My dad taught me cashflow with a soda machine

I didn't really mention timescales, but in my case he added the various complications gradually over about 4 years. It was never something I sat down and "learned". Whenever I started to drift away via boredom, a fun new twist would mysteriously appear.

Love what you're doing w/ the gum machines -- think it's an amazing approach.

just curious, where did your daughter place her vending machine? who worked out the logistics of where it could be placed?

The epitome of small-scale, early-stage funding. Good investment ;)

What was the initial investment?

It depends what you mean by 'being kids'. My grandfather taught me quite a bit about electronics when I was young (how to solder, what the major components do, etc.) and I loved it. We also did woodwork together. With him I designed and built my own briefcase for taking my books to school in.

For him these were things that I needed to know (he had been in the RAF as a wireless operator in the Second World War (http://en.wikipedia.org/wiki/Battle_of_the_Beams) and so electronics was important and he'd grown up at a time when people made a lot of there own things). For me it was wonderful stuff to know about. And, as you point out, I spent a lot of time with my grandfather.

My parents took me to events organized by the National Association for Gifted Children (http://en.wikipedia.org/wiki/National_Association_for_Gifted...) and also had me do various types of IQ testing. Some of those events involve my best memories of time spent with my father. Perhaps they were fulfulling some sort of wish for me, but I tend to think that they looked at me and realized that these were things that I was going to enjoy or needed.

Those interactions with my father and grandfather really matter a lot.

No.

Not if the definition of "letting kids be kids" is to let them do what everyone else's kids are doing these days, mollycoddling their every whim and when not acting as chauffeur or butler, letting them babysit themselves with TV and video games.

Or, yes...

If the definition of letting them be kids is shutting off the TV, on sunny days pushing them out the door to go play in the dirt, and on rainy days taking them to the library, coupled with spending time to encourage and support them in the interests they develop and express. The key is engagement.

I don't see any indication in this story that the boy didn't enjoy it. Sounds as though he found it an engaging challenge, and that it didn't take too much of his time. If he wasn't doing that, he could have been playing Lemonade Stand on a Commodore 64 or Apple II. If the story was about Lemonade Stand, nobody would say "let kids be kids", so what's the problem here? Is it that this sounds like "work"?

Work, even real work, can be fun, and figuring out how to enjoy something that returns financial gain may be the lesson with the most payoff a parent could provide, given the ratio of time most adults have to spend in work versus leisure.

I wouldn't read so much into this. It's a personal anecdote about the entrepreneurial spirit being encouraged in a young kid. All good parents want their kids to reach their own personal maximum potential. It doesn't sound like Mr. Robfitz was forcing his son to adhere to strict GAAP accounting principles, hustle for cheaper product, or make deals for prime vending machine real estate. This is equivalent to having a paper route as a kid -- which isn't really an option these days.

I did the typical American thing and started mowing lawns when I was around 13 or 14. At first I had a single 20" push mower and had one or two lawns. Then I used our family riding mower. After I had built up some clients I took out a loan and bought a used 36" commercial mower. The loan was repaid early, in about 8 months as I recall.

About this time my dad bought a trailer and we used the family van to pull the trailer around. Not very long after that, I bought a 48" commercial mower. Along the way I also bought string trimmers, backpack blowers, and hedge trimmers. Every new customer was a springboard to more customers in that neighbourhood. All I had to do was make the lawn look great, and the new customers would come to me!

At the fall peak, I could gross about $1400/month. I was my own boss, in top shape, had plenty of money (way more than all my friends) and in general was very happy. Those experiences were invaluable, and helped form my work ethic today.

My father still has the large mower, and uses it every week to mow his own lawn - 20 years later.

What matters is that it's "fun". I would have loved to manage my own soda machine. It's a learning game.

Managing a soda machine or playing Anno 1602, it's pretty much the same thing, isn't it?

Thinking back to when I was a kid, just about anything was fun. I remember categorizing my entire basketball collection in a spreadsheet, managing my parents' antique shop inventory, building bookshelves and birdhouses, putting together a garage sale with my brother and sister, and enjoying all of it. It's adults that forget how much fun can be found in everything around us. By delineating fun, work, learning, and development of other life skills, it's very easy to do children a disservice.

If by being kids are you focusing on purely unproductive play, or worse passively watching TV, then No.

Of course, I think there should be some of that. In fact, I think even adults should have some of that. I still play Go. I even still play Magic The Gathering and Video Games. And I watch more TV than I care to admit and let my kids watch more TV than they shoudl.

But the TV is a guilty pleasure I know I should cut back on for them and me, and even playtime comes after the home work is done and comes along with me trying to teach them things they won't learn in school. I try to make the lessons fun as well as educational, but I'll let the fun slide long before I let the educational part slide.

Paul Graham incidentally at least touches on this (and the fact that "childhood" now lasts much longer than it used too) in Why Nerds are Unpopular at http://www.paulgraham.com/nerds.html

You know, this kind of stuff is part of being a kid.

When I was in first grade, my next door neighbor and I went into a water-selling business (think lemonade stand without the lemons) that failed miserably.

My next venture was substantially more successful. Living in France, we had sticker albums associated to stories. A new movie would come out (for example, Star Wars) and shops would sell the album and sell sticker packs separately (each pack sold for the equivalent of about a buck and had 5-6 stickers in them). Each of the stickers were numbered and you would put them in your album to gradually uncover the story.

Thing was, there always seemed to be some stickers you were missing and couldn't find in the pack. So I first set up a marketplace where people could sell me their unused stickers for 1 cent and I would sell the sticker someone was looking for for 50 cents.

