Motley Fool Hidden Gems Investing - Make Your Kid a Money Genius

Episode Date: February 10, 2017

Activision Blizzard scores. Twitter tumbles. And Hasbro soars. Plus, best-selling author Beth Kobliner talks about her new book, Make Your Kid a Money Genius. Thanks to Audible for supporting our podcast. Get a free audiobook with a free 30-day trial at audible.com/fool.     Learn more about your ad choices. Visit megaphone.fm/adchoices

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That's why they call it money. The best things in life are free. But you can give them to the birds and bees. From Fool Global Headquarters, this is Motley Fool Money. It's the Motley Fool Money radio show. I'm Chris Hill, and joining me in studio this week from Motley Fool Supernova, David Kretzmann, and from Million Dollar Portfolio, Jason Moser and Matt Argesinger. Good to see you, as always, gentlemen. Hey, Chris.

We've got the latest earnings from Wall Street. We'll talk with bestselling author Beth Kobliner, and as always, we'll give you an inside look at the stocks on our radar. But we begin this week with the Magic Kingdom. Walt Disney's first quarter profits came in higher than expected. Revenue was a little light, though. David, I'll start with you. The ESPN narrative that we've seen the last few quarters continues, even though the parks and resorts are really kind of getting it done. Beating a dead horse there.

It's kind of Wall Street style with Disney at this point when it comes to ESPN. But last quarter, management set expectations for 2017 that the company's going up against a very tough comparison, largely due to the success of Star Wars The Force Awakens last year, which globally topped $2 billion at the box office. Rogue One came out in December, did great, hit $1 billion. But I mean, that's half of what Force Awakens brought, which is a great problem to have. I think you mean only $1 billion.

Right, only $1 billion. At this point, that's a low mark for Disney. But all in all, I think the quarter was good. You did see revenue down 3%, operating income down 7%. But like you said, the parks and resorts segment, you saw sales up 6%, operating income up 13%. Shanghai Disneyland is expected to break even this year. A lot of things to look forward to with Disney across all these different segments. And that is the beauty of the company. It's got its hands in so many of the premier

entertainment properties in the world. So, when one's down, and it's hard to call a studio business down when you've got a billion-dollar film come in, but when one's down, the others can pick it up. It's an extraordinary company and consistent. O' So, would you say when Disney has a flop, it's a little bit easier for them to let it go? Oh, man. I would expect that with Simon. I was just going to say, I expect puns from Simon. It looked a little forced, Jason. It looked a little forced, but good stuff.

Jason, we saw this story before the earnings report came out, and it got confirmed by the man himself, this idea that Bob Iger, who is due to leave the CEO office in June of 2018, may stay on a little longer. He said, I'm going to do what's best for the company, I'm going to listen to the board. If you had to bet right now, do you think he stays on a little bit longer? Because it feels like the window for him to put someone in place is closing pretty quickly. I think yes. And the reason why I say that is many-fold, honestly. But I think this is going to be perhaps the most important transition of power for this company in many, many years to come. And I think that with all of the

success that Mr. Iger has had to this point, and we were talking about this before taping, Wall Street is very persistent about this ESPN question. And until he can really firmly, I think, and successfully answer it, and really show the path to success with that, I think he wants to be able to do that. And we're seeing the signs there. I mean, the Hulu relationship that's getting ready to launch, additional over-the-top opportunities, technologies, all of the investment and time spent with Bantech. I think there are seeds there that are starting to show some green shoots, but I do think that Iger would love to be able to really prove that out. And so, to give him a little bit more time, he seems

to enjoy what he's doing, and he does it really well. And typically, when you have that combination, it's almost like you're not working anyway. So, I suspect for him, he's just having a really good time doing what he's doing, and I think shareholders wouldn't mind seeing him stick around. When you look at that media network segment, We really do need to keep it in perspective. I think this conference call, we saw Bob Iger and company talk about digital media, BAMTEC, more than they have in previous calls. So that's clearly where their attention is focused. And they're not being caught off guard with this transition from traditional cable bundles to digital streaming. But when you look over the

past five years, Disney is becoming increasingly diversified to Matty's point. So when you go back to 2011, the media network segment made up 70% of Disney's total operating income. Last year, made up less than 50%. So, the company is growing, and in the process, becoming more diversified. So, I think if you're only focused on ESPN, you're really overlooking a very quality and increasingly quality business. Shares of Twitter falling more than 15% on Thursday and Friday in the wake of a fourth quarter report that was disappointing, to say the least, Jason. Revenue was not only light, it was the slowest growth they've seen since they've gone public.

