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Four ways to avoid raising spoiled monsters


´╗┐Kay Wyma remembers the exact moment she realized she was spoiling her kids. The Dallas mom of five was driving to school one morning, and found her car surrounded by a Lexus on one side, a Porsche on the other, and a Maserati in front. That was when her 14-year-old son asked: "Which car will I look good in at 16?""I was like, you have got to be joking," she said. Wyma went home and had an ephipany. "Every bed was unmade, every dish was unwashed, and there was a trail of clothing everywhere," she said. "I was only there to serve them."She spent the next year scrubbing every bit of entitlement out of her five kids and even wrote a book called "Cleaning House" about the experience. But she is hardly alone in wrestling with that ultimate parental question: "Am I spoiling my kids?"The answer appears to be yes, according to a new survey. The new "Parents, Kids & Money" poll from Baltimore-based money managers T. Rowe Price suggests that many parents have not only veered off-track in raising money-smart kids but have steered into a ditch. Some 58 percent of parents admitted to worrying that they spoil their children, and 46 percent of parents have gone into debt to pay for something their kids wanted. Meanwhile, 57 percent of kids say they expect their parents to buy them what they want."There is a lot of emotion involved here," said Anne Coveney, T. Rowe Price's senior manager of Retirement Thought Leadership. "Parents certainly want to please their children."To keep spending on kids from running amok, here is what parents and financial planners suggest:

 1. Ask yourself if it is really for them"Many parents are burying themselves in debt trying to keep up with their neighbors, and even borrowing against retirement plans and home equity to do it," said financial planner Mark LaSpisa of South Barrington, Illinois. This is a race you cannot win, so be ruthlessly realistic with your own numbers. A practical tip: Do a digital detox, since University of Pittsburgh researchers have found frequent social-media users tend to have higher credit-card debt and lower credit scores as they pursue bragging rights on Facebook and Instagram.

 2. Institute an allowanceWhen you buy your kids whatever they want, they acquire the false illusion that the money supply is infinite. Instead, shift the burden of spending decisions to them by giving them a fixed amount and sticking to it. Parents say it works. "We just said, 'We will no longer be buying you things; you will be buying your own things,'" said Wyma. "It was so interesting to watch how much less they spent." 3. Require a summer job

By the time your kids are 14, you should have them looking for summer gigs, Wyma suggested. It may be a difficult task, since there is not much work available for that age group. But even if they get rejected, it will gird them for the many job-hunting years ahead. One of Wyma's daughters started helping out in an office at age 12, doing all the usual grunt work like making photocopies. She is now 16 and "could run a corporation," Wyma raved. 4. Stop trading time for thingsAlmost half of working fathers worry that they spend too little time with their children, according to Pew Research Center. When parents feel guilty, they tend to whip out their wallets to compensate. One survey by coupon site vouchercloud.com found that parents give their kids an average of $1,360 a year. While most would like to give less, they reported feeling in competition with other parents and not wanting to disappoint their kids."I'm guilty of this as well," said financial adviser Cory Papineau of Winnipeg, Canada. "We are effectively teaching our children the way to solve a problem is to throw money at the situation."So instead of making up for lost time with a new iPhone or XBox, try a cost-free weekend hike or a family picnic. 

Ifr european loans defect to the us


´╗┐LONDON, May 8 (IFR) - (The following story appeared in the May 5 issue of International Financing Review, a Thomson Reuters publication). The trend of European borrowers accessing US liquidity has stepped up a gear, with Misys becoming the latest company to tap the US leveraged loan market as cash continues to drain out of Europe. London-based Misys, which provides software to the banking industry, is readying a $1.06 billion term loan to back its 1.3 billion pounds ($2.10 billion) leveraged buyout by Vista Equity Partners. Similarly, German bathroom equipment maker Grohe launched last week a $250 million covenant-lite tranche in the US as part of a refinancing package, adding to the growing number of European borrowers attracted to US cash, even though some have no dollar revenues, nor a presence in the region. Year-to-date, a total of nine sponsor-backed European borrowers have accessed both European and US liquidity for buyout loans and refinancings. On these deals, $11.5 billion or 52 percent of the total liquidity came from dollars compared with 8 billion from euros. The lower pricing and cov-lite terms offered by US accounts are attractive to European borrowers and underwriting banks, faced with a lack of liquidity at home and fearful of a risky outlook that could make a syndication process difficult.

"You cannot afford to structure covenant-lite in Europe as you need to be able to maximise liquidity to the fullest," a leveraged loan banker said. Grohe has followed Swiss chemicals firm Ineos in opting for a cov-lite loan, a structure that has become possible again thanks to the increased demand for loan assets in the US market and a corresponding decline in spreads."While the European market is so unstable, the trend of European borrowers accessing US liquidity will continue. It is a perfect mixture of not having enough liquidity and volatility attached to the region that is pushing companies away," a leveraged loan syndicate head said.

"If you underwrite a deal tomorrow, who knows what the European market will be like in four weeks' time when you go to syndicate? For the big underwrites with high leverage, banks will go to the US, as there are more guarantees the market will be there," he added."If there is a euro carve-out in the deal, it will keep the European market just alive - if there is no carve-out, then it is even more problematic for Europe."GROWING TREND Misys and Grohe are following in the footsteps of Formula 1, Ineos, Germany's KDG, France's Oberthur, Germany's Schaeffler and Belgian group Taminco, all of which had successful syndications in the US.

German healthcare conglomerate Fresenius is set to be the next borrower to turn to the US, in its case to back its 3.1 billion euros ($4.05 billion) buyout of Rhoen-Klinikum, while Iglo, maker of Birds Eye fish fingers, is also expected to tap the US to back a 3 billion euros acquisition, as a deal of that size would pose a tough challenge for the European market."Any deal requiring more than 1.4 billion euros to 1.5 billion of leveraged loans will struggle to raise them in Europe. It would be very difficult," a banker said. The situation has prompted purely European companies such as Iglo to consider setting up US companies to get around withholding tax, as getting dollar funding turns from a "nice to have" into a "need to have" scenario. The lack of liquidity in Europe is accentuated by CLOs in the region coming to the end of their reinvestment periods, and banks have less appetite for risk due to increasing regulations. But bankers warn that European investors risk becoming irrelevant."European investors have to decide whether they want to stick around and have a life. How will they raise funds if they don't invest in anything?" a second banker said. Questions remain as to how long this transatlantic trade can continue, since looming regulation including the Foreign Account Tax Compliance Act could turn off the tap to US liquidity, potentially plunging the European market into greater turmoil. ($1 = 0.6180 British pounds) ($1 = 0.7663 euros)