full transcript

From the Ted Talk by Adam Carroll: What playing Monopoly with real money taught me about my kids--and humanity

Unscramble the Blue Letters

I recently coleetmpd an unsanctioned, unsupervised psychological experiment on my children, (Laughter) the premise of which was $10,000 in cash on the kitchen table and a sign next to it that said 'Don't touch the money yet!', and before I dive into it, you should know that we are a game-playing family. We play ball games, baord games, dice games, card games, all stors of games, but the games that my children love to play most are games like Monopoly, and when they play Monopoly, they play marathon gmeas of Monopoly that last hruos and hours over days of play. Each of my kids has a unique strategy and prleoitnsay when they play Monopoly. My daughter, who is 11, she is always the dog. She plays entirely for Chance and Community Chest cards; (Laughter) you can say that she uses the 'luck' strategy. My 9-year-old son is always the car - a very strategic pelayr. He buys all of the Railroads and all of the Utilities and then peodcres to put houses and hotels on the most expensive properties - very svavy. And then his younger brother, who is seven, he buys everything that he lands on with no exception, which is fitting because he is the wherorblaew. Now, before I tell you how my experiment uefldond, I have to share an observation that led me to the creation of it. One mloponoy marathon, stuaardy morning, I was playing with my kids and noticed that they were all pinlyag just outside of the rleus of the game. So they were doing things like buying each other out of jail and lending each other money to buy properties, and I found myself going, 'Guys, this is not how this game is played!' to which they'd say, 'Dad, it's fine! We just want her on the board with us', or, 'He can pay me back at the end of the game, when he's flush with cash', and I'm thinking again, 'What am I teaching these kids?' So, I seattrd watching how they were playing - listening to their banter, getting a feel for how they were making decisions - and I had this thought: 'What if they're playing this way because the money isn't real?' It's a concept I've been rndaeig a lot about, lately, 'Financial abstraction', the notion that when money becomes more and more of an idea, less tangible and therefore more abstract, it changes the way we interact with it on a regular baiss, and there's anecdotal evidence of abstraction everywhere around us. All you have to do is listen carefully to people who say, 'I loaned my child or grandchild the phone, and a month later, all these errant in-app charges sweohd up on my bill.' In 2014, Apple reimbursed customers for in-app purchases that were unapproved, mostly by children, to the tune of $32.5 mioliln. This is in a US FTC settlement. In the documentation, it said it was just too easy for kids to make an in-app purchase. The Imagineers at Disney were charged with mikang the parks 'frictionless' - is what they called it - so they invested a billion dollars in a MagicBand. It's a wabelrae device that functions as your room key, your park tikcet, and your ID and wallet when you're on park property. So if your child wants a set of ears and a dessert in the Magic Kingdom, 'bibbidi-bobbidi-boo' - (Laughter) your vacation just cost a whole lot more, magically. Magically. lsatly, I had a conversation with some teenagers who told me that $100,000 a year really wasn't that much money. I said, 'Really? Why do you think that?' They said, 'Well, we both have $500,000 in our ATM machines on ganrd tehft Auto', (Laughter) which is a very popular and somewhat sketchy video game. So as I'm playing with my kids and I'm wchnitag them play, listening to them talk, I thought, 'What if the money were real on the table? Would they play differently?' And so I calculated quickly on the box, 'How much would it take in capital, in currency, to play a physical game of Monopoly with my kids so that they actually tangibly got to feel the money in their hands?' And I estimated, for four or five players, it's about $10,000. So one Friday, I stopped at the bank, I got all the denominations of bills on a Monopoly board with the exception of a $500 bill - hard to get - and on Sunday, I rounded the fialmy up for a high-stakes game of Monopoly, (Laughter) where the wiennr taeks all. All of $20, by the way. All of $20. You have never seen kids' eyes light up the way mine did when I handed each of them $1,500 in starter capital, and you have never seen anyone's eyes lghit up like my wife's when I took it back on Monday. (Laughter) All of it. Our marathon game only laetsd two and a half hours - far srohter and more strategic than most of the games they normally play. True to my hypothesis, two of my three kids actually played differently; my daughter still played the 'luck' card. She was the first one bankrupted, (Laughter) and she hippaly retired to the lvniig room to read a book. My ysenougt son, the wheelbarrow, did not buy everything he landed on; instead, he carefully calutelacd how many rolls away he was from one of his brother's properties and how much he would owe his bteohrr if he landed on said potrpery, and made his dneiioscs based on that. In effect, having real money on the tbale and a cash prize at the end made him more conservative. And my midlde son - very strategic - still bought all of the Railroads, still bought all of the Utilities, but did not buy Boardwalk and Park Place or Mayfair and Park Lane, but instead, he put hotels immediately on oinaetrl and Baltic Avenue, or Coventry and Leicester Square on the UK version. When I asked him why, in his own words, he said, 'Dad, they're just more aodalfbrfe properties.' (Laughter) At which point, I cried a tear of prdie. (Laughter) So he got it! In the end, my son finished with 28 properties, more cash than he'd ever seen and held in his entire life, and he now knows the meaning of the phrase 'making it rain'. (Laughter) Look how hpapy he is, (Laughter) and how annoyed his brother and sister are. In the confines of my enemxpiert, there is an idea worth spreading, and it is this: I believe kids today are being raised in a world where money is no longer real; it's actually an illusion, but it has very real consequences. Peter Drucker, famed leadership guru, said banking and finance idseurnits tdoay are less about money and more about information, and yet young people today don't get that