WellesleyWeston Magazine

FALL 2012

Launched in 2005, WellesleyWeston Magazine is a quarterly publication tailored to Wellesley and Weston residents and edited to enrich the experience of living in two of Massachusetts' most desirable communities.

Issue link: https://wellesleywestonmagazine.epubxp.com/i/78488

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Page 155 of 211

family matters "live within a budget" that puts money in my pocket. A liability is something that takes money out of my pocket." If you want to be well off, Kiyosaki advises buying assets, not liabilities. While this makes intuitive sense, what isn't always clear is the difference between assets and liabilities. Is a house an asset? Or a car? Or an iPod? While each of these things can be won- derful—even essential—they are not considered assets according to Kiyosaki's definition, as they are taking money out of your pocket. To build a solid foundation, young people need to be buying real income- producing assets—stocks, bonds, mutual funds, CDs, and other secu- rities—not liabilities. 3. Live your own lifestyle—not that of your parents or the Joneses. Many of our kids have grown up with rather gracious lifestyles. And while we think we are doing our kids a favor by providing them with so many opportunities and items, we may be setting them up with expec- "It is important to realize that a credit card is not a debit card. It is a loan, plain and simple." tations they may not be able to afford on their own, at least initially. Learning to create and live within a budget is one of those essentials that can empower kids to life free from the anxiety of debt. It can also help them distinguish between needs and wants and manage the desire for more that can get them into a financial bind. A recent poll con- ducted by ForbesWomen and the National Endowment for Financial Education found that a majority of young persons have not been able to live within their means: Fifty-nine percent of parents are providing financial support to their adult children who are no longer in school. 4. Good credit makes the world go round. Establishing a good credit rating is important to being able to secure a lease or funding for a future home or business. Opening a credit card with rather strict limits on balances is a good place to start. This 154 WellesleyWeston Magazine | fall 2012 MEDIA BAKER Y

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