Updated on 08.09.08

Review: Young Bucks

Trent Hamm

Each Friday, The Simple Dollar reviews a personal finance book of interest.

young bucksWriting about kids and money is a fairly sticky topic. I’ve read several books on the topic and only bothered to review a few on here. The best one I had read so far, David Owen’s First National Bank of Dad, was really entertaining and offered some thought-provoking material, but in David’s own anecdotes, he didn’t practice what he preached, leaving me wondering what the point was.

For the most part, those books quibbled over issues like whether or not to give your child an allowance, how to convince your child to save, and how to introduce various money topics, such as credit cards. Troy Dunn, the author of Young Bucks, takes a different tactic. His focus is entrepreneurship for kids – how can you show your kids how to work for their own money in a fairly safe environment and also see the clear rewards of their effort?

Dunn is a self-made millionaire and the father of seven children, so he has extensive experience in both the entrepreneurship and parenting arenas. Do these combine to make a thought-provoking book of parenting advice about personal finance, or does it fall flat like many others?

One – Millionaire Mentality
Dunn argues right off the bat that there are three harmful myths that parents tend to share with their children that subtly guide them away from entrepreneurship and successful money management. First, a college education is the key to business success, which is something I’ve become less and less convinced of myself as of late. Second, a job with a good corporation will secure your child’s financial future. I don’t agree with that one, either – all it takes is a memory of Enron to show how fleeting even the biggest corporations can be. Third, children shouldn’t have to worry about money when they’re young, as there’s plenty of time to focus on finances when they’re adults. I think there’s a general sense that this third one is a myth, at least among people who think about their finances carefully. So many of us who are in debt trouble today came into that situation because of a lack of experience with money in our childhood.

Two – Mentor Magic
Dunn argues that you should be a business mentor to your children, encouraging them to think creatively about the things that they can accomplish with their time, their work effort, and their ingenuity. Have you ever told your kids to enjoy their childhood because when they grow up, they’ll have to work? That paints an extremely negative view of work, one that’s going to rub off on your kids. Instead of thinking of it as a fun challenge that they throw their passion into, they instead dread it. Change that by encouraging their creativity, offering only suggestions to channel it a bit, not stifle it. Even more importantly, Dunn encourages no allowances at all and no splurging, either. While that seems really harsh to some, his point is that an allowance encourages your children not to work and plan for what they want. Instead, you should encourage them to be little entrepreneurs, earning that money.

Three – The Millionaire March
What are your child’s natural talents and traits? What adjectives do you use when you think about your kid? Almost all of those, from stubborn to outgoing, are elements that point a child towards something productive they could be doing with their time. Dunn suggests simply taking those traits and coming up with an idea for a small business that the child could run. What fits their natural tendencies? The key, though, isn’t to push your great idea for them on them, but hold onto it and slowly push them towards developing it themselves.

Four – Business Building Blocks
So you have this great idea for how your kids could make money for themselves, but have you thought through it clearly? Dunn spends this chapter outlining some of the key things you should be thinking about well in advance of your kids so you’re prepared for it, from safety and seed money to legal requirements and logistics. Dunn also suggests starting as young as possible, assigning your youngest children (five and under) simple tasks and paying them immediately for them. We’ve already started doing this a bit with our two year old, believe it or not – he earned fifty cents for picking green beans the other day (seriously, yes, a two year old picked enough green beans for a family supper and earned fifty cents for his work). When they’re between the ages of six and ten, you should start them on very simple businesses – like, for example, collecting aluminum cans in the neighborhood. He suggests trying things at this age because they’re still happy for attention and deeply enjoy spending time with you. After that, it gets trickier – you’ll have to convince pre-teens that things are possible.

