We’re Hiring!
Posted: May 14, 2012 Filed under: Career Leave a comment »We’re hiring a software engineer and a systems administrator. Looking to add some awesome to your life? Looking to add some awesome to the world? Join us!
Rethinking Investing Education
Posted: May 11, 2012 Filed under: Uncategorized | Tags: #childfinance, #FinLit, #moneyandkids Leave a comment »Do you remember when investors accumulated individual shares of stock for the long haul based on the strength of the underlying company and the quality of its people and products? No? Me neither. They tell me it was prevalent practice in the late 19th and early 20th centuries. I wasn’t alive then, but I’ve seen evidence of it.
One day, I reviewed the investment portfolio of a 91-year old lady. She was sitting on huge gains in stock positions with holding periods, which stretched from 20 to over 60 years. Her portfolio was over $3 million AFTER the financial meltdown of 2008 occurred!
I had 16+ years of experience in my rearview by the time I met her acquaintance, but she made me look wet behind the ears, albeit in a cordial way. There was nothing I could teach her. In fact, I just sat and listened to her tell stories for the whole hour and a half and soaked up her wisdom like a sponge. To this day, she is my glimmer of hope that buy-and-hold still means something in this world.
I don’t expect BreadVault to render today’s world of financial and investment propaganda irrelevant. Actually, all of that already is irrelevant. We just don’t acknowledge that it is. Instead, we crave the sensory overload and maintain an insatiable desire to be entertained by financial “experts”, none of who are ever held accountable for their advice. It sounds like a rebel yell, but I don’t want my kids to conform to the financial services under the framework in which they are offered today with the ridiculous mutual fund sales charges, IRA account maintenance fees, and two-week outlooks. I want my kids to be savvier than that, and it’s incumbent upon me and other parents to teach them about investments at an earlier age.
The primary goal of the investment channel within BreadVault is to give our children (and adults, if you allow yourselves) the tools to become DIY (Do-It-Yourself) investors by condensing the investment and financial planning world down to the size of a mobile app. With an Internet connection and just fifteen minutes of dedication each week, our kids can learn enough to save themselves from a future of unnecessary fee erosion when they begin to invest on their own.
BreadVault is not developing a financial advice platform for kids. Rather, we are developing a web+mobile solution by which simple technology can lead kids toward their own financial revelations. We chose to start the educational development using stocks. A wise 91-year old lady convinced me that this was a good place to start. In her own words, “the turtle wins the race, you know.” Words to live by…RIP Esther.
Rethinking Envelope Systems and Piggy Banks
Posted: May 5, 2012 Filed under: Uncategorized | Tags: #childfinance, #FinLit, #innovatend, money 6 Comments »BreadVault was born out of my disenchantment with the ineffectiveness of our home envelope system. In theory, it was great. Each of our kids was required to put any income received into each of five envelopes labeled: Angel money, Learn money, Plan money, Wealth money, and Fun money. Sounds logical and well-intentioned, right?
Well, there were a couple of fatal flaws with my system. First, anything that my kids can’t find on a smartphone, tablet or PC is deemed out-of-date and of no interest to them. Second, when it came time to dole out the kids’ household wages, I couldn’t break a $10 or a $20 to distribute the money. That meant a trip to the bank, which was intended as a Saturday morning task, but some activity would always spring up that would prevent me from getting there. Therefore, by the time I got around to paying the kids, I was three months in arrears. You can imagine what a young teller thinks when some guy in his late 30’s makes a withdrawal request of $120 and asks for it all in ones!
I expressed my frustration to my father-in-law, who was in town for a visit. I said, “How can we get this envelope system onto those devices?” I pointed his attention to the living room where four kids were all playing on separate mobile devices. From there, the floodgates of ideas and opportunities opened.
Just over a year later, BreadVault has now come full circle, and we have solved that pain point in our household regarding child money. Now, my kids know exactly what they are saving for, how much they have saved, and how much they have left to save towards their spending goals, long-term savings goals, and charitable giving goals. The fund flows are now electronic (still real, though) and my kids can add to, subtract from, and re-rank their goals at any time, and the funds automatically adjust to their changes. In addition, all of this is now done with just the tap of an app.
