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Parents still hold the primary responsibility for teaching kids how to earn money, and it is even more important today than ever.

Most of us have heard about the longitudinal study of Yale graduates conducted in the mid 20th century. Researchers followed a graduating class through their entire working lives to age 65, and generated the following statistics.

By age 65, 36 out of 100 people had died. Now these days, with modern medicine, and extended life expectancies, that number may well be lower, but we can expect the proportions among the rest of the categories to be about the same.

Just 1% (one in a hundred) people were wealthy at age 65. Just one in a hundred Yale graduates – what would the statistic be for those who didn’t have a university education, I wonder?

Another 4% were financially independent. That is, they had passive income (income they didn’t have to work for) which was enough to comfortably cover their living expenses.

That accounts for 41% of the total sample.

The other 59% were in financial trouble. Some just had to keep working, because they couldn’t afford to stop. Others were dependent on government hand-outs or the charity of relatives.

More than half!

Do you think those fresh-faced young graduates believed that more than half of them would be struggling financially at age 65? Do you think any of them, through their working lives, planned to be broke, or dependent on others, in their retirement?

Of course not. They were as optimistic as we all are today. We all confidently expect to be financially OK, just like they did. We’re all working hard, paying off mortgages, and saving for retirement, like they did. And we are headed for the same kind of statistics as a result.

The situation for today’s workforce is no easier than it was for the Yale class of ’32. If anything, times are tougher. Fuel prices are higher, work is harder to come by, and less secure, and financial traps like credit cards and upside-down mortgages have come into existence.

Schools still aren’t teaching kids business skills - many adults don’t even know what passive income is, let alone how to earn it!

While it’s daunting to think that we, who are of working age now, are likely to find ourselves facing similar statistics – or being similar statistics – when we reach the age of 65, have you ever stopped to think about the other impact of lengthening life expectancy?

Not only will we have to come to terms with our own successes and failures in financial management sooner than we think, we will also live to see the effects of our parenting in the financial successes and failures of our children. We will, many of us, live to see our children reach the age of 65 – financially independent, or still struggling.

What are you doing, right now, to ensure that your kids know enough about money to succeed in life?