Self-made millionaire Larry Lynch visited the New Jewish Academy in Worcester last week to teach his financial literacy course, which is sponsored by local banks.
Larry Lynch, a venture capitalist and self-made millionaire who educates children and families on saving money, is putting a new spin on the old phrase “money talks.” Only he’s translated the complex language of finance into a kid-friendly series of conversations titled “So, who wants to be a millionaire?”
Although it may sound like a get-rich-quick plan or a hit game show, it is actually a method of instilling financial planning into adolescent minds, and if they listen to the man who has temporarily taken over their classroom, they could become millionaires themselves and set their bloodlines up for generations of wealth, according to Lynch. He said parents and teachers are not thrilled with the title of his course, but the children “eat it up,” and it is those students he is trying to reach.
Lynch has been educating children on the value of a dollar and the importance of saving, building credit and making financially sound decisions for five years. With sponsorship from local banks, he – or financial professionals who have been trained to teach his course – visit Massachusetts schools to help kids understand just how money works.
Natick-based Middlesex Savings Bank is one of the sponsors. Dana Neshe, senior vice president of the bank, said the idea of promoting financial literacy is important to many financial institutions. When Lynch came to Middlesex Savings looking for a new sponsor last year, the bank was quickly sold on the idea.
“He is great,” said Neshe. “He brings that energy and that passion to it, and the kids love it. It’s contagious. He gets them right from the get-go.”
According to Neshe, people are starting to pay more attention to the importance of teaching financial literacy at a young age. She said everyone has heard horror stories about young and naive spenders ruining their credit with their first credit cards. Such tales have induced an industry-wide reaction, she said.
“The old financial solutions are gone,” said Lynch, citing Social Security and pensions as things today’s children shouldn’t count to carry them after retirement. He said those are further examples of the importance of financial planning at a young age.
‘Generations of Wealth’
Lynch, who is also the author of the book “Help Your Kids Become Millionaire$” and creator of the Web site www.KidsFutureUSA.org, said he believes there are many Americans who have wealth potential of which they are not aware. He said the one thing children possess that adults lack is time. They can start saving now, invest at age 18 and be millionaires within 50 years.
Lynch teaches the kids that putting $2.47 per day, or $1,000 per year, into a Roth IRA will give them $1,163,909 of tax-exempt money in the bank by the time they are ready to retire. The Roth IRA also will be producing more than $100,000 in interest by then, he said.
“What we are doing is cascading generations of wealth. I want more people to understand how this works,” said Lynch. “Today, there is the best opportunity for personal wealth. The most powerful tool is mathematics.”
Lynch knows he has to give his students more than a math lesson, but a sure way to get their attention is to dangle their wealth potential in front of them.
“I am a millionaire,” said Lynch, wearing a bowtie and a big smile as he spoke to a room full of middle schoolers at the New Jewish Academy in Worcester last week.
“You are a millionaire?” asked a series of young voices that echoed one another.
“Being a millionaire is not anything wild and crazy. Yes, I am a millionaire,” he answered back. “Life is pretty good.”
Lynch now had their attention. As he talked about an upcoming trip to the Bahamas and not having had to work for the past six years – not to mention that he is set for life – it was clear he had captivated his audience.
As Lynch proceeded with the lesson, he went on to talk about the importance of establishing credit, budgeting and savings. Even in middle school, students can have a budget, he explained to them with a series of illustrations projected behind him and scenarios the kids could relate to.
“If you own too much stuff, the stuff will end up owning you,” Lynch told the youngsters. “There is a process called cash flow. Businesses use it, and you can use it, too. I want you to be the boss of your money.
“And how do I get good credit? You need to convince someone to lend you money, and then pay it back on time. You’ve got to do it; you don’t want to wreck it.”
“So credit is like a reputation,” said a young man in the audience who had raised his hand. Lynch smiled as it became apparent the students were starting to absorb his teachings.
According to statistics from the American Bankers Association, 50 percent of kids say they have not been taught about money in school or at home. Several bankers are starting to think about their next generations of customers and the right ways to reach them early. For example, Arlington-based Leader Bank has The Kids Bank Club, which is a way to attract young savers and get them in the routine of making deposits.
“We have a very fancy-looking passbook,” said Sushil Tuli, president and chief executive officer of Leader. Tuli also mentioned that when kids open a savings account with $100, they get a $10 gift certificate valid at more than 60 Arlington stores.
The Kids Bank Club has been available for two years. In that time, 439 youngsters have become Leader Bank customers, according to Tuli.
Tuli said he also believes the way to educate kids is in the classroom. Leader Bank managers, and sometimes even Tuli himself, make trips to the Hardy Elementary School every other Thursday. At that time, students are allowed to open accounts or deposit money into their existing account with Leader. Sometimes kids have birthday or holiday gift money. Other times they have a handful of change. “We bring the bank to the school,” Tuli noted. “The idea is teaching the kids to save money.”
Leader Bank also has worked with other schools and after-school programs to help kids start to save and value money.
“You know what I see is the pride of knowing it’s their money. They say, ‘This is my money.’ It is necessary to teach kids to save money. At any age, saving is needed. The right age is as soon as you can read numbers,” Tuli said. “We feel that the kids today are our future customers.”
