Leverage. Interest rates. Passive income. Sounds like the kinds of lessons you'd learn at a college-level economics course.
It's also the curriculum at a unique summer camp known as the Money Camp. At the camp, based in Santa Barbara, Calif., children ranging in age from 10 to 17 spend a week learning about saving money, investing that money and making money work for them. This is about more than just opening a savings account and waiting for your interest to grow.
"There's sailing camp and space camp and English camp and drama camp, but there wasno money camp," says Elisabeth Donati, the camp's executive director. "I said, why doesn't somebody do a money camp?"
Donati started the camp in 2002 with one class of 39 kids. Now, it has grown to more than a dozen classes across Southern California, and several imitators are springing up around the country.
Children are given paychecks and learn how to distribute their funds with an emphasis on paying themselves first. That savings is then used to invest in stocks, real estate and businesses. The goal by the end of camp is to have enough passive income from all of their assets to outweigh their expenses. If they can achieve that balance in real life, they will work because they want to work, not because they have to work.
Preston Nicholes made the 17-hour, 1,000-mile drive from Boise, Idaho to Santa Barbara to bring his 12-year-old daughter, Kirsten, to the Money Camp this summer. Nicholes says he has earned and lost millions of dollars in the last 30 years, and he doesn't want his daughter to make the same mistakes he has made.
"Money grabs at us all at some point in our lives," says Nicholes. "It becomes a very difficult problem. I think this will give her some ammunition to deal with some of those problems when those challenges come along."
By the end of her week at the Money Camp, Kirsten is able to explain the concept of leverage to her father.
"That's when you use other people's time, money and energy for your own benefit," says Kirsten.
"We have a tremendous amount of parents who drop their kids off and say 'I can't wait to see what I get to learn this week', says Donati. "That's fun for us."
Donati says the Money Camp has become so popular among parents that she now offers Money Camp classes for adults during the fall and spring. She says you're never too old to start learning new financial tricks.
"Look at what you're making," says Donati. "Look at what you're spending. Take the difference, and invest it in assets that are going to produce passive income and cash flow, so you can reach your dreams. It's so simple, but nobody gets it."
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