“Five Investing Rules You Can Learn From Kids - Daily Finance” plus 1 more

Five Investing Rules You Can Learn From Kids - Daily Finance

Posted: 05 Feb 2011 06:00 AM PST

A couple of weeks ago, I wrote about what you can learn from the opposite sex when it comes to investing. As with most things, men and women have different strengths when managing a portfolio.

This week, I'm taking it a step further: I'm going to show you what you can learn from your kids. Yes, your kids. Or your nieces and nephews, if you don't have kids of your own.

Children have an interesting perspective about investing: They can really bring you back down to earth and help you recover common sense (because, let's face it, money -- and, specifically, the prospect of making more money -- really makes us kind of lose it, a little bit).

So, here are five lessons you can take from the little ones in your life:

1. Buy Low. Logically, you know this rule. You'd never wait for the price of those shoes to go up. But for whatever reason, people tend to lose sight of this when investing.

"If you go back to March of 2009, stocks had a half-price sale, and kids will tell you that it's better buy something when it's on sale, when prices are low rather than high," says Allan Roth, a certified financial planner and author of How a Second Grader Beats Wall Street: Golden Rules Any Investor Can Learn. "But we were panicking in the streets, selling. Now that the markets have recovered, finally many people have started moving back into the stock market."

Ideally, of course, you want to do the opposite: Buy low, and sell high.

2. Diversify. Your kids probably know the saying as well as you do: Don't put all your eggs in one basket. For them, it might apply more to the mall than the stock market, but the key lesson remains the same. If you aren't spreading your investments out, or worse, your portfolio is too heavy in your employer's stock, you're asking for trouble.

Many people don't think about it this way, but your job is, essentially, one of your investments, and certainly the one with the highest return. If your company goes down -- and history shows us that's always a possibility -- you don't want the lion's share of your investments to go with it. Keep company stock to 5% or 10% of your portfolio, at the most.

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3. Lend With Caution. Or as a kid would say, don't lend money to someone who won't pay it back. This rule has two meanings, at least to me: First of all, keep your risk in check. Yes, you have to weigh your individual tolerance for risk, and some people like taking chances. That's fine, but don't let greed get in the way of common sense.

The second way this factors into your portfolio? Don't tie your money up in low-yield investments that won't beat inflation. If you do that, you're losing money. Instead, set yourself up with an emergency fund (here, the interest rate is less important than easy access) and then set up a portfolio that will beat inflation. That means an age-appropriate mix of stocks and bonds.

4. Don't Play the Game Unless You Understand the Rules. "We adults sign up for an annuity with a 373-page prospectus, not realizing that the actuaries and the attorneys aren't writing that thing to protect the consumer. I've never met a consumer who understood what they bought, and I've rarely met an agent who understood what they were selling," says Roth. This goes for all investments you don't understand: Ask questions, and if it still isn't clear, move on.

5. Keep It Simple. An overly complex portfolio isn't necessarily a better portfolio -- and in fact, in many cases, it's worse. Yes, you want to diversify, but you can do that with three to five funds, says Roth: A total U.S. index fund, a total international index fund and a total bond index fund. "With those funds, you can own the entire world. People think they have to have 53 mutual funds, but that doesn't mean they're diversified."

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New Java Gym to offer playland for kids, coffee shop for parents - MLive.com

Posted: 05 Feb 2011 03:01 AM PST

Published: Saturday, February 05, 2011, 6:01 AM

GRAND RAPIDS — A new place offers Mom or Dad a chance to relax with a latte, peruse e-mails or read while their kids jump, crawl and wind their way through a four-level play structure.

Or Mom and Dad can kick off their shoes and join the fun.

Laura and Matt Greene plan to open Java Gym between Feb. 26 and March 2 at 2211 East Beltline Ave. NE, Suite C, just north of Knapp's Corner.

The Greenes, of Rockford, moved from Detroit in 2007. They said they enjoyed taking their daughter, Katie, to similar businesses on the east side of the state.

Nothing was quite the same in West Michigan, said Laura Greene, who previously had a corporate job working in employee benefits.

So she and her husband decided to open a 5,300-square-foot children's activity center.

"There's something that everybody can enjoy," she said. "Parents have all been to places for kids that haven't been the most enjoyable place for adults. They can relax, or jump in and play with the kids."

The centerpiece will be a four-level, 18-foot-high soft-play contained structure — great for developing gross motor skills, the Greenes say — with crawl-through tubes, slides, bridges and webs, she said. A smaller soft play area is for children younger than 2.

"We think it will have appeal for children and parents," said Matt Greene, director of marketing for software at Siemens PLM Software. "It's a safe, clean environment in a state-of-the-art indoor facility.

"It's a great family-oriented entertainment center."

The concession area's menu will include gourmet coffee, salads, sandwiches, personal pizzas and smoothies.

The facility also will include three party rooms. Matt Greene said the goal is to bring in sports group, school programs and even business meetings.

For birthdays, a host will lead each party, eliminating frustration for parents. Laura Greene said she recently learned about the concept at a "Birthday University" seminar in Orlando, Fla.

The Greenes are collecting applications and plan to hire 20 employees. They said they are taking reservations for birthday parties but have not finalized party prices.

Their children — Katie, 6; Ryan, 2; and Collin, 1 — have had fun testing the equipment.

"They're extremely excited," Laura Greene said. "They can't wait for it to open."

Admission is $7 for ages 2 and older and $3 for children younger than 2.

Hours will be 8:30 a.m. to 5 p.m. Mondays through Fridays; 9 a.m. to 8 p.m. Saturdays and 10 a.m. to 6 p.m. Sundays.

E-mail the author of this story: localnews@grpress.com

Kids Shoes

Saturday, February 5, 2011