A Love of Books

As I've mentioned before, I participate in a tutoring program at my church. This is my 5th year with the program, and my 4th year with the same student. J---- and I were paired up together when she entered the program as a 3rd grader, and now she's in 6th grade. Time flies!

Her birthday was on Sunday, so Monday night after tutoring, I took her out for dessert to celebrate. And Teller's managed to out-dessert the ultimate dessert-atarian! She was overwhelmed by the richness of their Molten Chocolate Cake with raspberry sorbet.

It was a Good Time.

I like to give books to J---- as birthday and Christmas gifts. Mostly I've been giving her the books that were my favorites when I was her age. First, I gave her the Chronicles of Narnia books, and last year, I gave her Anne of Green Gables. So this year, Anne of Avonlea was one of the books that I bought for her.

I also found a recommended reading guide, which was really helpful. Since J---- has read all of the new Nancy Drew books from her school's library, the guide book suggested Shakespeare's Secret by Elise Broach. I also picked out a jewelry-making instruction book / kit that looked fun.

(And because I think that it's really important to teach kids about money, I also bought Complete Idiot's Guide to Money for Teens. But that's a tutoring/mentoring aid, not a birthday gift. J---- usually finishes most of her homework before tutoring, and she doesn't really need to work on basic math or reading skills, so we're going to devote part of each tutoring session to reading this book and talking about money.)

This year, I decided to include a letter with J----'s gift. I thought I ought to share it here, in honor of all of the people who gave me books when I was a kid:

Dear J----,

I wanted to tell you a little bit about why I buy books for you as birthday gifts and Christmas presents. The first reason is that I’m your tutor, so I think it’s good to give you gifts that are at least somewhat educational. But that’s kind of a boring reason.

The other reason is because I love books. I have always loved to read, and that’s something that I want to share with you too. (When you love something, like reading or skiing, of course you want to share those activities with people that you care about!) Many of the books that I have given to you are books that were given to me by people who loved me.

My step-mother gave me the Chronicles of Narnia books when I was a little girl, because she also loved those books when she was younger. I’ve read them dozens of times, and I still re-read them every couple of years, because C.S. Lewis’ stories are more than just fairy tales. He was a very wise man who wrote some important books for adults, but adults can also learn from the stories that he wrote for little kids.

I bought you the Anne of Green Gables books because my grandmother bought those books for me. My grandparents used to go to Prince Edward Island for their vacation every year, and my grandmother bought the books for me while she was there. My grandmother loved history, especially the history of the United States and Canada, and I remember her house was filled with books. One of her hobbies was studying genealogy, and she discovered that she had an ancestor who fought in the Revolutionary War.

So these books are a sort of heritage that I want to pass on to you. In addition to being great stories, they remind me of people who loved me. And I hope that when you think about these books, you’ll also remember that I gave them to you with lots of love!

Donald Miller - To Own A Dragon

Today I read To Own A Dragon by Donald Miller, the author of Blue Like Jazz.

It's an awesome book. Wonderful in every sense of the world. The first three chapters blew me away. Funny, profound, and beautiful prose.

Here's a paragraph that I can especially relate to:

I say this because there aren't many pleasures I enjoy more than sleep. I sleep till I am done, normally, and haven't set an alarm in years. I'm not lazy, mind you, I just find it odd anybody would program a machine to wake them. God made the brain so it would wake on its own, and as a follower of Jesus, I am a strict adherent to His system. Call me a fundamentalist if you want.

The book was written for guys who have grown up without fathers, but everyone should read this book-- If you had a difficult relationship with your father, if you have a friend who has grown up without a father, or if you are in a position to be a mentor to a fatherless child, then you will be inspired by this book.

In addition to being a great author, Donald Miller is also a founder of The Belmont Foundation. Their goal is to establish long-term mentoring relationships for fatherless boys.

In the United States, there are more than 11 million children being raised by a single parent. Of those, roughly 85% are being raised by single mothers.

According to the information in the back of the book, children from fatherless homes account for:

• 85% of all youths in prison (20X the average)


• 71% of all high school dropouts (9X)


• 63% of youth suicides (5X)

They're also 20X more likely to show behavior disorders and 9-10X more likely to wind up in a chemical abuse center or state institution.

