One question we hear often is, how do I teach my kids about money?

We’ve shared our conversation with Marilyn Wechter about subtle ways to set our kids up for success with money and talked about how not to be a snowplow parent, but what about the nuts-and-bolts? How can we teach our kids the basics of saving, the power of compound interest, and how capital markets work? In other words, how do we make finance fun?

Recently, John and I had a crash course in teaching a trio of teenagers. We thought we’d share some valuable takeaways you can incorporate into your own “money talk” with your kids. 

The meeting’s highlight was “Roll with the Market”, a dice game that aimed to replicate the stock market. We also introduced them to our version of Finance 101: budgeting, savings, goals, credit cards, and Rick Hill’s favorite Rule of 72.

In “Roll with the Market”, the kids decided if their money was “in” or “out” through 10 rounds of dice rolls. The game gave the kids a taste of what it’s like to be invested in the stock market, simulating a rising or falling market’s emotional effects and changes to their investments. To our surprise and satisfaction, the three kids stayed in the market all 10 rounds, never once deciding to sit out (equivalent to going to all cash). Even at this young age, they were able to intuitively understand and take the long view!

Here are a couple of tips for keeping children engaged as they learn:

• Use cold hard cash – Once we threw some cash on the table and got them involved in helping manage it, they were hooked. 
• Gameify the essential topics – Making the lesson a game reframed their idea of money from obscure to practical and made it fun! They were also able to practice and absorb the lessons without just listening to us drone on. 
• Make it relevant – We believe the real power of wealth lies in creating freedom and options to lead the life you choose. By asking a couple of pointed questions, we were able to help them understand that money can power their dreams, even now. The key was showing them money matters today – not just in the future. Each member of the family was totally engaged, asking great questions, participating in thoughtful conversation.

If the idea expressed here sounds good to you, let us take “the money talk” off your hands. Contact us about scheduling a family meeting. You never know what small spark will set off your child’s long-term success with money.

If you’ve been hunting around our website recently, you might have noticed a link to our Client Relationship Summary (Form CRS).  This new regulatory document helps investors answer the question, “Is Hill Investment Group the right investment advisor for me?” It’s aimed at anyone who is curious how we can help. 

In our opinion, it’s a great move by regulators. It makes important information about advisors and broker-dealers crystal-clear, like fees, services, disciplinary information, and their fiduciary obligation (audio clip). As an existing or prospective client, we encourage you to check it out. You might learn something about us you didn’t know before, maybe even ways in which we can be more helpful to you!

We work for our clients. It’s that simple. We value the work of our partner firms (mutual fund companies and custodians), but we never forget who we serve and our fiduciary duty to them. To that end, you should know we routinely ask our partners for better options and lower fees – when and where appropriate. Hill Investment Group is pleased to announce significant fee reductions related to 14 funds in our recommended portfolios. The largest reduction is a 20% drop in fund expenses and the smallest change is 3.6% in one of our fixed-income solutions. Big or small alterations, it’s good news and savings for clients. We will not list individual funds here, but look forward to sharing the details with you during your next review. For now, we end this post with a quote from Dimensional Co CEO Gerard O’Reilly:

“We expect to do better than benchmarks and peers, after fees, so we fight for every basis point. We continue to gain insights from research and innovate across all aspects of our process.”