KIDS INVESTING 101

Having kids investing their piggy bank money into the stock market or a mutual fund sounds so sophisticated and complicated for a little person, doesn't it?

You usually don't hear kids talking about which mutual fund they've chosen for a long-term investment, or how many shares of Disney they've decided to buy with the money they've made from cutting the neighbour's lawn.

Grown adults struggle to know what a wise investment is for their own money. How is a nine or eleven year old supposed to know what to do?

But why shouldn't they know about simple concepts and avenues of investing? If you're waiting for Investing 101 at school to cover that topic, you and your kids will be waiting a very long time...

You might be thinking that they are too young to understand investment strategies, but try giving them a little more credit. You'll be surprised at what they are capable of learning!

Sure we can take some of their money and invest it for them, but we want a financially educated child, that will grow into a financially educated young adult, right? Having kids investing their own money is the only way they will learn money fundamentals.

They'll need to be taught how to save, why they're saving, and why they'll need to invest now for the long-term.

Before we even get started with this topic, it's important to understand that kids investing their money isn't something they will want to do automatically. We have to establish the groundwork with them first, so they will want to invest on their own accord.

So, before we talk about introducing stocks and mutual funds to our kids, please read the next few paragraphs which explain how we can lay the verbal groundwork. Kids need to become accustomed to thinking and talking about money in a practical way before they can move on to investing...

The following is a bit harsh, but true:

Seriously, unless we talk to them about basic money skills, they won't know how to manage their money or what value their money has.

Unless we talk to them about basic money skills, they will receive a dollar and promptly spend a dollar. A future paycheck to paycheck mentality will be in the making. Not a good thing!

Unfortunately, they'll have absolutely no concept of how much it costs to live if we don't open up and talk about it. (It's quite the wake up call when kids realize how expensive life is.)

This may feel uncomfortable, but we need to talk openly to our children about our own personal money situation, good or bad, rich or poor.

As "money" subjects come up during the day, we shouldn't keep our kids out of the conversation because we think they're too young. We shouldn't try to "save" them from knowing how tough life is. The sooner they know the good and the bad about life and money, the more adept they'll be in handling their future.

There are so many ways to include our children in money conversations. At the same time, we'll be making them financially "aware" of their surroundings.

For example, teach them how much groceries cost, and what your mortgage/rent is per month. They need to know that when they turn the heat on, or a light on, it's not magic. It actually costs money. Every time they brush their teeth or take a bath, the water they use costs money too. They'll also need to understand how people manage to pay for all these expenses. How long does it take for mom/dad to work to pay all these bills? How often do the bills come and when do they need to be paid?

If they're old enough to add and subtract, they're old enough to look at the bills with you. Have them add up all the bills with you and then have them subtract that total from your pay.

You will be amazed as to how much more your children will respect you if you communicate with them and let them in on the mechanics needed to run your household.

Communicate the mistakes you've made so they don't make them. Share the things you've done that have worked for you, so they learn from them.

Even if you are struggling financially, sharing with your children the steps you are taking to become financially responsible will make them respect you, and you will become their role model and mentor.

Now you'll have kids investing some of their money willingly and understanding why their doing it. They'll want to learn more creative ways to invest. Great!

The Beginners Guide To Investing will show you and your kids investing strategies that will help them create wealth for their future.

Please click on the link below to get started!

THE BEGINNERS GUIDE TO INVESTING