At what age to teach kids about investment

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michoco911
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At what age to teach kids about investment

Post by michoco911 »

Hello

Seeking advise from people who went through this on the ultimate age to teach kids about investing early enough to make them on the right path for financial freedom and have good and solid financial principles and knowledge.
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MathWizard
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Re: At what age to teach kids about investment

Post by MathWizard »

Started at age 8.

Both boys very frugal, gained through this by observing us .
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Sandtrap
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Re: At what age to teach kids about investment

Post by Sandtrap »

At the earliest age:

Inter-related and concurrent.
1. The value and love of work.
2. The value and love of learning.
3. The value of money.
4. The value of character strength, integrity, morality, ethics.

At a very early age, my parents set up a savings passbook account at the bank. I was given a small "paper" booklet with columns to keep track of "my money". I was also taught earnings and interest with piles of loose change which I had fun sorting out. Later, I was shown the stock listings in the newspaper and taught what that was for. My parents were both business owners. My mom was a bank auditor/accountant. Very early on I knew the difference between those that had jobs and worked for others and those that had their own businesses. We did not have an "allowance". It had to be earned.

In sequence.
1. First learn to earn through love of hard work and pride in efforts.
2. Then, you have something to save so learn to save.
3. Now that you have savings, learn to invest.

j
Last edited by Sandtrap on Sun Aug 25, 2019 11:56 am, edited 3 times in total.
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Trader Joe
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Re: At what age to teach kids about investment

Post by Trader Joe »

michoco911 wrote: Sat Aug 24, 2019 5:44 pm Hello

Seeking advise from people who went through this on the ultimate age to teach kids about investing early enough to make them on the right path for financial freedom and have good and solid financial principles and knowledge.
As early as possible.
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Wiggums
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Re: At what age to teach kids about investment

Post by Wiggums »

I think our boys learned by going to the bank with us. We had them deposit their Christmas money to their savings account. We taught them that we used coupons and purchased items on sale. They understood those lessons well by the time they were in middle school.
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Re: At what age to teach kids about investment

Post by Dottie57 »

Sandtrap wrote: Sat Aug 24, 2019 5:52 pm At the earliest age:

Inter-related and concurrent.
1. The value and love of work.
2. The value and love of learning.
3. The value of money.
4. The value of character strength, integrity, morality, ethics.

At a very early age, my parents set up a savings passbook account at the bank. I was given a small "paper" booklet with columns to keep track of "my money". I was also taught earnings and interest with piles of loose change which I had fun sorting out. Later, I was shown the stock listings in the newspaper and taught what that was for. My parents were both business owners. My mom was a bank auditor/accountant. Very early on I knew the difference between those that had jobs and worked for others and those that had their own businesses. We did not have an "allowance". It had to be earned.

j
Great answer.

Teach saving first. I knew about interest from my grandfather who said “make your money work for you”. Dad gave me the first Jane Bryant Quinn book on money when I had my first 401k.
Ricecakes
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Re: At what age to teach kids about investment

Post by Ricecakes »

michoco911 wrote: Sat Aug 24, 2019 5:44 pm Hello

Seeking advise from people who went through this on the ultimate age to teach kids about investing early enough to make them on the right path for financial freedom and have good and solid financial principles and knowledge.
We started teaching our daughter finance when she was about 10 or 11. At first simple things- how to shop, compare prices. We shared with her the household budget in effort to help her understand the need to control spending. About middle school years we began to share with her how our 401 worked. Made her an offer. Each year whatever she saved from gifts, allowances, etc we would match $.50 on the dollar. We continued this through high school. Today she is an independent, happy well adjusted young woman. First car purchased was a ten year old used Honda; purchased with cash. She is very frugal with money but not stingy. We hope the lessons learned remain with her throughout her life.
NMBob
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Re: At what age to teach kids about investment

Post by NMBob »

Why play candyland when you can play Stocks and Bonds?? Hint: always buy Stryker Drilling!

https://www.ebay.com/sch/i.html?_from=R ... e&_sacat=0
Wakefield1
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Re: At what age to teach kids about investment

Post by Wakefield1 »

My first lesson about "investment" was when my parents had me put about $20. into the (?) Old Dominion Bank and several years later we found that they hadn't paid a cent of interest so that lesson was "beware" and be suspicious
Actually all I was taught was to "put your money in the bank" and don't spend wastefully until I got a tiny smattering of "investment" from high school history class
when I was in high school or a bit earlier a retired Federal Government employee who paid me to cut his lawn told me of the virtues of stock ownership,particularly Standard Oil/Esso
In college I rubbed shoulders with people who had investments and Financial Advisors such as Merrill Lynch
a stockbroker who was a member of the Saturday Morning 5 mile runners" group influenced me a few years after my college graduation and after a few years of being employed some ICMA representatives told us of the virtues of Deferred Comp. (457 plan)
I might have heard of Vanguard or Mr. Bogle from a fellow runner sometime in the mid 1980's but probably didn't know his appearance
By happenstance sometime shortly after Mr. Bogle had a heart transplant I was in an audience for a financial seminar put on by the Washington newspaper,an older gentleman started a bit of a conversation with me during an intermission,he was there to give the next talk and he introduced himself to me as Jack Bogle. (I might have by that time had moved my IRA to Vanguard)

