Category Archives: education

how to talk to your teenager about personal finance

If you have children or younger relatives - particularly teenagers - then this thought probably crossed your mind at one point: “if only they would do some of the things I wish I had done!” Maybe you always dreamed of visiting Mongolia or taking a year off after high school to backpack around Europe. Perhaps you hope your teenaged children will take the leaps you never took. The most important thing you can do is to give them the basic skills to succeed in life. One of the best ways to do this is to teach the teenagers in your life how to invest.

teenagers gloucester green oxford

Just as saving is a good subject for children to learn, investing is a great skill for teenagers. Sadly, investing is still not taught in most secondary schools, and many parents who are struggling to get out of debt may not have the background themselves to educate their children. Parents may be embarrassed to admit a lack of skills in this area, but just like “the talk” about sex or drugs, that embarrassment must be overcome for the teenager’s sake!

So what can you do? A few simple steps can be taken. None of them require a huge investment of time.

  1. Open a custodial account. A custodial account is opened in the name of an adult “for the benefit of” a minor as a Uniform Gift to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA), depending on your state of residence. Taxes are not collected until the teenager has more than $850 in income, at which point it’s taxed at the child’s rate. Above $1700 it’s taxed at the parents’ rate (these are 2007 limits). However, consider that in order for your investment to generate $850 in income at an 11% rate of return the amount invested would need to be greater than $7700. Include them during tax season by obtaining student tax software online which will get them accustomed to filing their own taxes.
  2. Put some dollars in it. The amount is not particularly important. If you have the resources to give your child a lot of money to invest, do it. If you don’t have the resources, don’t worry - the purpose is to educate at an early age. Once they have their own money, they can invest it themselves. Your role is to start the fire, not to bring the logs.
  3. Contribute a certain amount in lieu of gifts. So much angst is created in our consumer-driven society by a corporate-imposed mandate to buy love through “stuff.” Your child is going to whine when you don’t buy them an Xbox and instead give them $300 to invest. Your job as a parent is to show them, both in word and action, that until they make their own money, it is your money to spend as you see fit. Toys will be forgotten.
  4. Sit down and explain the basics. You may not understand the basics of investing. Study. Read blogs, read some of the basic books on investing. You don’t need to understand option puts. You need to understand what a share is, why dividends are paid, what unrealized and realized gains and losses are. If you don’t understand these terms, study.
  5. Don’t just buy a “how to” book, though. If you buy a cookbook and follow its directions point-for-point, you can probably bake a cake. Teachers don’t just stand in front of a classroom reading directions from a textbook point-for-point, though, and great chefs do not rush back and forth to check whether to add flour or bacon grease to a chocolate cake. They understand their subject well enough to teach it themselves, not just by reading a book aloud. Do the same with investing - read about investing, not “how to” invest. Sit down with them. Make sure you read the books at the same time as they do. Work through the book with them - make it a question-and-answer exercise.
  6. Choose investments together; involve them. To illustrate this point, Bubelah and I made the mistake of steering her younger sister away from a “trendy” stock (AAPL) in favor of a “solid” one (INTL). Even though our reasoning was sound, the decision to buy a particular stock has to be the teenagers, not yours, or they will lose interest in investing. If you make the choices, it becomes another adult-driven enterprise that they have no “real” say in. If they want to invest in speculative risky investments that fail, let them! Losing money can be as much of a lesson as making money. Teenagers are young; they have time to recover from their losses.
  7. Go over it every month or quarter or year to review what went right and wrong. Make sure you sit down and look at “what ifs.” What if that dividend had been reinvested? What if the money had been put in a CD instead of stocks? Maybe it would have been better, maybe it would have been worse. Make sure they understand the parts that went wrong - it may be even more important than understanding what went right. Simplify the process by investing in some inexpensive personal finance software.
  8. If your teen makes some money, ask them to reinvest at least 10% of it, even it’s a single dollar. My own prejudice has always been that reinvesting is key to building wealth. Dividends and gains are not money for spending - not ever. Teach your teenager that just because they’ve received a dividend is no reason to spend it on “stuff.” Learn how to reinvest before ever even touching the money by using DRIPs (dividend reinvesting plans).
  9. Teach them not to touch principal. I find the concept of a house’s foundation is useful. Before you can build a castle, you have to lay down a foundation. You can’t pull chunks out of the foundation just because you’re running short of concrete to build a tower. The base of an investment portfolio has to be thought of always and forever as untouchable.
  10. Consider alternative ways of investing. Most of the examples I’ve given are equities, because that’s a low-barrier entry into investing. You can invest small amounts easily in the market. That doesn’t mean your teenager can’t learn about investing in real estate or businesses. The same lessons can come from successes and failures in those areas. If your teenager is more interested in building an online business with their investing money, let them. Help them decide, let them succeed or fail on their own, and help them review the results. Despite what the conventional wisdom of the retirement-planning industry may say, you can invest without putting money in the market.

