How can you get your child interested in investing?

I feel this is a real­ly impor­tant ques­tion as learn­ing is a life­long prac­tice. And, invest­ing well over a life­time is about learn­ing the basics so that over time you make increas­ing­ly bet­ter deci­sions.

I’ve found the best way to get chil­dren inter­est­ed in stocks is to get them a stock (or a frac­tion­al share) in a com­pa­ny that they’re famil­iar with.

I’ve bought kids shares in Apple and Amazon, and have tak­en my kids into their stores, and men­tion it to them when we receive some thing from Amazon. Their response is fas­ci­nat­ing… because they ask to go to their stores and are learn­ing to under­stand that they own a (very) small piece of these com­pa­nies.

Let me answer anoth­er cou­ple of ques­tions:

1. How do you teach them some­thing use­ful, as well as get­ting them inter­est­ed in stocks?
2. How do you actu­al­ly do it? That is, how do you buy them a stock?

For #1 — I learned about div­i­dends ear­ly on, and thought about it as “mon­ey mak­ing mon­ey”. Back then buy­ing stocks was expen­sive, hard, etc. (It was the 80’s).

I’ll nev­er for­get get­ting the quar­ter­ly state­ments in the mail show­ing me the amount I “earned” (it was pen­nies — I had five shares in a util­i­ty — maybe $100 worth of shares)… but the idea that my mon­ey could make mon­ey stuck with me deeply.

Then, TEACH THEM ABOUT COMPOUNDING by rein­vest­ing div­i­dends and show them the div­i­dends increas­ing each quar­ter. Even if it’s small, you can show them per­cent­ages… they might get a 10–15% raise each year. It takes time, but you will teach your chil­dren well.

Remember, Albert Einstein was rumored to have said that com­pound­ing is the 8^th won­der of the world. Whether it’s true or not that he said it, the sen­ti­ment is absolute­ly cor­rect. And, when teach­ing kids, this is how they can learn to under­stand the val­ue of time on their port­fo­lio.

For #2 — and I have no inter­est in this com­pa­ny oth­er than I love the imple­men­ta­tion, check out Stockpile. It’s an app / web­site that has a great cus­to­di­al imple­men­ta­tion. For teach­ing them, your kids can have their own accounts, track their own stocks, but not have pur­chas­ing pow­er. You can buy for them… and they can have real own­er­ship, but with­out hav­ing to give them con­trol. If you go to a tra­di­tion­al bro­ker­age, the account is in your name… which is OK too… but you’re giv­ing them access to the account, or not. You can’t give them access as the minor.

Other com­pa­nies are either allow­ing frac­tion­al share pur­chas­es or soon-to-release the abil­i­ty to do so:

• Robinhood
• Fidelity (only from their mobile app)
• Schwab (just announced)

If you agree with this, and want to see some of the sim­ple ‘ana­lyt­ics’ or ‘met­rics’ that get peo­ple excit­ed read this post. What Should You Measure to Help You Get Started Investing? — 🐘💵

These met­rics will help peo­ple have fun invest­ing… instead of think­ing of it as a chore, or doing it because them must. Fun is a great, and under-used tool for teach­ing kids about invest­ing.