This week, New York Times columnist Thomas Friedman wrote about what the country really needs instead of yet another economic stimulus package:

What the country needs most now is not more government stimulus, but more stimulation. We need to get millions of American kids, not just the geniuses, excited about innovation and entrepreneurship again. We need to make 2010 what Obama should have made 2009: the year of innovation, the year of making our pie bigger, the year of “Start-Up America.”

On that note, and in the spirit of getting the year started on the right foot, here are five ways to teach the next generation about the American Dream.

1. You’re never too young to learn. TIME magazine recently profiled Chicago’s Ariel Community Academy and its K-8 investing program. Each incoming kindergarten class is given dominion over an investment portfolio worth $20,000; by seventh grade, the young investors are allowed to pick what and when to buy and sell. Any profits at eighth grade graduation go toward a college scholarship fund that benefits the graduating class.
2. Even lemonade stands are teaching tools. Watch our video for just a few of the lessons this classic summertime activity provides young kids.
3. Encourage teens to start their own companies. The Network for Teaching Entrepreneurship’s flagship program is a contest at middle and high schools nationwide (mostly in low-income communities) that helps 24,000 participating students start their own businesses.
4. Avoid the “Freshmen Financial Fifteen.” College students are particularly at risk for not budgeting properly, signing up for expensive cell-phone plans, and abusing their credit cards. If they are aware of the responsible use of each, they are primed for a financially secure adulthood.
5. Finally, take the Econ4U Entrepreneurship Quiz. Even adults may be surprised at what they don’t know about starting a business.

If you’re a small-business owner, you’ll want to pay close attention to today’s column. You may just qualify for one of the following deductions, which could save you major money on your taxes come April 15. Listen up:

1. Buy a heavy truck or SUV. If you haul around a lot of stuff in your line of work, new and pre-owned “heavy” SUVs that are used primarily for business qualify for a depreciation write-off of $25,000 under Section 179 (also known as the Hummer Tax Loophole). SUVs with a manufacturer’s gross vehicle weight rating (GVWR) above 6,000 pounds qualify for the full deduction, but the purchase of a lighter SUV, passenger vehicle, or light truck could also net you a smaller write-off.
2. Buy new office equipment (from cows to computers). Section 179 has other juicy benefits for business owners. You can write off up to $250,000 in new property, ranging from computers and software to ostriches and helicopters if that’s what your business entails, and if any of the above have been installed or put to use before December 31.
3. Have your office assets depreciated in value? Because of the 2009 American Recovery and Reinvestment Act, you can also claim an additional 50 percent first-year depreciation bonus on qualifying new equipment and software you bought this year. But note: If you’re also claiming the Section 179 write-off, the bonus only applies on the cost remaining after that deduction.
4. Maximize your health claims before year end. If you are self-employed and pay for your own health insurance, you can itemize your premiums and other medical expenses only if they are in excess of 7.5 percent of your adjusted gross income. But that goes by year, so if you’re close to that threshold but haven’t met it yet, see your doctor now before the cycle starts over on January 1 and you lose that deduction.
5. Evaluate this year’s tax rates and next year’s predictions. If you have freelance income or if your business expenses go on your personal tax return, consider that this year’s personal tax rates are expected to be roughly the same next year. But if you expect to make more money in 2010 and you think taxes will rise, it may make more sense to postpone your deductible expenses until the new year.

All it takes to save major money on your taxes is a little foresight and the ability to spend now before you lose out on these sweet deductions.

Imagine you’re standing on a street corner in New York City, hand raised to hail a cab. Two cabs pull up to vie for your business; a beat-up late 60s sub-compact with no air conditioning, and a brand new mid-size sedan, with working air conditioner and an electronic meter.

It’s not hard to pick which door to open.

That’s the decision facing residents and visitors in Mumbai, India. As the city grows, so has the demand for clean and reliable taxis. The Meru cab company has answered that demand:

“Meru has become so popular that it has to turn away about half of the more than 10,000 calls it gets every day, and reservations have to be made about four hours in advance. “Nobody wants a black-and-white TV when you have LCD screens,” says (owner) Mr. Gupta.”

With such high demand, why haven’t new taxi companies sprouted all over Mumbai?