information; they don't get the experiences of money, early on. Three researchers from the Centre for Creative Leadership, in a study done two decades ago that's been replicated many, many tmeis, they interviewed over 200 executives in a report called 'Key events in executives' lives'. In this rproet, they found that of the 200 top-level eicutevexs who were the top of their game, all of them had samliir characteristics. One of them was that elray on in their career, they had been thrust into a leadership role that rqrieued them to make decisions that had serious consequences. They also had a mentor in pclae that helped them appreciate the loensss they were supposed to learn from those experiences. The study created a leadership framework that said, in escnsee, that someone with potential, if given the onptitpoury to enagge in slrelaattcigy relevant experiences and given the ability to learn the lessons from those experiences, would have a higher likelihood of success in their career in a leadership capacity. Now if you took that study framework and my $10,000 experiment and looked at it through the kaleidoscope, you would get a statement like this: if kids are given financially-relevant experiences in their life and someone is there to help them learn the lessons from those experiences, they have a higher likelihood of achieving financial success later in life, and in my humble opinion, they need to have them early, and they need to have them often. We under this not-so-subtle societal shift in the way that we pay each other, today. It's estimated there are trillions of dollars circling the gbole in our global economy every single day, yet only four percent of that money is actually in coin or currency. The rest is all digital, data pakctes, ones and zeroes, and today's digital-native youth - they don't see people paying with cash or cheques. In fact, if ever you're in a line, and someone in front pulls out their chequebook to pay, you are liable to say to yourself, 'Really, a chequebook? This is going to take forever.' You're laughing because it's true. The currency of today is digital. Many of these kids equate spending with credit and debit cards, with Google Wallet and Paypal and Zap. All of these are what they equate spending to, and by the way, I am not pooh-poohing the technological advancements in payment tolchenogy today - far from it. I think tnoeioktiasn and randomisation and biometrics are the wave of the future. The first time that I used alppe Pay, it was like showing the caveman fire. It was amazing. But what snapped me back to reality was hearing my son behind me say, 'I sure wish I had a phone so I could buy stuff.' (lueahgtr) You see, money, to a young person, is somewhat abstract, anyway, and when we further the abstraction by waving a MagicBand or putting our ponhe over a sensor and giving the thumbprint, all it does is further the actorstiabn. It's a recipe for financial disaster later in life to the uneducated because, to a young person, they see money as limitless because they have no concept of the baenkcd until it comes around to bite them in the back end. I've seen this fnirthasd in my work with university sttudnes - young people who borrow and spend uoltnd antomus of money, having no concept or understanding of the increase in payments, the decrease in lifestyle, and the challenges they'll face later on. In the UK and the US, student debt is ballooning problem. In the US, we're at $1.2 trillion in student loan debt, second only to mortgage debt in the US. One in three students is delinquent. One in five is in default. It's a huge peblorm, and the reason that this is concerning for all of us as a global economy is this: Dun & Bradstreet found that people spend 12 to 18 percent more when using credit cards over cash. They have yet to do a sduty how much more we'll spend with a MagicBand or a phone, but I can imagine it would be 15 to 20 percent, or 18 to 25 percent, and all you need to do is read the headlines in the newspapers and magazines across the world today. Places like The Guardian, The Washington Post, Fortune, Forbes - these are the headlines we're seeing: 'New consumer debt reaching a seven-year high' in the UK, 'Consumer debt hitting an all-time high' in the US, 'Choking on credit card debt', 'The credit card debt crisis: the next economic domino'. It's what happens when people overspend and get in over their head with money. Unfortunately, The Money Charity says that in the UK right now, one person every five muitens and three scndeos is either daeclred insolvent or bankrupt. To put this into perspective, since I started speaking today, two people in this cunrtoy have declared bankruptcy. In the UK, Demos.org says that aiecnamrs aged 25 to 34 have the second highest rate of bpauctnrky. 25-year-olds. Everyone's question should be, 'Why? Why is this happening?', and in my simplistic view, it is this: because the money they're sdnepnig isn't real - it's an abstraction. So to stem this tide with the next generation, we have to bring them up to understand that they are living in a world where they have to make very real money decisions, in a world money is largely an illusion but has very, very real consequences. Because I want your cdhilren and mine to be suepr successful facniianlly, consider any of the following: If you are going to spend mnoey on children, give them a set amount of money and let them spend it. Let them tangibly feel the money go through their hands. Let them succeed or fail with minor consequences so that later in life, when they're making the major decisions, they understand there are major consequences that go along. For older kids, it's this: set a beeudtgd amount for soochl cltohes, supplies and what-have-you, give them that aumnot, and when they are done spending it, it's done. And here's the key; they get to spend it with your subtle giacndue, your subtle mentorship, your subtle supervision, and whether you call it an aocawlnle, you call it cismoismon for chores or you call it a wlekey stipend, every single child, from the age of five on up, needs to be given some tangible amount of money on a weekly basis so that they urnnetasdd how to function in a cashless society someday. Better to taceh the young the habit of saving when they have a little bit of money to save than try to teach savings when they have no money because they're in over their head. I met an American named José. He was a 20-year-old student