We are eager to release the BreadVault platform to all of you so that you can ease your own pain in trying to effectively manage your children’s money. Barring any more development delays, which only means that we want nothing less than perfection, we are just days away from letting our beta participant households in on the fun.
Rethinking “Allowance”
Posted: May 1, 2012 Filed under: Uncategorized | Tags: #FinLit, allowance system, child finances, child money management Leave a comment »If you read Rethinking Chores, you learned that BreadVault promotes the use of a child “wage” or “salary” as the preferred means of rewarding kids for meeting a performance standard you set for them. So, it makes sense that we should discard the term “allowance” at this juncture. Over time, an allowance starts to resemble a per diem, and per diems tend to get taken for granted or abused. So, let’s call it a wage from now on.
How much wage should I pay my children? Before you do a Google search for a simple answer, we suggest you bookmark www.usdebtclock.org. The four ominous numbers below should set the proper motivation for you to address this question of “how much”.
Unfunded Social Security Liability = $15.6 Trillion
Unfunded Medicare Benefits Liability = $82.3 Trillion
Unfunded Prescription Drug Benefits Liability = $20.6 Trillion
US National Debt Liability = $15.7 Trillion
(Ref. www.usdebtclock.org 04.29.12)
Whether we choose to ignore it or not, the federal entitlements to which we have grown accustomed are at risk for our children. The most effective way for our children to avoid this future financial duress is to allow them to start managing their own discretionary economy at a younger age. Instead of carrying out the economic decisions on behalf of your children and sliding them a arbitrary “allowance”, consider allowing your children to take ownership of their own economic decisions under your supervision.
You can start by identifying the line items that represent your kids’ discretionary expenses – i.e. their “wants” – within your household budget. These items might include iTunes, new clothes, camp dues, concert tickets, etc. (Don’t be surprised if your kids think these are all fixed, non-negotiable needs.) Once all of the discretionary expenses are identified, cut and paste them into a separate worksheet. Next, quantify the total monthly dollar amount that you normally budget for those same discretionary expenses and transfer a virtual wage equal to that amount onto the child’s worksheet. From there, let them reset their own budget amount for each category with one prerequisite: the sum of their budget should not exceed the wage you offered! Finally, give them the tools to set savings goals for their future expenses and also encourage them to set long-term savings and philanthropic giving goals as additional budget items.
BreadVault is built to accommodate this system of management on a web + mobile platform, and we’ve made it simple and seamless for you and your children to manage.
Ross Almlie, CEO
Rethinking Chores
Posted: April 26, 2012 Filed under: Uncategorized | Tags: chores, jobs, kids 4 Comments »Not once have I ever heard a child utter the words, “When I grow up, I want to be an independent contractor.” So, why do we pay our kids per chore completed around the house?
As a parent who tried the chore system with my oldest child, I quickly noticed an unhealthy pattern developed. When she was really pressing for that American Girl doll, she would jump at the chance to empty the dishwasher, set the table and separate the recycling. Then came the standard trailing question, “Can I have my money now?” At other times, when she had no immediate “wants” on her radar, I’d witness a very unenthusiastic and insufficient response to that same list of chores.
I explained to her that a firefighter is not compensated for each fire extinguished, nor is a nurse compensated for the number of patients seen in a day. Rather, we get paid to produce high quality work and to carry our load as part of a team, no matter the number of tasks completed in a given day. As adults, if our performance on the job doesn’t match or exceed the expectation set forth in the job description, we risk getting demoted or fired. That is the real world, and that is the world our kids will one day enter. So, why color it differently for them today?
In my daughter’s case, something had to change. The chore system was clearly not leading her down the right path, so we transitioned to a monthly salary, which came with a job description. Now she knows that if she meets the performance standard, the money will show up in her BreadVault account at the end of the month. If she doesn’t, we reserve the right to dock her pay or completely eliminate it. Thankfully, we haven’t encountered that kind of laziness yet.
As Mohandas Gandhi so eloquently put it, “Satisfaction lies in the effort, not in the attainment.” When our kids understand this, they will have acquired work ethic and the understanding that sometimes work comes without a tangible reward. So, bag the pay-for-chores system for something more relevant and effective.
