It's fascinating to get your kids involved in investing

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Grt2bOutdoors
Posts: 23045
Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: It's fascinating to get your kids involved in investing

Post by Grt2bOutdoors »

DaftInvestor wrote: Thu Sep 03, 2020 3:19 pm
Grt2bOutdoors wrote: Thu Sep 03, 2020 2:40 pm
GoldenGoose wrote: Thu Sep 03, 2020 1:52 pm
DaftInvestor wrote: Thu Sep 03, 2020 11:26 am
GoldenGoose wrote: Thu Sep 03, 2020 8:05 am

There that dreaded word again, "lucky". Gosh, why does this community is so obsessed with this word? If you did great, you're lucky. If you didn't do as great, are you unlucky?
I only used it in this instance. Since you disagree this was luck explain to me then how 4 stocks picked by children had an increase in these first 5 business days was something other than luck?
I'm not disagreeing with having luck in investing but it seems every time there is a success and it's not the bogleheads-approval method, then it's luck.
That is what’s known as rigid beliefs. They will stay on the ship and go down with it even if rational thinking says abandon ship. OP - you don’t need the forum to tell you how to accumulate assets, truth be told I’d be surprised if everyone on this forum is 100 percent truthful on the sources of income and wealth. Intentional or not, there’s almost always a bit of fudging. The best ones are those who say they did it themselves but omit the help they had or that it was RSUs and stock option lottery tickets that did 90 percent of the heavy lifting but they continue to believe that their work efforts was the sole source for the stock price moving - not speculation or plain luck they found a job that offered lottery tickets. No that was not luck right? Many roads to Dublin as they say, so OP you keep doing what you are doing as that will turn on a light switch for your child that an index in the current age will likely not. It’s all about identification and it is behavioral.
If favoring index investing in favor of 4 stock picks for your portfolio is a "rigid belief" feel free to call me rigid. And yes - I will certainly "Stay on the ship" of holding index funds before switching to a strategy of 4 individual stock picks.
Getting the RIGHT individual 4 stock picks will have a lot of LUCK involved. Indexing Investing has proven to be the solid path to actually "Investing". This belief doesn't make me Rigid - it makes me Smart :)
(I just checked the top of the page to make sure I was still in the right place).
You were a child once? Do you remember? What did you identify with at the age of 8? Was it index funds or even actual individual companies? Most kids at that age and even myself at the time were interested in Barbie Dolls and Tonka toys! So the child would identify with those toys and the companies that made them - probably Hasbro. This is the Bogleheads but it’s also a place where investors skew on the actual investments they choose including index funds, individual stocks, real estate, bitcoin/cryto, entrepreneurship. So you can choose the road you like but there are many roads on the journey to financial security and most investors will say they like to be well diversified. Holding 1 or a bakers dozen of individual securities in addition to what may likely be many different tools in the child’s lifetime is perfectly fine. Most people’s wealth will be in their primary home as is currently except in the Boglehead forum where it seems not to be and that’s fine but if you don’t like what the OP is doing at least acknowledge there are many ways to financial security.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
Grt2bOutdoors
Posts: 23045
Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: It's fascinating to get your kids involved in investing

Post by Grt2bOutdoors »

GoldenGoose wrote: Thu Sep 03, 2020 3:29 pm Can't believe the narrow minded of some of the bogleheads on this board.
+1
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
Topic Author
GoldenGoose
Posts: 320
Joined: Tue Jan 30, 2018 2:08 pm

Re: It's fascinating to get your kids involved in investing

Post by GoldenGoose »