I don't remember any parent pressure in the matter (mostly, my parents looked at this as kids being kids) and I learned a lot about supply and demand in the process (including getting stuck with tons of worthless stickers at some point :) )

You ever been a parent? I'm guessing not because if you were, at some point you would have arrived at the horrifying realization that kids don't grow up on their own--that by some incalculable measure what we do today will affect their self-image, motivation, and desires for the future. Of course we are an amalgam of memory and experiences, and you can't look back and identify one single event that shaped your future, as Rob addressed in the article. But it is like sowing seeds--you don't know which ones specifically will take, but with some hard work and care-taking you can be know that the result will be good.

A parents job is to offer comfort, support, and, yes, to teach the child what they feel they should know. A lot of people, this forum not excluded, have a definitive view of parenting, and if someone strays outside of that view then its not right.

For instance, I am raising my oldest with the same tenderness and security that most parents have to offer, but I choose to be strict with education. As a result he is 3 and can read, write, do mathematics, and understand higher-level concepts than his peers. He still loves power rangers and playing outside, but he also feels good when he learns something new and receives the praise of his parents, teachers, and friends.

But when he was about 1.5 I posted a thread asking for suggestions for raising an advanced child and was demonized. My view - which is just one view, is that the more you can teach a child (socially, academically, creatively) the better.

What it means to "be a kid": experimenting, learning, challenging yourself. That's what's going on here.

I didn't need my parents to teach me to be entrepreneurial; I set up a lemonade stand in front of my house that I wanted to be the guy to provide services that people would pay for.

That depends on who is asking. If you're a responsible parent who plans creative and intellectually-stimulating activities for his/her children, by all means pick other activities.

On the other hand, for many people I know, "being kids" refers to watching TV and playing halo. I was lucky to grow up in a house without television and I had an intellectually stimulating childhood that I wouldn't exchange for the world. I hope all kids experience "the zone" and a more meaningful, well earned, type of fun than that of consumption.

The actual accounting knowledge the OP gained might not be important in the long run. The experience is.

I think it depends on the kid. Speaking for myself, I would have loved that as a kid, so much that you don't even realize you're learning important things. There are probably plenty of kids who this would have made miserable and not been worth the trouble.

I'm not saying this would work for every or even most kids, but if you can use the kids natural excitement to teach them important skills (not just cash flow, but money management, value of work, etc) then why wouldn't you? I think this is a great story, and I hope when I'm a parent I can engage my kids with something as creative.

The primary difference between 'play' and "work" is safety, both in terms of personal harm and in terms of wasted resources. Most 'play' simulates some adult activity in a (hopefully) safe way; from mud pies on up to the first-person shooter video games.

From that point of view, a business like this where the parent provides the 'safety net' so that the kid can explore without much by way of negative consequences /is/ play.

I don't know. Running a vending machine actually would sound like fun to me. It's a modern day lemonade stand.

LOL - I assume you meant $0.50 each?

dang, that's some markup!

I looked into this a bit (I wanted to take the same ideas and package them for elementary schools to teach to students).

Vending machines are far from ideal, although they're still plausible if you have a friend who owns a car repair shop or something similar with a few steady workers plus customer traffic.

If I was doing it today, I would take one of the single-serving coffee machines. Some of them have coin slots, pricing controls, and protected inventory. They're a bit expensive to buy individually (a couple grand) but might make sense to share the responsibilities and decisions among a class or a group of family friends.

Because of the smaller footprint, also easy to add to a teacher's lounge, office, etc and it's possible the manufacturer would cut you a break for doing something so PR-able, especially if you turn it into a repeatable school program.

Drop me a note if anyone decides to pursue something like this -- I'd be happy to help where I can: developing the curriculum, yelling at suppliers, or coming up with new lower-cost hardware.

I think the stock market is a lousy way to teach kids about investing. In fact, I'm not even convinced that interest-bearing accounts are of much use to kids.

The time value of money is significant to a kid. Consider a kid with, say, $500 from babysitting or lawn-mowing. This could buy the kid, say, a really nice bicycle (+ helmet, lock, rack, basket, chain lubricant, etc. Assume they're old enough that they won't outgrow it for a while.) Alternatively, the kid could wait a year and expect to have an extra $20 (given the 4% annualized inflation-adjusted return on the market - what, you're investing, right? not gambling? then you get 4%. :P)

Which would you choose: about $20, or a year with a bicycle? Opportunity cost! And the $20 will just about cover the commission on trading. Ouch. Transaction fees.

The reason that the stock market is attractive to adults is that we generally have an adequate supply of Things that we need to make use of our time. There isn't another object we can spend $500 that will make that sort of an impact on our lives. Diminishing returns!

(Also, we have tens of thousands of dollars, so we can invest without being slaughtered with fees.)

Of course, there are many worse things to spend your time on as a kid than a combination of physical exercise and teamwork.

Do you see something wrong with playing soccer? Or was the key word in that sentence the "just"?

... Because lying to your kids is a good idea?

From OP, part of the joy was using the key to open the machine and get a drink when others were watching.

Removing the tangibility of the project (and the heavy lifting——are you teaching your kids that you'll buy and move their inventory?) seems like it might not be the best approach.

If the machine is not real, you don't get the real consecuences of your actions, like:

  "Suddenly I couldn’t afford to make re-stocking trips
  every week, grape soda was cut for an extra column of
  Coca-Cola. I lost some niche customers."

Is this a good idea?

Regarding your comment about script kiddies - absolutely. So many of them have no legitimate outlet for their curiosity and skill that they end up "learning to hack" because they think it's cool. It's a really sad thing, and something I wish there was a solution for...

From my perspective, it doesn't make a huge difference whether the idea was independently discovered by my dad or inspired by something he read--what matters is the effect it had on me.

I'd have to ask my mom to be totally sure, but I'd estimate I ran the machine for roughly 4 years beginning when I was 7 or 8.