at an aceiamrn urestniivy. He was the child of two Cuban-born parents. At the age of 15, his parents told him, 'José, we will give you food, we will give you shelter and we will give you $50 a month, but the rest is up to you.' I asked him, 'What was that like?' He said, 'Clothing, toiletries, school spepulis, entertainment, gas - it was all on me. I renesetd my parents for a year. But you know what? I realised it was the single best thing they could have ever done for me.' When I met José at 20, he was on a full-ride scholarship at the university he attended. He had $20,000 saved in a savings account from working part-time in high school, and this kid exuded financial prowess and unmistakable leadership potential. At the heart of my mseagse today is this: it does not take a $10,000 board game and it doesn't take cutting kids off financially to make a difference. The first step is, honestly, quite easy. It's about eadntciug the next generation to make decisions in a world where money is largely an illusion but has very, very real csenqcoeneus, and the reason it's so imotanprt for all of us, as a gaolbl soicety, to do this is this next generation coming up will iinerht the global eomnocy that we are handing to them, and we will precariously place it on their sudlorehs. We owe it to them to set them up for financial success. Thank you. (Applause) Thanks. (apspuale)

Open Cloze

I recently _________ an unsanctioned, unsupervised psychological experiment on my children, (Laughter) the premise of which was $10,000 in cash on the kitchen table and a sign next to it that said 'Don't touch the money yet!', and before I dive into it, you should know that we are a game-playing family. We play ball games, _____ games, dice games, card games, all _____ of games, but the games that my children love to play most are games like Monopoly, and when they play Monopoly, they play marathon _____ of Monopoly that last _____ and hours over days of play. Each of my kids has a unique strategy and ___________ when they play Monopoly. My daughter, who is 11, she is always the dog. She plays entirely for Chance and Community Chest cards; (Laughter) you can say that she uses the 'luck' strategy. My 9-year-old son is always the car - a very strategic ______. He buys all of the Railroads and all of the Utilities and then ________ to put houses and hotels on the most expensive properties - very _____. And then his younger brother, who is seven, he buys everything that he lands on with no exception, which is fitting because he is the ___________. Now, before I tell you how my experiment ________, I have to share an observation that led me to the creation of it. One ________ marathon, ________ morning, I was playing with my kids and noticed that they were all _______ just outside of the _____ of the game. So they were doing things like buying each other out of jail and lending each other money to buy properties, and I found myself going, 'Guys, this is not how this game is played!' to which they'd say, 'Dad, it's fine! We just want her on the board with us', or, 'He can pay me back at the end of the game, when he's flush with cash', and I'm thinking again, 'What am I teaching these kids?' So, I _______ watching how they were playing - listening to their banter, getting a feel for how they were making decisions - and I had this thought: 'What if they're playing this way because the money isn't real?' It's a concept I've been _______ a lot about, lately, 'Financial abstraction', the notion that when money becomes more and more of an idea, less tangible and therefore more abstract, it changes the way we interact with it on a regular _____, and there's anecdotal evidence of abstraction everywhere around us. All you have to do is listen carefully to people who say, 'I loaned my child or grandchild the phone, and a month later, all these errant in-app charges ______ up on my bill.' In 2014, Apple reimbursed customers for in-app purchases that were unapproved, mostly by children, to the tune of $32.5 _______. This is in a US FTC settlement. In the documentation, it said it was just too easy for kids to make an in-app purchase. The Imagineers at Disney were charged with ______ the parks 'frictionless' - is what they called it - so they invested a billion dollars in a MagicBand. It's a ________ device that functions as your room key, your park ______, and your ID and wallet when you're on park property. So if your child wants a set of ears and a dessert in the Magic Kingdom, 'bibbidi-bobbidi-boo' - (Laughter) your vacation just cost a whole lot more, magically. Magically. ______, I had a conversation with some teenagers who told me that $100,000 a year really wasn't that much money. I said, 'Really? Why do you think that?' They said, 'Well, we both have $500,000 in our ATM machines on _____ _____ Auto', (Laughter) which is a very popular and somewhat sketchy video game. So as I'm playing with my kids and I'm ________ them play, listening to them talk, I thought, 'What if the money were real on the table? Would they play differently?' And so I calculated quickly on the box, 'How much would it take in capital, in currency, to play a physical game of Monopoly with my kids so that they actually tangibly got to feel the money in their hands?' And I estimated, for four or five players, it's about $10,000. So one Friday, I stopped at the bank, I got all the denominations of bills on a Monopoly board with the exception of a $500 bill - hard to get - and on Sunday, I rounded the ______ up for a high-stakes game of Monopoly, (Laughter) where the ______ _____ all. All of $20, by the way. All of $20. You have never seen kids' eyes light up the way mine did when I handed each of them $1,500 in starter capital, and you have never seen anyone's eyes _____ up like my wife's when I took it back on Monday. (Laughter) All of it. Our marathon game only ______ two and a half hours - far _______ and more strategic than most of the games they normally play. True to my hypothesis, two of my three kids actually played differently; my daughter still played the 'luck' card. She was the first one bankrupted, (Laughter) and she _______ retired to the ______ room to read a book. My ________ son, the wheelbarrow, did not buy everything he landed on; instead, he carefully __________ how many rolls away he was from one of his brother's properties and how much he would owe his _______ if he landed on said ________, and made his _________ based on that. In effect, having real money on the _____ and a cash prize at the end made him more conservative. And my ______ son - very strategic - still bought all of the Railroads, still bought all of the Utilities, but did not buy Boardwalk and Park Place or Mayfair and Park Lane, but instead, he put hotels immediately on ________ and Baltic Avenue, or Coventry and Leicester Square on the UK version. When I asked him why, in his own words, he said, 'Dad, they're just more __________ properties.' (Laughter) At which point, I cried a tear of _____. (Laughter) So he got it! In the end, my son finished with 28 properties, more cash than he'd ever seen and held in his entire life, and he now knows the meaning of the phrase 'making it rain'. (Laughter) Look how _____ he is, (Laughter) and how annoyed his brother and sister are. In the confines of my __________, there is an idea worth spreading, and it is this: I believe kids today are being raised in a world where money is no longer real; it's actually an illusion, but it has very real consequences. Peter Drucker, famed leadership guru, said banking and finance __________ _____ are less about money and more about information, and yet young people today don't get that information; they don't get the experiences of money, early on. Three researchers from the Centre for Creative Leadership, in a study done two decades ago that's been replicated many, many _____, they interviewed over 200 executives in a report called 'Key events in executives' lives'. In this ______, they found that of the 200 top-level __________ who were the top of their game, all of them had _______ characteristics. One of them was that _____ on in their career, they had been thrust into a leadership role that ________ them to make decisions that had serious consequences. They also had a mentor in _____ that helped them appreciate the _______ they were supposed to learn from those experiences. The study created a leadership framework that said, in _______, that someone with potential, if given the ___________ to ______ in _____________ relevant experiences and given the ability to learn the lessons from those experiences, would have a higher likelihood of success in their career in a leadership capacity. Now if you took that study framework and my $10,000 experiment and looked at it through the kaleidoscope, you would get a statement like this: if kids are given financially-relevant experiences in their life and someone is there to help them learn the lessons from those experiences, they have a higher likelihood of achieving financial success later in life, and in my humble opinion, they need to have them early, and they need to have them often. We under this not-so-subtle societal shift in the way that we pay each other, today. It's estimated there are trillions of dollars circling the _____ in our global economy every single day, yet only four percent of that money is actually in coin or currency. The rest is all digital, data _______, ones and zeroes, and today's digital-native youth - they don't see people paying with cash or cheques. In fact, if ever you're in a line, and someone in front pulls out their chequebook to pay, you are liable to say to yourself, 'Really, a chequebook? This is going to take forever.' You're laughing because it's true. The currency of today is digital. Many of these kids equate spending with credit and debit cards, with Google Wallet and Paypal and Zap. All of these are what they equate spending to, and by the way, I am not pooh-poohing the technological advancements in payment __________ today - far from it. I think ____________ and randomisation and biometrics are the wave of the future. The first time that I used _____ Pay, it was like showing the caveman fire. It was amazing. But what snapped me back to reality was hearing my son behind me say, 'I sure wish I had a phone so I could buy stuff.' (________) You see, money, to a young person, is somewhat abstract, anyway, and when we further the abstraction by waving a MagicBand or putting our _____ over a sensor and giving the thumbprint, all it does is further the ___________. It's a recipe for financial disaster later in life to the uneducated because, to a young person, they see money as limitless because they have no concept of the _______ until it comes around to bite them in the back end. I've seen this _________ in my work with university ________ - young people who borrow and spend ______ _______ of money, having no concept or understanding of the increase in payments, the decrease in lifestyle, and the challenges they'll face later on. In the UK and the US, student debt is ballooning problem. In the US, we're at $1.2 trillion in student loan debt, second only to mortgage debt in the US. One in three students is delinquent. One in five is in default. It's a huge _______, and the reason that this is concerning for all of us as a global economy is this: Dun & Bradstreet found that people spend 12 to 18 percent more when using credit cards over cash. They have yet to do a _____ how much more we'll spend with a MagicBand or a phone, but I can imagine it would be 15 to 20 percent, or 18 to 25 percent, and all you need to do is read the headlines in the newspapers and magazines across the world today. Places like The Guardian, The Washington Post, Fortune, Forbes - these are the headlines we're seeing: 'New consumer debt reaching a seven-year high' in the UK, 'Consumer debt hitting an all-time high' in the US, 'Choking on credit card debt', 'The credit card debt crisis: the next economic domino'. It's what happens when people overspend and get in over their head with money. Unfortunately, The Money Charity says that in the UK right now, one person every five _______ and three _______ is either ________ insolvent or bankrupt. To put this into perspective, since I started speaking today, two people in this _______ have declared bankruptcy. In the UK, Demos.org says that _________ aged 25 to 34 have the second highest rate of __________. 