Yeah, and I told Mac on MarketFoolery, I think that the Twitter investor relations feed needs to change their avatar on their Twitter feed back to the Twitter egg, because these guys just lay egg quarter after quarter after quarter on the earnings side, and they continue just to disappoint. It seems to be as regular as the sun coming up almost. But I do think that for all of their shortcomings, and I've been extremely critical of a company that I was very bullish on for a long time, I'd say I'm still quasi-bullish. It's hard for me to imagine a world without Twitter. I think it does really serve a very important purpose, but I think it's been a very poorly run business for a long period of time. There

is maybe a little light at the end of the tunnel. I mean, I think you saw modest growth in users, but I think more importantly, you saw a third consecutive quarter of accelerating growth in daily active users. And I think for something like Twitter, that speaks volumes, because it is that type of a platform where, more or less, the users are using it and checking it on a daily basis. And that's a sign that engagement is improving. And engagement really is going to be something born of, all of the new things that they roll out to the platform. So, Jack Dorsey, I think, hit the nail on the head when he was talking about the fact that while Twitter remains very relevant, they're still not meeting those growth expectations

that have been set for them. Again, hard to imagine a world without Twitter. I think, for shareholders, it's easy enough to sort of hang onto your shares, because it's that ticket to the potential that still exists, but no question, it seems like it's going to take a while for them to ultimately get there. Yeah, because if you're an ad business and you're struggling during a presidential election, then you're not doing it right. That's what's brutal, and that's what I really don't get with Twitter. This quarter they had higher user engagement, both with monthly active users and daily active users.

Their ad engagement was up 151% for the quarter, which is accelerating, but ad revenue still fell year over year. I just don't get that. As far as an advertising company, they are really dropping the ball here. Yeah, and I agree there. I think it's important to note that they've been very consistent. Dorsey's been very consistent when he said, listen, revenue is going to trail user growth. So, user growth is going to come first. And once they can prove out the platform and engagement, that makes it more attractive for advertisers, which then helps spur revenue along. So, that remains to be seen. I mean, they have a lot of lofty goals for 2017, one of which is to become

Gap Profitable. And if they can hit that, if they can become a profitable business, then I think all of a sudden, you've got something there. You've got an actual business that has some promise, and then you can start to more traditionally value the stock, and you can make a little bit more of a case for it as an investment. Shares of Activision Blizzard up more than 18% on Friday after a blowout fourth quarter report, the video game maker's profits and revenue both higher than expected. What's driving it, Matty? Matty Lillard. They absolutely crushed it. Going into the quarter, a lot of investors, including me, were worried about the Call

of Duty sales, which really disappointed. That's usually their big game every year in the holiday season. Didn't do well, had some bad competition with Battlefield 1, which everyone seemed to like, but clearly, Call of Duty did not matter. Revenue in the fourth quarter was up 49% to over $2 billion. Here's what's really impressive, though. For the first time, Activision had at least $1.5 billion in sales each on PC, console, and mobile. So, absolute home runs on every gaming platform. And of course, we know the mobile story there is there because they purchased King Digital, the leader, about a year ago. A few interesting points. Consumers spent an estimated $43 billion hours playing or watching Activision games

last year. That's on par with the number of hours watched on Netflix. And maybe this is Bobby Kotick throwing a little shade out there, but it's 1.5 times the amount of time spent on Snapchat, which we know is about to go public at about the same valuation as Activision Blizzard, so I'm just saying. But the story here with the video game space and with Activision, it's just the move to digital that we've seen over the last several years. In-game content sales were $3.6 billion last year. That's a record. Even if you take out King Digital, that grew 30% year-over-year. They generated $2.2 billion in operating cash flow and announced a $1 billion share buyback. I think Bobby Kotick just dropped the mic there.

