brain. It’s fascinating. (For the past few years, Tirado has been a polarizing figure in poverty debates.) Kris also helped me edit this article, which she thinks is totally misguided. (She’s a crusader for societal change!)

Systemic Poverty in Action

As an exercise, let’s look at the single largest example of systemic poverty in the United States.

For hundreds of years, white Americans enslaved black Americans. Around 150 years ago, slavery was abolished in this country.

In 1860, slaves made up 13% of the U.S. population. After Abraham Lincoln’s Emancipation Proclamation on 01 January 1863 (and after the Civil War), these slaves were made free. But that freedom did not mean they were given an equal playing field with other Americans. Economically, for most black people, things got worse.

During the late 1930s, the Works Progress Administration (or WPA) conducted the Federal Writers’ Project, an attempt to create a sort of oral history of the United States. As part of this, the WPA compiled a 10,000-page collection covering 2000 interviews with former slaves. If you’ve never read it, the Slave Narratives are equal parts frustrating and fascinating. They offer a first-hand view of what life was like for black Americans both during and after slavery.

For purposes of our current discussion, the Slave Narratives clearly demonstrate the origins of black poverty in the United States. Take this volume of stories, for instance, which is peppered with anecdotes about how difficult it was for former slaves to make ends meet after the Civil War. (If you’re offended by a certain racial epithet, even when it’s used in context by members of that race, you should skip the following quotes.)

Here’s Ella Kelley from Winnsboro, South Carolina:

Money? Help me Jesus, no. How could I ever see it? In de kitchen I see none, and how I see money any where else, your honor? Nigger never had none. I ain’t got any money now, long time since I see any money.

And here’s James Johnson (“The Cotton Man”) from Columbia, South Carolina describing his experience:

It ain’t what a nigger knows dat keeps him down. No, sir. It is what he don’t know, dat keeps de black man in de background. […] I sho’ am glad I didn’t come ‘long then. I feels and knows dat de years after de war was worser than befo’. Befo’ de war, niggers did have a place to lie down at night and somewhere to eat, when they got hungry in slavery time. Since them times, a many a nigger has had it tough to make a livin’. I knows dat is so, too, ’cause I has been all ‘long dere.

If you read interviews with former slaves, you see this pattern again and again. During slavery, their basic needs — food, shelter, clothing — were provided (at the cost of their freedom, of course). After slavery, meeting these basic needs became a struggle. The former slaves talk about this period as “the hard times”, and that seems apt.

Obviously, the abolition of slavery was a good thing. But the process failed to provide a means for newly-free Americans to become self-sufficient.

Houston Hartsfield Holloway, a former slave who taught himself to read and write, became a traveling preacher after emancipation. He once wrote, “We colored people did not know how to be free and the white people did not know how to have a free colored person about them.” Colored people didn’t know the rules of the game, and they were playing at a severe disadvantage.

Please note that I am in no way defending slavery. Far from it. I’m merely pointing out that upon emancipation, black Americans did not magically become equal with white Americans. Aside from receiving their freedom, things got worse economically for the majority of former slaves.

Think of it this way: A group of friends is playing Monopoly. Everyone has been around the board a few times. Most of the players have acquired a few properties and some cash. One player has managed to build hotels on Park Place and Boardwalk. In walks another friend, Jenny. The group invites Jenny to play the game, but she has to start at square one. Not even square one, actually. She doesn’t get the same $1500 everyone else got at the start of the game. She gets nothing except the wheelbarrow token. Jenny spends the rest of the game trying to gather enough money to pay the rents when she lands on properties the other players own. She never gets an opportunity to begin stockpiling money so that she can buy property of her own.

In this situation, is it Jenny’s fault that she’s unable to compete with the other players? Of course not! She was handicapped from the start. Yet for some reason, there are people who cannot comprehend that there are large populations in the U.S. that suffer similar handicaps in real life. Yes, it’s true: The economic effects of slavery are still being felt today, more than 150 years after the institution was abolished in this country.

According to the U.S. Census Bureau, the poverty rate for white Americans in 2010 was 11.6%. The poverty rate for black Americans was 25.8%.

A Widespread Problem

That’s just one example. It’s not just black Americans who have been handicapped in the game of wealth.

For most of its history, the United States has been the proverbial melting pot, a place where people from other countries came to escape their pasts and to pursue more promising futures.

Many, many of the people who immigrated to the United States were poor. They fled poverty in Russia or Ireland or Italy or Poland or Germany or Mexico or China only to find a different sort of poverty here. Sure, we celebrate success stories of people who achieve the American Dream — as we should! — but there are just as many stories of families who came to the U.S., worked hard, and…struggled to get by. (Don’t get me started on Native Americans. They’ve been screwed over repeatedly, essentially been forced into poverty. The afore-mentioned Census data revealed that Native Americans had the highest poverty rate at 27.0%.)

By this point, I’m sure some of you are bemoaning the fact that I’m a bleeding-heart liberal. I’m not. And, generally speaking, Get Rich Slowly does not do politics. (I’m doing my best to keep this piece apolitical too.)

I did, however, grow up in poverty. Not ex-slavery poverty, but poverty nonetheless. Post-poverty, I spent nearly twenty years digging out of debt. While my life is comfortable now (and I have plenty of money), that hasn’t always been the case. I have lots of financial empathy for people who are poor because I have first-hand experience with some of the problems they face.