Five – The First Meeting
So, how do you get started? Dunn suggests waiting until there’s something that they want that they can’t afford, giving them incentive. Then, suggest the idea of starting their own little business with questions, not by offering commands that seem like more work. “Why don’t you try earning the money?” Allow them to be creative, then just guide that creativity with some more questions, and eventually transition that into coming up with a business plan with them. Just let them lead – ask questions that makes them think about all of the things you’ve already considered. That way, when the idea comes to fruition, they’ll feel as though they built it.

Six – Business Begins
Once the ball is rolling, you’ll have to guide your child through many of the logical steps of a basic business. What exactly are you going to provide? What is a sensible price? How will you market it? What are the startup costs, and how will those be handled and repaid? As a parent, you should consider these things and offer your child good suggestions that will help them out. Show them the prices of comparable items. Show them how other businesses advertise – what makes an effective poster? Let them decide, but be there to help them along and help them avoid any obvious pitfalls.

Seven, Eight, and Nine – Big-Buck Businesses
Here, three chapters are devoted to ideas for microbusinesses for your children to take up. In all, twenty eight businesses are suggested over the three chapters, with a detailed description, the startup costs, needed materials, potential income, and suggested marketing strategy for each one. While reading these, many others came to mind – this is really just a starting point to get your (and your child’s) creative juices going.

Ten – Business Pitfalls
Obviously, such a business is not going to be all roses and cherries. One big problem that children face at the lemonade stand is people who play hardball – they “power negotiate” or they simply don’t pay up for the service provided by the child. Don’t let your child get disillusioned – talk to them about it seriously. Help them to develop a healthy sense of skepticism (but not paranoia or mistrust). Eventually, they’ll be able to apply that skepticism successfully in other aspects of life.

Eleven – Sweet Returns on Passive Revenue
Your child is earning money and building up a nice little amount. What should they do with it? At first, obviously, they’ll probably purchase the item they’ve been talking about, but after that, it’s a good idea to encourage them to do something wise with it. Perhaps they can hire an assistant, paying that assistant some portion of the proceeds to help with the business. They might also want to reinvest it, buying a better lawn mower or more supplies. They may also want to invest it in something more than just a savings account. Again, talk with your child about these decisions and make sure they choose one that makes sense.

Some Thoughts on Young Bucks
I think you have to be entrepreneurially minded to encourage your kids to be entrepreneurially minded. Most of this advice works best if you’re an entrepreneur (or at least self-employed) with kids, because most of the thought process here will already be natural to you.

The “no allowance” thing is interesting. I think the idea is strong, though, as long as the child has the opportunity to earn direct rewards for extra work. Dunn points towards this with young children in the fourth chapter.

I think this is much more like the direction that I’d like to encourage my children to go than some other books I’ve read. I’d like my children to see the basics of personal finance management as young as possible, see the connection between work and money, and see the value of saving and budgeting as early as they can and repeat it for as long as possible.

Is Young Bucks Worth Reading?
If you have kids, I think Young Bucks is well worth reading. The idea of encouraging your children to follow an entrepreneurial path is worth serious consideration. I know in my family it’s one that we’re pondering over as we watch our young ones slowly progress from being babies to being toddlers, then on to being young children. How will we teach them how to spend and use money wisely?

Given that, I don’t think Dunn’s overarching ideas about child entrepreneurship are necessarily something every parent will agree with. Young Bucks is, in some ways, a perspective book – it’s a how-to for encouraging your child to be an entrepreneur. But do you want your child to be an entrepreneur? That’s a question you really have to answer for yourself, and this book just provides one side to that argument.

From my perspective, though, Young Bucks was a very enjoyable and thought provoking book to read. It goes up right next to First National Bank of Dad as the best reading I’ve come across for thoughts and interesting reading on how to financially educate your children, and it tackles the topic in a much different fashion. Well worth reading if you’re a parent of young children.

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  1. K says:

    Last summer my husband was at home during the day and some neighborhood kids came by selling paper bookmarks that they had colored themselves for 10 cents each. When he asked what they were raising money for, they said “ourselves!” He bought one and actually paid them 25 cents because that’s all he had. We never used the bookmark but I think it was great of him to support their entreprenurial spirit.

