My dad taught me cashflow with a soda machine

My 11-year-old daughter for Christmas last year asked for a bubble-gum vending machine. She got the idea from hearing stories about a family member who had over a hundred machines placed at one time.<p>I thought it was a great idea. She placed one machine, then another. Now she has four machines, but she has only placed 2 of them. Each machine makes about a buck a day gross, 70 cents or so net.<p>I'm purposely not doing any of the stuff this guy's dad did -- charge for gas, insist on doing the math, etc. For now all she has to do is buy the inventory. Once a month or so to pick up the "haul."<p>I think if you push these things then you lose track of the point. Right now it's something she enjoys -- who wouldn't want to take a trip each month and come back with tens of dollars? If we were to get into marketing, sales, cash flow, or any of that? I think it would turn it into a chore. After all, geesh, the kid is only 11. The only thing I've told her is that she has to save up if she wants another machine, and the more machines she has placed in good spots the more money she will make.<p>Looking back over the previous year, I think this Christmas gift might turn out to be one of the best presents we've ever given. It has the potential to teach so many lessons. The coolest part is that it is all driven by motivation on her side -- she was the one asking for the machine, she is the one picking out the product, she is the one saving up for new machines, she is the one responsible for scouting out new locations and making the pitch to store owners, etc. If she pushes a lot, she could make some real cash. If not, then she knows more about how these things work. It's a win either way.

Anyone else here think that kids should be allowed to spend their childhoods being, well, kids?<p>A lot of people seem to spend their time as parents trying to teach the things they think their kids should know, but too often these seem to be things that kids need to know to fulfil their parents aspirations for them. Sure cash flow is a useful lesson (though one that I'd suggest could be taught more efficiently) but this feels a bit like a parent pushing someone down a particular line.<p>Now I'm not saying that this is a bad story, and certainly not a bad parent, just that IMHO the absolute best bit of this story - by a country mile - is that it's something they did together, parent and child spending time with each other. If he learned about cash flow then that's great, but it's not nearly as great as him learning about his dad and his dad learning about him.

Reminds me of a story of a similar family, posted on everything2.com a while ago after a long discussion of how to rip off soda machines by using coins stuck to fishing line or pouring salt water through them:<p><a href="http://everything2.com/user/Trilateral+Chairman/writeups/Ripping+off+soda+machines" rel="nofollow">http://everything2.com/user/Trilateral+Chairman/writeups/Rip...</a><p>Lots of life lessons there.

A beautiful story. I myself was raised by two academics in safe middle class public sector jobs their whole life. Only at my 30th year did I consider starting my own business. Looking back on friends who started on their own, I do not doubt that either being an entrepreneur is 1) in the bloodline (nature) and in the upbringing (nurture).<p>I had a wonderful childhood - but I think I would have started my own business much earlier, had I had a father like yours. And it just goes to show, that valuable life lessons does not need to be boring chores and stern rants from the elderly.<p>Thanks for an inspiring read.

When I was 9 or 10 we'd go to Costco and purchase the big flats of large muffins. We'd sit around the dinner table and wrap them in cellophane and then send them with my dad to put in his office's kitchen. We sold those things for $50/each on the honor system and made a tidy profit. I hadn't thought of that in a while, but it definitely was a fun adventure.

The simplest lessons are often the most difficult to learn and internalize to the limit of it becoming second nature ( or intuition ). Brilliant dad. What a great story. Thank you kindly.<p>Fathers are so, so, so important.. here's an interesting excerpt from the recent Steve Jobs bio :<p>" It was important, his father said, to craft the backs of cabinets and fences properly, even though they were hidden. He loved doing things right. He even cared about the look of the parts you couldn’t see. "[1]<p>Connect the above with the speech Johnny Ive gave at the recent memorial :<p>" we shared a giddy excitement spending months and months on a part of a product that nobody would ever see, well not with their eyes. "[2]<p>[1] - <a href="http://www.amazon.com/Steve-Jobs-Exclusive-Biography-ebook/dp/B005J3IEZQ/" rel="nofollow">http://www.amazon.com/Steve-Jobs-Exclusive-Biography-ebook/d...</a><p>[2] - <a href="http://www.youtube.com/watch?v=nPUsuY8JZJI&#38;t=2905" rel="nofollow">http://www.youtube.com/watch?v=nPUsuY8JZJI&#38;t=2905</a>

This is amazing. Usually parents try to teach kinds about mature life by making them do chores or get higher marks in school. And yet what do you learn this way?<p>That life doesn't reward you for this no matter how many chores you do and how good marks you get.

Empowering people to figure stuff out on their own is the best way to teach. My Dad handed me the reins to out a small stock account with my own, my siblings and some of his money when I was 11. Man, can that motivate you to learn. I'd read 20 investing books by the time I got into high school. And fundamentally the most important thing it taught me was how to think about money. And its was so effortless on his part.<p>On a similar note, Warren Buffet made around $50,000 by the time he graduated high school by owning several vending machines, among other things.

Great story. I'm always looking for new ideas on how to teach these concepts to my own children and I love this approach. Now, I just need to find a good place for a vending machine...

That is a great story. Shorter and simpler after mowing the lawn one dad. I told my dad I wanted to invest in stocks. He thought this was a great opportunity to teach me about money. So he loaned me money to invest in the stock market. Help me pick and buy stocks, track their values. Eventually to sell them and pay back the loan keeping profits for myself...<p>The only real issue was it was the start of tech bubble and I was a computer nerd. I bought all tech stocks which soared, my older brother buy shoe companies and the like...<p>I nearly tripled my investment while my brother lost 30ish% of his. Not sure it was quite as real world learning opportunity as he was hoping.

"I get the impression kids are a bit slippery in that regard."<p>True. Come to think of it, I'm middle-aged and I'm still like that.