I’m not willing to dismiss the poor as stupid or ignorant or lazy or unmotivated because I don’t believe it’s true. Besides, my aim at Get Rich Slowly is to help everybody get better with money, no matter where they’re starting from.

Solving Poverty One Person at a Time

But here’s where I part ways with my more progressive friends: While I agree that there are very real problems with systemic poverty in this country (and, more so, in the world at large), I think it’s pointless to try to fix these problems on a grand scale. It’s never going to happen. You’re not going to eliminate poverty through government policy. You’re not going to eliminate poverty through redistribution of wealth. You’re not going to eliminate poverty by trying to make wealthy people feel guilty or by inciting class warfare.

Sure, we as a society should foster economic policies that make it possible for everyone to have the opportunity to succeed. No question. But I believe that poverty must be solved one person at a time.

I believe strongly that the best way to help individual people escape poverty — to escape it permanently — is to teach them the skills and give them the tools needed to improve their circumstances, to show them that the quickest and easiest way for them to defeat poverty is to do it themselves.

Your situation may not be your fault but it is your responsibility. It’s up to you to change things for the better. It’s up to you to learn how money works, then use that knowledge to build the life you want. It’s up to you to dig out of debt, shake the shackles of poverty, and work your way toward financial freedom.

Here’s something actor Will Smith posted to Instagram a couple of weeks ago about the difference between fault and responsibility:

If you’re poor, it’s probably not your fault that you’re poor. But like it or not, it’s your responsibility to escape that poverty.

Meanwhile, I believe the rest of us have a responsibility to:

  1. Acknowledge that not everyone enjoys the same start in life,
  2. Create a “level playing field”, removing barriers to class mobility, and
  3. Do what we can to help those who are less fortunate work to improve their situation.

What does that mean for you? I don’t know. Only you can make that call.

For me, it means meeting with anyone who wants to pick my brain. It means publishing material at Get Rich Slowly that can help people of all circumstances better manage the money they have. It means teaching migrant workers how to budget. It means investing in businesses that help people to help themselves.

I do believe that wealthy people and poor people think differently. And I do believe economic mobility is possible in the United States. But I also believe that it’s callous to dismiss poor people as lazy, stupid, and unmotivated. Poverty is a weight. It’s a handicap. It’s a trap. We should be doing what we can to help others escape this trap.

Again, I recognize that this topic is loaded with political ramifications. While we generally steer clear of politics at GRS, I understand that this discussion is going to go there. That’s fine. What’s not fine are name-calling, facile arguments, and gross generalizations. Please keep the conversation civil!



Source link

The secret to a rich life ~ Get Rich Slowly


There’s this idea in our society that if you want something amazing, there’s got to be some secret to getting it.

People want “magic bullet” answers. They think if they look long enough and hard enough then maybe, just maybe, they’ll stumble upon the SECRETS “THEY” DON’T WANT YOU TO KNOW.

Whispers

I’m not judging. I used to be like this too. But now I know different. Now I know there aren’t any secrets. The truth is often hidden in plain sight; you just have to learn to see it.

  • The secret to fitness? Eat real food and move regularly.
  • The secret to being organized? Have a place for everything and keep everything in its place. (Want help? Check out the Konmari Method.)
  • The secret to time management? Learn to say “no” and tackle your most important tasks first.
  • The secret to writing a novel? Write a little bit every day.

I’ve found that the best way to learn the “secret” of whatever it is I want to achieve is to listen to people who have done it (or are doing it) first.

When I wanted to become a writer, I read advice from my favorite authors. When I wanted to get fit, I read interviews with elite athletes. While digging out of debt, I talked to others who’d done it before me.

Two years ago, I read The Snowball, a fantastic biography of billionaire Warren Buffett. There’s a lot to learn from the world’s third-richest man. I believe that soaking up his wisdom — his “secrets” — helps me become a better investor and a wiser steward of my wealth. It also helps me become a better teacher of personal finance. (It was through reading this Buffett bio that I came up with the concept of the wealth snowball.)

Buffett’s advice probably won’t help me become a bonafide billionaire but a guy can dream, right?

How to Reach Financial Freedom

Taking advice from billionaires is great, but in some ways it’s also impractical. That’s why I also do my best to learn lessons from successful people in my day-to-day world. If I want to uncover the “secret” to a rich life, the best approach is to see what works (and what doesn’t) for average people.

Here’s an example. A while back, Jeff from the Sustainable Life Blog asked 39 colleagues two questions:

  1. What inspired your journey to Financial Independence?
  2. What do you think is the most important thing people need to do to reach Financial Independence?

Jeff compiled the responses into a colossal collection of stories and tips about how to achieve financial freedom. If you’re at all interested in this subject, you should bookmark his post: Who else wants to retire early and be free? (Unfortunately, the original article has been “unpublished”. I’ve linked to the archived version from the Wayback Machine.)

Here, for example, is how my buddy Jeremy answered the questions.

Secrets to Financial Independence

Because I’m a nerd, I spent an hour reading everybody’s answers. And I took notes. And I crunched the numbers. Here are the most common responses:

  • Eleven people stressed the importance of a high saving rate.
  • Ten people argued that it’s vital to align your spending with your values — and seven more said something about ignoring everyone else and/or learning to think differently from the norm.
  • Six people believe the most important thing is to spend less — especially on the big things. Two people emphasized income.
  • No other piece of advice had more than three responses.