King Digital, the maker of Candy Crush, they paid a lot of money for King Digital and a bunch of people, myself included, were very critical of that. It looks like, based on this latest report, I need to eat a little crow on that one. Well, I don't know about that, but that mobile business now is generating hundreds of millions of dollars in cash flow. If you look at King Digital, they might pay that back in about two years, and pay off all the debt they took out to do it. So, very impressive buyout. One potential blemish with King Digital is the monthly active user count for King Digital has dropped from about $500 million at the time, Activision bottom, at the end

of 2014, and now that number is down to just $355 million. So, that number has steadily gone down each quarter. The users that they do have are increasingly engaged, but at some point, they need to come up with another Candy Crush-esque hit to bump up that user count again. Sticking with gaming, Take-Two Interactive shares hit a new all-time high this week. David, they got a new partnership with the NBA? Yeah, so they're creating a joint venture with the NBA, and this will be the first professional video game league with the U.S. Sports League, the NBA. So think eLakers and eKnicks.

So essentially, the vision here is that each franchise in the NBA, whether you're talking about L.A., New York, Sacramento, shout out to my Kings, they'll own or control their own esports team. So they'll draft players. These will be full-time salaried players. These different teams will deal with marketing, product licensing, and more. And as someone who, my eyes glaze over whenever I play or watch a shooter game. And I think this is something that will really broaden the market for esports. And for a lot of people like me, who might not be drawn to a shooter game, watching an esports tournament with basketball, football, hockey,

I think that really does open up the market. So I'm curious to see how this plays out. And maybe your E-Kings can make the playoffs. I hope so, man. Better than the real kings, hopefully. Hasbro shareholders had their best day in more than two decades after fourth-quarter profits came in much higher than expected. Jason, they also raised a dividend. That's always nice. Sure is. Continuing from the discussion there on Disney and its success, I think

Hasbro is a very good example of a company that has figured out how to hitch their wagon to the stars out there in the IP world, Disney being the main one. And I think in the face of what was obviously a very brutal retail season. It seemed like every retail stock just got peppered. Hasbro just went the other way. It was a phenomenal quarter for them, a phenomenal year, really. You look at a company like this, they grew their top line 14%. They grew sales 14% for the year. Just phenomenal, I think, for a company like this, when we've been talking so much about the secular challenges in the toy industry. But I think they've made a very good shift there into the digital space. I think they've utilized a lot of the properties

that Disney has to do that. We didn't really have any doubt here, but we were wondering, would Hasbro winning that Disney Princess partnership have a material effect on the business? It certainly has. And we've seen on the other side of that coin, certainly Mattel has suffered, which just makes you wonder how leadership let that one slip from their fingers. But I also think this is a testament to Hasbro's leadership. A very smart, consistent leadership in CEO Brian Goldner. He's been there since 2008. Look at the stock chart, Chris, does the results speak for themselves? Yeah, you wonder if, you know, we're always looking to see if Iger's going to make another acquisition.

Obviously, they've earned great licensing revenue for years, if not decades, from Hasbro. But, you know, bring that in-house, capture a lot more of that revenue. Well, and they continue, Disney, trying to figure out how to make that consumer products part of the business stronger. That could certainly be one way to do it. Up next, earningspalooza rolls on. This is Motley Fool Money. Welcome back to Motley Fool Money. Chris Hill here in studio with Jason Moser, Matt Argersinger, and David Kretzmann. NVIDIA's fourth quarter revenue rose more than 50%.

It is the second straight quarter. The graphics chip maker has done that, and it just wasn't enough to impress Wall Street. Well, the stocks had an incredible run. But this isn't how it's supposed to work in the chip space. NVIDIA has been around for a long time. They've made GPU processors for as long I can remember playing video games in the 80s and 90s. But it's experienced, certainly, a renaissance. And its chips have become attached to a lot more interesting and compelling end markets. We talk about autonomous driving, virtual reality, and artificial intelligence. And as a result, their sales have boomed in recent years. Their gross margin has held up around 60%.

