“You can be any age and start to talk to kids about money – there’s no age that’s too young.”

-Mellody Hobson

Moderator

Anna MAGZANYAN

President

LA Times Studios

Speaker

Mellody HOBSON

Co-CEO

Ariel Investments

As co-CEO of Ariel Investments, Mellody Hobson chairs Ariel’s publicly traded mutual funds and co-founded Ariel Alternatives, a private equity enterprise. She was board chair of Starbucks Corporation and is currently the lead independent director. Hobson is director of JPMorgan Chase, former board chair of DreamWorks Animation and past board member of the Estée Lauder Companies. Her children’s book, Priceless Facts About Money, demystifies money for young readers. Hobson earned her AB from Princeton University.

ON FINANCIAL EDUCATION REGARDLESS OF TIMING

Hobson: I am of the belief that you can be any age and start to talk to kids about money, so there’s no age that’s too young, but how do you do that? You could take a five-year-old and say to them: do you want this cupcake or do you want a toy? That’s barter, and you’re actually forcing them to assign value to something. That is a good starting point for understanding what something is worth to a child, which may be different to you than you. The other thing about the book – even though I geared it to eight to 12 or 13 years old, this was all a ruse. I just wanted kids who read it to be a gateway to their parents, too.

ON LEARNING THE “LANGUAGE” OF MONEY

Hobson: If you want to learn a language, the best thing to do is learn at the youngest age possible, so your brain just knows how to digest and process the information. Unfortunately, 77% of adults in this country feel anxiety about money, and the discussion and the fears and anxiety that come when talking about money actually have no connection to wealth – wealthy people have the same anxiety as people who have less means. People with less means are afraid that if they talk about money with their children, they are going to cause them to worry a lot. People with great wealth think that they’re going to have entitled children. Both are wrong, because avoiding the topic actually leads to more anxiety. It compounds the problems and we become either afraid or confused. So I want people to start talking about this issue at a very young age.

ON STARTING YOUNGER PEOPLE ON CREDIT AND ITS ADVANTAGES

Hobson: I’m gonna say something that is gonna shock most people. I think you should give kids a credit card really young. Everyone gets that it’s like a weapon of mass destruction, but the way it works in society – once your children are out of your house, you can’t control them in any way. You want to give them all the training and development while they are under your roof and you’re not trying to figure out how to talk to them about something that will torpedo their credit if they don’t get it right – so I tell people 13 to 14 years. They say, “You want to give them a credit card?” Yeah. And you want to show them the bill. You want to explain to them that making the minimum payment is not a good idea. Like all of these things, you want to start really, really early, so that they understand the significance of the damage that they can do not only to themselves, but to you. I need them to understand bad credit takes years off your life – it’s very expensive to be poor.

ON THE FUTURE AND CONTINUED CONVERSATIONS ABOUT MONEY

Hobson: Oprah picked me as one of her favorite things, and she’s like, “I learned so much.” Being on this bestseller list is amazing, but she also said, “You've struck a nerve.” Parents want to teach their kids about money. So that’s my big-picture goal is that this, in a way, goes viral. At Christmas, everyone has the book and it’s so not about me, but it’s like they'll be telling these facts at school or at cocktail parties, as I’ve said, and you’ll learn things about money that you never knew.