In other words, when you ask a pool of people who write about Financial Independence what the secret to success is, about half say “spend much less than you earn” and about half say you should be willing to leave the herd to follow your own path.

The Secret to a Rich Life

Put these two ideas together and you have a powerful recipe for a rich life. The secret to a rich life? Save half of your income so that you can pursue your purpose.

That’s the secret.

There’s a real temptation to believe that financial success is more complicated than that…but it’s not. That’s what others have concluded, and that’s what I’ve come to understand after twelve years of reading and writing about money full time. The “secret” to financial success real is this simple. (But, as always, simple and easy aren’t the same thing.)

My entire mission here at Get Rich Slowly is to help my readers do thes two things. That’s why I’m so insistent that folks write a personal mission statement. And that’s why I stress that the most important thing you can do to achieve your financial goals is to boost your saving rate.

To my mind, these two steps are the keys to financial freedom. They’re the secret to a rich life.



Source link

The optimization trap ~ Get Rich Slowly


Since returning to Get Rich Slowly in October, I’ve begun to receive more and more email from readers with questions about what they should do with their financial lives. I love reading what people have to say, and I love trying to help (when I can).

Often the folks who write to me are focused on frugality. They want to make the most of their grocery trips, their book budgets, and so on. Sometimes the questions come from people who want to know which index fund to choose: Is it better to buy Vanguard’s Total Stock Market Index Fund (VTSMX) or Fidelity’s Spartan Total Market Index Fund (FSTMX)?

In other words, many of the emails I receive — regardless the sender’s financial situation — are about what’s best to do with their money.

I think it’s great that GRS readers are making deliberate decisions about their financial lives. It’s awesome that they’re looking to optimize their saving and spending, that they’re clipping coupons and fretting over how to get the best returns on their investments.

However, I worry that sometimes people pay too much attention to small details, to minute aspects of personal finance, while neglecting the Big Picture. It’s easy to fall into what I call “the optimization trap”, to believe that tiny tweaks will make more of a difference than they actually do.

Here’s a real-life example from a reader named Dave:

We get coupons in our Sunday paper. I’ve contemplated getting rid of the paper because it’s sometimes difficult to have the coupons subsidize the monthly cost of the paper. (The paper costs $12.45 per month.) Many times it ends up being a push. Should I ditch the coupons altogether and cancel the paper or stay the course?

Dave’s dilemma is a perfect example of the optimization trap in action. He’s spending $150 per year on a newspaper. By clipping coupons, he’s able to defray some of that expense — but not all of it. Should he cancel his subscription?

My response? This isn’t an important financial decision. Even if Dave only recovers half of his newspaper expense via coupons, it’s only costing him $75/year. If he uses the paper and enjoys it, and if the $75 per year is worth it to him, then he should continue getting the paper.

Meanwhile, I worry that Dave (and people like him) are missing the Big Picture. Small economies are a terrific way to optimize your spending, but they’re a terrible place to start. If you’re at the beginning stages of getting your financial house in order, it’s far more important to ask questions like:

  • How much of your budget goes to housing?
  • How much do you spend on transportation?
  • Have you taken steps to boost your income?

It’s great that Dave wants to be sure he’s getting value from his newspaper subscription, but he should be concerned with this sort of small optimization only after he’s taken care of the Big Picture. Let me say this once again: It’s far more important to get the big stuff right than it is to optimize the small stuff.

Look, I don’t mean to pick on Dave here. Far from it. (Turns out Dave gets a kick out of frugality. “I get excited about saving $2 on sunscreen!” he told me in a follow-up email.) But I want to use his situation to warn Get Rich Slowly readers about the optimization trap.

A lot of times, the optimization trap is a way to avoid dealing directly with more important issues. It’s easier to focus on which online savings account is best than it is to actually put money into that savings account. Choosing to move to a smaller home requires sacrifice; fussing over your newspaper subscription does not. The difference, though, is that the former can help you build wealth while the latter might save you six bucks a month.

Does it make a difference which index fund you choose? Sure. Some. But that’s not nearly as important as choosing to invest in the first place. Does it matter that your home-brewed spreadsheet projects the exact date you’ll reach Financial Independence? Not really. But it’s vital to your financial success that you have a sense of purpose, that you know what your money is for.

I’m not saying that optimization shouldn’t be on your financial to-do list. It should be. But it should be near the bottom of the list, not the top. Optimization is about taking what works and making it work better. You don’t optimize something that’s broken. If your budget is broken, you fix it by making big moves not tiny ones. Once you’ve made the big repairs, then you can concern yourself with optimal performance.



Source link

Teaching kids about money ~ Get Rich Slowly


A few years ago, I polled my Twitter followers to ask: “What did your parents teach you about money? Anything? Did it work?

A lot of folks responded to say that their parents were poor examples:

  • @MoneyMateKate wrote: My parents didn’t teach me — I taught them! I was paying my own dental bills (no insurance) from age 12 onwards with babysitting dollars.
  • @liberryteacher wrote: My parents never had any money, and life was hard. So they taught me by example that that was not a good way to live.
  • @mike_strock wrote: My parents gave me money whenever I asked. Needless to say, that wasn’t helpful later in life. I’m learning!
  • @tcita wrote: My parents taught me absolutely nothing: no chores, allowance, budgeting, spending money, savings — nothing. Though I guess that taught me value of work.

