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Great gifts for kids that instill financial savvy

Pay Day
REUTERS/Lucas Jackson Warren Buffett, America’s second-richest man. Sure, we all know that an Ivy League education, stint at a blue-chip firm, and stellar sales skills can help us get ahead. But it may surprise you just how many lesser known, seemingly random variables contribute to your professional success.  From the month you were born to your comedic timing, the weirdest quirks can affect how successful you’ll ultimately be. We combed through research on success to identify 12 surprising things that can influence your career trajectory. While some factors can be sought out, others are beyond your control. This is an update of an article written by Alison Griswold. For starters, your birth month is hugely important in determining success. There’s a ton of research on what’s variously called the “relative-age effect,” “month of birth bias,” or “birth-date effect.” The basic principle is that kids born right before an annual cutoff date for starting school or sports are at a disadvantage because they’re essentially a full year younger than other members of the group. That makes a big difference in physical, emotional, and intellectual maturity. On the other hand, just missing the date means you will be more developed than your peers. Malcolm Gladwell popularized this idea in “Outliers,” which explored how more professional hockey players from Canada were born in January, February, and March than any other months. The reason? Canada’s cutoff date for hockey programs is Jan. 1. Similar research has shown that the number of CEOs with June and July birthdays is far below the expected normal distribution. That’s because kids born in June and July are usually the youngest in school, putting them at an early intellectual disadvantage. Your birth order influences your personality and development. Research shows that first-borns are highly ambitious and competitive. They tend to excel academically and, according to CareerBuilder, are the most likely to earn six figures and hold a C-level position. Middle children are considered strong team players and negotiators. Career-wise, they’re the most likely to work in entry-level jobs and earn less than $35,000. The youngest siblings are usually the most creative and entertaining in their families. Because of this, they often end up in creative roles or mid-level management. Finally, only children are most likely to be self-centered and success-seeking, and can also be unusually mature because they spend so much one-on-one time with their parents. Like first-borns, they often end up in C-level or six-figure positions, but can be less satisfied with their jobs than people who have siblings. Public or private school? It turns out that more expensive isn’t always best. That’s right, the latest data says that public schools actually outperform their costlier private peer institutions. University of Illinois professors Christopher and Sarah Lubienski published that surprising finding in their book, “The Public School Advantage: Why Public Schools Outperform Private Schools.” According to their research, students at private schools generally do well because they come from wealthy backgrounds and families with more advantages. But public schools are actually better when it comes to teaching math and keeping their teachers trained in the latest instructional methods. Your high school math performance can predict your future salary. If you ever thought about skipping algebra class, here’s a big reason not to: Higher achievement in math is correlated to higher salaries later in life. Regardless of high school graduation status, students who complete advanced math courses like algebra II and geometry have been later found to earn $1.30 to $1.66 more per hour than students that didn’t reach that level. In a 40-hour week, that means you could make an additional $66 if you paid attention in class. Kids who play sports achieve greater academic success. Regular exercise and participation on a sports team are both linked to greater academic performance. In one study conducted by the Los Angeles Unified School District, student-athletes were found to attend on average 21 more days of school than their peers and earn GPAs that were 0.55 to 0.74 points higher. Other research has found that college students who exercise regularly get better grades, and that students who study a lot are more likely to exercise on a regular basis. Military service can also shape your leadership abilities. People from military backgrounds might make the best leaders, according to a new working paper from the National Bureau of Economic Research. And knowing if someone has military experience can tell you a lot about their management style. The authors find that CEOs who’ve served in the military are (1) more conservative financially, (2) less likely to be involved with corporate fraud, and (3) better equipped to steer firms through tough times. Sounds like a pretty good combination. Healthy sleeping habits are linked to better grades. It turns out that all-nighters probably aren’t worth your time. The cost of sleep deprivation is greater than the knowledge you might gain from studying. Research shows that the less high school students sleep, the worse they tend to perform in class and on assessments. According to one study, students who receive C’s, D’s, and F’s in school get on average 25 fewer minutes of sleep than A- and B-students. It also helps to be a morning person. It seems the early bird does, in fact, get the worm. Research shows that people who perform best in the morning do better in their overall careers than those who hit their stride in the evening. One explanation for this is that evening people are out of sync with the normal corporate work schedule. Morning people are affiliated with better grades, which lead them to better colleges and presents them with better job opportunities. Early risers are also thought to be more proactive, which is another indicator of career success. Taller people make more money and are seen as more competent. The small and average-sized among us are short on luck. According to one book on height and success, bosses are more likely to hire a taller person (even when given two identical resumes) and have a positive first impression of them. Tall people are in control of their physical space, which increases the sense that they are self-assured and commanding. They tend to make more money, work in high-paying careers, and shine in jobs that emphasize social interactions. Attractive people also enjoy greater career success. There’s no other way to say it: Attractive people are simply more successful. Good-looking people usually get hired and promoted quicker and enjoy higher salaries than their less attractive coworkers. According to one recent study, hotter CEOs also help the bottom line. Research shows that hiring an attractive CEO can boost stock prices on that person’s first day and any time he or she appears on television. These CEOs also fare better in M&A transactions. A good sense of humor helps people build connections. A well-timed joke can be the quickest route to building a new relationship and can also increase productivity. Laughing and smiling produces dopamine, a neurotransmitter that stimulates our brain’s learning functions to up efficiency, creativity, and engagement. According to one study, happy employees were found to be 31% more productive and generate 37% higher sales than their peers. For leaders, humor can help to win over employees and come off as empathetic and approachable. And using a nickname could significantly boost your salary. Believe it or not, people who go by shorter names tend to earn more money. According to one analysis of nearly 6 million names by career site TheLadders, every extra letter in your first name can correspond to a $3,600 drop in annual wages. If you’re debating between “Sam” and “Samantha,” that’s a big difference. LinkedIn has conducted similar research showing that the most popular CEO names worldwide — Peter, Jack, and Fred — are either short names or shortened versions of names. So long as your nickname sounds professional, it can help convey friendliness and openness while also earning you more money. Now, see how your parents shape your success: How 14 Things That Happened To You In Childhood Shape You As An Adult Read more stories on Business Insider, Malaysian edition of the world’s fastest-growing business and technology news website.