Grt2bOutdoors wrote: Thu Sep 03, 2020 3:31 pm
DaftInvestor wrote: Thu Sep 03, 2020 3:19 pm
Grt2bOutdoors wrote: Thu Sep 03, 2020 2:40 pm
GoldenGoose wrote: Thu Sep 03, 2020 1:52 pm
DaftInvestor wrote: Thu Sep 03, 2020 11:26 am
I only used it in this instance. Since you disagree this was luck explain to me then how 4 stocks picked by children had an increase in these first 5 business days was something other than luck?
I'm not disagreeing with having luck in investing but it seems every time there is a success and it's not the bogleheads-approval method, then it's luck.
That is what’s known as rigid beliefs. They will stay on the ship and go down with it even if rational thinking says abandon ship. OP - you don’t need the forum to tell you how to accumulate assets, truth be told I’d be surprised if everyone on this forum is 100 percent truthful on the sources of income and wealth. Intentional or not, there’s almost always a bit of fudging. The best ones are those who say they did it themselves but omit the help they had or that it was RSUs and stock option lottery tickets that did 90 percent of the heavy lifting but they continue to believe that their work efforts was the sole source for the stock price moving - not speculation or plain luck they found a job that offered lottery tickets. No that was not luck right? Many roads to Dublin as they say, so OP you keep doing what you are doing as that will turn on a light switch for your child that an index in the current age will likely not. It’s all about identification and it is behavioral.
If favoring index investing in favor of 4 stock picks for your portfolio is a "rigid belief" feel free to call me rigid. And yes - I will certainly "Stay on the ship" of holding index funds before switching to a strategy of 4 individual stock picks.
Getting the RIGHT individual 4 stock picks will have a lot of LUCK involved. Indexing Investing has proven to be the solid path to actually "Investing". This belief doesn't make me Rigid - it makes me Smart :)
(I just checked the top of the page to make sure I was still in the right place).
You were a child once? Do you remember? What did you identify with at the age of 8? Was it index funds or even actual individual companies? Most kids at that age and even myself at the time were interested in Barbie Dolls and Tonka toys! So the child would identify with those toys and the companies that made them - probably Hasbro. This is the Bogleheads but it’s also a place where investors skew on the actual investments they choose including index funds, individual stocks, real estate, bitcoin/cryto, entrepreneurship. So you can choose the road you like but there are many roads on the journey to financial security and most investors will say they like to be well diversified. Holding 1 or a bakers dozen of individual securities in addition to what may likely be many different tools in the child’s lifetime is perfectly fine. Most people’s wealth will be in their primary home as is currently except in the Boglehead forum where it seems not to be and that’s fine but if you don’t like what the OP is doing at least acknowledge there are many ways to financial security.
:sharebeer
Grt2bOutdoors
Posts: 23045
Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: It's fascinating to get your kids involved in investing

Post by Grt2bOutdoors »

arcticpineapplecorp. wrote: Thu Sep 03, 2020 2:47 pm
GoldenGoose wrote: Thu Sep 03, 2020 2:40 pm Great lesson today. Today their account went negative. So far they are down $50. They panicked and I had the chance to tell them "If you haven't sold yet, then it's not a loss. If you get out now, then when the market goes up again, you will lose out". They understood that and left the account alone! Win!
"But Mommy/Daddy, why did these 4 companies go bankrupt?"
"Mommy/Daddy, what is bankruptcy?"
GoldenGoose wrote: Thu Sep 03, 2020 2:40 pm At first they are reluctant. So to tempt them, I show them my investment account. Seeing what kind of gains I have, they relent and let me have the money. So we open an account and buy stocks from 4 companies in approximate equal amounts
"But Mommy/Daddy, you never told us we could lose money. You only showed us your account that had gains. You tricked us!"

Later in life...
"But Mommy/Daddy, you never told us we could own 8734 stocks. Why did you have us buy 4 stocks when we could have owned 8734 stocks???"
https://investor.vanguard.com/mutual-fu ... view/vtwax
Mommy/Daddy: what is ArticPineapple talking about? Are they financially illiterate as to not understand the difference between unrealized and realized losses? None of my companies are bankrupt, it’s just silly people selling because they needed the money to buy food or pay rent. That’s just like when ArticPineapple sells their index funds to get cash!