So a lot of kids never get(got) to be taught about investment until they are(were) almost grown up
I think Mr. Bogle thought that needed change
I think 4 or 5 years old is not too early
Wakefield1
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Re: At what age to teach kids about investment

Post by Wakefield1 »

I would start out with mutual funds knowing what I do now rather than the individual stocks as I did (other than the employer 457 plan which began to be offered after I had already worked a few years
of course a young kid can start out with a bank account but make sure it promises to pay interest!
Better yet maybe a credit union
Kagord
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Re: At what age to teach kids about investment

Post by Kagord »

Investing not only in accounts, but life, I'd say age 11 or 12.

1. Let them have a say in how their money is invested (custodial accounts)
2. Encourage them to be entrepreneurial and develop side businesses, despite the tax headache this creates
3. Also, start a part time job at 14, if they can, to learn the ways of the world, and have some spending money/investment money
4. And, what we didn't do, set expectations for how much you will contribute for college, so if they get accepted into top 10 schools and demonstrated need is 0 because you have a nest egg, it's not a shock as to why they aren't going there without massive student debt (which we won't cosign for anyways)
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Re: At what age to teach kids about investment

Post by BarbBrooklyn »

My ex, a finance/Tech guy, did the "what does your parent do at work day" when eldest was in Kindergareten. He tore up a large sheet of paper into little bits and told the kids that this was what stock was...little bits of a company that you can own.

My daughter's friends are now in their late 30s and still talk about that day.

I don't think it's ever too early to talk about what you are doing to promote your own financial well-being to your kids. You just narrate your life to them.
BarbBrooklyn | "The enemy of a good plan is the dream of a perfect plan."
Dandy
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Re: At what age to teach kids about investment

Post by Dandy »

Teach saving first
+1
Investing can be very complicated to explain. Teaching savings is also about the advantages of delayed gratification and earning interest and after awhile the magic of compounding. Kids tend to either want to spend it all on today's toys or hoard it all. If you can get them to do a bit of saving and "rational (for a kid)" spending you will set them on a great financial path.

That might be giving them a small allowance (remember those?) if they don't have "income". Opening a Savings account and having them put some $ into it. Maybe matching their savings? Showing them the interest earned. Maybe having them withdraw some money to buy mom a gift on her birthday, etc.

When my girls were older and began earning some money I opened an IRA for them. I initially funded it -- i.e. didn't use their earnings but gifted them some money so they could fund their IRA. Later I would gift them a match of whatever they put in. After that I would gift them with "no strings" (to see what they would do). :happy they proceeded to fund their own IRAs.

As far as teaching them about investing -- I still don't think they know really what a stock or mutual fund really is all about.
And they don't seem to have the interest/focus to learn - too much else going on. They are invested in TD or all in one funds. They seem to manage money well so I guess the approach was reasonably successful.
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CyclingDuo
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Re: At what age to teach kids about investment

Post by CyclingDuo »

michoco911 wrote: Sat Aug 24, 2019 5:44 pmSeeking advise from people who went through this on the ultimate age to teach kids about investing early enough to make them on the right path for financial freedom and have good and solid financial principles and knowledge.
Start playing the classic board game of Monopoly with them.
:sharebeer

As parents, we certainly took it upon ourselves as part of the educational process of raising our children to teach them about the value of human capital, saving and investing for retirement and their futures, the pros and cons of debt and general investing advice. We used the game of Monopoly as they were growing up plus we always included them on viewing their individual portfolios that were set up to pay for their college education so they realized what the money was for, what companies they were invested in, how dividends worked and the expectation in our household was that they would be attending college.

Once they were teenagers, they held part-time jobs to earn the value of making a buck, contributed some of their earnings to fund their Roth IRA's, and both got paid internships in college, etc... as part of the process. Our adult children still have some things to learn, but at least they have been presented with plenty over the past 2 1/2 decades to counter the lack of any training in HS/College that they didn't get when it comes to a 401k plan. We kept it very simple in consulting with them for post college career jobs to use a Vanguard target fund in their 401k and contribute at least enough to get the match, plus the three fund portfolio in their Roth IRA's using low cost ETF's.

Not saying everything is perfect by any means. The financial education parents provide for their children continues beyond when the children leave the nest as well. It continues on into their adulthood.

But back to younger children...