But not all parents fail at training their children about money. Plenty of folks picked up good habits from the Bank of Mom and Dad. Here are some of my favorite anecdotes and tips:

  • Pam from The Turtle Path (a running blog) told me: In junior high, my parents gave me $400 at the beginning of the year (instead of a weekly allowance). They told me I could do whatever I wanted with it, but they weren’t giving me any more money the rest of the year, so don’t ask.
  • @Elle_CM wrote: My mom (and grandma) emphasized always saving a chunk of any income you receive. We used to make Saturday deposits at the bank.
  • Via Facebook, Cynthia wrote: As kids, if we were at the store and saw something we wanted, my dad would say, “Did you bring your money?”
  • @mattwakefield wrote: My dad taught me about the stock market by using a 1/100 scale model of the [stock] market. Got hooked early!
  • @EverydayFinance wrote: My father insisted on no credit-card debt and said, “Everything in moderation.” It worked like a charm.
  • @kingkool68 wrote: My parents printed family checks for my allowance. I could write checks to my parents in first grade! They also gave me monthly statements.

Teaching your children about money is one of the best things you can do to ensure their future success. Financially aware kids become financially aware adults.

How do you teach kids about money — especially if you haven’t yet figured out money for yourself? This is a tough question for me to answer since I have zero experience raising children. That said, I’ve paid close attention to the experiences of my friends and family over the past twenty years. While I don’t have any personal experience with this subject, I’ve observed what has and has not worked for others.

Teaching Kids About Money

The Opposite of SpoiledSome parents try to shield their kids from the family finances, but this often does more harm than good. From the parents I’ve spoken to, the ones whose kids seem to have the best handle on money are the ones who’ve seen how Mom and Dad deal with money, both the good and the bad. If they see the challenges you face, they can prepare for them in their own lives.

A few years ago, I chatted with New York Times columnist Ron Lieber about his book The Opposite of Spoiled, which is all about “raising kids who are grounded, generous, and smart about money”.

“How do children become spoiled?” I asked.

“They’re not born that way,” he said. “We do it to them. Nobody wants to raise a spoiled child, yet it happens all the time.”

“When we talk about spoiled children,” Lieber told me, “the opposite qualities are modesty, patience, thrift, generosity, perspective, perseverance, courage, grit, bravery, prudence, and so on.”

“The thing is,” he continued, “you can use money as a central tool to teach kids about every single one of these. Instead of shying away from the topic, what if we put money at the center of family conversations? What if we assumed not that money subverts values but contributes to them? Because it does. This is the path to financial literacy and financial education.”

From what I’ve seen, there are four steps parents can take to teach their kids smart financial habits:

  • Set an example. Model the behavior you want your kids to learn: If you want them to save, save. If you don’t want them to become compulsive shoppers, curb your own compulsive shopping.
  • Be prepared. Have answers before you need them. Know how you’re going to handle specific situations like allowances or begging for candy in the grocery store. (I know one couple who deflect begging by simply saying, “Sorry, that’s not in the budget.” I love it!)
  • Be consistent. Kids do best with clear, consistent expectations, so think carefully about your family’s money rules before setting them. Don’t be so rigid that there’s no wiggle room but once you’ve set a policy, apply it consistently and fairly.
  • Be honest. Share your success and failures. Tell your kids what you did right and what you wish you’d done differently. Explain your thought process each step of the way.

Most of all, make this learning process interactive. Involve your kids in frugal activities that teach them self-sufficiency, such as gardening, baking, home improvement, and so on. Teach them to comparison shop at by having them help at the grocery store. As they get older, make them financial apprentices: Show them how to pay bills, check a credit score, and buy a car. Teach them that managing a household is a team effort.

Providing Hands-On Experience with an Allowance

One of the best ways to teach kids about money is to give them hands-on experience with an allowance. When they have their own cash to manage, kids are better able to learn the value of saving and the difference between wants and needs.

There are two schools of thought about how allowances ought to be provided.

  • The first says that the money should be tied to grades, chores, and behaviors. This gives kids an incentive to do the right thing. But critics argue that tying an allowance to these actions sends the wrong message. Kids should stive for good grades regardless of what (or whether) they’re paid, say the critics, and doing chores is part of belonging to a family.
  • The second camp says that you should give the allowance without expecting anything in return. Using this method, kids learn about money even if they don’t make good good grades or do their chores. But some people believe this method leads to an “entitlement mentality” in which the kids expect something for nothing.

Most families are probably best off with some sort of hybrid approach: Provide a minimal base allowance that’s paid no matter what, and then add incentive pay for certain chores and behaviors.

Tip: If you want to incentivize good grades without money, consider rewarding with something else your child values: a later curfew, a trip to a concert or pro sporting event, golf lessons, more time with friends. This should encourage the behavior you want without tying it to money.

Whichever method you choose, use the allowance as a chance to teach your children the value of money. Instead of letting them spend it on whatever they want, consider a system that divides the money for specific goals.