25-year-olds. Everyone's question should be, 'Why? Why is this happening?', and in my simplistic view, it is this: because the money they're ________ isn't real - it's an abstraction. So to stem this tide with the next generation, we have to bring them up to understand that they are living in a world where they have to make very real money decisions, in a world money is largely an illusion but has very, very real consequences. Because I want your ________ and mine to be _____ successful ___________, consider any of the following: If you are going to spend _____ on children, give them a set amount of money and let them spend it. Let them tangibly feel the money go through their hands. Let them succeed or fail with minor consequences so that later in life, when they're making the major decisions, they understand there are major consequences that go along. For older kids, it's this: set a ________ amount for ______ _______, supplies and what-have-you, give them that ______, and when they are done spending it, it's done. And here's the key; they get to spend it with your subtle ________, your subtle mentorship, your subtle supervision, and whether you call it an _________, you call it __________ for chores or you call it a ______ stipend, every single child, from the age of five on up, needs to be given some tangible amount of money on a weekly basis so that they __________ how to function in a cashless society someday. Better to _____ the young the habit of saving when they have a little bit of money to save than try to teach savings when they have no money because they're in over their head. I met an American named José. He was a 20-year-old student at an ________ __________. He was the child of two Cuban-born parents. At the age of 15, his parents told him, 'José, we will give you food, we will give you shelter and we will give you $50 a month, but the rest is up to you.' I asked him, 'What was that like?' He said, 'Clothing, toiletries, school ________, entertainment, gas - it was all on me. I ________ my parents for a year. But you know what? I realised it was the single best thing they could have ever done for me.' When I met José at 20, he was on a full-ride scholarship at the university he attended. He had $20,000 saved in a savings account from working part-time in high school, and this kid exuded financial prowess and unmistakable leadership potential. At the heart of my _______ today is this: it does not take a $10,000 board game and it doesn't take cutting kids off financially to make a difference. The first step is, honestly, quite easy. It's about _________ the next generation to make decisions in a world where money is largely an illusion but has very, very real ____________, and the reason it's so _________ for all of us, as a ______ _______, to do this is this next generation coming up will _______ the global _______ that we are handing to them, and we will precariously place it on their _________. We owe it to them to set them up for financial success. Thank you. (Applause) Thanks. (________)

Solution

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  5. decisions
  6. globe
  7. takes
  8. games
  9. spending
  10. shorter
  11. rules
  12. showed
  13. amounts
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  16. commission
  17. wheelbarrow
  18. saturday
  19. declared
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  24. started
  25. technology
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  34. making
  35. money
  36. million
  37. educating
  38. inherit
  39. engage
  40. consequences
  41. allowance
  42. university
  43. financially
  44. industries
  45. resented
  46. seconds
  47. oriental
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  56. lasted
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  64. place
  65. personality
  66. supplies
  67. amount
  68. study
  69. wearable
  70. applause
  71. experiment
  72. board
  73. savvy
  74. hours
  75. playing
  76. monopoly
  77. property
  78. report
  79. phone
  80. youngest
  81. unfolded
  82. player
  83. lastly
  84. minutes
  85. shoulders
  86. watching
  87. happy
  88. society
  89. laughter
  90. reading
  91. light
  92. family
  93. country
  94. early
  95. school
  96. children
  97. affordable
  98. apple
  99. abstraction
  100. guidance
  101. american
  102. americans
  103. happily
  104. firsthand
  105. problem
  106. message
  107. packets
  108. weekly
  109. tokenisation
  110. bankruptcy
  111. grand

Original Text

I recently completed an unsanctioned, unsupervised psychological experiment on my children, (Laughter) the premise of which was $10,000 in cash on the kitchen table and a sign next to it that said 'Don't touch the money yet!', and before I dive into it, you should know that we are a game-playing family. We play ball games, board games, dice games, card games, all sorts of games, but the games that my children love to play most are games like Monopoly, and when they play Monopoly, they play marathon games of Monopoly that last hours and hours over days of play. Each of my kids has a unique strategy and personality when they play Monopoly. My daughter, who is 11, she is always the dog. She plays entirely for Chance and Community Chest cards; (Laughter) you can say that she uses the 'luck' strategy. My 9-year-old son is always the car - a very strategic player. He buys all of the Railroads and all of the Utilities and then proceeds to put houses and hotels on the most expensive properties - very savvy. And then his younger brother, who is seven, he buys everything that he lands on with no exception, which is fitting because he is the wheelbarrow. Now, before I tell you how my experiment unfolded, I have to share an observation that led me to the creation of it. One Monopoly marathon, Saturday morning, I was playing with my kids and noticed that they were all playing just outside of the rules of the game. So they were doing things like buying each other out of jail and lending each other money to buy properties, and I found myself going, 'Guys, this is not how this game is played!' to which they'd say, 'Dad, it's fine! We just want her on the board with us', or, 'He can pay me back at the end of the game, when he's flush with cash', and I'm thinking again, 'What am I teaching these kids?' So, I started watching how they were playing - listening to their banter, getting a feel for how they were making decisions - and I had this thought: 'What if they're playing this way because the money isn't real?' It's a concept I've been reading a lot about, lately, 'Financial abstraction', the notion that when money becomes more and more of an idea, less tangible and therefore more abstract, it changes the way we interact with it on a regular basis, and there's anecdotal evidence of abstraction everywhere around us. All you have to do is listen carefully