Teaching kids about investing is rather easy...

https://www.cnbc.com/2018/05/30/kevin-o ... sting.html

http://money.com/money/4616756/make-you ... ng-genius/

https://trader.media/what-age-you-shoul ... -investing

https://investorjunkie.com/36071/age-ki ... t-account/

Planting the seeds early, and keeping it simple does the trick in the early going. Granted, it's a process and one shouldn't expect to accomplish the formal education of one simple little 2 minute chat to make an 8 year old suddenly be "in the know", but all the simple seeds that are planted will grow with patience. A parent will immediately know when they've gone too far and moved beyond the point of engaged interest from the child.

CyclingDuo
"Save like a pessimist, invest like an optimist." - Morgan Housel
PS-Newtothis
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Re: At what age to teach kids about investment

Post by PS-Newtothis »

I wish they would have to option to learn this in school/college. It's so imp! Adults like me are struggling, wish I knew long time back that these investment options existed!
Topic Author
michoco911
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Re: At what age to teach kids about investment

Post by michoco911 »

I wish they would have to option to learn this in school/college. It's so imp! Adults like me are struggling, wish I knew long time back that these investment options existed!
It’s exactly what i feel that’s why i want to help my kids now that i have the knowledge to be ready and well packed for a good financial start.

They don’t have to wait for their 30s to hear about this and then find that they have lost 12 or 15 years of saving and compounding power.

Thanks for all the comments brought to this thread
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sport
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Re: At what age to teach kids about investment

Post by sport »

Start early with simple things and increase the complexity gradually as they get older. My kids were 6 and 8 when Grandma gave each of them a present. She wanted them to have something from her after she was gone. It was not a large amount, but enough to open UTMA mutual fund accounts. I got the printed semi-annual reports in the mail and gave them to the kids. I explained what it was all about, how they actually owned small pieces of all those companies. It just grew naturally from there.
usagi
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Re: At what age to teach kids about investment

Post by usagi »

We started them with finance when we started giving them allowances at age 4 We deducted taxes from their allowance and gave them statements so they would understand the real world. They learned what investments were and all were taught to balance a checkbook and pay bills by kindergarten. Our family finances were an open book to them most of their life. None of them has ever had a financial issue. Our view, as a society, we coddle children too much. Kid wants to emulate adults and generally find money fascinating.
Mr. Rumples
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Re: At what age to teach kids about investment

Post by Mr. Rumples »

It starts young in almost unseen steps. Whether its learning how to handle an allowance at age 5 and saving for what I wanted (back then it was a milkshake for 19 cents or so) or watching my mother every month sit down at the kitchen table and pay bills, its not too early. It was at some point in elementary school that started reading Changing Times magazine. By the time my uncle gave me stock as a gift when I was 13 (Martin Marietta) I was ready. With my great nieces and nephews (ages 5 and 6), tiring of the useless plastic gifts which are discarded, I tried giving them 5 $2 bills each. They hoard them, turning them into savers.
StealthRabbit
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Re: At what age to teach kids about investment

Post by StealthRabbit »

start early (4-5? )
earning and saving... and spending..

age 8 - Join 4H, do a project book (costs of production / raw materials for sewing, plans, tracking. later to trades / skills / research) nice 4H scholarships BTW)

age 10 - start them in a business (mowing, weeding, snow removal, trimming, gardening, backyard eggs / growing sheep, steers and hogs if you have acreage and zoning to support) 4H market animals can bring BIG bucks (for a kid). Nice gratification (24 months delayed earnings on investment). Hogs are faster, but only bring $300. Chickens can bring good stable income (eggs and meat). Our kids managed our U-pick customers (fruit is WAY too much work and very seasonal and hail / drought / rain / locusts can wipe you out of yrs of income). Good lesson for kids(?) Don't buy a farm like your foolish parents did! (but the leanings for kids is priceless)
Have them help with paying bills / learning about checking account and budgeting. Engage them in monthly family budget planning. Have then do the shopping / spending for family.

age 12 - stocks / Roth IRA (Match their earnings 100% into Roth... good time to inform kids that 'college is on your dime, so start figuring it out!" FAFSA (college Fin aid) will not touch IRA (not considered as 100% available funds, tho it is... penalty free).

Age 15 - Want a car? start saving and find one you can afford (don't forget insurance $100 / month +... just for liability (boys)
Age 16 - Where is your car? (show me the money) Best to buy 'beaters'. Girls should have a car with airbags!
age 17 - Wean them some more... they buy their clothes, start budgeting for MOVING out (utilities, rents, insurance, groceries) Good yr for career exploration.. set them up with entire day at a desired workplace. My uncle set me up for 3 days of tours at Caterpillar manf in Peoria. I subsequently became a toolmaker (great paying high skilled career, led to Engineering, and later International Supply Chain management. My company(not CAT) paid 100% for (5) degrees
age 18 - Bye, see ya. (Pots and pans and silverware from Goodwill is a nice HS graduation gift :beer )

If they are trained adequately, they will 'embrace the challenge' and appreciate you trusting them to handle it. And they will handle it .
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