    I think this sounds like a good book, although I disagree with the no allowance thing. Many people argue that a teenager’s job is to do well in school and they should still have some money to practice budgeting with even without having to put in extra hours above their schoolwork. But teaching your kids to think creatively about how to earn money is a good skill for them to have.

  2. Jaymo says:

    I am very interested to see/hear how you more deeply approach this subject in the future, Trent. It seems to me a really good approach is to present the fundamentals of entreprenerialship or excellent financial technique to your children in the form of play. I don’t see any reason why these basic concepts can’t be fun and completely integrated into a child’s development (or an adult’s for that matter).

  3. writer dad says:

    This book sounds terrific. Teaching children about money is really important, and not something we, as a society, do near enough of.

  4. writer dad says:

    Sorry, I had another thought. My wife and I run a nursery school, and we involve our son and daughter (4 and 6) at every opportunity. We take them grocery shopping for supplies and do all the math with them; when I pay the bills (online or checks), I usually have one of them with me; and I always take one of them with me when I go to the bank. It’s easy to raise a millionaire, and you don’t have to do it with money. You do it with knowledge, which is free. Though my wife has a masters in early childhood education, I never went to college. I started my first business at eighteen instead, so I am a big believer in college not being for everybody.

  5. My first boss/unwitting mentor didn’t go to college and still runs a successful email newsletter empire. My best friend didn’t go to college and is currently traveling the country working remote for his SEO clients.

    College = not for everyone.

    I liked it, myself.

    Also I really like the idea about payment for tasks instead of an allowance. I guess you could also keep the allowance painfully low ;)

    Great review, sounds like a great book.

  6. tjwriter says:

    About the allowance thing, when I was growing up it never came free. There were certain chores my mom expected us to have completed or we were not allowed to go out and play, nor did the allowance dollars flow our direction. We had to earn it from our parents. It was most certainly not a handout.

  7. Carolyn says:

    Just be careful that your desire to nurture this entrepreneurial spirit doesn’t go too far. My husband was raised in a family that strongly encouraged working at an early age, being self-sufficient (financially), etc. etc. All seems like a good plan, no?

    Only problem is that he (and his immediate family members) are all workaholics whose only goal in life is to make enough money to get the next gadget on their list. Family, friends, downtime, personal health, and many other things aren’t all that important because they don’t generate income. Why go to a picnic and relax when you can work during that time and earn money instead?

    I don’t necessarily disagree with the concept presented in this book, but it must be carefully balanced with an understanding that money, work, and things are not all there is to life.

  8. My two teenage daughters aren’t very business minded, but my 9 year old son IS. He is constantly thinking about things he can make and sell to the neighbors. He offers to shovel snow, clean up their yard, and begs me to let him cut our grass…for $15. It’s a deal so I let him and I pay him.

    I think that at some point, he will be interested in starting a business and I’m going to do all I can to help him.

    Thanks for the book review. I’ll check it out.

  9. Salve Regina says:

    My issue with this, while trying to raise five kids well, is the idea of being paid to work “around the house.” Being a member of this family requires participation in a number of ways, including chores. I am wrestling with the idea of paying them to do what they are expected to do because they live and eat here, vs. helping them learn to earn and manage money. I do pay them for chores above and beyond (e.g. when the 14 y.o. has to babysit the younger ones), but deciding what is “extra” is tough for me. We live on a small farm, so animal chores are involved, but again, that goes back to working to eat (garden, eggs, etc.). I want to encourage enterpreneurship, of course, but not an entitlement mentality. Sounds like an interesting read to get the ideas flowing in the right direction…thanks for the review!