You might, for example, use three jars (or envelopes) labeled:

  • Save (30%). This money is for long-term goals, such as buying a bike or a baseball mitt. Let the child decide on the goal — with your help.
  • Share (10%). The money in this jar (or envelope) is for giving to somebody else. Your kid can decide where it goes — whether it’s a charity or just somebody else in need (even a sibling!). The point is to share with others.
  • Spend (60%). There are no restrictions on the money in this jar. Your child can spend it on comic books or bubble gum — whatever strikes her fancy.

A decade ago, my friend Lisa tried this system. She wrote a guest post here at GRS about how she had her kids divide their allowance into four jars: Spend, Save, “When I’m Old”, and Donate. (If you don’t want to use jars or envelopes, you can now purchase money-savvy piggy banks with slots for Save, Spend, Donate, and Invest.)

An allowance is a great way to teach kids about money

Final Thoughts

Last month, my friend Doug from The Military Guide told me about how he raised his daughter to become a financially capable young woman.

“We got her involved from a young age,” Doug said. “My daughter got to see how my wife and I made financial decisions. But the best thing we did was to start her on an allowance. We gave her money and let her do what she wanted to do with it. She made some mistakes, sure, but we were there to help her. And I’m glad that she made those mistakes when she was thirteen years old instead of 23 or 33.”

I think Doug’s approach was smart. So far, it seems to be paying off. Now that she’s an adult, his daughter is making smart choices and is well on the path to future financial independence.

Many of us were raised with faulty and/or incomplete money blueprints. We entered adulthood not knowing how to handle money responsibly. I believe one your most important jobs as a parent is to give your children accurate, reliable money blueprints that will help them establish a solid financial foundation — then construct a life where they don’t have to worry about money.

Ultimately, the most important thing is to get your children thinking about and interacting with money from an early age. It’s better for them to make money mistakes at thirteen years old than at thirty!



Source link

A magazine for teen entrepreneurs ~ Get Rich Slowly


Teen Boss magazine“What in the world are you doing?” Kim asked me the other day. We were in line at the grocery store, and I had just placed a magazine in our pile of stuff. “Are you buying a fashion magazine?”

“It’s not a fashion mag,” I said. “Look! It’s awesome! It’s a magazine targeted at teaching teen girls how to become entrepreneurs.”

And that’s how I discovered the wonderful world of Teen Boss.

Last summer in an interview with the blog Fashionista, Teen Boss editor Brittany Galla said that the magazine aims to fill a glaring market gap: “With the influence of Shark Tank and social media, we’re seeing a huge increase of tweens and teens who are looking to create their own business or dream about running their own business one day.”

Up front, let me say that Teen Boss isn’t perfect. In fact, there are lots of folks who think the magazine is awful. Slate called Teen Boss “a horrifying artifact of our time“.

While the critics are right that the content in Teen Boss skews shallow and superficial, I think they’re wrong to dismiss the magazine entirely. I believe that, on the whole, Teen Boss is exactly the sort of thing we should be encouraging our kids to read. It’s positive. It’s inspirational. It encourages self-reliance.

There’s no doubt that much of the magazine’s content is focused on fashion and social media (which is why some adults have a problem with it). I’m okay with that. Lots of adult entrepreneur publications are focused on social media nowadays too.

A horrifying artifact of our time?

My issue of Teen Boss profiles dozens of teen entrepreneurs, including:

The issue of Teen Boss I purchased also includes business advice from adult CEOs, a collection of business lessons from fictional characters, a huge section on creating a vision board, and examples of business ideas that did not work out.

My products make girls feel empowered

I started an online cooking show

My lollipops are good for your teeth

Despite its flaws, I think Teen Boss is awesome. I’m sad that adults have been so quick to dismiss what looks like a positive, inspirational publication. Would they rather have our kids reading Seventeen and People?



Source link

A Legal Guide for Unmarried Couples: Frederick Hertz Attorney, Lina Guillen Attorney: 9781413323795: Amazon.com: Books




Source link

The cost of pet ownership ~ Get Rich Slowly


This article is part of relationship month at Get Rich Slowly.

As a dental hygienist, my girlfriend Kim meets lots of interesting people and has lots of interesting conversations. Last week while cleaning a patient’s teeth, the topic turned to pets.

“Two years ago, we didn’t have any animals,” Kim told her patient. “We were on the road in an RV. Today? Today we have three cats and a dog. Honestly, I’d be fine with more animals. We love them.”

“We love our animals too,” her patient said. “We might love them a little too much. Recently, we moved. I’d say 90% of that decision was based around our dog. Is that wrong?”

Kim laughed. “It’s not wrong,” she said. “We did something similar ourselves.”

Pets are expensive, Kim and her patient agreed. Are they worth it? Yes. Yes, they are. But as with most things in life, pet costs can quickly get out of control if you let them. It’s important to find a balance between the needs of your animals and your own financial well-being.

For the past two years, Kim and I have been working to find where that balance is for our family.

Meeting Tahlequah

Near the end of our 15-month RV trip around the United States, Kim and I stopped to visit my cousin in Tahlequah, Oklahoma. For a week, we left behind modern life to enjoy the slower pace in this isolated 100-acre creek hollow. We enjoyed the communal meals (during which several families dined together at once). We marveled at the light show provided each evening by the fireflies. (There are no fireflies in Oregon.) And we lavished love on all of the animals: the cows, the chickens, the cats, and the dogs.

Especially the dogs.

