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Teaching Kids About Money Through Laundromats
I would say that one of my biggest passions revolves around my kids. And that is to teach them about money and entrepreneurship. This for me is, without a doubt, my favorite thing I love about this business and why I love to own a Laundromat.
When my eldest daughter was 8, one day she came up to me with her wallet and showed me how much money she had managed to save up. She had $347. I was impressed; man I never had that kind of money when I was only 8 years old, and so I said to her, “Wow, that’s a lot of money. Well, I guess you are old enough now for us to go down to the bank and open up a savings account.” I had been teaching my kids the Kiyosaki (Robert Kiyosaki, author of Rich Dad, Poor Dad) concept that, the rich don’t work for money, they know how to have money work for them. And she said, “Oh no, Dad, I don’t want to do that! I want to buy a money machine like you have in your Laundromat! Can I buy a washing machine?”
I could not believe it. All I could think was, THAT’S MY GIRL! And a huge smile came across my face. But now I had a problem, because the Laundromat had no room for any more washers. So I told her, “I’m sorry sweetheart, the Laundromat doesn’t have room for any more washers.” Then added, “but it does have room for a vending machine that sells toys and stickers for kids. So I’ll tell you what I’m going to do. I will partner with you on it and we can go into business together.” Her face lit up with excitement, as did mine and when we figured it out, it cost about $1,200 to buy the vending machine and fill it up with all the stuff. So I made her a deal that I would loan her the rest of her half of the money but she would have to do all the work for the business. Well to make a long story short, within 5 months, she was able to pay back the $253 she owed me for her half of the vending business and her net profit each month is about $60. That is a 10% monthly return, Wow!
But the teaching didn’t stop there. In order for her to get her share of the profits, she needs to fill out a Profit and Loss statement and a Balance Sheet each month. And the lessons keep coming. Every time we do a collection, which happens once a month, afterwards we stop by Mc Donald’s for breakfast and the business picks up the tab. I tell her that when you own a business, the business pays for your meals, but when you work for someone else, you have to buy your own food.
About 6 months into her business while we were counting the collection one day, I asked her, “How many hours do you figure it takes for you to run your business per month?”
She said, “Well, if you include driving time and counting everything, it takes about 4 hours a month.”
Then I said, “So how much is that per hour?” and she said, “$15”.
Then I asked, “How many hours do you spend doing your chores each week?” and her face began to frown as she said, “about 6 hours.”
Then I asked, “And how much is your allowance?” Still frowning she said, “$3.”
“So how much is that per hour?” and she said frowning even more, “fifty cents.”
Then I said, “so tell me which is better, to work for yourself or to work for someone else?”
It was like ding! A light had turned on and then a huge smile broke out on her face as she said, “to work for yourself.”
A week later she came up to me and asked if it would be alright if she hired her younger brother to do some of her chores. I said sure, as long as you oversee his work. She is now 11 and she still runs her vending business. And as we got other stores, the other kids want a piece of the action!
As a result of this business, we constantly have money conversations with our kids. I think teaching our kids how to make and handle money is one of the most important things we can do as parents. Sadly in this country, the subject of finances is never taught to kids at a young age. Instead, kids are being bombarded with ads and commercials on how to become spenders instead of investors. And these lessons are not taught in school either. So, one of the things that I have been doing, is going to local schools and teaching kids in the 4th and 5th grades about investing and being an entrepreneur.
- Brian Brunckhorst