And generally, you'll see with a lot of chip companies, that gross margin, it's super hard to maintain, usually comes down over time. NVIDIA has been able to maintain it. And I would just say, looking at the stock and what it's done, it gives me the hibby-jibbies about the hype cycle that we talk about sometimes, Dave Kretzmann. But I don't know, what do you think? You had CES in January. NVIDIA really stole the show with its keynote. And I can't help but wonder if we're nearing the peak of the hype cycle. But man, the company has its hands in all these different valuable segments. And its biggest segment is still gaming, which makes up over 60% of revenue. But there are a lot of tailwinds behind gaming. As we talk

about e-sports, virtual reality, the performance demands for that hardware and software will continue to rise. So, I think NVIDIA is in a good position with that, let alone with other categories like automotive or data centers or whatever it might be. Fourth quarter results for Buffalo Wild Wings were anything but spicy. Profits came in lower than expected, and same-store sales fell more than 4%. And yet, David, the stock didn't really suffer. Defying logic. I mean, Buffalo Wild Wings had a rough 2016, and the company consistently overestimated what its future results would be. So, it closed out 2016 with the worst

quarter of the year, fittingly enough. Total sales were up less than 1%. Same-store sales down 4%. Net income down 38%. They do have a new CFO on board. And I think they're starting to feel the pressure from activist investor Mercado Capital. So, you're seeing the company tone down the number of company-owned locations it's expecting to open. They're re-franchising about 10% of their company-owned restaurants this year. They're going to be taking on debt to buy back up to $500 million worth of stock this year. And I'm not really sure about that strategy because the stock is near a 52-week high. The valuation is questionable. And the fact that they're going into debt to buy back stock rather than focus on the core operations gives me pause. But all in

all, they are shifting their strategy a bit. Shares of Panera Bread hitting a new all-time high this week after fourth quarter profits came in higher than a year ago. And Jason, and you look at what they're doing in terms of digital sales, and it's really impressive. Yeah, I've really enjoyed watching this turnaround, particularly sitting at my desk enjoying a delightful chicken Caesar salad from the Panera right across the street. I think, wow, I mean, they really have pulled this turnaround off. And I think that Starbucks is going to be taking some lessons from these folks in the near future here, given the challenges we've seen at Starbucks with mobile ordering and ordering in advance

and throughput and whatnot. not. As you mentioned, digital sales, a big key here now, a quarter of total sales in company-owned stores. They have 25 million MyPanera loyalty members. I think probably every one of us here at the table are members of that club. At the year-end, a little bit more than 2,000 stores, a nice healthy mix of franchise and company-owned. I think when you look at this concept, the stock is doing well because the business is doing well. And that's because of, sort of, founder Ron Shaik taking a step back, looking at this pragmatically. I think the mosh pit concept was really when things started to

turn around, because that was when they realized they had a problem and they needed to do something about it. I think the most attractive part of Panera is still the upside here. They can open more stores, and I think the market opportunity is there, a much broader cross-section of opportunity than maybe some of their competitors. So, I suspect we'll continue to talk about more upside for Panera for many quarters to come. Whole Foods' first quarter results were almost an afterthought. As the company said, it is scaling back its expansion plans. Matty, we always mention that CEO John Mackey is on the board of directors here at The Motley Fool. That goal of 1,200-plus stores that

they've put out there for a while, that is now a thing of the past. Right. I think a lot of us started questioning that pretty regularly over the past couple of years. It just didn't seem that a lot of the new markets they were going into were bringing a lot of success, and now we see comparable store sales continue to decline. Guidance was very weak for this coming year. But I actually think it's the right move. I mean, I think this is what we've talked about, which is, if they can pivot back to their core customer and not worry about the value-conscious customer who's clipping coupons and going to Safeway or Kroger, I think that's the right customer. Now, if this is a story

where we don't have 1,200 stores, but we have 700 or 800 stores that are very profitable, well-positioned... Because now they're at about 450. Right. That's still a relatively compelling story. I expect the unit economics of each store to improve because of that. And so, this could be still a valuable investment for investors. It just won't be the growth store we thought it was. Yeah, I think that's key there. And I think we've seen some signs that really surprised us, yet also made a lot of sense. Ratcheting back that opportunity, they've