A few weeks before we arrived, one of the farm dogs had given birth to a litter of puppies. Kim fell in love with them. “I think I want to take one home with us,” she said.

“Maybe on our way back through,” I said, trying to be the voice of reason.

Kim meeting puppies

Our plan was to turn east toward Memphis, Mississippi, and Alabama. We’d then drop down to the Gulf Coast, cut over to New Orleans, then make our way into Texas. “Dallas isn’t far from here,” I said. “When we get there, then we can decide whether or not we want a dog.”

For the next month, Kim and I spent our evenings reading about dogs. Both of our families had dogs when we were growing up, but neither of us had owned one as an adult. We learned about different training philosophies. We discussed discipline. We discussed costs. We discussed what adding an animal would mean for our relationship as a couple.

“Do you still want the dog?” I asked Kim a few weeks later as we pulled into Dallas.

“Yes, I do,” she said.

After spending a few days with my pal PT (from PT Money), we returned to my cousin’s farm in Tahlequah. Kim’s puppy was still there. “Hello, Tahlequah,” Kim said as she petted the pup. “How would you feel about moving to Oregon?”

Tahlequah seemed happy about the idea. Kim was even happier. She turned to me and smiled. “With this dog, I thee wed,” she said. And that’s how we entered a new phase in our lives.

Puppy Love

We’ve now had Tahlequah (or Tally, as we call her) for 18 months. The experience has been awesome and frustrating at the same time.

Tally is a mutt but she’s 100% hound (a mixture of beagle and mountain cur, the latter of which is the newest registered breed at the AKC). She’s ruled by her nose. If she gets on a scent, her entire brain shuts down and instinct takes over.

Yesterday, for instance, I was walking her off-leash (with permission) through the neighbor’s property. She stumbled upon the spot where the local deer had bedded down the previous night and she was off like a bolt, streaking across other neighbors’ properties (without permission). It took ten minutes to get her back on leash. (Or just now, as I was writing this paragraph, she spotted the squirrel that lives under our house. She’s now barking barking barking incessantly out the window and she will not stop.)

Mostly, though, we love her — and she loves us. Kim and I have become those obnoxious pet parents who take their dog with them everywhere. (We’re not even ashamed of it!)

Driving with Tahlequah

At first, adding a puppy to our lives seemed like a reasonable financial decision. Before we picked her up, Kim and I spent maybe $100 or $200 on puppy supplies, such as a crate, a collar, a leash, and a variety of toys and tools. After we left my cousin’s house, we stopped for a couple of days in southern Kansas. While there, we took Tally to the vet for a checkup and her first series of shots. That vet visit was under $100. (In retrospect, that’s because we were in southern Kansas.)

“This dog isn’t so expensive,” I said. Hahaha. Little did I know…

Pets Are Expensive

Upon returning to Portland in June 2016, the cost of pet ownership began to mount.

  • First, vet visits here are more expensive.
  • Second, once we had settled at home, we began acquiring more dog stuff: toys, treats, and so on.
  • Third, Tally turned into a destructive force of nature.

In under six months, our puppy probably did a couple thousand dollars worth of damage. This is embarrassing to admit, but it’s true. Tally destroyed shoes — including Kim’s favorite pair of leather boots. (Eventually we realized that if we sacrificed one pair of shoes to her, Tally would leave the other shoes alone.) She ate eyeglasses. She devoured my dental retainer. She gnawed on the furniture. She peed on the carpet. She scratched at the doors.

“This dog is expensive,” I said.

Apparently, Kim and I are gluttons for punishment. One animal was not enough. Within a month of returning to our condo in Portland, we decided to expand the family. We picked up two kittens from a local rescue. And not two ordinary kittens. Two sickly kittens.

Over the next few months, Avery and Bagheera made several vet visits, both to get their initial checkups and booster shots, and to make sure they were recovering from whatever respiratory infection they’d suffered from as babies. Meanwhile, we discovered the cats could be just as destructive as dogs. Our kittens were hell-bent on shredding anything made of cloth or paper. They peed on the bed. They destroyed the blinds.

“These cats are expensive,” I said.

All Creatures Great and Small

Throughout last winter, Kim and I enjoyed bonding with our three beasts. The five of us made do in our condo. We walked the dog through the park next door. The cats got a taste of the outdoors from our balcony — but they wanted more. In the evening, all of us snuggled together while binge-watching All Creatures Great and Small.

“Maybe we should move,” Kim said one day last March.

“What do you mean?” I asked.

“It doesn’t feel right to keep these animals trapped in a fourth-floor apartment,” she said. “They’re wild beasts. They want to be outside. They need space to roam.” I agreed with her.

While the animals weren’t the only reason we decided to move last year, they were certainly a major consideration. As we hunted for houses in April, we looked for a lot where we could let the beasts outside to roam. Eventually, we opted for a one-acre lot in a semi-rural neighborhood. It was a good choice.

This place is like dog heaven. We have a large fenced yard that Tally can use whenever she wants. At least once per day — sometimes twice — we take her on a two-mile walk through the neighborhood. She sniffs and sniffs and sniffs, tracking the squirrels and deer and coyotes. She digs in the ditch to uncover mice and moles.

