Hey friends,

Thought of an idea recently that may be helpful for parents and kids out there.

But before I get into that, yes, for this idea I was consulting AI. Irony chimes since a few posts ago I wrote about being careful with AI as it can start dominating your day with useless threads: “why is the sky blue?”

That was a bit tongue in cheek; for some people, it really is useful to know why the sky is blue! The reality is, everything in life is contextual and you get out what you put in.

Anyway, on the topic of money (why we're all here right 😅), I keep hearing the same thing from people: “I wish I learned this stuff earlier.”

It’s true, there is almost no finance forward education in regular schools today, at least in Canada. When I spoke to a room of ~100 high school seniors about investing and finance, it was met with a room full of hands up.

Great to see that engagement, but telling. I asked the head of school, what is it that prevents schools from teaching kids about money?

The answer is: money! Rather, the lack of it to invest in training teachers up to a level where they feel comfortable teaching about money.

Anyway, as I routinely ponder over this, last week I decided to prompt this into Claude:

“parents want nothing more than for their kids to suceed and have a good eductation schooling experience. with AI, it should be a powerful tool to augment the learning journey and an app that kids could use from when they're able to start reading all the way through to grade 12 that is fun and engaging and rewarding and results driven and also useful for the parnets as they should be able to monitor progress- and even interact and use the app in tandem. it would be an app we could build together, and charge a subscription. i need you to help me see if anyythjing like this exists on github and if there is an angle we should use to start this business idea, build it, market it, and start selling it! what do you think? should we focus on one thing only like reading or learning a language or finance? what would have the most demand and what is the market like for these products? surely there are lots of startups already doing this ideas but if the market is growing then there is market share for more. also canada innovations and implementations are usually slower than the US counterpart so maybe there is an attack angle for the canadian market for education?”

Yes, that was the actual prompt. The output and ensuing thread was cool. So cool that this went from “why is the sky blue” to, ok, there’s something real here to pursue.

And so I am.

Introducing SmartMoneyKids - AI Powered Financial Literacy for Canadian Kids.

Here’s what’s been accomplished so far, with the (focused) help of AI of course:

And here we are now. Long time readers might appreciate this initiative. I hope it really reaches people and helps the next gen.

If you're a parent and you want your kids to actually understand money before they learn it the hard way, join the waitlist.

And if you're not a parent but know one who'd want this, forward this email to them. That's the best way you can help me get this off the ground.

Back to regular programming below.

Eddie

PS Sneak peek of the protoype:

Stock market is getting rocked. Broad indices are down 5-7% from all time highs made in January just two months ago.

I remind you, this stuff happens all the time.

Dec 26, 2021 - S&P500 hit an all time high.

By November 2022, one year later, the S&P500 was down 23%.

It was a helluva painful slow grind down that entire year. I remember explicitly as I was still managing rich people’s money for a living.

Can anyone remember why it dropped 23% without googling?

What about the 22% grind down in 2018?

Can you remember that without googling?

What about the 2020 35% collapse?

Hopefully you got that one without googling.

All this is to say, markets go down all the time.

It’s just too hard to say (1) how much lower they’ll go, (2) when it will stop, and (3) when the march upward continues.

Those are three (3) very difficult and critical judgements to make. One mistake and air ball.

Long term readers of the Journal know how I feel about trying to time the market…

A generation of investors that “missed the golden opportunity” to invest in March 2009 have silently been cheering for a similar catasrophe - this is when we get our Christian Bale Michael Burry moment!

Assume it does happen, do you think they’ll have the intuition to make that three (3) point shot?

Rhetorical, yes. That was.

TLDR; keep it simple, earn more, spend less, invest the diff, early and often, own the market for a long time and you’ll do just fine.

Randomly checked a beachfront apartment on zillow to see the price. $1.2 million.

Then I checked the strata fee - $900!

Pricey. But it is an old apartment complex, so not all that surprising.

Anyway, I thought to myself, what does an extra $900 payment imply financially?

Basic home financing terms - 5% interest, 75% mortgage - a $900/mo strata payment effectively increases the cost of the home by about $100,000 - 10x the annual amount. Ball park of course.

Not that strata living is bad. The fee is worth something after all: collectively the strata corporation you pay money to takes care of common area maintenance, insurance, gardening, snow removal etc. Some people value not having to rake leaves and pull weeds every saturday. It’s an exchnage of time and money. Simple as that.

But before you go thinking a strata living situation is ideal for you, remember that strata payments effectively make the cost of your purchase higher, and moreover, they never stop, they’ll only increase (unlike an amortizing mortgage payment).

As I always like to say, crunch the numbers before buying anything.

“The only way you can lose is if you invest zero

Because if you invest zero

You will stay at zero.”

—Jim Chuong

Parents - any input as smartmoneykids.ca gets off the ground?

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