closed down a few underperformers, and they've more or less put that 365 concept on hold to further assess it. They have some leases they're going to fulfill as they open up a a few new ones. But I think they really want to get a handful of them open, run them, study them, learn from them. But the 365 concept doesn't really fall in line with the strategy shift that we just found out about, when they're going out of their core customer. So, my suspicion is we probably won't see the proliferation of those 365 stores that we anticipated maybe a year ago. Alright, Jason Moser, David Kressman, Matt Argersinger, guys, we'll see you later

in the show. Up next, best-selling author Beth Kobliner is going to make your kid a money genius. Stay right here. This is Motley Fool Money. All right, before we get to my conversation with Beth Kobliner, I've got to say thanks to Audible for supporting this week's episode of Motley Fool Money. Audible has an unmatched selection of audiobooks, original shows, news, comedy, and more. Audiobooks are great to listen to when you're driving, when you're stuck in traffic, if you're doing stuff around the house, at the gym, running errands, whatever you're doing, you can take an audio book with you. And for our dozens of listeners, Audible is offering a free audio book with a 30-day free trial. If you want to listen

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Welcome back to Motley Fool Money. I'm Chris Hill. If you want to teach your kids about money, there is a good chance you're doing it all wrong. Beth Kobliner is the author of the New York Times bestseller, Get a Financial Life. Her new book is Make Your Kid a Money Genius. Even if you're not, Beth Kobliner, thanks for being here. It's great to be here. You and I grew up at the same time, and over the years, I am guessing you remember seeing public service announcements on television encouraging parents to talk to your kids

about drugs and alcohol, talk to your kids about sex. Absolutely. I've got two daughters and one son. I've talked to my kids about sex and drugs, and yet I was smiling when I started reading your book because this is something you hit on right at the start. It is so hard to talk to your kids about money. Yeah, it really is. I think it is just drenched with emotion and, you know, there's no black and white to it. It's kind of all these gray areas. And we feel like it's something we know it's important. And I mean, obviously, you know a lot about money, but even people who don't know about money are pretty terrified, scared, feel like they don't know enough to tell their kids or fearful that their kids are going to find out how bad they are with money. So I feel like

this book was really specifically for parents of hopefully all income levels and all educational levels when it comes to money savvy. And I feel like it will help teach parents about money and help them then teach their kids about everything from saving to compound interest to why you shouldn't get into credit card debt. And one of the things you hit on right at the start is just how young children are when they start picking up clues about money and how it works and how we value it. And so one of the shocking things to me was when I was reading your book, I was thinking, wow, I didn't, I feel like I started early enough and I probably should have started even earlier. Yeah, I think, I mean, it's funny. I feel like people get kind of anxious about what

they miss out on teaching their kids. But I do think this is one of those topics you can kind to ease in on any age group. You know, the research shows by age three, kids actually understand. There's some great research, University of Wisconsin, this Professor Corinne Holden, and she found that by age three, kids can really understand basic money skills, basic money concepts like exchange. When, you know, you give money, somebody gives you something back at the store or value certain things of value. Kids could understand needs versus wants. You know, we need milk, but we want chocolate milk. And we'll talk about like whether we're, you know, we're paying most of our money for needs, but some maybe for wants. And those kind of discussions

are really great to have with kids when they're young. But there are other discussions you can, you know, make up for lost time, hopefully, and talk about, you know, a little bit more advanced ways of talking about money to impart that to kids. So what are some of the biggest and most common mistakes that parents make? I think parents lie. We say, oh, you know, you're in the store and a kid said, can we have this? And you say, no, sorry, I don't have any money on me. And then you use your credit card for coffee and they see it. So I think we lie and it also confuses them because, you know, many kids, many little kids haven't even seen cash before. All they see is the card. I think we fight about money with our spouses and research has shown that it can lead

to kids as they grow up having more difficulties with money. I think we sort of shun the idea that our kids could even understand it, whether they're three or even 13 or like, oh, they don't really get it. I think we start too late about it. And I also think we sort of give into our financial baggage. Like if you feel that, oh, I don't know, it's too overwhelming. I'm too scared to talk about it. And I don't want to get into college because who knows if I could even afford it. I think we just sort of try to put it out of our mind. But I actually think that talking about it, all these topics are really important, like talking about college in eighth or ninth grade with your kids can actually relieve the anxiety. If you go to a few websites to find out, you know,