to people who say, 'I loaned my child or grandchild the phone, and a month later, all these errant in-app charges showed up on my bill.' In 2014, Apple reimbursed customers for in-app purchases that were unapproved, mostly by children, to the tune of $32.5 million. This is in a US FTC settlement. In the documentation, it said it was just too easy for kids to make an in-app purchase. The Imagineers at Disney were charged with making the parks 'frictionless' - is what they called it - so they invested a billion dollars in a MagicBand. It's a wearable device that functions as your room key, your park ticket, and your ID and wallet when you're on park property. So if your child wants a set of ears and a dessert in the Magic Kingdom, 'bibbidi-bobbidi-boo' - (Laughter) your vacation just cost a whole lot more, magically. Magically. Lastly, I had a conversation with some teenagers who told me that $100,000 a year really wasn't that much money. I said, 'Really? Why do you think that?' They said, 'Well, we both have $500,000 in our ATM machines on Grand Theft Auto', (Laughter) which is a very popular and somewhat sketchy video game. So as I'm playing with my kids and I'm watching them play, listening to them talk, I thought, 'What if the money were real on the table? Would they play differently?' And so I calculated quickly on the box, 'How much would it take in capital, in currency, to play a physical game of Monopoly with my kids so that they actually tangibly got to feel the money in their hands?' And I estimated, for four or five players, it's about $10,000. So one Friday, I stopped at the bank, I got all the denominations of bills on a Monopoly board with the exception of a $500 bill - hard to get - and on Sunday, I rounded the family up for a high-stakes game of Monopoly, (Laughter) where the winner takes all. All of $20, by the way. All of $20. You have never seen kids' eyes light up the way mine did when I handed each of them $1,500 in starter capital, and you have never seen anyone's eyes light up like my wife's when I took it back on Monday. (Laughter) All of it. Our marathon game only lasted two and a half hours - far shorter and more strategic than most of the games they normally play. True to my hypothesis, two of my three kids actually played differently; my daughter still played the 'luck' card. She was the first one bankrupted, (Laughter) and she happily retired to the living room to read a book. My youngest son, the wheelbarrow, did not buy everything he landed on; instead, he carefully calculated how many rolls away he was from one of his brother's properties and how much he would owe his brother if he landed on said property, and made his decisions based on that. In effect, having real money on the table and a cash prize at the end made him more conservative. And my middle son - very strategic - still bought all of the Railroads, still bought all of the Utilities, but did not buy Boardwalk and Park Place or Mayfair and Park Lane, but instead, he put hotels immediately on Oriental and Baltic Avenue, or Coventry and Leicester Square on the UK version. When I asked him why, in his own words, he said, 'Dad, they're just more affordable properties.' (Laughter) At which point, I cried a tear of pride. (Laughter) So he got it! In the end, my son finished with 28 properties, more cash than he'd ever seen and held in his entire life, and he now knows the meaning of the phrase 'making it rain'. (Laughter) Look how happy he is, (Laughter) and how annoyed his brother and sister are. In the confines of my experiment, there is an idea worth spreading, and it is this: I believe kids today are being raised in a world where money is no longer real; it's actually an illusion, but it has very real consequences. Peter Drucker, famed leadership guru, said banking and finance industries today are less about money and more about information, and yet young people today don't get that information; they don't get the experiences of money, early on. Three researchers from the Centre for Creative Leadership, in a study done two decades ago that's been replicated many, many times, they interviewed over 200 executives in a report called 'Key events in executives' lives'. In this report, they found that of the 200 top-level executives who were the top of their game, all of them had similar characteristics. One of them was that early on in their career, they had been thrust into a leadership role that required them to make decisions that had serious consequences. They also had a mentor in place that helped them appreciate the lessons they were supposed to learn from those experiences. The study created a leadership framework that said, in essence, that someone with potential, if given the opportunity to engage in strategically relevant experiences and given the ability to learn the lessons from those experiences, would have a higher likelihood of success in their career in a leadership capacity. Now if you took that study framework and my $10,000 experiment and looked at it through the kaleidoscope, you would get a statement like this: if kids are given financially-relevant experiences in their life and someone is there to help them learn the lessons from those experiences, they have a higher likelihood of achieving financial success later in life, and in my humble opinion, they need to have them early, and they need to have them often. We under this not-so-subtle societal shift in the way that we pay each other, today. It's estimated there are trillions of dollars circling the globe in our global economy every single day, yet only four percent of that money is actually in coin or currency. The rest is all digital, data packets, ones and zeroes, and today's digital-native youth - they don't see people paying with cash or cheques. In fact, if ever you're in a line, and someone in front pulls out their chequebook to pay, you are liable to say to yourself, 'Really, a chequebook? This is going to take forever.' You're laughing because it's true. The currency of today is digital. Many of these kids equate spending with credit and debit cards, with Google Wallet and Paypal and Zap. All of these are what they equate spending to, and by the way, I am not pooh-poohing the technological advancements in payment technology today - far from it. I think tokenisation and randomisation and biometrics are the wave of the future. The first time that I used Apple Pay, it was like showing the caveman