Keep your teenagers engaged and interested, and you may even get excited about investing all over again. Remember that spending and saving habits are established in your early life. Small actions now can stoke the fire of determination to achieve financial success for a lifetime. You can provide the spark.

(Photo credit: kamshots)

is college worth it? (part 2)

princeton college in second life

Note: Fecundity took a look at the spreadsheet I used to calculate these numbers and found one formula error and a couple of simplifying assumptions that she refined (she built a more realistic tax calculation, for example). None of the changes affected the conclusion, and in fact it tilted things a bit further in Paul’s favor, so I decided to edit the original article to reflect her changes. Thanks Fecundity!

As I discussed earlier, I’ve been wondering about the difference in wealth between college graduates and skilled non-college graduates. I decided to do a comparison of the two career paths, and see what those big choices meant for someone later down the road. Specifically I wondered if I could answer a few questions:

  1. Can the late start in saving by the college graduate be overcome through higher salaries?
  2. Does the lower earning potential of a non-college graduate mean that the non-college graduate will be required to “work until they die”?
  3. Who will be able to quit the rat race first?

Fred attended college for four years, taking out student loans. Paul got a job at 18, straight out of high school. I wanted to see whether college was worth it, and whether attending college helped or hurt Fred’s chances of getting out of the “rat race,” and whether Paul was facing an unbelievable uphill climb to achieve the same goal.

I made a lot of assumptions. Both men work until age 65. Tax brackets as of 2006 are used (15% to 33%). Both invest in accounts returning 8% per year. Fred starts college at age 18, taking out $40K in loans ($10,000 per year). When he finishes college, he pays back 5% per year ($2000) . He puts aside 10% of his after-tax income for debt and investing. He pays the debt first. He invests the balance of the money. His salary starts at $27,000 and increases 4.5% per year over his life (average annual wage is $80,947).

Paul starts working at age 18. He invests 10% of his after tax income, and has no debt. His starting salary is $8.95 an hour and over his lifetime his average annual wage is $44,895 based on yearly increases of 3.5%.

Here’s what happens. Fred contributes less than 3% of his after-tax income to his investments until he’s 32 years old. He doesn’t invest more than Paul does until they are both 42 years old! His tax bracket jumps to 25% when he’s 26, and by the time he’s 25 he only has $2,000 saved, or approximately 6% of his annual pre-tax salary.

Paul, on the other hand, starts earning and investing when he’s 18. He doesn’t reach the 25% tax bracket until he’s 35 years old. However, at age 35 he has almost $75,000 saved, 231% of his annual earnings before tax.

Fred starts to catch up once his loans are paid off. His investing, starting when they are both 42, is now approaching 1.6 times more per year than Paul. However, by age 50 Paul has $328,000 saved; Fred still only has $164,000. However, since Paul had 4 times as much saved as Fred at age 35, this ratio of almost 2 to 1 is a huge improvement.

As we approach retirement age, Fred is living a pretty good life. His salary is in the mid-six figures at age 60 ($143,000). Paul is making half as much ($76,000). Fred is moving into the top tax bracket, and socking away more than $10,000 per year in savings. Paul is still saving about $500 per month and is just preparing to move into the 28% bracket.

At 65, Fred is making $180,000 per year. He has over $777,000 in savings (4.3 times his salary). His savings in retirement will generate $31,000 per year at 4%, the rule of thumb used for retirement withdrawals for a sustainable amount assuming a normal US life expectancy (78). This means that he will have to live off 24% of his last after-tax salary, plus whatever government benefits or pensions or capital gains from selling his house that he can obtain.

Paul, on the other hand, has more than a million saved ($1,189,000). He NEVER saved more than $600 per month in his whole life. His final salary was $90,000. He will have $47,600 per year (using the 4% rule) to live on; still only 67% of his after-tax salary, but much closer than Fred to a reasonable amount.

Amazingly, Paul only invested a total of $177,000 over his 48-year working life. Fred invested more: $231,000. Yet Paul’s final portfolio contained 7 times more cash than he invested; Fred’s was only 3.36 times as much as he invested.

