A Contract for the Kids

Now that I have my first teenager I've been thinking a lot about how the frontal cortex is not fully developed until around the age of 25. (This was from that fantastic lecture series by Robert Sapolsky from The Teaching Company - "Biology and Human Behavior: The Neurological Origins of Individuality, 2nd Edition." Again, I highly recommend this course!)

I was thinking about coming up with a contract with my kids to sign, maybe when they start high school, or perhaps when they go off to college. Here's what I was thinking of including:

- Don't get married before 25.
- Don't have a kid before 25.
- Don't get a tattoo before 25.
- Don't get a credit card before 25.
- Do call us if you're ever in trouble.
- Never drive under the influence or ride with anyone under the influence.
- Always wear your seat belt or helmet.
- Always use protection no matter what the other person says.

Hmm. Maybe this is getting a bit long. And kids need to be able to make some of their own mistakes. I'm just trying to figure out how to minimize the possibility of the biggest ones.

I need to mull it over a bit more. I've got another year and a half before my oldest heads off to high school. Probably the best next step is to work on what it should contain together and see if he has any ideas and if he has any questions about what I already put on the list.

Ah, the grand experiment, parenthood. In 20 years I'll let you know if this made any difference. And even then I probably won't be able to be certain. :)

No Corners

After this historic election, reading things on www.factcheck.org, talking with friends, reading comments online, it's amazing how polarized things get.

As if we were all so different. In reality most of us are trying to do good things with the best of intentions. That's why when people try to demonize people on the other side of a political stance, to me it feels contrived, like so much hyperbole.

This reminds me of the old Tom Lehrer line he said before his song "National Brotherhood Week." "There are people out there that do not love their fellow man, and I hate people like that!"

But seriously, back in my 20s I came to the realization that no one has the corner on the truth market. Most of the polarizing arguments represent a false dichotomy presented in a very biased fashion by both sides.

Fundamentally I think people find clear cut divisions more appealing than fuzzy gray areas and I suppose that's why the divisions we see out there develop and are played upon.

My thought is a little doubt goes a long way. If you're willing to think about the possibility that you may be wrong and look at not just the other side of an argument, but at what might be between those points of view, in the process you'll come to a deeper understanding of your own beliefs and learn more about others as well and possibly come to a new solution even if you simply end up reaffirming what you believe in.

Bottom line - anything worth believing is worth questioning.

Great Article on Credit Default Swaps

On the way home from work on Friday I listened to a fantastic article on NPR about Credit Default Swaps. Sounds really exciting, I know. :)

Here's the article, give it a listen, it's really eye-opening!

As I listened to the article, it became clear to me, at least in part how the economy got to this point. Years of sub-prime mortgages had a large number of families living on the edge. Those same families probably had little to no savings as well.

Although we already had more foreclosures than usual, when the cost on gas and other goods went up substantially people barely hanging on couldn't any more.

The massive amount of foreclosures starts breaking the chains of Credit Default Swaps that have been building up and it all starts unraveling. Poof!

Hindsight is 20-20 of course. If more people were more cautious fiscally and had savings to tide over rough times, if sub-prime mortgages were much more cautiously granted, and if there was complete visibility of the Credit Default Chains, we'd be better off.

I understand there were many other factors, but it seems that at least these three are obvious and actionable. It will be interesting to see how it all plays out.

And every day I think how much my Mom influenced my financial thinking. Thanks to her we have no worries because the idea of being financially stretched makes me itch. Thanks Mom!