fire. It was amazing. But what snapped me back to reality was hearing my son behind me say, 'I sure wish I had a phone so I could buy stuff.' (Laughter) You see, money, to a young person, is somewhat abstract, anyway, and when we further the abstraction by waving a MagicBand or putting our phone over a sensor and giving the thumbprint, all it does is further the abstraction. It's a recipe for financial disaster later in life to the uneducated because, to a young person, they see money as limitless because they have no concept of the backend until it comes around to bite them in the back end. I've seen this firsthand in my work with university students - young people who borrow and spend untold amounts of money, having no concept or understanding of the increase in payments, the decrease in lifestyle, and the challenges they'll face later on. In the UK and the US, student debt is ballooning problem. In the US, we're at $1.2 trillion in student loan debt, second only to mortgage debt in the US. One in three students is delinquent. One in five is in default. It's a huge problem, and the reason that this is concerning for all of us as a global economy is this: Dun & Bradstreet found that people spend 12 to 18 percent more when using credit cards over cash. They have yet to do a study how much more we'll spend with a MagicBand or a phone, but I can imagine it would be 15 to 20 percent, or 18 to 25 percent, and all you need to do is read the headlines in the newspapers and magazines across the world today. Places like The Guardian, The Washington Post, Fortune, Forbes - these are the headlines we're seeing: 'New consumer debt reaching a seven-year high' in the UK, 'Consumer debt hitting an all-time high' in the US, 'Choking on credit card debt', 'The credit card debt crisis: the next economic domino'. It's what happens when people overspend and get in over their head with money. Unfortunately, The Money Charity says that in the UK right now, one person every five minutes and three seconds is either declared insolvent or bankrupt. To put this into perspective, since I started speaking today, two people in this country have declared bankruptcy. In the UK, Demos.org says that Americans aged 25 to 34 have the second highest rate of bankruptcy. 25-year-olds. Everyone's question should be, 'Why? Why is this happening?', and in my simplistic view, it is this: because the money they're spending isn't real - it's an abstraction. So to stem this tide with the next generation, we have to bring them up to understand that they are living in a world where they have to make very real money decisions, in a world money is largely an illusion but has very, very real consequences. Because I want your children and mine to be super successful financially, consider any of the following: If you are going to spend money on children, give them a set amount of money and let them spend it. Let them tangibly feel the money go through their hands. Let them succeed or fail with minor consequences so that later in life, when they're making the major decisions, they understand there are major consequences that go along. For older kids, it's this: set a budgeted amount for school clothes, supplies and what-have-you, give them that amount, and when they are done spending it, it's done. And here's the key; they get to spend it with your subtle guidance, your subtle mentorship, your subtle supervision, and whether you call it an allowance, you call it commission for chores or you call it a weekly stipend, every single child, from the age of five on up, needs to be given some tangible amount of money on a weekly basis so that they understand how to function in a cashless society someday. Better to teach the young the habit of saving when they have a little bit of money to save than try to teach savings when they have no money because they're in over their head. I met an American named José. He was a 20-year-old student at an American university. He was the child of two Cuban-born parents. At the age of 15, his parents told him, 'José, we will give you food, we will give you shelter and we will give you $50 a month, but the rest is up to you.' I asked him, 'What was that like?' He said, 'Clothing, toiletries, school supplies, entertainment, gas - it was all on me. I resented my parents for a year. But you know what? I realised it was the single best thing they could have ever done for me.' When I met José at 20, he was on a full-ride scholarship at the university he attended. He had $20,000 saved in a savings account from working part-time in high school, and this kid exuded financial prowess and unmistakable leadership potential. At the heart of my message today is this: it does not take a $10,000 board game and it doesn't take cutting kids off financially to make a difference. The first step is, honestly, quite easy. It's about educating the next generation to make decisions in a world where money is largely an illusion but has very, very real consequences, and the reason it's so important for all of us, as a global society, to do this is this next generation coming up will inherit the global economy that we are handing to them, and we will precariously place it on their shoulders. We owe it to them to set them up for financial success. Thank you. (Applause) Thanks. (Applause)

Frequently Occurring Word Combinations

ngrams of length 2

collocation frequency
global economy 3
eyes light 2
real money 2
real consequences 2
young people 2
higher likelihood 2
financial success 2
equate spending 2
credit card 2

Important Words

  1. ability
  2. abstract
  3. abstraction
  4. account
  5. achieving
  6. advancements
  7. affordable
  8. age
  9. aged
  10. allowance
  11. amazing
  12. american
  13. americans
  14. amount
  15. amounts
  16. anecdotal
  17. annoyed
  18. applause
  19. apple
  20. asked
  21. atm
  22. attended
  23. avenue
  24. backend
  25. ball
  26. ballooning
  27. baltic
  28. bank
  29. banking
  30. bankrupt
  31. bankruptcy
  32. bankrupted
  33. banter
  34. based
  35. basis
  36. bill
  37. billion
  38. bills
  39. biometrics
  40. bit
  41. bite
  42. board
  43. boardwalk
  44. book
  45. borrow
  46. bought
  47. box
  48. bradstreet
  49. bring
  50. brother
  51. budgeted
  52. buy
  53. buying
  54. buys
  55. calculated
  56. call
  57. called
  58. capacity
  59. capital
  60. car
  61. card
  62. cards
  63. career
  64. carefully
  65. cash
  66. cashless
  67. caveman