  10. mike c says:

    I don’t have kids, so maybe I do not have the perspective that some of you have. I do not like the “no allowance” policy. In my opinion kids should not do chores for money; they should do chores because they have to, period. My feeling is that if you give them money to, say, mow the lawn, at some they may decide that it is not financially worthwhile for them to do it, so they would stop doing it. I would like to teach my kids that they have to mow the lawn (or any other chore), because they are part of a family, and they have to help around. Same thing with school. I want to teach them that they have to do well in school just for themselves, not for some reward that I may give them. I think that giving them money for good grades would not send the right message.

    I think I would try to encourage my kids to save, and to learn about money; by, for instance, guiding them to save for bigger goals (buy a videogame, or a bike, or something).

    As for entrepreneurship, I would like them to explore their talents. I believe that it is precisely when we are kids that we can explore without having to think about the money behind. If my kid wants to play piano, I would encourage him to do so, even though I know that it is very unlikely that he could make a living being a professional piano player. I would just make sure that he understands that.

  11. Kevin says:

    Thanks for the review, Trent. Sounds like some good info in there.

  12. George says:

    I don’t have kids, but I was a kid once… :-)

    Mom encouraged me to earn my own money, though I also had some small allowance. What I learned from the experience was that I am basically unsuited to sales work as I dislike the constant rejection.

    The entreprenurial spirit carried on after college, but eventually died off as I preferred a steady income and couldn’t catapault myself into a commercial success. Steady income is good!

  13. momof4 says:

    We give the kids a small allowance, $5 every paycheck, so they can learn to make choices about cash. Money above that amount can be earned by doing extra jobs, but every day chores are expected to be done without pay because they are members of the family, and many jobs aren’t fun but need to be done anyway.

    We decided to go the small allowance route as an experiment and it has significantly decreased requests for toys and treats, since the standard response is “you can buy that with your money if you want too”. So far they are all far more interested in saving it up, and it’s been interesting to watch them make choices, like participating in an experience ( movie, fair, carnival etc) over purchasing a thing.

  14. beth says:

    I am definitely going to take a look at this book. I have teen daughters who are too young to get a ‘real’ job in our state, too young to drive, but with lots of things they’d like to save up for (respectable toys like a good SLR camera as well as shameless mall trips, not to mention cars and college coming soon enough). I’ve been trying to encourage them to come up with ways to make money besides endlessly looking for babysitting gigs (somehow no one in our neighborhood or circle of friends ever seems to go out), and this might just help.

  15. Meg says:

    I didn’t have an allowance until my parents divorced. My mom thought it would be a good way for my dad to stay connected with my sister and I if he had to send a check for $X each month with a little letter saying ‘I love you’ in addition to what phone calls we had.

    I later sold girl scout cookies in elementary school(back when it was door-to-door) and baby-sat in middle and high school (generally for my extended family). I didn’t have a ‘real’ job until I got out of high school and had a summer job before college.

    My sister never really got into the cookie selling or babysitting, but when she was in high school she got a job as a hostess at a restaurant.

    My sister and I have always had different views of money. I have always been a saver and she has always been a spender. Similar beginings, different results. Personality plays a big role in where you end up and how you get there.

    I still haven’t decided whether or not to do an allowance when I have kids. But finding ways to encourage kids to make money on their own and early is definitely going to be in the plans.

  16. michael s says:

    The danger of so much focus on entrepreneurship is that the child becomes ignorant of any other way to behave. The encouragement of work-for-money must be tempered by encouragement of philanthropy and the knowledge that other households teach their kids different values.

    All things in moderation. Don’t let your child believe that money is the purpose of all work.

  17. oneofnine says:

    Hi, I agree with Salve Regina about paying kids to do chores. I have a 2 1/2 year old and I wouldn’t dream of paying him to pick green beans for a family dinner. I grew up with nine kids and when my parents tried this tactic they ended up with a mutiny– someone didn’t care to get paid for picking green beans for dinner so my mom had to make them do it anyway– it completely negated the point of having a responsibility (duty?) to help your parents and family from your heart. We could, however, earn money by doing chores that were not otherwise required– washing the car, mowing the lawn, cleaning out the garage, etc. And some of us learned very quickly that we could even pay our siblings to do our regular chores! The rude awakening, though, was that we had to do extra work to make up for the chores we had paid someone else to do, haha!