Mentoring can change these odds dramatically.

The Importance of Mentoring

From a Newsweek article called The Trouble With Boys:

One of the most reliable predictors of whether a boy will succeed or fail in high school rests on a single question: does he have a man in his life to look up to? Too often, the answer is no. High rates of divorce and single motherhood have created a generation of fatherless boys. In every kind of neighborhood, rich or poor, an increasing number of boys--now a startling 40 percent--are being raised without their biological dads.

Psychologists say that grandfathers and uncles can help, but emphasize that an adolescent boy without a father figure is like an explorer without a map. And that is especially true for poor boys and boys who are struggling in school. Older males, says Gurian, model self-restraint and solid work habits for younger ones. And whether they're breathing down their necks about grades or admonishing them to show up for school on time, "an older man reminds a boy in a million different ways that school is crucial to their mission in life."

In the past, boys had many opportunities to learn from older men. They might have been paired with a tutor, apprenticed to a master or put to work in the family store. High schools offered boys a rich array of roles in which to exercise leadership skills--class officer, yearbook editor or a place on the debate team. These days, with the exception of sports, more girls than boys are involved in those activities.

In neighborhoods where fathers are most scarce, the high-school dropout rates are shocking: more than half of African-American boys who start high school don't finish. David Banks, principal of the Eagle Academy for Young Men, one of four all-boy public high schools in the New York City system, wants each of his 180 students not only to graduate from high school but to enroll in college. And he's leaving nothing to chance. Almost every Eagle Academy boy has a male mentor--a lawyer, a police officer or an entrepreneur from the school's South Bronx neighborhood. The impact of the mentoring program, says Banks, has been "beyond profound." Tenth grader Rafael Mendez is unequivocal: his mentor "is the best thing that ever happened to me." Before Rafael came to Eagle Academy, he dreamed about playing pro baseball, but his mentor, Bronx Assistant District Attorney Rafael Curbelo, has shown him another way to succeed: Mendez is thinking about attending college in order to study forensic science.

Education is a Passport

Don't get me wrong— I like Cincinnati, and I think it's a great place to live. But to make my case today, I'm obligated to present some unpleasant facts about our city:

• Crime - Cincinnati is significantly worse than the national average for almost every type of crime. We have more prisoners than we have jail space, so we farm some of them out to another county. We don't trust our local government to spend money effectively, so we vote (repeatedly) against a tax levy to build a new jail.
  
  When police patrol high crime areas, people complain that innocent people are being harassed or harmed by the police. When police don't patrol high crime areas, people complain that the city doesn't care about victims in poor neighborhoods.


• Poverty - Cincinnati has been ranked as the 3rd poorest big city in the United States, with 28% of its residents living in poverty. We have a higher percentage of people living in poverty than Los Angeles, New York City, and Chicago. Two-thirds (66%) of the students in Cincinnati Public Schools are classified as "economically-disadvantaged."


• Racial Issues - Cincinnati is a black and white city; African-Americans aren't really a minority group here. The racial breakdown for people living in the city of Cincinnati is approximately 43% African-American and 53% white. In Cincinnati Public Schools, 75% of students are African-American or multi-racial, and 21% are white.
  
  However, Cincinnati neighborhoods are generally segregated by race, and in this instance, separate is clearly not equal: The median incomes for Mt. Adams, Hyde Park, Mt. Lookout are roughly ten times the median incomes for Winton Hill, the West End, and Over-the-Rhine.


• Traffic - OK, so I'll admit that, in the grand scheme of things, traffic is not one of the most significant problems that Cincinnati faces. In fact, it's way down at the bottom of the list, in tiny print. It's easy to get frustrated by traffic, but we really ought to be ten times more frustrated by the tremendous waste of human talent that is embedded in all of the statistics about poverty and crime in Cincinnati.

A few years ago, I happened to overhear a local talk-radio program. The hosts and the callers were bemoaning the problems with Cincinnati. I don't remember if they were talking about poverty, or crime, or racism, or some combination, but I do remember thinking, "Yeah, so you've got a strong opinion and a loud voice, but what are you DOING to make things better?" At that moment, I became 100% convinced of one thing:

An opinion is worthless unless there are actions backing it up.