Paul ends up with $412,000 more than Fred. Paul, at age 65, has a far better chance of surviving in comfort off his $1 million portfolio and a lifestyle presumably suitable for someone who makes less than $100,000 per year. Fred, on the other hand, will struggle to survive if he maintains a lifestyle built around a $180,000 per year salary with only $777,000 in the bank.

Now Fred, of course, may have bought a house in a metropolitan area when he was 40 and now can sell it for hundreds of thousands in profit; however, I’m willing to bet that unless he was highly disciplined he still has a mortgage, and the chances of making over $400,000 in profits on a home are small (not impossible - but small). Fred may also have had access to tax-advantaged plans and matching programs through company 401(k)s and so forth that Paul might not have had. Even if all of these scenarios play out perfectly for Fred, he barely catches Paul. Even if he DID have $1.3 million saved, it’s still only enough to guarantee 29% of his after-tax retirement income.

So what does this all mean? Should every 18-year old skip college and go straight into the workforce? The short answer: no. Assuming that you did start earning at 18, you would need to be a highly disciplined saver, and not everyone is. If Paul didn’t start saving until he was, say, 29, he has only $665,000 in savings at age 65. Those extra 10 years after high school - when he saved only $18,000 - made an almost half million dollar difference at the end of his working life. Ask yourself how many people at age 18 can save 10% of their salary. They exist, sure, but realistically very few people have that discipline.

What’s the solution, then? I think if you go to college, avoid student loan debt if you can. How? Don’t go to an expensive school if a less-expensive option is available. If Fred’s student loan for $40,000 disappears, he has $1.3 million when he retires. Still not enough, probably, but $650,000 more than he would have had. That debt makes a huge difference.

A second tip is start investing early. Very small amounts invested early in your life will grow significantly more than the same amount (or an even greater amount) invested later. If you managed to save a few hundred dollars in high school, that’s far more significant than thousands when you’re in your 40s. Think about that - a tiny bit of sacrifice early on will make you richer than a much larger sacrifice later in life, when you think you have “too many expenses.”

A third lesson: consumer debt will cripple your chances of accumulating substantial savings. I assumed both men were exceptionally disciplined and never incurred any debt other than student loans (in Fred’s case). If either one had spent that 10% per year on credit card debt instead of investing it, their future prospects for quitting work before death plummet to almost zero.

A final lesson: even small amounts make a huge difference. Think again about this statement: “He [Paul] NEVER saved more than $600 per month in his whole life.” Isn’t that amazing? Not one month in his life did he ever save more than the cost of an iPhone plus accessories, or much more than digital cable plus cell phone service. He didn’t save thousands per month, just $600. If that’s not enough, keep in mind that was the absolute maximum he ever saved in a month! On average, he only saved around $300 per month over his life!

Here were my original questions, and the answers I discovered:

  1. Can the late start in saving by the college graduate be overcome through higher salaries? Not really, unless the college graduate’s salary is significantly higher or the savings rate is substantially greater.
  2. Does the lower earning potential of a non-college graduate mean that the non-college graduate will be required to “work until they die”? Absolutely not - in fact, if the non-college graduate is a disciplined saver, the opposite is true.
  3. Who will be able to quit the rat race first? Based on my model, the non-college graduate - but the real indicator is who starts saving the highest percentage of their income earliest in their career.

Don’t take too much of this as gospel. This was an illustration only, and of course a million variables come into play about spending habits, debt, housing, career growth, investing choices and so on. The purpose of this exercise was to challenge my context, and hopefully yours too. Don’t always assume that just because the college presidents of America tell you that you need college that you do. I had a lot of good times in college, and I wouldn’t trade them for anything. But don’t kid yourself - colleges are businesses that want your tuition to fund their foundations and football teams and new buildings and conferences and so on. They want you to take out big loans, because they don’t care that you start your earning life saddled with debt as long as they get their tuition revenue.

The moral of the story is that you shouldn’t believe a thing just because everyone else says it’s true.

(photo by MarkWallace)

i’ve been accepted to imaginary college!

I have given some thought over the years to going back to school. Ah, to be back in the fraternity, drinking Schlitz, playing lacrosse and sleeping from 4 am to 2 pm. Oh, you thought I meant for the classes and the knowledge? Are you kidding me?

Seriously, though, I was tagged by Melissa at A Penny Closer to participate in a meme: to devise a list of 5-10 courses you would take to fix your life. I’m supposed to pick one of hers, as well, so that we can skip classes and copy each other’s notes. Just for the sake of being different I’ll attend 7 (imaginary) courses.

