Wow!  We sure have gotten some interesting hate mail - oh, um... I mean feedback from you folks lately!  Apparently, our readership has gone through the roof as more and more readers are dying to reach through the computer screens to either choke the life out of a Tycoon writer, or to give him a high five!

Your feedback has motivated me to give you some free advice on one of the best actions that you can take to help your kids.  What feedback am I talking about?

Well, a few weeks ago, people were cursing at Teeka when he put out his article: "Will China Eat Us All."

Dylan has been talking about "killing" mortgage brokers for pushing risky ARM loans on the 20- somethings (which have crippling impact on your children's future no matter which way you slice it.)  I saw an overwhelming amount of finger-pointing from our readers, and I have to say that I was disappointed with a lot of what I read. 

The borrowers said, "That's right!  Those big bad brokers should be next in line after Saddam."  The lenders and brokers said that either they disagreed with ARMs and therefore didn't push them, or that "kids are so internet-savvy these days that they should have done their own research."  (Shocking assumption/cop-out.)

Then Jason wrote about the subtle changes in the US in his article:  "Capitalism gone wild" where he gives his opinion on the Starbucks tip jar, the bathroom guy who wants to push your soap dispenser for a couple bucks, and how people are paying big bucks to see guys kicking the crap out of each other on "Ultimate Fighting".  Again, an overwhelming number of responses, and again, some finger-pointing.

In response to your responses, in February, we're actually going to produce a pay-per-view program where five Chinese mortgage brokers get in a cage and have a celebrity death match with all five Tycoon editors.   (Watch out for "Big-T.")  Keep an eye out for it.  It should be pretty funny. 

Maybe you agree with their recent opinions, maybe you disagree.  Thank goodness your opinion has no impact on their track records.

I personally tend to shy away from stirring up a buzz based on my own controversial opinion.  But after reading your responses, I had to jump into this... 

Here's something that you may or may not feel comfortable digesting:  If your 20-something kids  are  screwing themselves over financially, then you CAN'T blame the mortgage brokers, you CAN'T blame the real estate guy, you CAN'T even blame the government. 

So, whose fault is it?  The 50-somethings!  That's right, I'm talking to YOU.  It's the generation that came before them.  How 'bout some accountability here, folks?   (I guess accountability isn't very popular in this country.)  The next thing you know, you'll start blaming the music the 20-somethings listened to.

I hesitate to simply blame the parents although I hold them most responsible.  But what about the other family members, the educators, or basically anyone who cares about the future of our country? 

This is the United States of America, and if you want to enjoy the privilege of the freedom to get what you want by having the ability to make it happen, then you have to also accept the responsibility of making it happen, as well.  Most people conveniently forget that part of the deal.

That's right.  You can't just expect to create a new life and then send him or her off to some school system, and everything will be okay.  You have to fill the holes that are in these stupid school systems like teaching financial management.  If you yourself lack the skills, that's understandable, but not an excuse.  You still have the ability to reach out there and try to learn.  If your kid sees you trying, at the very least, the example is set.

Hey, 20-somethings, how many classes did you take on wealth creation?  Balancing your checkbook?  Taxes (writeoffs?)  Saving?  How about investing?  At what age did you figure out that keeping cash in the bank at an interest rate lower than the rate of inflation is a great way to lose money over time... or do you even understand that yet? 

What percentage of your income goes to rent, or your car, partying, or clothing? ... Eh-hem - Savings?

How many classes did they offer you in school about leverage?  The positives and negatives?  That might have helped these kids when the big bad mortgage man ran up behind your kid with the pitchfork, huh?

How many of you young bucks are starting to realize that as your income goes up, your expenses are going up?  I once knew an ambitious 17-year-old kid from lower middle class Queens, New York who did a bunch of extra credit to get out of high school early so he could go to Wall Street and make the big bucks with his older buddies.  He didn't want his future generations to have to struggle like he did.  Since he had a passion for the job as well as the luck of having close friends in the business to provide good training, he started making six figures immediately.  By the time he was 20, he was driving a new Benz (and parking it for $30.00/day at work) and was going out to dinner in Manhattan every single night (and if you've gone out to eat in Manhattan, you understand my point.)  But guess what: he always had less than $10,000.00 in the bank.  Zero in stock.

Can you guess how I know this guy so well that I know what his bank statements looked like each month?  Gosh, I wish I heard the saying, "It's not what you make, it's what you save," long before I had to pay taxes.

How much did you invest into stock before you were 18?  Parents?  Did you do anything here?  (And don't write in telling me that not everyone can do that.  I know that not EVERYONE can do that.  But most of the people reading this could afford two shares of CSCO, 10 shares of Apple or five shares of Intel.)  I know, I know: "How much could I possibly make with five shares of Intel?"  First of all, depending on how long ago you bought it, it's probably a lot.  But that's not the point.  The point is that if you, as a parent, bothered to buy your kid five shares of Intel, and you made it a point to show the kid the brokerage statements, then you just bought your kid (and maybe yourself) an education that most schools never provide.  The price tag?  Today it's about $100.00 (Intel's just over $21.00.)

And what if the stock goes down?  Down money is better than spent money.

That simple exercise may have even replaced that (forgivable) loan that you've recently provided him/her with.

How the hell is it that schools don't have at least one class/year on "Managing Your Finances"?  It's kinda important, wouldn't you say?  It's no wonder why so few people hold most of our country's wealth.

PLEASE someone try telling me I'm wrong about this.  I'll just talk next week about the fact that consumer debt is at record highs with savings at record lows.

If you never teach your kids about health, then it's your fault if they have heart problems as an adult.  And yes, they do have health class in school (now,) but it all starts at home.

If you sit there and point fingers at everyone else, you know what?  Like you, your kids will lack accountability for their own mistakes in life and will have a hard time taking the initiative to improve themselves or their surroundings (such as school systems, economy, government or anything that they believe in.)

One thing that I was fortunate enough to learn from my mother was to fight when things are tough.  Never curl up in the fetal position, and if you're going to go down, then go down swinging.  Thank goodness.  That's the only thing that bailed me out of the lack of education in money management skills.  My education in money management was going broke a few times (and getting up and dusting myself off and trying again) before I made it.  What an expensive tuition.  Imagine if that money that was blown had been invested, instead?

Look, folks, you can only do what you can do.  Sometimes you try to teach your kids until you're blue in the face, but it just doesn't happen.  But if you try, then you can't blame yourself.  THEN you can kill mortgage brokers.  And, 20-somethings: The worst thing that you can do (especially if you are over-leveraged due to an ARM loan or anything like that) is sit there, and mope around pointing fingers and calling yourselves "the victim".  It's irrelevant.

So what CAN you do?  Two things:

1) Forgive your parents.  Whatever the outcome, just keep fighting.  You've just paid up for a very expensive tuition.  Don't point fingers because it won't help.  But pay attention and learn from the mistakes that were made.

2) Buy a few shares of stock for a child that you care about.  You might be able to pay about $100.00 (a steep discount) for the very same tuition.  Consider it "averaging down."  This way you've bought two tuitions at half price.

Your feedback below will be respected.


“Profit from the Trend”

Chris Rowe
Chief Investment Officer
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