Finance/Children

Hi Taylor: Based on what I’ve been reading, I get the feeling that we’re both afraid of and in Taylor control of inflaKovar tion. Am I right? Because that doesn’t really make sense to me. - Kira our money starts to feel useless and a lot of people struggle. If the dollar falls too far while the Yen or the Euro shoots up, our international leverage will suffer. You’ve probably heard stories of other countries (most notably Venezuela) where inflation has crippled the economy. There are no signs of that happening to us, but it’s the cautionary tale we need to be aware of.

Hey Kira: What a conundrum, right? If you type “Why is inflation” into your search bar, the top two autofills are probably going to be “good” and “bad.” We’re all apprehensive about it, but as long as the rate doesn’t get too high, and the rises and falls sort of match each other, inflation is just another tool of economics with pros and cons.

Pros. When you think about the economy, you have to look past jobs and GDP. Those are huge, significant markers, but the lending system has almost equal pull—as we learned the hard way back in 2008. Home, business, and personal loans serve as a massive pillar of commerce, heavily intertwined with our government as well as foreign governments. When inflation rises and gets close to or exceeds the current interest rate, borrowers can benefit. As a seller of bonds, our government can eliminate debt by selling bonds at an interest rate that starts higher but ends up being lower than the inflation rate. This can backfire when it comes to consumer confidence, but it’s something on the treasury department’s radar, especially when dealing with a deficit like the one we’ve got. Also worth considering: even if inflation makes people a little antsy, it creates a strong push toward buying and investing when rates come back down.

Cons. The main negative goes without saying. Should we get to the point where a soda costs $14, Control. We fight inflation by raising interest rates and decreasing spending, so the government can pull the opposite levers in an attempt to inflate. Low interest rates (as we’ve had for a while) lead to extra spending. Coupled with the stimulus and other big government projects, inflation would be expected to rise. Then, should the inflation rate eclipse the 2% target, the Fed might step in to adjust rates and try to hit a little inflation reset.

As you can see, there are a lot of things at play when it comes to this issue. With our big, deserving country and economy, it’s not as simple as saying that inflation is bad and should be avoided, though it’s understandably a little frightening for many investors. Hope this helps!

Legal Disclaimer: Information presented is for educational purposes only and is not an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. To submit a question to be answered in this column, please send it via email to Question@GoFarWithKovar.com or via USPS to Taylor Kovar, 415 S 1st St, Suite 300, Lufkin, TX 75901. Many times have I warned parents of the pitfalls of micromanaging their children’s academic reJohn sponsibilities Rosemond lest said children deduce that the responsibilities in question are not theirs at all and begin acting increasingly irresponsible. Hello? Is there anybody out there?

“I know you say parents shouldn’t micromanage their kids, John,” a parent tells me, “but if I don’t check behind him, he doesn’t do his homework.”

Some parents will do anything it takes to feel useful, even if it means doing what is useless and even counterproductive. The fact is that if you act as if tell you don’t trust your child to do what he is supposed to do, he will prove you correct, even if he shoots himself in the foot in the process. In psycho-lingo, that fact is known as the “self-fulfilling prophecy.” At least a dozen times in the last several months or so mothers have told me they “must” check to make sure their kids are properly doing their schoolwork.

“How do you know?” I ask.

“Know what?”

“That if you don’t check behind him, he won’t do his homework?” Typical answer: “Well, um, because, um, he, um, I mean, he won’t.”

I should mention that the kids in question are boys, usually, and the parents in question are moms, always. No offense, ladies, but moms seem to think their job is to make everything perfect. To clarify, that describes many of today’s moms. The moms of sixty-plus years ago did not fit that description at all.

An apt aside: My wife and I are in thrall to a dog named Mazie who enjoys playing “catch me if you can.” Mazie will let us know she wants to be walked, but then, when one of us goes to leash her, she begins darting about, hiding under furniture, running up and down the stairs, and so on and so forth until finally cornered. If, however, when she demands to be walked, we ignore her, she eventually comes to us and humbly submits. Zen dog management.

My point: Like Mazie responds to being chased, the boys in question are responding predictably to being micromanaged – they act as if they require it – and as long as their moms micromanage, they continue to act as such. Micromanagement begets irresponsibility like an egg begets a chicken, or something along those lines anyway.

So, I inform the mothers in question of all that and tell them to do what every fiber of their modern maternal beings protest: to wit, stop checking, even asking. Above all else, do not go to the stupid school homework portal (created by micromanagers to encourage micromanagement). Read a good book. Chew your fingernails. Anything but what you have been doing.

The response on the part of these moms begins with “but.” You can imagine the rest. They quickly discover, however, that I am a better salesperson than they are micromanagers. With great reluctance, and fully expecting the endtimes Academic Apocalypse, they agree.

Every single time – mind you, “every single” is not hyperbole –the boy-child in question begins doing his work as if he wanted to do it all along, which he probably did.

The rules of parent-child physics will not be overridden by mere mortals.

Family psychologist John Rosemond: johnrosemond.com, parent guru.com.

John Rosemond has worked with families, children, and parents since 1971 in the field of family psychology. In 1971, John earned his masters in psychology from Western Illinois University and was elected to the Phi Kappa Phi National Honor Society.