Meanwhile, the cats love it here too. They’re able to hunt whenever they want. (In 45 days this year, they’ve caught twelve critters.) They like going outside to bask in the sun. There are plenty of trees to climb and dark places to hide. With the cats, though, there’s an element of danger. As I said, there are coyotes here, and we lost Bagheera to them at the end of October. (Yes, I’m aware that many people believe cats should remain indoors. Kim and I believe exactly the opposite. We’re aware of the risks faced by outdoor cats, but believe its cruel to keep them confined inside.)

After Bagheera disappeared, Kim and I had a discussion. How many animals should we have here at our country cottage? “You shouldn’t ask me,” Kim said. “If it were my decision, we’d have a whole farm: goats and horses and chickens and cows. Plus, more cats and dogs.”

I’m not willing to turn this place into a full-fledged farm but I was willing to bring home two new kittens. At the end of November, we added Savannah and Bisbee to our menagerie.

We now share our home with one dog, three cats, and a whole lot of chaos.

Our current crop of cats

Enough Is Enough

Because I’ve been carefully logging every penny I spend, I’m able to see how much our animals cost us. Last year, I spent $1763.25 on the pets. Kim — who does not track her spending — spent several hundred dollars too. My best guess is that we’re paying $200 per month (or about $7 per day) to care for our companion animals. They are not cheap.

Our pet spending (2017)

In the nearly three months we’ve had the new kittens, I’ve spent $1076.83 for their initial examinations and shots. On Monday, we took Tally and Avery for their annual checkups. The dog cost us $376.38 and the cat cost us $404.45.

That’s $1857.66 I’ve paid to the vet in three months. To be fair, I shouldn’t have any additional pet fees this year — barring illness or injuries — but there are still ongoing expenses for food, treats, toys, litter, and petsitting.

“Wow,” Kim said on our drive home from the vet. “That was twice as expensive as I thought it would be.”

“Yeah,” I said. “I hate how much it costs. I mean, I want to make sure our beasts are healthy, but where do you draw the line? How much is too much to spend on a cat? Or on a dog?”

“I’m willing to spend as much as we need to keep the dog healthy,” Kim said. “But we live in the country. Our cats go outside. As much as I love them, we have to be realistic about it. They have great lives, but those lives will probably be short.”

“Well, now that everybody is up-to-date on their basic shots, now that we know everybody is healthy, maybe it’s time to stop doing annual checkups for the cats,” I said. “What do you think about taking them in only if they’re sick or hurt?”

“I think that’s how it should be,” Kim said. “That’s how we did it when I was growing up.”

“Same here,” I said.

Special offer: My brother Tony owns a business that produces animal nutritional supplements, including dog treats. For the rest of 2018, he’s offered to give GRS readers a 20% discount (and free shipping) on orders for dog products totalling over $20! Visit Majesty’s Animal Nutrition and use the promo code tally20 at checkout. (I have zero financial stake in this, by the way.)

Cutting the Cost of Pet Ownership

Kim and I have decided that, in effect, our cats only have catastrophic health care coverage. (Although I’m worried that this could be a false economy. We’ll see.) Meanwhile, we’re discovering ways to cut the cost of pet ownership — especially on the everyday stuff. For example:

  • We’ve been drying dry dog food and dry cat food from Amazon via their “subscribe and save” program. About once every three months, we need an extra bag of food. When we do, I buy it at Costco.) We also buy treats via Amazon.
  • We’re buying wet cat food at the local Wal-Mart, which seems to have the best prices.
  • We’ve learned to buy our pet toys at the thrift store, not the pet store. Two weeks ago, for instance, we bought Tally six or seven stuffed animals (stuffed animals intended for kids, not for dogs) and paid less than $20. Once garage sale season begins, we’ll explore that route too.
  • When we can remember, we buy cat litter in bulk at a local pet store. It’s way cheaper than buying smaller packages.
  • When possible, we’re paying people we know to take care of our animals when we’re gone. Not only is this better on our pets, but it’s less expensive for us.

Thankfully, Tally’s destructive nature has diminished as she’s become a teenager, which saves us money. She hasn’t shaken it completely — she ate my best hat a few weeks ago — but mostly she’s learned what she can chew on and what she can’t. (More importantly, Kim and I are very vigilant about leaving stuff where the dog can get to it.)

We would love to hear experiences from other pet owners. Do you have animals? How much do they cost? How much do their annual vet visits cost? Do you have pet insurance? Why or why not? If you do have it, how do you feel about it? What other tips do you have for keeping the cost of pet ownership low?

On a semi-related note, here’s an amazing story about a woman who adopted an older dog — only to discover it’s the same dog that she had to give up when she was a girl.



Source link

Should you give money to your adult children? ~ Get Rich Slowly


This week’s reader question is an example of why I love the “ask the readers” feature here at Get Rich Slowly. I get to write about situations that otherwise would never occur to me!

Karen writes because she’s having trouble with two of her kids:

I keep getting sucked into helping two of our children who can’t seem to get it together. I don’t want to see them on the street but they keep making dumb mistakes. What do you do when faced with a kid going to prison for lack of funds to pay fines? What about a different kid who is at risk of becoming homeless? This is tough to watch. (I really prefer dogs!) When does helping a family member financially become enabling? Or is it always enabling?

I find this situation fascinating because there’s a disconnect between my general advice about giving money to adult children and my specific advice for Karen.