I believe that you shouldn't complain about a problem unless you're willing to be part of the solution. (Admittedly, I fail to live up to this belief on a regular basis, but nevertheless, there it is.) It's both arrogant and irrelevant for me to take part in intellectual debates about all the things that are wrong with Cincinnati, unless I'm actively trying to do something to make things better.

So what are some potential solutions for crime, poverty, and racism? And how can we participate in those solutions?

• We can expect our government to solve these problems. They'll continue to hire more police officers, build more jails, and lock up more people. They'll pass out more welfare checks, subsidize more housing, and pass more laws and quotas for affirmative action programs. We participate in this solution by paying taxes and complaining about how much money is being wasted. Because this method has worked so well in the past...


• We can hope that non-profit organizations will scrounge up money from somewhere, so that they can pay their employees to solve these problems. Our participation could consist of [grudgingly] allowing our employers to withhold a pittance from each paycheck as part of their corporate United Way goals, or maybe we send a check to a particular agency once a year. The NPO's build lots of roads paved with good intentions, which certainly help lead some people out of poverty. Yet somehow the statistics continue to show that a little bit of ground is lost each year.


• We can try to influence the hearts and minds of adults who have given up on all of their personal dreams, who don't have hopes for their kids, and who don't see any point in trying to improve their neighborhoods and communities. I believe that this approach could work, but personally, I haven't seen very many opportunities to get involved in this way.


• We can step up and get involved with kids and try to change the path of their lives, so that they grow up to help solve problems, instead of following the statistical trends for crime and poverty. We tell them that education is important, and we show them where it can take them.

Working with kids just seems like the most obvious choice for me. At the very least, it's a solution that I can easily participate in— I can personally effect change by getting involved in a kid's life, and I can encourage other people to do the same. Even if we don't see 100% improvement, we will certainly see some progress in every kid, and that's just got to be better than doing nothing at all. And it's easy to get involved in these sorts of programs. Here are three examples I can recommend:

• Whiz Kids Tutoring


• Cincinnati Youth Collaborative


• Big Brothers Big Sisters

So if you agree with my conclusion, please don't use "But I don't know how to get involved" as an excuse. Contact one of these agencies and they'll quickly get you hooked up with a kid. I promise, it's easier than you think.

---

This is a long post, and I've been working on it for about a month now. An article on thug culture got me thinking about what I wanted to say, and then I stumbled across some quotes from Bill Cosby's speech on the 50th anniversary of Brown V. Board of Education:

I mean, this is the future, and all of these people who lined up and done, they’ve got to be wondering what the hell happened. Brown V. Board of Education. These people who marched and were hit in the face with rocks and punched in the face to get an education, and we got these knuckleheads walking around who don’t want to learn English.

I know that you all know it. I just want to get you as angry as you ought to be.

When you walk around the neighborhood and you see this stuff, that stuff’s not funny. These people are not funny anymore. And that‘s not my Brother. And that’s not my Sister. They’re faking, and they’re dragging me way down because the state, the city, and all these people have to pick up the tab on them, because they don’t want to accept that they have to study to get an education...

...I’m telling you Christians, what’s wrong with you? Why can’t you hit the streets? Why can’t you clean it out yourselves? It’s our time now, ladies and gentlemen. It is our time. And I’ve got good news for you. It’s not about money. It’s about you doing something that we ordinarily do— Get in somebody else’s business. It’s time for you to not accept the language that these people are speaking, which will take them nowhere. What the hell good is Brown V. Board of Education if nobody wants it?

In addition to giving several speeches along these lines, Bill Cosby has written a book with his friend Alvin F. Poussaint, who is a Psychiatry Professor at Harvard Medical School. The book is called Come On People: On the Path from Victims to Victors. I picked it up at the library last week, and I think it's very good. Not funny, but definitely honest and challenging.

The book contains a quote from former Cincinnati mayor Dwight Tillery:

The high school graduation rate in Cincinnati for black males is 25 percent, compared to 43 percent for white males.

Those numbers shocked me, so I did a little bit of research and found out that there's been some significant progress for Cincinnati Public Schools in the past 7-8 years. According to the latest data, the overall four-year* graduation rate has increased from 51% in 2000 to 79% in 2007.