And I go through that in the book to find out what financial aid or what your financial expected contribution would be, you know, within a few thousand dollars. But just to get a feel for where you could afford, where you could apply, and to start having those discussions sooner. One of the classic debates when it comes to kids and money is paying them a weekly allowance versus paying them to do chores around the house. Where do you fall down on that? Well, you know, it's interesting because I have been hearing that debate for 25 years, and I finally looked at the research. There are, you know, a couple of dozen studies that look at should you give kids allowance, and the bottom line is studies all over the country and in England and in Great Britain and also Canada,

and there was a study, you know, one study said that when you give allowance, it's really good because it gives kids money and teaches them responsibility. Another study said, no, when you give allowance, it's kind of money coming out of nowhere, and it's not good for kids. And the bottom line is it doesn't really matter if you give allowance or not, but it does matter if you are giving money to your kids in some form that you be consistent and you be clear about what you expect them to use it for, and then you don't go back on your word.

For example, I think it's so common to say, all right, I'm going to pay for, of course, your food and your clothes and the basics, but if you want to, you know, go out to pizza with your friends, you know, I'll pay for that once a month, but you're going to have to pay for it from then on. But then, you know, week two rolls around and suddenly your kid wants to go out with friends and you're like, oh, all right, I want them to be social, I'll pay for it.

I think that's where we all make mistakes as parents. I know I certainly have, and I think it's important to come up with a reasonable expectation of what your kids will do with the money that they give them and to be consistent about it. You're listening to Motley Fool Money talking with bestselling author Beth Kobliner. Her new book is Make Your Kid a Money Genius Even If You're Not. There's some unconventional wisdom in this book. One example, you say that a great parenting move is just doling out a big wad of cash. That sounds like a recipe for losing my money. Doesn't it? But here's the thing. Okay,

So we know, as you know, MIT showed that when you use plastic, you basically are likely to spend twice as much than when you use cash. When you use a debit card, credit card, plastic, it feels like fake money, and you spend twice as much. Also, if you give a kid cash, you give them $100, say, for you can buy extra stuff for school or whatever it is, for clothes or whatever that budget is, and they go to the cash register and it's $101, they're going to have to put something back. There's that experience of I don't have enough money. Whereas if you give it, you hand over your debit card or credit card, even if you have a good kid and you say, well, don't spend more than $100. If it's $110, nobody's going to say anything. So it's important to give kids cash so they experience the idea that money is a finite thing.

And I think it really does give kids a grounding in literally the value of a dollar by seeing the dollar. What about when your kid has money, and it's their own money, and they want to spend it on something that you know in your heart is just frivolous and it's going to be a waste of money? Do you step in? Do you stop them? Do you wait for them to blow it, and then a week later you hold it over their head and say, remember, I told you? Right. You know, it's funny, this comes up a lot. And I feel like, I mean, it's fine to have rules if you don't want them to spend all their money on candy, like 100, you know, Snickers bars, or not to spend their money on toy guns, or Barbie dolls, or whatever your thing is. I think it's okay to be reasonable and say, I don't like X. But I think beyond that, it's pretty good to let them spend their own money. That's the point, right? To have those experiences. And if they

buy something you know is a crummy toy and it's going to break what i what i sort of suggest is let them do it but also remind them to keep the receipt and then they might say you know they might have that experience my son just did that he bought this like drum he's a drummer and he bought this thing and it didn't work quite as the way he thought it would and i said okay we have the receipt find it that bag on the bottom of your you know desk fish it out look for the receipt and we could return it because it was defective when you bought it so those kind of experience are really huge learning lessons because he was like wow that's awesome that if it's not if it's not working properly you can return it get a new one and I think that kind of learning experience is