The reason is the disgruntled drivers of the old cabs. These drivers realize that the new cabs – equipped with such luxuries as GPS and functioning climate control – represent the end of their way of life. So, they’ve erected a pretty intimidating barrier to entry in the industry – physical violence.

Sheikh Shamin Ahmed… was eating chicken fried rice at a roadside stand next to his new, metallic-green cab when two old taxis full of old-taxi drivers rolled up and started to beat him. They told him his fancy new Mahindra Renault with its air conditioning and GPS navigation system had better stay away from their customers.

Now, although the violence is inexcusable, I don’t want to overlook the plight of the old cab driver. This new technology means they’ll have to learn a new skill set; older drivers who never learned to read in school may find themselves with no way to make a living. This often-painful process of new technology replacing old and outdated technology is called creative destruction, a term coined by the famous economist Joseph Schumpeter.

While the short-term consequences of creative destruction may be difficult for drivers of the old cabs, the long-term benefits to society are substantial. Modern cabs are safer, more comfortable, produce fewer harmful emissions, and allow cab drivers to update their skills and remain relevant for the 21^st century. Additionally, free entry into the market for taxis ensures that consumers have a wide range of transportation options when they’re driving around Mumbai.

A growing city that wants to leap into modernity can’t support a taxi fleet that’s stuck in the 1960s. Just don’t tell those old taxi drivers I said so.

MicroFrugality.com promises useful tips geared toward a younger audience of budgeters. Miller writes:

This blog will be all about the most controllable part of the personal finance equation – your expenses – and how you can dominate them!

The vision is to build out a strong community of ‘Frugalheads’ who are insanely focused on discussing, sharing, and executing on living frugally to cut their expenses and work towards complete financial freedom.

Its first bit of advice: Use RSS feeds on Craigslist to notify yourself of a great deal on a used car before someone else snatches it out from under you. (This tip also worked well for me when I was apartment hunting last year — set your search criteria and let an RSS aggregator pile up the results for you.)

Best of luck to Miller in his new endeavor! We think it’s an idea with a lot of potential.

Each state was assigned a letter grade based on their performance on 92 policy and outcome measures and there was certainly no grade inflation. The states that received an A were Iowa, Kansas, Maine, Massachusetts, Minnesota, New Hampshire, Vermont, Washington State, and Wyoming. On the other end of the spectrum, Arizona, Arkansas, Louisiana, Mississippi, and South Carolina all flunked.

The report also revealed a few surprising trends. More than 37 percent of homeowners and 45 percent of renters spend over one-third of their income on housing. And since business equity is — after homeownership — the second-biggest factor in wealth building, CFED recommends implementing a New Entrepreneur Tax Credit for small-business owners with big ideas.

I especially like this last proposal. Starting a business is risky but it’s the American dream — and incentivizing people to go for it seems like a great way to spur the economy.

A columnist for the San Francisco Chronicle is balking at the high cost of finding a competent babysitter so she can enjoy a night out with her husband:

It wasn’t so long ago that San Francisco-based babysitters were requesting — and I presume getting — a pretty astounding hourly wage. My “favorite” was a college student who said she expected $25 per hour, three hours minimum, plus cab fare to and from the job. Holding back wild laughter, I said thank you but that is more than what I was willing to pay. Her response was a terse, “well, you get what you pay for, lady.” …

Using the more “reasonable” $20 per hour model, this is what it would cost for a typical pre-recession evening:

- Sitter from 7 to 11 = $80 (scratch that — $90 with tip)

- Before dinner drinks (one each, plus tip) = $25

- Moderately priced meal for two = $100

- Cab ride home = $15

- Total cost: $230

That was a daunting sum for a simple night out. And because of it, we cut back. So…the bars, restaurants, and cab drivers lost too. 

This simple real-world economics lesson shows how a prohibitively high cost of labor can cause a domino effect of cutbacks across the board. (As well as how an entrepreneurial babysitter might be able to corner the San Francisco market by charging a still-respectable $15 per hour!)

