What your kids can learn by playing Jenga

You take a block from the bottom and you put on top. That’s how you build a financial future: You just don’t stop

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When you want to teach your kids about money, lessons from Jenga may not come to mind. After all, what do wooden blocks have to do with budgets and stocks? 

And it’s true: You’re better off starting with Monopoly.

But children’s brains are like sponges, and every minute you spend with them is a teaching opportunity. So why not play up the metaphors contained within the game of stacking blocks?

Three personal finance lessons from Jenga

1️⃣ Keep it simple. How many tabletop games have all of their instructions embedded in their jingle? “You take a block from the bottom, you put it on top, that’s how you build a tower, you just don’t stop.” If they made a jingle for Risk, it’d be 25 minutes long. The simplicity means just about anyone in the household can play, provided they’re old enough not to eat the blocks. When it comes to money, your basic plan should be similarly singably simple. For example, Elizabeth Warren’s famous 50/30/20 plan, in which you spend 50% of your monthly income on needs, 30% on wants, and either save or pay debts with the remaining 20%.  

2️⃣ Maintain a strong base. If you take all the blocks from the bottom and put them all on top, your tower will collapse. Similarly, you shouldn’t use your entire life savings to buy a new car. Keep the base strong, and use what you can spare to keep building.

3️⃣ Take calculated risks. When your turn comes, you have to take a block. That means you could topple the tower and lose the game. But Jenga pros know there are good risks, like taking the center blocks before the sides to keep the base strong.

Finally, let your kids know that Jenga is derived from the Swahili word meaning “to build.” And personal finance is all about building wealth over the long term. 


“Money gives them space to pay.”

What Joey, a 4-year-old, thinks about money

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This is part of The Wealthie Interviews With Kids, our ongoing series that helps parents talk to their children about money. Today’s kid is Joey, a four-year-old. Want to ask your kid these questions? Our script is here, and if you’d like us to publish the results, let us know! We’ll commission a portrait for every kid we feature.

What would you do if I gave you $10?

I would keep it, because I don’t want to use it right that minute.

What would you do if I gave you $100?

I would save it for a long time. At least until I find something that costs that much. If I find something that much, I would pay for it.

What’s the best gift you’ve ever been given?

A remote-control car.

What can people do with money?

They pay. Money gives them space to pay. You pay and pay and pay until your wallet is full of as much money as it can hold.

How do people get money?

Oh, let’s see. The very first place? From your mom or dad.

What if you’re already an adult? How do adults get money?

Then, if they don’t have, they ask another adult that has.

What are THREE things that everyone should know about money?

That it helps you pay. That money is important. I’m not sure what the third one is. Oh, I think I know it: Money is special.

Wealthie’s Interviews with Kids are an ongoing project. If your kid would like to take part, you can find the questions here.

Why “buy the dip” is good advice for stocks

“Buy the dip” is something financial types repeat when the market goes down. What does it mean? It’s really just a spin on the old standard “Buy low, sell high.” And like most mantras, it’s great advice that’s hard to follow. Sure, I’ll buy low, but when is it low? Is it going to go […]

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“Buy the dip” is something financial types repeat when the market goes down. What does it mean?

It’s really just a spin on the old standard “Buy low, sell high.” And like most mantras, it’s great advice that’s hard to follow. Sure, I’ll buy low, but when is it low? Is it going to go lower? 

So buy the dip, but is this the dip? Is it going to dip lower? When’s the dippiest dip going to happen? 

Buy the dip applies to all the dips.

The good news: If you’re not a professional day trader, it probably doesn’t matter. For the average investor in it for the long haul, a dip tends to be a good deal. When the market dips, stocks are cheaper so you can buy more of them. But really, you should always be buying: Dips, peaks, valleys, spikes, and everything else. It’s why Dollar Cost Averaging is a thing, and a thing worth doing.

Historically, the market has generally climbed back to where it was — and beyond. In the long run, you’re likely to come out ahead. Yes, it might take a while, and yes, you may not get the absolute best deal. But it’s still good to buy the dip — because it’s good to invest.

Wealthie Works Daily, Inc publishes content that builds financial literacy for parents, kids, and families.

Wealthie does not offer investment advice. All investments involve risk, including the potential loss of principal. Content presented by Wealthie is provided for general investment education and informational purposes only and does not constitute an offer to sell, or a solicitation to buy specific securities.


Dollar Cost Averaging: A thank you from your future self

It’s impossible to time the market, so this is the logical next step

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Imagine everyone’s yelling useless advice at you. Now imagine shutting them all up. 

That’s dollar cost averaging.

Let us explain.

We all know you can’t time the market. And by that, we mean you can’t know exactly when to buy the lowest low and sell the highest high. It’s been proven again and again and again. There will always be people who try, and every once in a while they’ll get lucky — but those blessed individuals are the exceptions that prove the rule.

So if we know this, what do we do about it? Dollar Cost Averaging. All that means is you spend your spending dollars over a long period of time so that you’re not affected by daily ups and downs of the market. It is the opposite of trying to time the market. You buy when it’s up, you buy when it’s down, you buy when it’s in the middle. And in the end, if the last 100 years of history is any guide, you come out ahead.

Dollar cost averaging is all about having a long-term plan

So when it feels like no one knows anything, remember what we do know: You can’t time the market, so stick with the plan.


What does “don’t grab a falling knife” mean?

Financial advisors don’t want you to buy the market before the bottom — but where’s the bottom?

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The jargon’s drifting up from the financial district again.

“Buy the dip”, they’re shouting. 

Don’t grab a falling knife,” they’re hollering.

Who are these people? And what the hell does it mean?

It means they don’t want to buy a plunging stock before it hits the ground. The knife in this metaphor is the stock, and if you grab it in mid-air, you might cut your hand. But if you wait for it to clatter on the kitchen floor, you can safely pick it up by the handle and get back to chopping broccoli.

Don’t grab a falling knife, but when will it stop falling?

Here’s why this isn’t useful advice for the average investor: We don’t know where the floor of this hypothetical kitchen is. When will the knife stop falling? It’s anyone’s guess. Money managers have to avoid the plunging knife because that’s their job. In the words of Rob Carrick: “Professional money managers live in a different world than individual investors. They’re constantly accountable for their work and thus have to be more reactive to market events.”

Those of us looking for long-term returns may be wise to just stick to the plan, buy index funds, and Dollar Cost Average for life. (Aside: When you’re looking for a place to live, ensure the kitchen has a floor. #winning)

Don’t grab a falling knife, but do grab small knives every single day

What we do know is this: If a stock is dropping in value, and if history suggests it will eventually regain that value and then some, it’s a good deal. So if you’re in it for the long haul and have a suitably balanced portfolio, leave the knife talk to the chefs and traders. Buy low, sell high. It’s just common sense.