Ross Almlie, CEO
Rethinking Household Finance
Posted: April 24, 2012 Filed under: Uncategorized | Tags: #FinLit Leave a comment »As an 18-year veteran of the financial services industry and a father of two, I have lent an ear to families who are struggling to effectively teach their kids to be financially responsible. They are looking for solutions for what’s not working in their household. Truth is, many adults are a bit of a financial mess themselves, and so the advice often extends beyond the children. It’s just not an easy task for any age to master unless you really have a sense of urgency for your financial matters.
We believe that your children will benefit from BreadVault if you, as parents, are willing to rethink household finance. There are some 20th Century financial education methods that are no longer effective for teaching kids about money. The good news is that there are several new methods that work magnificently, and a few of them rely on easy-to-learn technology. BreadVault brings both the education and the technology together in one simple system on the two platforms which we spend most of our waking hours…web + mobile.
Over the next few weeks, our team will blog a series of 21 techniques and concepts of household finance that are effectively working for modern families. Bookmark this blog and revisit it every so often.
We’ll kick it off on Thursday with Blog #1: “Rethinking Chores”. If you are paying your kids to do chores, you are doing them a disservice. (We can’t wait to explain this one.)
Ross Almlie, CEO
Fargo…This Must be the Place
Posted: April 10, 2012 Filed under: Uncategorized | Tags: #BreadVault, #Fargo 1 Comment »If I had a nickel for every time someone told me that BreadVault needs to move out to Silicon Valley to become successful, I’d have a nice start to my kids’ BreadVault accounts. Don’t get me wrong. I love it out in Silicon Valley. I spent time there when the bright minds behind Freeinternet.com, Pets.com, Boo.com, and e.Digital were just getting funded. All kidding aside, I have a tremendous amount of respect for the idea. I love the ocean, the tech vibe, the whole nine…but Fargo is home, and the grass only gets greener where you water it. (copyright my friend Jon Hauser) We choose to water it here in Fargo. It’s not so ridiculous when you consider the following facts about Fargo…
- average new home price is about $160k
- located in a state with a budget surplus
- premium office space averages about $15 per square
- has the nation’s second lowest unemployment rate
- 45% state tax credit to residents who invest in state’s new startups
- daycare costs about $500/month
- schools among the best in the country
- 7 minute average commute
- great colleges and universities
- family-friendly community
- low state tax rates
- significant economic benefits from oil boom in the Bakken Formation (Western ND)
Sounds like a sensible place to get launched, right? I didn’t say glamorous. I said sensible. When your company truly wants to optimize efficiency, come to the Midwest. Better yet, come to Fargo. We’ll take you in.
Ross Almlie
CEO/Founder
We’re Hiring!
Posted: January 26, 2012 Filed under: Career Leave a comment »Are you a rockstar coder, or do you know one? Join our team!
UPDATE 2012-01-31: We’ve opened up this position to Minneapolis residents.
UPDATE 2012-03-30: This position has been filled. Welcome, Shane!
What inspires you to give?
Posted: December 23, 2011 Filed under: Give | Tags: charity Leave a comment »
Rachel Beckwith heard that there are people in the world who die because they don’t have access to clean drinking water. This inspired her to ask for donations instead of presents for her ninth birthday. What an enlightened girl she was! Her heartbreaking story led on to inspire many others to raise over a million charity:water.
What inspires you to give?
It Pays To Wait
Posted: October 11, 2011 Filed under: Invest | Tags: buy and hold, Economics, Finance Leave a comment »
It’s a bear market. The S&P 500 fell 20% in the last couple months. Many of us hear this news and get depressed. But investors savvy on delayed gratification might do little more than raise an eyebrow before turning back to their morning cup of joe. These patient investors recognize the other edge of this sword.
In the last Planet Money podcast, Jacob Goldstein lays it out for his co-host Robert Smith. He discusses with Robert how he’s automatically investing a portion of his paycheck in the stock market, saving up for his retirement little by little, and explains:
The next couple of years are irrelevant to you. You my friend, are not going to retire for a couple of decades or more… this 20-plus-year outlook for corporate profits, it has not changed in the past couple of months.
He goes on to explain that a 20% drop in the market means that investments (shares of other company’s profits) are 20% off. They’re on sale!
Read more about dollar cost averaging on Wikipedia.