[*NOTE: Four-year graduation rates don't reflect kids who drop out before 9th grade. Tillery's statistics are specific to males, and they may or may not include boys who never made it to high school.]

While a 20% drop-out rate leaves plenty of room for improvement, Cincinnati Public Schools (and the Gates Foundation) deserve credit for the overall progress that they've made in a relatively short period of time. They also managed to eliminate the gap in graduation rates between blacks and whites, which is a huge accomplishment.

---

Bill Cosby's book also includes this quote from Malcolm X:

Education is our passport to the future, for tomorrow belongs to the people who prepare for it today.

I think that's a great metaphor. What happens if you arrive somewhere new and different without a passport? Customs agents will turn you around and send you back where you came from.

Many of the kids in the Cincinnati Public School system know all about poverty, violence, and drugs, but they don't know anything about the world that exists outside their neighborhoods. They may sense that there is a gateway out there, but they also know that there are guards who are waiting to turn them away at the door. They need a passport to get through.

What we can do for kids is show them views of the big world that's out there waiting for them: interesting jobs and careers, opportunities to travel, healthy communities, stable families, comfortable homes, and financial security. And then we show them how to get a passport that will open doors for them: learn how to study, stay in school, work hard, develop technical skills or earn a degree, start a career.

I believe that education is a passport into a world of opportunity, and I believe that every kid needs someone who can show them how to get that passport.

Education Prognostication

I believe that home-schooling will continue to gain momentum in the next five to ten years. My prediction is that home-schooling families will form co-operative groups where one parent teaches Math and Science, another parent teaches English and Social Studies, and yet another parent teaches Art and Music, for example.

And we'll look at them and wonder why it costs $13,000 for each child in public schools, when families can do it for less than $500 per year.

Financial Literacy

OK, one more rant on personal finance and then I'll stop. Maybe.

Newsweek published an article called Clues for the Clueless about trying to improve financial literacy in America. The article opens with this question:

It is, or at least it should be, a simple question. You have $200 in an investment that's earning 10% a year. Assuming you let the money grow, how much would you have at the end of two years?

Here's how American adults answered that question:

• 18% said $242.


• 34% said $240.


• 48% had no clue.

Extrapolating from those results:

• Fewer than 1 in 5 adults grasp the basic principles of compound interest. In terms of financial "literacy" we can assume that this group can at least read street signs and newspaper articles.


• 1 in 3 understand how to calculate simple interest, but they don't understand that there's a difference between simple and compound interest. This group has learned the alphabet, and maybe they can work their way through Dr. Seuss books.


• Roughly half of all American adults don't understand simple OR compound interest. They don't understand sales tax, let alone credit cards and mortgages. Financially, they're completely illiterate.

And we wonder why our country is having economic problems? Who would ever suspect that big companies might try to take advantage of an ignorant group of consumers like this? Big companies always act in the best interests of their customers. Because that's their job, right?

Oh, wait, I forgot... The primary responsibility of big companies is actually to return huge profits to their investors. And investors really don't care what happens to customers, as long as people keep buying what the company is selling. It reminds me of the line from Casablanca: "I'm shocked, shocked to find that gambling is going on in here!" "Here are your winnings, sir." "Oh, thank you very much."

The problem with the system is that regulators assumed that banks would want to protect themselves and act in their own long-term self-interest. But corporations generally set up employee metrics that reward short-term behaviors, and people generally figure out ways to achieve their metrics. (i.e. People do what you pay them to do. That's the double-edged sword of metrics.) In this case, individuals within the banks recognized that they could best advance their careers by creating complicated, high-risk mortgages and bundling them as securities, and they also realized that they would be promoted and out-of-sight by the time the long-term effects came back home to roost.

SIDEBAR: Speaking of "creative" financing... We have an acquaintance who has recently gotten into the consumer finance industry. He mostly works with people who are on the verge of bankruptcy due to credit card debt and/or "unconventional" mortgages. Recently, he was telling us about a potential client who had a less-than-interest-only mortgage. Here's how it worked:

The guy bought a house for $280,000 with essentially no down-payment. He pays the bank something like $2,000 per month, which is actually less than the interest being accrued on the loan. At the end of 30 years, he has to make a "balloon payment" to the bank of $320,000.