kind of invaluable for a kid and sometimes that means failing and doing something wrong and I think that is what their own money is supposed to be for as long as it's not dangerous one of the things I really like about your book is that it is age-appropriate for different ages. The lessons for elementary school kids are obviously more basic money one-on-one things than for kids in high school, that sort of thing. At The Motley Fool, we focus on investing in stocks. What do you think in terms of starting that conversation with your children about not just be careful about the money that you spend. Also, make sure you save money in terms of investing money so that you can grow it over time. When do you start that conversation? I think, again, I mean,

in very, very elementary ways, you can start talking about it with really little kids. You know, the notion of you plant a seed and it'll grow. So, I mean, that's really young. For like a three or four-year-old, it's the notion of you, you know, put down a foundation and you put the seed in the dirt. I'm from the city, so I barely know how to do this. And it invests. It grows into a beautiful flower. That's, you know, blossoming.

But when you're talking about elementary school kids, you can explain the basics. You know, the next time you watch a Disney movie or drink some sort of drink with your kid, a Coke, you can, you know, talk about stocks. These are companies and they sell stock. And a stock is a small piece of a company that you can own. And then you can talk about, you know, what that means.

And if your kid is in third or fourth grade, they'll be able to understand those basics. You could talk about, like, Coca-Cola, it's a drink that maybe he loves or not allowed to have. Or, you know, Hasbro makes a toy he loves. And talk about the different things that affect a stock price. I think kids are so interested in those concepts. In middle school, I think the best thing is to talk about, you know, compound interest. That is, as you guys talk about, you know, the eighth wonder of the world. If they start at age 10 and they put aside, you know, a quarter a day for the rest of their life,

you know, they'll probably have, if they get a 7% return, we'll have about $50,000 by the time they retire. And just those numbers alone, there's a great, the SEC has a website, investor.gov, that you can go on and play around with the numbers, teaching kids the fun rule of 72, or talking about inflation. I'm not a big fan at all of these stock market games or investing camps. I mean, I think sometimes it entices kids, and it's great if you need a way to sort of get a kid interested in money. but I would much prefer talking to a kid about an index fund and talking about why that's a smart way to invest. I think kids love the insidery, you know, behind the scenes here. Well, you can pay one percentage point or you can pay 0.1 percentage point and look how much you're saving over X

number of years. You know, the real examples with using numbers is always effective and research shows that's a better way to teach kids or teach grownups in general about money. And I think that there is so much they could understand, you know, even in high school, opening a Roth IRA if they have a job. And that will protect the money if you're applying to college. You know, colleges take more of a kid's money in his name or her name versus in the parent's name. So putting a little bit of money into an IRA is not a bad idea because colleges usually don't look at that when they're looking at how much aid you'll get. So I think there are all kinds of ways that kids can parents can approach investing with kids, even if they don't know that much about it,

they can still explain a lot of these pointers and they'll learn those pointers as they read my book. You dedicated this book to your parents who did not have a book like this when you were a kid, but it sounds like they definitely instilled money values in you and your brothers. What's one tip you can share from Shirley and Harold Kobliner? Oh, thank you. Yeah. I mean, it really is a labor of love in that way that my parents really taught us. You know, my dad was an educator, a principal, and my mom was mostly, she was a chemistry teacher, but then a stay-at-home mom. And they were very good at saving, but we never felt deprived. And what my dad, you know, our favorite family story is my dad came home when in New York City they started offering

pension plans and you're allowed to put away as much as 50% of your income. And my parents had three kids and a house, a little house in Queens, New York. And my dad said, we have to put away 50% of our income, Shirley. And my mom said, ah, how can we afford it? And my dad's answer was, we can't afford not to. We have to do this. And they both did it. And my mom was like the first arbitrage, I think, because she would buy, you know, something with 10% off. She would, you know, wait for triple coupon day get 30 off and then get like free all of our plates and glassware came from free from the supermarket because you could use coupons once you buy stuff then you know so it was all like they the supermarket was paying my mother to shop there because she was so wise

about this kind of thing so i learned that you know frugality or being smart about money is a great thing. And I think it's really empowering. And I think growing up with those lessons, I feel like it's fun to be able to talk about them with people and make it a lot less scary than it seems. The new book is Make Your Kid a Money Genius. Even if you're not, it is available everywhere books are sold. It's already the number one parenting book in America. Beth Kobliner, great talking with you. Thanks. Great. Thank you so much. So good to talk to you. Coming up next, we'll give you an inside look at the stocks on our radar. This is Motley Fool Money.