  68. centre
  69. challenges
  70. chance
  71. characteristics
  72. charged
  73. charges
  74. charity
  75. chequebook
  76. cheques
  77. chest
  78. child
  79. children
  80. chores
  81. circling
  82. clothes
  83. coin
  84. coming
  85. commission
  86. community
  87. completed
  88. concept
  89. confines
  90. consequences
  91. conservative
  92. consumer
  93. conversation
  94. cost
  95. country
  96. coventry
  97. created
  98. creation
  99. creative
  100. credit
  101. cried
  102. currency
  103. customers
  104. cutting
  105. data
  106. daughter
  107. day
  108. days
  109. debit
  110. debt
  111. decades
  112. decisions
  113. declared
  114. decrease
  115. default
  116. delinquent
  117. demos
  118. denominations
  119. dessert
  120. device
  121. dice
  122. difference
  123. differently
  124. digital
  125. disaster
  126. disney
  127. dive
  128. documentation
  129. dog
  130. dollars
  131. drucker
  132. dun
  133. early
  134. ears
  135. easy
  136. economic
  137. economy
  138. educating
  139. effect
  140. engage
  141. entertainment
  142. entire
  143. equate
  144. errant
  145. essence
  146. estimated
  147. events
  148. evidence
  149. exception
  150. executives
  151. expensive
  152. experiences
  153. experiment
  154. exuded
  155. eyes
  156. face
  157. fact
  158. fail
  159. famed
  160. family
  161. feel
  162. finance
  163. financial
  164. financially
  165. finished
  166. fire
  167. firsthand
  168. fitting
  169. flush
  170. food
  171. forbes
  172. fortune
  173. framework
  174. friday
  175. front
  176. ftc
  177. function
  178. functions
  179. future
  180. game
  181. games
  182. gas
  183. generation
  184. give
  185. giving
  186. global
  187. globe
  188. google
  189. grand
  190. grandchild
  191. guardian
  192. guidance
  193. guru
  194. habit
  195. handed
  196. handing
  197. hands
  198. happening
  199. happily
  200. happy
  201. hard
  202. head
  203. headlines
  204. hearing
  205. heart
  206. held
  207. helped
  208. high
  209. higher
  210. highest
  211. hitting
  212. honestly
  213. hotels
  214. hours
  215. houses
  216. huge
  217. humble
  218. hypothesis
  219. id
  220. idea
  221. illusion
  222. imagine
  223. imagineers
  224. immediately
  225. important
  226. increase
  227. industries
  228. information
  229. inherit
  230. insolvent
  231. interact
  232. interviewed
  233. invested
  234. jail
  235. kaleidoscope
  236. key
  237. kid
  238. kids
  239. kingdom
  240. kitchen
  241. landed
  242. lands
  243. lane
  244. largely
  245. lasted
  246. lastly
  247. laughing
  248. laughter
  249. leadership
  250. learn
  251. led
  252. leicester
  253. lending
  254. lessons
  255. liable
  256. life
  257. lifestyle
  258. light
  259. likelihood
  260. limitless
  261. line
  262. listen
  263. listening
  264. living
  265. loan
  266. loaned
  267. longer
  268. looked
  269. lot
  270. love
  271. machines
  272. magazines
  273. magic
  274. magically
  275. magicband
  276. major
  277. making
  278. marathon
  279. mayfair
  280. meaning
  281. mentor
  282. mentorship
  283. message
  284. met
  285. middle
  286. million
  287. minor
  288. minutes
  289. monday
  290. money
  291. monopoly
  292. month
  293. morning
  294. mortgage
  295. named
  296. newspapers
  297. noticed
  298. notion
  299. observation
  300. older
  301. opinion
  302. opportunity
  303. org
  304. oriental
  305. overspend
  306. owe
  307. packets
  308. parents
  309. park
  310. parks
  311. pay
  312. paying
  313. payment
  314. payments
  315. paypal
  316. people
  317. percent
  318. person
  319. personality
  320. perspective
  321. peter
  322. phone
  323. phrase
  324. physical
  325. place
  326. places
  327. play
  328. played
  329. player
  330. players
  331. playing
  332. plays
  333. point
  334. popular
  335. post
  336. potential
  337. precariously
  338. premise
  339. pride
  340. prize
  341. problem
  342. proceeds
  343. properties
  344. property
  345. prowess
  346. psychological
  347. pulls
  348. purchase
  349. purchases
  350. put
  351. putting
  352. question
  353. quickly
  354. railroads
  355. raised
  356. randomisation
  357. rate
  358. reaching
  359. read
  360. reading
  361. real
  362. realised
  363. reality
  364. reason
  365. recipe
  366. regular
  367. reimbursed
  368. relevant
  369. replicated
  370. report
  371. required
  372. researchers
  373. resented
  374. rest
  375. retired
  376. role
  377. rolls
  378. room
  379. rounded
  380. rules
  381. saturday
  382. save
  383. saved
  384. saving
  385. savings
  386. savvy
  387. scholarship
  388. school
  389. seconds
  390. sensor
  391. set
  392. settlement
  393. share
  394. shelter
  395. shift
  396. shorter
  397. shoulders
  398. showed
  399. showing
  400. sign
  401. similar
  402. simplistic
  403. single
  404. sister
  405. sketchy
  406. snapped
  407. societal
  408. society
  409. son
  410. sorts
  411. speaking
  412. spend
  413. spending
  414. spreading
  415. square
  416. started
  417. starter
  418. statement
  419. stem
  420. step
  421. stipend
  422. stopped
  423. strategic
  424. strategically
  425. strategy
  426. student
  427. students
  428. study
  429. stuff
  430. subtle
  431. succeed
  432. success
  433. successful
  434. sunday
  435. super
  436. supervision
  437. supplies
  438. supposed
  439. table
  440. takes
  441. talk
  442. tangible
  443. tangibly
  444. teach
  445. teaching
  446. tear
  447. technological
  448. technology
  449. teenagers
  450. theft
  451. thinking
  452. thought
  453. thrust
  454. thumbprint
  455. ticket
  456. tide
  457. time
  458. times
  459. today
  460. toiletries
  461. tokenisation
  462. told
  463. top
  464. touch
  465. trillion
  466. trillions
  467. true
  468. tune
  469. uk
  470. unapproved
  471. understand
  472. understanding
  473. uneducated
  474. unfolded
  475. unique
  476. university
  477. unmistakable
  478. unsanctioned
  479. unsupervised
  480. untold
  481. utilities
  482. vacation
  483. version
  484. video
  485. view
  486. wallet
  487. washington
  488. watching
  489. wave
  490. waving
  491. wearable
  492. weekly
  493. wheelbarrow
  494. winner
  495. words
  496. work
  497. working
  498. world
  499. worth
  500. year
  501. young
  502. younger
  503. youngest
  504. youth
  505. zap
  506. zeroes