  1. Art of Persuasion 101 is the class I’d like to share with her. Why? Who doesn’t need this skill? Is there any way that’s NOT a useful skill to have? I can think of a million ways that could be useful, but in particular being able to persuade my son to eat his breakfast would be a HUGE benefit!
  2. Car Maintenance for Your Post-2000 Car 101: When I was younger, I managed to do a lot of car maintenance on my 1976 Mercury Comet without too much trouble. Nowadays I open up the hood and don’t see much that I can distinguish from the guts of my Toshiba computer. I’m nervous just adding wiper fluid. Hopefully this imaginary life-fixing college would have an imaginary community college campus where I could take a class like this one.
  3. Simplification 101: As much as I do try to simplify, there is always something new to complicate my life. I’d like to have a magic bullet - as much as I know there isn’t one - so why not take a course like this?
  4. Yoga 102: I have been to a yoga course, and I liked it. I like the idea, I like the fact that many pro athletes rely on it for conditioning, and I like the promised stress relieving benefits. Yet… I never do it. I need a class to convince me once and for all that I need to engage myself fully in yoga.
  5. Real Estate Appraisal/Inspection 101: OK, the real estate bubble burst. OK, this isn’t your typical college course. However, I can’t imagine any way, shape or form it wouldn’t be handy to have a good understanding of how to appraise and inspect and evaluate real estate. Even if you never invest in real estate, being able to help family and friends or even look at your own home would be a hugely useful skill.
  6. Environmental Studies 202: I’ve read a lot about the environment. One book in particular shook me terribly, but I sometimes feel that I could use a twofold course about the environment: 1, the detailed science around global warming, 2, a detailed examination of the environmental threats faced by urban dwellers and 3, how to protect your home. Fortunately most of this information is available through blogs and websites so I’ve got a lot of resources to fall back on.
  7. Getting Off the Grid 101: I get really worried sometimes that I’m “out there” too much…hence the semi-anonymous blogging. There may be too many people with too much information about me. I think a thorough course in how to “disappear” myself as much as possible would probably be handy later on in life. I may actually soon de-anonymize (is that a word) Brip Blap, so I probably have to be careful about this…

I suspect as I look at that list I may have been too narrow minded - these are hardly grand themes to fix my life, just tweaks. I just thought that something like “Perfect Retirement Planning” wouldn’t be as interesting to read. In any case, these courses would fix parts of my life.

And one more course for nothing more than my own enjoyment, Astronomy 103b “Just the Cool Stuff.” I love astronomy - discovering planets, dark matter, Voyager and Pioneer trivia, quasars, and on and on. I am really, really fascinated by the Pillars of Creation. Oddly enough, I never took a course in astronomy while at college and have never done more than show a layman’s fascination. I think in an alternate lifetime I was an astronomer, though, because I could read about this stuff for days. Nothing close to earth like the space shuttle or the space station, but the crazy far-off stuff just fascinates me. It won’t fix my life but it might make me happier… so that might be a fix, anyway.

Tags. Hmm. I tagged a bunch of people recently so maybe I’ll stretch past my normal blogroll and tag-ees and go to some blogs I haven’t mentioned much (or at all) before, but that I do read: Variable Interest and One Money Dummy Getting Smarter. And as always, tag yourself if you feel so inclined!

Recommended Reading

I will not pay for my children’s college education, part 2

Continued from Part 1. Many of the personal finance sites I read concentrate on a few key areas: reducing debt, making investments, emergency funds, saving for your children’s college education and saving for retirement. I agree that most of these are important topics, but I don’t believe that you should save for your children’s college education. This may come across as a shocking or neglectful thing for a parent to say, but I have my reasons.

College costs. A report, “Trends in College Pricing 2006” (warning, big PDF), noted that “[p]ublished tuition and fee charges at four-year private colleges average $22,218 in 2006-07. The $1,238 increase over 2005-06 represents an increase of 5.9 percent, or 2 percent after adjusting for inflation. The average total tuition, fee, room, and board charges at private four-year colleges and universities are $30,367.” The report goes on to note that this amount is usually reduced by student aid, but let’s assume you’re trying to pay for them to go to the best college possible (no Cornell for my baby, only Yale/Harvard/Stanford for her!)

