Team McCallum

R&D for Lifetime of Life

How to make your kids rich!

According to two separate studies published recently, making your kids rich is as easy as 1-2-3! Literally!

The first was a study carried out by James P Smith of RAND Corporation, John McArdle of the University of Southern California and Robert Willis of the University of Michigan. They looked at who makes the financial decisions in the family, and what affects the success of these decisions.

Typically in older families, the decision maker was usually male, although this may be changing in younger families.

The researchers looked at a series of cognitive capabilities, such as memory function, but found only one with a strong connection to financial success, and that was numerical capability. Where both partners could correctly answer 3 simple numerical questions, the average family wealth was $1.7 million, compared to an average of just $200,000 for families where neither partner could answer any of the 3 questions.

The numerical skills tested here were typical of maths taught at school.

The study, published in Economic Journal, also found that with each extra question answered, the family had more wealth invested in the stock market, suggesting this is where the knowledge of maths made a difference.

So the issue is now, how do you get your kids to cope with school level maths?

In a second study, Prof Susan Levine of the University of Chicago investigated why some kids do better on standardised maths tests at school than others. Her team went into homes where there were children aged 14 months to 30 months, videotaped interactions with their parents, and tested the children’s maths ability at just under 4 years old.

There was an enormous variation in the amount of number-related words spoken to a child, from as little as 28 words per week to 1,800 per week.

When the parents talked more about numbers and played number games with the baby, their child scored better on the maths test at age 4.

This links to better maths on entry to school, which in turn is linked to better maths later on in school.

Prof Levine’s research is published in Developmental Psychology.

So, if you want your kids to get a head start in maths at school and get rich in life, talk numbers to them and play simple number games with them. As simple as 1 block, 2 blocks, 3 blocks. As easy as 1-2-3!

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November 10, 2010 - Posted by | Finance, Learning, Relationships, Success

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