Why You Shouldn’t Give Money to Adult Children

My standard advice is: Don’t help your kids financially. Doing so harms both you and your kids. A decade of reading about money and hundreds of conversations with parents have brought me to this conclusion: Giving adult children financial support is, generally speaking, a bad idea.

Some people don’t want to hear this, especially coming from me. (I have no children, so that disqualifies my advice in the eyes of some folks…as if it’s impossible to recognize that a person has a broken bone if you’ve never had one yourself!)

But it’s not just my opinion. In The Millionaire Next Door [my review], authors Thomas Stanley and William Danko devote two entire chapters — 69 pages! — to “economic outpatient care”, the substantial financial gifts some parents give their adult children (and grandchildren). Their research indicates that “the more dollars adult children receive, the fewer they accumulate, while those who are given fewer dollars accumulate more”.

The authors note that some forms of economic outpatient care, including subsidizing an education and funding business ventures, have a strong positive influence on the recipients. (They teach the children “how to fish”.) But most financial assistance simply creates a cycle of dependence:

What is the effect of cash gifts that are knowingly ear-marked for consumption and the propping up of a certain lifestyle? We find that the giving of such gifts is the single most significant factor that explains lack of productivity among the adult children of the affluent.

Stanley and Danko write about four specific ways in which cash gifts to adult children create problems:

  • Giving encourages more consumption than saving and investing. In particular, Stanley and Danko warn about gifts of house down payments.
  • Gift receivers in general never fully distinguish between their wealth and the wealth of their gift-giving parents. They believe they are entitled to the things their parents have, and feel resentment if the wealth is given to somebody else.
  • Gift receivers are significantly more dependent on credit than are non-receivers. They use credit in order to sustain their lifestyle of consumption between gifts.
  • Receivers of gifts invest much less money than do non-receivers. The authors claim that gift receivers are “hyperconsumers”, only thinking of now. They have come to expect that their financial needs will be met by their parents, so they don’t plan for the future.

I’ve known people who received financial assistance from their parents or grandparents. Most of these people have struggled with money in some way. They spent too much. They didn’t feel the need to take a job. They put off making financial decisions because there was no need to do so. One time, for instance, I had an affluent friend who received a $25,000 gift from his grandparents. Rather than invest the money, he bought himself a new car. (There was nothing wrong with his old car.)

Obviously, not everyone who receives financial assistance from their parents will fall into this trap. But accepting such gifts often leads to trouble.

Note: There’s another downside too. When parents give money to an adult child, they’re compromising their own financial health. They’re sacrificing saving for retirement (or other goals), which means they’re hurting themselves as well as their kids! In my own life right now, I’m watching as two different sets of parents struggle to make ends meet because they’re giving up money they need for themselves in order to help children who are perfectly capable of providing for themselves — except they were never encouraged to leave the nest.

What If Your Kid Will End Up Homeless?

Now, having said all this, what about Karen’s situation? She has one child who is at risk of going to prison because she (or he) hasn’t paid some fines. The other is at risk of ending up homeless. Should Karen simply sit back and allow her children to suffer?

I’ve had two weeks to think about this question. Some days, I feel as if there’s no way Karen should let her kids go to jail or end up homeless. Other days, I feel like she should absolutely let them experience the consequences of their actions. Most of the time, however, I feel like this is a tough call and not something a stranger can decide.

So, I tried to practice some financial empathy. I ask myself what I would do if I were in Karen’s shoes. What if I did have kids? What if they made some stupid-ass choices? (That’s how Karen described her kids when she wrote to me, which cracks me up.)

Honestly, I don’t know what I’d do. I have no clue what the right decision is in this situation.

What do you think? Is it always a parent’s duty to protect their children, even when they’re adults? If you ended up in jail because you did something dumb with money, would you expect your parents to bail you out? If you were at risk of becoming homeless, would it be your mom and dad’s responsibility to help you? What’s the right choice here? Is there one?



Source link

Super Business Girl ~ Get Rich Slowly


Long-time readers know how much I love child entrepreneurs. This probably stems from my own experiences having kid-sized businesses when I was young. Whatever the reason, I can’t get enough stories of kids who build their own businesses and learn to take charge of their lives from a young age.

Here, for instance, is a 2014 story about Asia Newson, an 11-year-old girl from Detroit, Michigan. She runs a company called Super Business Girl.

Asia, who must be fourteen by now, has help from her parents but she’s the driving force behind Super Business Girl. Together, they manufacture and sell what their website describes as “the world’s best candles“.

Asia’s poise and entrepreneurial savvy have garnered a lot of attention. The founders of one Detroit start-up incubator believe she has a better understanding of business than most adult entrepreneurs. They’re helping her develop her skills. In return, Asia is teaching what she knows to other kidpreneurs.

Here’s Asia’s January 2015 appearance on Ellen, which sheds some more light on this young businesswoman:

“My daddy was a candle salesman,” she says. “He also made candles. He taught me and I loved it, loved it, loved it.” More than making candles, Asia loves selling them. Her enthusiasm is infectious. I wish that when I was a salesman for so many years, I had loved it the way she loves it! I might have been better at the job.

Asia has grand ambitions. She wants to go to college, become a lawyer, become mayor of Detroit, and then become President of the United States. I think she just might meet all of those goals. I wouldn’t bet against her!

For now, though, if you’re in the market for some candles, go check out Asia’s online store at Super Business Girl.



Source link