April 2015
Money Talk: A Lifetime of Learning

As a regular contributor to The New York Times and the author of two books, Carl Richards knows the value of a good story.


Here's one he loves. It comes courtesy of Ron Lieber's new book, The Opposite of Spoiled. Lieber, who also writes a personal finance column for the Times, wrote in his book about Scott Parker from the San Diego area. His family didn't discuss money much, but he wanted that to change. So Parker went to a bank and withdrew his entire monthly paycheck in $1 bills, went home and piled all of the money on the dining room table. He then gathered his family.


"I definitely had their attention," Parker says in Lieber's book. "And then I just started peeling away."


Parker took away the money used for the family's tithe, income taxes, and mortgage and insurance costs. He took more away for various bills, groceries, gas and car payments. Then he removed the money used for expenses such as trips for soccer and outings to restaurants. By the time he was done, there wasn't much money left on the table. Parker says he was sure his children had never added up all of the places that a paycheck needs to go, and that the exercise left a strong impression on them.


Richards counts Lieber as a friend, colleague and mentor. But that's not why he's such a fan of Lieber's book and the story of Scott Parker and his stacks of money.


"That story is amazing to me," says Richards, the director of investor education for the BAM ALLIANCE and author of The Behavior Gap and the recently released The One-Page Financial Plan. "It's so powerful, so tactile, so real. Talking about money with our children is something we can all do, if we just get over the fear of it."


The Opposite of Spoiled offers real-life stories that touch on a range of money topics that can arise when raising children, from allowances to cell phones to part-time jobs to college tuition. As the book states, "Good parenting means talking about money with our kids much more often. When parents avoid these conversations, they lose a tremendous opportunity -- not just to model important financial behaviors, but also to imprint lessons about what their family cares about most."


Richards, in fact, believes the reluctance to talk about money is one of the biggest money mistakes people make, but that Lieber's book offers myriad examples of the value that can come from having such discussions with children. He says reading about these conversations not only gives us permission to have them with our children but also provides us with a template to guide these very conversations.


Richards, who has four children, offers a tip for getting these conversations started -- and it begins with simple silence. "There's such a value in just pausing, building in a pause, when kids ask tough money questions. It helps you avoid the knee-jerk reaction of just saying something to avoid the subject or say, 'We don't talk about that.' " Richards, instead, has found it beneficial to say, "Tell me more."


He says: "By asking why they are asking, I often get a whole new viewpoint on where their question is coming from. It provides an opportunity to have a conversation, for you to start listening to understand instead of listening to judge. So often, I think we are so quick to say yes or no or I agree or I disagree instead of listening to understand. To me, that's a powerful thing.


"Who doesn't want to have cool conversations with their kids, and money provides a really awesome framework because it's so closely tied to values. And we all at night want to have better relationships with our kids."


BAM ALLIANCE Foundational Film: "The Science of Investing"

In this film, "The Science of Investing," Director of Research
Larry Swedroe explains how we base everything we do and what we recommend on the latest academic research, not our opinion. "Investing, in order to be successful, not only requires a deep knowledge of the theory of finance, an understanding of markets, but you also need a deep history to understand how markets work and what products mix well together to build a portfolio."


" My job is to take these often 50- to 70-page dense academic papers and write it up in plain English so that advisors and investors alike can understand first, what did the researchers look at; two, what did they find; and most importantly, what implications does that have for our investment strategy."  

-- Larry Swedroe, director of research for the BAM ALLIANCE 
Retirement Education From the AARP

Tips for Singles

Manisha Thakor of the BAM ALLIANCE offers insight in 

this article that looks at strategies that can help singles when it comes to retirement planning.

Take the Quiz

From IRAs to mutual funds to how stocks and bonds factor into retirement planning. The AARP wants to see how well you can do on this RICP Retirement Income Literacy Survey