Does it make any sense to deliberately create a situation where someone is perpetually upside-down on a 30-year mortgage? (Yes, the house will probably be worth much more than $320,000 at the end of 30 years, but he's still going to be in serious trouble if he tries to sell the house after only 5 years.) How is it even a mortgage? It looks suspiciously like a love child begotten when Luxury Rental Property went out slumming and had a one-night stand with Payday Loans.

So anyway, back to the Newsweek article...

Financial pros have fretted for decades over our ignorance about money. It's not that Americans' financial knowledge has declined, but that the need for it has increased. Until 30 years ago, people shopped mostly with cash, relied on company pensions for retirement and bought houses using fixed-rate mortgages. Today's world of credit cards, 401(k)s and exotic mortgages require more-sophisticated consumers, but there are few mechanisms to aid this transformation. Some high schools offer courses that teach students how to balance a checkbook or follow the stock market, but only 18 states require personal-finance instruction, and some principals resist adding the topic to schedules already crowded with really useful classes, like trigonometry.

I'm an engineer, so yeah, I actually do think that trigonometry is useful. I also think that American high schools need to be pushing more math, not just making substitutions, if we hope to compete with the rest of the developing world. But in the grand scheme of things, I do believe that a class in personal finance is more important than trigonometry or pre-calculus for the vast majority of high school students, especially for students who hate math and don't plan on pursuing any sort of higher education. I've said it before, and I'll say it again, "If you don't understand math, people will cheat you and take advantage of you. And you won't even know that they're doing it. You'll just know that you're always broke, and you always will be."

Here's the next frustrating bit from the article...

Class and culture also play a role in financial-phobia. When Laureen Hudson, a 39-year-old technical editor, ponders why so many of her friends are clueless about money, she recalls how her crowd of left-leaning humanities and science majors held particular disdain for business students, who always had their noses in The Wall Street Journal. "It's considered noble to ignore money, and it's considered grubby or lesser to concern yourself with finance," she says.

I believe there's a special place in hell for people who choose willful ignorance. (In this case, it's called bankruptcy court.)

I've finished my rant, so I'm going to conclude with this brilliant gestalt from indexed:

As the saying goes, "A picture is worth 1,000 words." Or, in this case, a graph...

Home Economics

Every day it seems that there's a new story about how home foreclosures are increasing, resulting in widespread implosions of real estate "bubbles" and threatening the overall health of the American economy. Earlier this year, there were Congressional Hearings on the business practices of "payday loan" and credit card companies.

It starts to sound like the downfall of the American economy will ultimately come about simply because the majority of Americans are bad at math.

Before I start down that path, let me just say that, in my opinion, most credit card companies are sharks and many of their "business practices" are nothing more than heinous usury. (And the payday loan companies are at least ten times worse.) I also know that many home mortgage refinancing companies are doing some pretty shady things. Agents will promise certain terms over the phone, but then at closing, the paperwork will show a different interest rate or hide a boatload of closing costs that are being rolled into the loan, and desperate people will go ahead and sign on the dotted line.

Maybe these things should be illegal, but ultimately, I believe that educating consumers about their tricks and traps is probably a better solution than passing more federal regulations. If people would recognize how they're getting ripped off and start talking about it, then these companies would gain or lose business based on their reputations. Right now, no one is willing to step up and announce that, "My credit card payment was due on a Sunday. I mailed it on a Tuesday, it arrived on Friday or Saturday, but the credit card company didn't apply the payment until Monday. They charged me a $39 late fee and raised my interest rate by 5% just because they don't process payments on weekends." Or "Company A pulled a bait-and-switch on my refinance deal, and I wound up paying $5000 in closing costs."

The bigger problem is that most people don't even know it's happening. They don't understand how to calculate compound interest, and they're too intimidated to ask questions about the paperwork at closings. As my friend Tracie says, "Life's hard[er] for stupid people." She used to work in the mortgage industry, so she knows exactly how people get ripped off by hidden closing costs and the sky-high interest rates that are charged for having bad credit.

Exhibit A: When my brother-in-law got divorced, he agreed to buy a house in certain neighborhood so that his son could go to that school system. My ex-sister-in-law couldn't figure out why he couldn't afford to buy a house worth more than $125,000, because she thought that house payments were basically just the value of the house divided by the number of payments, plus maybe a hundred dollars to cover the taxes and 6% [simple] interest.

