Teaching kids financial basics in a zero interest rate environment

[Anonymous]

Anonymous wrote:OP here- Some interesting approaches mentioned.
I had in mind relatively simple questions about how finance and the economy works. When their ""piggy bank" fills up and i tell them that it is time to put money in the bank, they naturally ask why. I think that some concepts (the bank will pay you interest for the use of your money, it then takes that money and lends it to other people and charges them interest to use it) are so foundational to the entire economy, that it is difficult to understand very much at all without them.

Have them give you the money in the piggy bank but give them back 50% more back. Show them how to repay the loan. That is what our economy is based on, lending.

[Anonymous]

offer 'allowance day loans' at usurious rates in the days leading up to their weekly allowance payments.

[Anonymous]

Seems pretty obvious to me- show them other investment returns. I made almost 30% last year in one of my retirement accounts.

[Anonymous]

In this low interest environment you could teach them the value of leverage. Those who play it safe in savings are missing out big time.

[Anonymous]

PP here. That is to say, loan them cash at low interest, explain the risks/rewards of various investment vehicles, and let them put the money where they choose, seeking the best return, all things considered.

[Anonymous]

I've taught my second grader about: supply and demand (American Girl doll of the year, after she is retired on Ebay -- we bought one in November and sold it in Dec. together on ebay and made $50 profit), inflation (dolls this year are $10 more than last year).