Grandparents scrambling to buy the “perfect” gift may want to pause and consider something a little more practical than a remote-controlled car or a Frozen Barbie doll. Consider items that help kids learn about money and ways to save, share, and spend it.

Cash or gift cards

While not always the best choice, dollar bills or coins can sometimes hit the right note.

‘If you’re doing money, give cash to young children, as they  can connect with the value of money when it’s in cash rather than a gift card or cheque,” says Kathryn Mandelcorn, a certified money coach with Money Coaches Canada in Vancouver (http://moneycoachescanada.ca/about/kathryn-mandelcorn/). “Sometimes giving cash can feel like you are not making an effort in your gift giving but I believe on the contrary. It allows the child to make decisions with money on how to spend or save it.”

It works even better when you help with those decisions, going with them to make choices in a store and even allotting a portion to sharing.

“In many cases, money can be powerful if used in the right way,” says Darren Coleman, certified financial planner, portfolio manager, and assistant branch manager at Raymond James in Toronto (http://raymondjames.com/colemanwealth/index.htm). “You can say, ‘I’d like to go with you to spend it. You are going to give some of it a charity and we’re going to work on who we’re going to give it to and why that is meaningful to you. Certain charities have catalogues where you can buy a well or a medical kit; something tangible like that is especially good for kids.

“Then when you go shopping together, you can say ‘we’re going to talk about what you like, what you’re interested in, so you become educated about how you should make purchases,’” he adds.  “They might have $100 to spend at Chapters or Sport Chek and they have to make economic decisions: will they buy one big thing or three smaller things? Gift cards for kids are interesting because they can be an educational tool: if you do it well you can get a child educated on becoming a consumer and being involved in making choices.”

For relatives wanting to give money to preteens but who are worried it will just get squandered, Mandelcorn suggests “dream building”.

“Dream building is a wonderful way to give,” she says. “It may be the child’s dream or it may be a reflection of your dream – a love of travel, for instance. Open an account for your preteen and every month deposit an amount, perhaps $10 a month. By the time they have graduated they have an amount set aside to travel or for whatever other dream they have.”

Money-related games or toys

One of Lee Richmond’s  top recommendations for those looking to instill a little financial savvy into their young’uns this holiday season is the Moonjar Savings Bank. The three-part box has sections labelled Save, Share, and Spend.

“This is my all-time favourite,” says the owner of Kaboodles Toy Store (http://www.kaboodlestoystore.com/) in Vancouver and Victoria. “It really teaches younger kids, up to about age 10, how to separate their money. They can visually understand the concept of saving for something in the future, even if that future is in only two weeks. Also, so many parents these days are trying to teach their children about giving to others, and this is one way to do it. It’s also a way to teach fractions and percentages.”

A home-made spin on this, Mandelcorn notes, is to take four mason jars, let the kids decorate them, and label them Spend, Save, Invest, and Give.

Other toys for kids aged three and up, Richmond says, include the Teaching Cash Register by Learning Resources, which contains Canadian play money, an LCD screen that displays transactions, and a talking checkout scanner; and Star Wars Math Workbooks from Thomas Allen Publishers.

Then there are board games.

“Monopoly is a great game for kids to understand the value of money and how to save, spend and invest,” Mandelcorn says. “The traditional game is the best.”

For teenagers, she suggests the  Cashflow board game by RichDad.com (http://www.richdad.com/apps-games/cashflow-classic.aspx), which is a game the whole family can play together.

Books

Kids eight and under may enjoy the Zela Wela Kids’ Learn about Money or Build a Bank (http://www.zelawelakids.com/store/), Mandelcorn says, while several books teach young people about generosity and sharing (http://www.the-best-childrens-books.org/teaching-generosity.html).

For teenagers, she suggests Living Me to We: The Guide for Socially Conscious Canadians or Craig Kielburger’s  Lessons from a Street Kid.

“Find a book that your teen would connect to,” Mandelcorn says. “It can inspire your to give back. Giving is a huge part of receiving, especially when it comes to money.”

RESP contribution

This idea is better for older kids, since little ones still like having something to open on Christmas Day.

“A Christmas contribution during the teenage years allows you to start the conversation about post-secondary education,” Mandelcorn says.  “What are the expectations? What portion will you pay for? Teaching your children about the cost of education early allows for you to plan together. Show them their RESP account and how they receive grant money and about the power of compound interest and the benefits of investing over the long term.”

Just be sure to check with the parents to make sure the gift doesn’t result in an  overcontribution, Coleman notes: there are limits in place and excess contributions will  result in negative tax implications.

Stocks

Purchasing stock for a grandchild isn’t that common a gift these days.

“I think it’s great, but I don’t think kids get much out of it,” Coleman says. “It sounds interesting, but I don’t think the kid cares. They get a stock certificate and they just don’t understand it.”