She's never learned anything about mortgages because her parents actually bought her a huge house and put into a trust fund for her. The problem is that she and her brother are eventually going to inherit a multi-million-dollar company from their parents. When they inevitably run it into the ground, dozens of their employees will lose their jobs, and the economy will bleed from one more small cut.

Most college students wind up buying a new car within a year or two of graduating. But I wonder how many of them actually understand what it means to be "upside down" on a car loan? Every year, credit card companies send dozens of pre-approved applications to every college freshman. Their goal is to make sure that they all walk of of school with $5,000 - $10,000 of credit card debt. Students might be somewhat troubled by the fact that they're so far in debt when they're not earning anything, but the credit card companies hope they they'll build up a tolerance to it until they reach the point where they're comfortable carrying $20,000, $30,000, or $40,000 worth of debt for decades. They might look around and see that all their friends have roughly the same income and debts, so they think they're doing OK, but actually they're just all broke together.

Exhibit B: I had a credit card in college, and initially I paid it off every month, but in grad school, my rent was actually more than my income. (No one told me that I would be taxed on the total value of my research grant. The majority of stipend wound up being withheld in order to cover the taxes from my tuition reimbursement. That's not meant to be an excuse-- It's just an example of a lesson learned the hard way.) So I wound up charging my groceries and living expenses on my credit card, and when I graduated, I had $5,000 in credit card debt on top of my $20k in student loans. I wasn't terribly worried about paying it off, because I was making more money than most of my friends from college. After I bought my house, I slid much further into credit card debt, and I started to lay awake at night, wondering how I would ever pay it all off. I didn't get out of credit card debt until I had been out of school for 5 years. (I'm still working on the student loans, but the end is in sight!)

My parents never talked to me much about budgets, credit cards, or mortgages. I remember my mom briefly listing all of our monthly expenses once, when my sister was complaining about why she couldn't buy all of the stuff that her friends had. When I graduated from college, my dad put $1,000 into an IRA for me, and he walked me through the calculations on how much it could grow by the time I wanted to retire. When I started working, he encouraged me to put 6% of my salary into my 401k, because he knew the company was doing a 75% match. But my dad learned a lot about investing from his dad, and I suspect that most parents never take the time to explain these things to their kids.

Maybe parents don't teach their kids about budgeting and investing because they feel like they're not practicing what they preach, or maybe it's because they simply don't understand the principles well enough to explain it.

Kids (and adults) can't see the value of Algebra or Geometry, let alone a reason to learn exponentials or compound interest. But no one can truly avoid learning about "the most powerful force in the Universe." If kids don't learn how to do the math while they're young, they wind up figuring it out in the school of hard knocks.

I tell the little girls that I tutor, "It's really, really important to be good at math, because otherwise, for your entire life, people will cheat you and take advantage of you. And you won't even know that they're doing it. You'll just know that you're always broke and you always will be."

I think it's time to start requiring a home economics class as a requirement for graduating high school. Obviously, it shouldn't be the traditional Home Ec of sewing, cooking, and all that antiquated stuff. Instead it should cover things like:

• Monthly Budgets - How much do utilities cost? How much does a typical car cost, including the loan payment, insurance, and repairs? How much do people pay for childcare? What about groceries and eating out at restaurants?


• Credit Cards - Suppose you buy a computer for $1000, and you start making payments of $100 each month. For a given interest rate, how long will it take before it's paid off? What will happen if you're late? How much will you wind up paying for the computer? Repeat the same calculations for rent-to-own furniture.


• Mortgages - If you buy a house for $200,000, how much will it wind up costing every month? How much will you pay over 30 years? What happens if you make an extra payment every year?


• Investments - The company you work has a 50% match, and the average rate of return is 7%. If your salary is $50,000, and you invest 5% of your income, how much will you wind up with when you retire?


• Taxes - Given a W-2 form and a couple of 1099's, fill out a 1040-EZ tax return. (This skill is important so that people don't fall prey to tax refund loan companies, which are just as bad as the payday loan companies, IMHO.)

So here's my final thought for today:

What do you think?