If we consider that tuition, fees, etc. increase at the same rate going forward (no sure thing) then a private school tuition for four years will be $42,000 in today’s dollars by the time my son is in college, around the year 2024. If you consider inflation, that will be $80,000 or more. So you’ll need $80,000 in the bank for each child. Keep in mind that the starting point, $22,000 is the average for a four-year college, not for the very best colleges. Yale, for example, now costs $35,000 per year all in. In 2024 a Yale education might cost – get ready - $370,000 for a four-year degree by my very rough calculations. I won’t have that much saved, frankly.

Personally I am not convinced that there is a lot of value in a private school education that is not present in a state university education. There may even be an argument that not everyone needs a four-year degree, to be honest. I am prejudiced. I received a bachelor’s degree and a master’s degree from a state university, and I work alongside Ivy League grads every day. They don’t make any more money or have any more prestige due to their schooling than I do; the distinction between our backgrounds was flattened out back in the first 3 or 4 years of our careers. By year 15 nobody asks where you went to school unless you’re talking about sports.

Those Ivy grads I work with may not be the most successful Ivy alumni, though. If you want a career with the movers and shakers of the world, you need to go to a school where you’ll meet fellow future movers and shakers. For every Ronald Reagan attending Eureka College there are a thousand Bill Clintons/John Kerrys/George Bushes attending Yale, I’m sure. But don’t think that a state school means your ambitions will be cut short, and unless you have ambitions to be the next hedge fund manager or a U.S. Senator I’m not sure a private school is that much better. After you get that first job, no-one will much care if you went to State U. or Fancy Institute except on football weekends. Of course, if you want to major in some specialty that only exists at some private school, or you have some other reason for going (family ties, etc.) there’s nothing wrong with it, but I don’t plan on giving my children an extra $328,000 just for the heck of it.

Invest in early education. One of the main reasons I’ve been uncomfortable with 529s is the fact that you are tying up money for a college education. I know you can get it out, I know it can be used for your own education if your child decides to run off to Nepal, and so on – but what if you need money for education in the early years? We are considering a private pre-school and kindergarten for our son; first, for safety and quality reasons and second, for our own opinions on educational philosophies (we are very interested in Waldorf education, for example). We hope that money spent early on can provide some love of learning that will help earn scholarships later on. I won’t have an answer on whether this was a good idea or not until 18+ years in the future, but it makes sense to me.

Conclusion

I guess in the end this is more of a decision related to your personal values. My parents helped me a lot during college, but I provided the great majority of the money for the total costs of my undergraduate and graduate education came from scholarships and teaching jobs, including 100% of tuition. While my parents could have (and I am sure would have) scraped together the money for me to attend Harvard (yes, I was accepted there), I never felt a burning desire to attend and haven’t ever felt that I shortchanged myself.

My hope is that my son will appreciate the fact that I have enough confidence in him, even now, to know that he’ll be able to put himself through college with scholarships and hard work, and hopefully we will return the favor by making sure first that we are never a burden to him.

I should also point out that I do have a 529 for my son (set up by his grandparents), but it’s mainly a place for relatives to put gifts. I haven’t contributed anything to it myself to date. Please don’t beat me up too much in comments.

I will not pay for my children’s college education, part 1

Many of the personal finance sites I read concentrate on a few key areas: reducing debt, making investments, emergency funds, saving for your children’s college education and saving for retirement. I agree that most of these are important topics, but I don’t believe that you should save for your children’s college education. This may come across as a shocking or neglectful thing for a parent to say, but I have my reasons.

Save for your retirement and debt reduction first. Quite simply, there is a good chance that any 529 or savings plan you start today will not have a better return than debt reduction or your own retirement savings. You may argue that a 529 and a 401(k), for example, have a similar pre-tax benefit, but if your 401(k) has an employer match it’s going to come out ahead of a 529. Now, if you have an employer who will match 529 contributions, then it’s probably a good idea (and hold on to that job like grim death because I bet it offers very good benefits in general). But I doubt your 529 will return 15% if your IRA is returning 3%; most likely they’ll both be in the ballpark of the market in general, assuming you have similar funds in each.

Just remember that if you are a burden on your children when you retire, due to debt or lack of savings, much of the money you saved for their education may be lost. You may unconsciously think of putting money into your child’s education as a retirement plan (“my son the rich doctor will buy me a house in Arizona when I’m old!”) but that’s putting a huge amount of faith in a future unknown. What if your child decides instead to work as a doctor for “Medicin Sans Frontieres” or has eight children of their own (i.e. no money leftover)? Or, more brutally, decides that he or she want a vacation home in California and decide to leave Mother and Father in the one-bedroom in Funkytown? I hope that my son will spend his money on himself and his family rather than needing to help me out. I hope that if I really need help, he’ll be there, but more in the sense of physical or emotional or ‘administrative’ help when I’m too old to manage for myself. And it takes a lot of money to pay for the golden years.