I can't say my parents had lessons this cool, but I did spend some of my time in my teenage years working at my cousins' vending machine warehouse, doing various tasks: counting the take (and filling out the spreadsheet), filing refill slips for the drivers, putting new inventory in the right place, trips to purchase new inventory, and even refilling a machine once. It's a pretty interesting business, and it's interesting to me to see how one can scale up the "levels of responsibility".

Brilliant story. This model is much better than giving allowance.

this is great- good thing your dad didn't pick up a slot machine, you could've ended up in politics :)

Great Story. I think one thing I am realizing with my little daughter is that kids - even at 1.5 years old - are curious and resourceful. My job as a parent is not to make her happy... but to help equip her to fullfil her purpose and passions to the fullest - that's when she'll be happiest.<p>That's perhaps why my parents stopped giving us an allowance early on.<p>My dad loves woodworking, and I remember at 5 years old, taking scraps, nailing parts together to make a very crude looking airplane and actually sold (yes, someone actually bought it) it to raise money for something - can't remember what it was. But I do remember the work, I remember getting paid, and I remember the satisfaction and fulfillment in a happy customer (even if he did buy it out of compassion).<p>If I wanted a toy (birthday/Christmas aside), I had to work for it (not the regular chores). It encouraged me to think... be creative... buy low, sell high. Robert Kiyosaki had similar experiences as a kid in his book "Rich Dad, Poor Dad". - As an aside the Cashflow game is really good and although it may be expensive, it is totally worth it. There is a kids version too.<p>I did the lemonade... I tried selling baseball cards... As I got older, so grew the ideas. In highschool video games were expensive. I started reviewing them through a couple of companies (now owned by IGN) and got my games for free to review them and write an HTML review page.<p>In university (ah, the advent of eBay), I started going to garage sales/thrift stores/pawn shops and buying selective items. I'd clean and test the items, put them up for sale. All my "toys" (games, computer parts, my Metcal Station, DVDs, etc) were bought through the sale of items on eBay.<p>Of course, this is all besides running a Computer Consulting/VAR company, creating applications, websites, and study/work.<p>Ah, the good old days. Forgive me for rambling... I got caught in the nostalgia.

I had a huge smile on my face while reading this.<p>This has got to be one of the best stories I've read in a while, and a fantastic idea if I ever have kids. I love it. Especially the idea that the dad would slowly start introducing charges to the kid. It's actually a brilliant idea, and more real-world than giving a kid chores and allowance.

Thanks for writing this article. I really enjoyed it. When I was growing up, I was terrible with cash management. My parents continuously subsidized my various entrepreneurial endeavors (building and selling skateboard ramps, selling people's stuff on eBay, manual labor...). So, I grew up really excited about the upside potential of entrepreneurship, but learned little about what it takes to manage the extraordinarily limited resources that you have when you are building businesses in the real world.<p>Now I help invest in and build companies and work on projects of my own. Learning the trade offs between pricing/volume, technology/cost, etc., is so valuable and I'm only starting to understand them deeply now. I think I'll do something like this when I have kids, whenever that may be....

I love this story. Awesome awesome<p>I made plush South Park characters and sold them to my mom's fitness/spinning clients. Learned a lot about pricing, investing, selling, creating at 10.<p>Highly encouraged to give children opportunities like this and not just have them do soccer

Great story. I did a similar thing with Pokemon cards - I lived in one school region but actually attended school in another, so had access to two markets. I kept track of inconsistencies in demand and used it to my advantage, taking a plentiful card type from one area to the other and vice versa. Being a kid is serious biznuz!<p>Reminds me of Barry Silbert (of Second Market)'s introduction to trading - <a href="http://ecorner.stanford.edu/authorMaterialInfo.html?mid=2699" rel="nofollow">http://ecorner.stanford.edu/authorMaterialInfo.html?mid=2699</a>

I'm curious if this kind of youthful money making is still possible. It tends to be much rarer in the UK anyway, but I'm pretty sure there are a gajillion petty bureaucracies that would stop it - working age laws; minimum wage laws; tax / benefit laws; insurance; health and safety; etc etc etc.<p>But, see also "The inexplicable war on lemonade stands" which is also happening in the US.<p>(<a href="http://www.forbes.com/sites/erikkain/2011/08/03/the-inexplicable-war-on-lemonade-stands/" rel="nofollow">http://www.forbes.com/sites/erikkain/2011/08/03/the-inexplic...</a>)

Brings to mind two ideas.<p>Could a parent do all of this without actually renting a machine? Not ideal and a bit of a white lie, but would remove that cost. A father/mother could come home each night or report back at the end of the week. A bit like playing lemonade stand by proxy.<p>Could a simple app assist a parent in doing this and getting imaginative/realistic situations to keep the child interested? Or even a service renting physical vending machines specifically for parents and children to try this?

This is great. By the time I was 9 or 10, I was frustrated that for all my playing with tools, reading, tinkering, etc., none of it was towards a practical goal. Finding a way to give kids real-life responsibilities in such an engaging way is awesome.<p>I wonder if script kiddies, for example, lean towards the nefarious because there are no industrious outlets nor mentors for them to work with.

Very interesting idea. I need to figure out a way to teach my kids about money and cashflow using something like this method. However, as cool as this story is, I swear I read it in one of Rich Dad Poor Dad books. Maybe this is the source of the books story. I'm not sure.

Rob - how old were you when this started and how long did this venture last?

Great story Rob. Your Dad was an amazing person. He taught not only the 8 year old boy but the 20 something girl the same principles. He was truly an amazing man and I miss him every day.

How did the $0.55 price turn out? Did you keep it?

Awesome and delightful!

Great example of why entrepreneurs don't need an MBA:)

Now I see the downside of having a socialist father.