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A recent article by Randall Stross, “Buy Now, Pay Later (Maybe With Your Allowance)” details the growing use of a virtual credit line offered through Kwedit, a company that is facilitating the exchange of money for virtual goods used in online gaming. Children, over the age of 13, can buy virtual goods, through their Kwedit account, and choose to pay later. The arguments promoting the “virtues of virtual” are surely coming soon. Why? While there is currently no real life penalty for not paying your Kwedit debts you are still required to pay with a credit or debit card or real cash via your local 7-11 store. If you don’t your virtual Kwedit credit score could be low thus warning other sellers of virtual goods not to sell to you. Sounds like real life, right? As we all mature there are pathways that form in our brains. Stimuli such as nicotine, alcohol, and sugar have a pathway burning effect. From there we can become addicted to the sensations we receive from those stimuli. So do particular emotions that are associated with stimuli. An example could be the euphoric feeling I get from the pride my dad shows in me when I win a foot race. That pathway in my brain feels satisfied when my dad expresses pride in me. Since this particular “father’s pride” pathway screams for satisfaction I push myself even harder to win more races. Has anyone considered this process of using virtual credit to be the equivalent of training wheels on a real world debt ridden lifestyle? This ties instant gratification to fun entertainment with no exertion, save clicking a button, on the child’s part! The child then forms a pathway that says “Using credit is easy. By using it I get immediate access to more fun. There is no “real” penalty if I don’t pay.” Children are not animals. However, their minds can be conditioned and I am reminded of the story about the experiment Ivan Pavlov conducted on dogs. When they saw him coming with the food bowls they would drool in anticipation. Pavlov began ringing a bell every time the food was brought. The dogs quickly associated the bell ringing with receiving food. Soon, Pavlov noted the dogs were drooling at the sound of the bell even when no food was present. They were now conditioned to associate one sensation with a particular stimulus. Can the same be true with easy virtual credit? Is it possible that the gratifying sensation I get from immediate entertainment by going into virtual debt is transferable into the real world? Are there no other forms of entertainment or recreation for our children? These kids aren’t outside throwing or catching a ball, running around bases, or operating a lemonade stand? The most unbelievable part of this is that Stross goes on to state that our country, currently in economic hardship, spent over $1 billion on “virtual goods” in 2009 with it expected to increase to $1.6 billion in 2010! For anyone interested in turning their money into real assets versus pretend puppy food please see my related articles. For now I will relish the scarce times I see a 13 year old entrepreneur shoveling walks, selling cookies, delivering papers, or washing cars. There is a kid who will be putting experience on a resume, street smarts in her brain, and something called “cash” in her pocket. http://www.nytimes.com/2010/02/07/business/07digi.html Learn many easy ways to reach your financial goals at BowmansMoneyCollege.com. |