Finally, I think it goes without saying that if you’re paying 18% on credit card debt but skimping on debt repayment to fund a 529, and your 529 returns are 10% per year (even considering the tax advantages) it’s probably better to pay the debt down first, then worry about your children’s education.

Student loans/scholarships. Quite simply, nobody is going to give you a loan or a gift to fund your retirement. On the other hand, student loans are easy to come by and scholarships, while not always easy to come by, are plentiful. I was no great athlete, but I received tennis scholarships. I also received a number of academic scholarships. Some were general, but others were award-related (National Merit Finalist scholarship, for example). If your child studies hard and participates in extracurriculars, they will receive scholarships. They may not receive scholarships to every school they want to attend, but I guarantee there will be a college willing to extend “free money” in the form of a scholarship to attract students with good grades or community leadership activities or athletic ability.

…to be continued…

Reading in early childhood

Little Buddy doesn’t watch much TV other than an occasional DVD to keep him distracted when he gets too anxious, but I think we have already managed to make him love books more than TV. I have no illusions that this will always be the case, but right now if you turn on the TV and wave a book at him, he will grab for the book every time. This was a fairly simple process, and there are a few simple ways you could do this, too.

  1. Buy books before the baby is born. You simply won’t have the time or patience the first few months to look. Get a few classics before the baby arrives - Good Night Moon was the first book we got for Little Buddy (other than hand-me-downs from my childhood).
  2. Start reading to the baby in the womb. This is not for any reason other than to get used to doing it. I had almost zero experience reading children’s books. Once in a blue moon I read to a child, but it could not have been more than a dozen times in my whole life. But reading to your wife’s stomach a few times helps relax you and gets you used to the idea of it. There is no need to do this a lot, just a few times until you are comfortable with it. I wish I had done it a bit more than I did, but the few times I did were enough.
  3. Read to the baby when he is born. I read Little Buddy books as soon as he came home from the hospital. I read him books in his swing, then on a mat on the floor, then holding him in my lap as soon as he could sit up. People thought I was wasting my time, but he started focusing on the book as a source of happiness very, very early on, and as soon as he could crawl he would crawl to the books and bring it to Bubelah or to me.
  4. Buy a limited number of books. Only buy a dozen or so books, and learn them well. I can recite most of our “greatest hits” from memory. I have a set of standard sound effects to go with them. I think if I read a new book every night it would be difficult to have the same consistency, and very young kids love consistency. We read “The Little Bunny” hundreds of times, always in the same tone of voice, always with the same “effects” - and he still remembers all of them even now that we don’t read the book as much anymore.
  5. Read to him in more than one language if possible. I am fortunate that my wife is not a native English speaker, so we can have two sets of books. I am further fortunate that I speak her native language, Russian, and that she speaks English fluently. We try to stick to our native languages while reading, to ensure Little Buddy learns the correct pronounciation and accent, but we switch back and forth and in a sense I think that keeps him entertained, too. If you speak a foreign language and can read it - even slowly - try buying a few books in that language, you will be amazed how well children can pick up two sets of words. Little Buddy already clearly understands both languages.
  6. Make reading interactive. Don’t go for more than a page or two without asking a question or deviating from the text. Just as with adults, repetition can lead to inattention. Although I know I said babies love consistency above, they don’t love dull repetition.
  7. Above all, make reading fun. I seldom read any book with Little Buddy without a constant stream of sound effects, tickles, faces and even some running around or lifting him up in the air. Different books have different purposes. Hand Hand Fingers Thumb is exciting. The Runaway Bunny is calming. Both are fun - they just have different cadences, tones and actions associated with them. One of the worst things to do is make reading dry and dull. An infant or toddler probably won’t understand the great majority of the words in a story, but I always show Little Buddy my arms outstretched pretending to exercise when we see that word in one of his books. Now, when he hears that word, he stretches, too. The same goes for grasshoppers, monkeys, balloons, fire trucks and so on.

All of this has paid off handsomely for us. Although we didn’t follow all of these tips all the time, it is a great feeling as a parent to watch your child walk right past a turned-on TV to grab a book and either read it himself or toddle over to you and put it in your hands, then plop down on the carpet and wait expectantly for you to read it.

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