Monday, May 19, 2008


Keep YOUR kids out of debt! Explain the FACTS OF LIFE now!

You can help your kids stay out of debt and reach all their goals in life by explaining the FACTS OF FINANCIAL LIFE. You can do this only if you know the answers to these two questions asked of 12th graders. These questions were asked of participants in the JumpStart Coalition on Personal Financial Literacy.

Which of the following tends to have the highest growth over long periods, say 18 years?
a) A checking account.
b) Stocks.
c) A U.S. savings bond.
d) A savings account.

At age 25, Mary began investing $5.56 per day, $2,000 a year. At age 50, Rob started saving $4,000 a year. They now are both age 75. Who has more money saved for retirement?
a) They each have the same amount.
b) Rob, because he saved a bigger amount each year.
c) Mary, because her money grew for a longer time at compound interest.

If you correctly answered "b" and "c," you did better than most of the nation's high school seniors. Most got them wrong. A Schwab survey found that while 70 percent of parents had taught their kids how to do laundry, only 19 percent had explained how to invest money to make it grow.

It is not difficult to learn these lessons. In fact, our members have found the pictures and charts in our FREE Guide make it easy to explain the FACTS OF FINANCIAL LIFE. Try it yourself for FREE at

It is a curious thing that our representatives in Washington have not found a financial literacy course for our schools after 220 years. According to John Adams:

"All the perplexities, confusion and distress in America arise, not from defects in their Constitution ... not from want of honor or virtue, so much as from the downright ignorance of the nature of coin, credit and circulation."

By the way, Mary will have about $6.5 million and Rob will have about $630,000 using a tax-free low-cost broad market index account.