As always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. Welcome back to Motley Fool Money. Chris Hill here in studio once again with Jason Moser, Matt Argesinger, and David Kretzmann. You can check out past episodes of Motley Fool Money and all of our podcasts by going to podcast.fool.com. You can also subscribe on iTunes, Stitcher, Spotify, Google Play. Just click the subscribe button. Just do it. It takes two seconds. Go ahead. We'll be with you.

All right, let's get to the stocks on our radar. And our man, Steve Broido from behind the glass, we'll hit you with a question. David Kretzmann, you're up first. What are you looking at? We're talking a lot about video games, and I don't want to overlook electronic arts, so I'm going to go with that once again. I just love the different franchises the company has under its belt. You have Battlefield, Mass Effect, Star Wars, Titanfall, EA Sports. And I think we will see more sports leagues look to shift to esports. And if that happens, EA is just in a great position with Madden, FIFA, NHL, really across the board. So, I think the

company is in a good position if that trend continues. $3.2 billion in net cash. I really like CEO Andrew Wilson. So, I think a lot of things to like here for this year and going forward. Steve, question about Electronic Arts? Are any of these phones I can play on my cell phone? I saw it at the Super Bowl, there were a lot of ads for them. Are any of these cell phone games any good these days? Yeah, they just launched NBA Live for mobile. They have Madden on mobile. So, all those traditional franchises are on mobile, and they keep seeing those user accounts going up, so you should try it out, Steve. Jason Moser, what are you looking at?

Yeah, checking out Control 4, ticker CTRL. This is one I've called out on the show before, but it's been a while. Seems like this one was headed for mediocrity at best, but perhaps we were just a little bit early to the game in looking at the stock. The company focuses on solutions, both on the hardware and software side, for the connected home, which is becoming more and more a thing now with the success of Amazon's Echo, and recently Control4 integrated with the Echo. So, it has, I think, opened them up to a much larger market opportunity. It makes, ultimately, what Control4 does more relatable to the everyday a person, and easier to integrate into the home. Historically, Control 4 has focused

more on the high end, total solution. And now that they are integrating with things like the Amazon Echo, this really, I think, expands their market opportunity in a very significant way. The stock had a phenomenal Friday after earnings up, I think around 20%. Perhaps this is something on the road to recovery. Steve, question about Control 4? Are there security concerns here? I think about somebody opening my garage door while I'm at work, just online, going to my phone and just opening up the windows. I think there are as many concerns as your mind will allow. And I'm with you, Steve,

I have security concerns myself. We have an Echo at home where I've hooked up our lighting to the Echo, but I'm not going to hook up our locks to the Echo. There's just a point where I just can't make that leap. Alright, Matt Argersinger, what are you looking at? I'm going with American Tower, ticker AMT. It's a longtime Rule Breaker. We just added it recently to our MDP watch list. This is a real estate investment trust, REIT. They own 144,000 tower sites around the world, including places like India, where they have almost 60,000 sites, and Brazil, where they have about 18,000. And this is all about wireless

data and the growth in wireless data. And they own one of the biggest, actually the largest wireless data footprint in the world. Pays a nice, modest dividend, a growing dividend, like the business. Steve, question about American Tower? I'm a shareholder. What's their next move? What's the next big play? Can they just put in more towers? More American towers? Well, they're mostly an acquisition company, so I expect them to continue to make acquisitions, but mostly outside the U.S., probably in emerging markets like Asia, Latin America. Steve, three stocks. You got one you want to add to your watch list?

I might play some video games this weekend. Let's go to Electronic Arts. Alright. David Kretzmann, Jason Moser, Matt Argersinger. Guys, thanks for being here. Thanks, Chris. Thank you. That is going to do it for this week's edition of Motley Fool Money. Our engineer is Steve Broido, our producer is Mac Greer. I'm Chris Hill. Thanks for listening, we'll see you next week. Subtitles by Subtitle Workshop