    I am greatly appreciative of the attitude that we should teach our kids about money early on by allowing them to observe how we as a family handle our finances. My husband wants to eventually give our kids a small allowance, and I want to make sure they develop good helping habits around the house. So as long as they know they are earning their allowance by their overall contribution to the household (NOT specific chores) I think they will feel responsibility for the money they’ve earned.

  18. Georgia says:

    Growing up I never had an allowance. At 12 I started babysitting, at 14 I worked as a car hop for the summer, at 15 washed dishes in a fancy restaurant for the summer again (lied about my age both of those summers.) At 16 worked 48 hrs. a week as a waitress and attended high school full time. Mom & dad did not have extra money to give us. We all had to help and did. If we wanted money, we earned it.

    I did give my children a small allowance, but out of that they put a tithe in church, saved a little, bought their school supplies from our “family store.” The rest they could spend as they wished. I bought school supplies cheaply, divided them up so the kids could buy smaller amounts from the “store” for smaller payment. It worked fine.

    I do believe that allowances can be given as a thank you for helping with your everyday chores, but extra work needs to be supplied so you can earn a little and find out how far money goes – not too far, huh?

    Good job vetting these books on helping kids learn about money. Doing a good job, Trent.

  19. mk says:

    “Entrepreneurship for kids” is an interesting topic. However, if your own entrepreneurship spirit has never been awaken, it’s a weak message to convey to your kids.

    I heard about job interview of investment bankers – One trait of success is how entrepreneurial they are, and having their parents own and run business is one of the positives to their potential. Entrepreneurship has grown in them by watching parents running business.

    One thing I keep in my mind: The kids are meant to be who they are by nature, and parents should not interfere with what they become. Any idea would be helpful for broader options, unless parent stay clear of decision making or notion of what “success” means to them as parents.

  20. Leonie says:

    As a Christian, in a Christian family, I have to take exception to the idea that our dd should automatically look for the monetary payout on anything she does for anyone else.

    Whilst I agree that down the track she will get paid for work she does, our emphasis is Christ first, family second and career third.

    I don’t want her ever feeling guilty because she was spending more time looking after her bank account than looking after her family, or, even more importantly, looking upwards for spiritual direction.

    We (my dh and I) make sure that commitments she undertakes are met, whether she wants to, in the long run, or not, that she tithes and saves and that she must have a clear idea of what she wants because if she’s “not sure of where she wants to go, she’ll end up getting into a state of confusion.”

  21. Joyful Abode says:

    This sounds like a great book! I’m not planning on having kids for a few years, but it definitely sounds up my alley.

    When my sisters and I were kids, we had our normal jobs, and a regular (very small) allowance. Our dad had always been an entrepreneur, so a lot of our monetary upbringing was based on this.

    Sometimes he and my step-mother would post a list of extra jobs we could do, and my sisters and I would all put our “bids” in for the jobs (how much money we’d be willing to do the job for). The lowest bidder “won” the job and was paid at its (quality) completion.

    One of my favorite books growing up was “Capitalism for Kids”… another kid-entrepreneur book, but written for the child to read rather than the parent. I just recently started reading TSD so I’m not sure if you’ve reviewed it yet, but if not, you should definitely put it on your list! Of course, I haven’t read it recently, so I’m not sure what my current impressions of it would be.

  22. Gilora says:

    Trent, does this book give equal weight to training girls for entreprenuership? Frankly, from the title and the cover picture, it appears a bit sexist. Just wondering.

  23. Wow. There’plenty to think about there. I shall have to get certain members of my tribe motivated.

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