Econ4U wanted to go a step further, so we went exploring and found 12 of the most prolific personal finance gurus (both big and small) on the popular social networking website:

• OnTheMoney — from CNBC’s personal finance program of the same name, updated throughout the day
• TND_DebtCons — debt consolidation advice from TopNewsDigest.com
• GHCommunity — family budgeting tips sponsored by insurance giant Allstate
• GettingFunded — an entrepreneur shares tales from his journey of attracting investments to his business ideas
• DaveRamseyLIVE — the Twitter page for personal finance guru Dave Ramsey
• FrugalToRich — daily tips on how to save money on hotel rooms, gas, groceries, and more
• RealEstateUS — the latest in mortgage refinancing, ways to prevent foreclosure, and other real estate news
• CramerTV — hour-by-hour stock advice from Mad Money’s Jim Cramer
• OnlineResume — a good one to follow if you’re in need of job-hunting tips
• ColumbiaEntprog — news stories and tips for building your own start-up from Columbia Business School’s Eugene Lang Entrepreneurship Center
• MJHel — small-business development ideas from market researcher Mark Helgestad
• TransformMoney — personal finance coach Melanie Fine shares ways to make your budget stretch and savings grow

Fortune Small Business reports on entrepreneur Seph Skerritt, who is offering custom-tailored mens dress shirts online for just $90 apiece. He started off by selling only 300 shirts in the first 5 months.  But now he’s aiming for 15,000 shirts this year, bringing in more than $1.3 million in revenue.

In Maryland food auctions are taking off as a way to buy food in bulk and avoid grocery store prices.  Richard Betz is a middleman who buys food from farmers that is sold at food auctions. He’s noticed a huge jump:

“The places where it used to be a full house are now standing-room-only. People, when they get their gas electric bills, their health insurance bills — they get laid off — they look for a way to try and save a buck. And they have to eat.”

Many restaurants and bars are taking advantage of the fact that even during a downturn, people still want to unwind with a beer.  Across the country there are “recession specials” like the one at “Below Bar” in Denver which turned Wednesday into Recession Sessions offering $2 Late-on-Your-Rent Lager and a $5 Fill-up (Beer + a shot).

So take some time to scope out what kind of recession deals are available in your neighborhood to make sure you’re getting the best bang for your buck during the downturn.

The reality, of course, is that starting a business – even a sole proprietorship – is filled with risk and hard work. So before sending off an angry “Take this job and…” email to everyone in your company directory book, here are a few links with good tips for the wannabe entrepreneur:

• BankRate.com: 5 ways to crash your small business – There are some excellent things to remember at this link, starting with “use your head, not your heart.” Many people go into business for themselves because they want to do what they love without the extra baggage that comes with working for someone else. The reality is that the baggage is oftentimes necessary: the details of accounting for every dollar and minute spent are ultimately important. Treat your business like you own it, not as if it’s just a job.
• Blogtrepreneur: Small Business Startup Myths – Think that with your own business you’ll be able to just relax and wait for the money to come in because you happen to be good at your current job? Think again. This post addresses some of the most common fantasies/myths people have about starting their own business.
• Guy Kawasaki: Five most important lessons I’ve learned as an entrepreneur – A great list from well-known tech entrepreneur and venture capitalist Guy Kawasaki that’s primarily useful for web startups. Two particularly stand out: Focus on Cash Flow and Try Stuff. Early on, profitability is less important than spending money wisely and building an interesting product or service. Don’t hamstring your great idea because you’re focused on short-term profitability.
• Trizle: What Startups Get Wrong – Think you have a great idea that is sure to succeed? Well, it probably won’t. And here’s why. (Thankfully, the oft-cynical Trizle also lists some of the ways a small business can rebound from a slow start.)

However, some bits of their advice are better than others.

“Work hard — and you’ll get lucky”: Is that truly a valuable tip? Has “imagining what your ideal life as a millionaire will look like” really translated into a cushy corner office or winning stock portfolio for anyone?

There are tangible ways to building your wealth that don’t rely on luck or daydreaming. No self-made millionaire would argue against living within your means, starting your retirement savings while you’re young, or maintaining a high credit score.

Too many people lack the understanding of what it takes to make it to the top, and Financial Literacy Month is as good a time to make that point as any. The essential tools for financial success begin with solid personal finance education taught by qualified professionals, but sadly, as a recent Econ4U survey showed, a majority of people are unclear on the basic concepts that really do translate into wealth.