Mommy/Daddy - why doesn’t the index heads know how the stock market works? :twisted:
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
User avatar
arcticpineapplecorp.
Posts: 6186
Joined: Tue Mar 06, 2012 9:22 pm

Re: It's fascinating to get your kids involved in investing

Post by arcticpineapplecorp. »

Grt2bOutdoors wrote: Thu Sep 03, 2020 3:31 pm
DaftInvestor wrote: Thu Sep 03, 2020 3:19 pm
Grt2bOutdoors wrote: Thu Sep 03, 2020 2:40 pm
GoldenGoose wrote: Thu Sep 03, 2020 1:52 pm
DaftInvestor wrote: Thu Sep 03, 2020 11:26 am
I only used it in this instance. Since you disagree this was luck explain to me then how 4 stocks picked by children had an increase in these first 5 business days was something other than luck?
I'm not disagreeing with having luck in investing but it seems every time there is a success and it's not the bogleheads-approval method, then it's luck.
That is what’s known as rigid beliefs. They will stay on the ship and go down with it even if rational thinking says abandon ship. OP - you don’t need the forum to tell you how to accumulate assets, truth be told I’d be surprised if everyone on this forum is 100 percent truthful on the sources of income and wealth. Intentional or not, there’s almost always a bit of fudging. The best ones are those who say they did it themselves but omit the help they had or that it was RSUs and stock option lottery tickets that did 90 percent of the heavy lifting but they continue to believe that their work efforts was the sole source for the stock price moving - not speculation or plain luck they found a job that offered lottery tickets. No that was not luck right? Many roads to Dublin as they say, so OP you keep doing what you are doing as that will turn on a light switch for your child that an index in the current age will likely not. It’s all about identification and it is behavioral.
If favoring index investing in favor of 4 stock picks for your portfolio is a "rigid belief" feel free to call me rigid. And yes - I will certainly "Stay on the ship" of holding index funds before switching to a strategy of 4 individual stock picks.
Getting the RIGHT individual 4 stock picks will have a lot of LUCK involved. Indexing Investing has proven to be the solid path to actually "Investing". This belief doesn't make me Rigid - it makes me Smart :)
(I just checked the top of the page to make sure I was still in the right place).
You were a child once? Do you remember? What did you identify with at the age of 8? Was it index funds or even actual individual companies? Most kids at that age and even myself at the time were interested in Barbie Dolls and Tonka toys! So the child would identify with those toys and the companies that made them - probably Hasbro. This is the Bogleheads but it’s also a place where investors skew on the actual investments they choose including index funds, individual stocks, real estate, bitcoin/cryto, entrepreneurship. So you can choose the road you like but there are many roads on the journey to financial security and most investors will say they like to be well diversified. Holding 1 or a bakers dozen of individual securities in addition to what may likely be many different tools in the child’s lifetime is perfectly fine. Most people’s wealth will be in their primary home as is currently except in the Boglehead forum where it seems not to be and that’s fine but if you don’t like what the OP is doing at least acknowledge there are many ways to financial security.
yes, but another way of going about it is if you believe index funds are the way to go, you don't help your kids buy 4 individual stocks.

just because they know barbie and you can say, "Do you want to own Hasbro?" doesn't mean you should.

Instead, you could also point out Coke, Nike, Google, Ford, Nestle, McDonalds, and so on...all the companies they know and love.

then you ask, "Would you like to own ALL those companies?" Of course they would.

"Well, it's too expensive to buy them individually, but there is a way we can own them all. It's called indexing. Do you want to buy them all? Let's go do that instead of having to decide which to own and which to exclude." Simpler now and likely better over time.
Last edited by arcticpineapplecorp. on Thu Sep 03, 2020 3:49 pm, edited 2 times in total.
It's "Stay" the course, not Stray the Course. Buy and Hold works. You should really try it sometime. Get a plan: www.bogleheads.org/wiki/Investment_policy_statement
User avatar
arcticpineapplecorp.
Posts: 6186
Joined: Tue Mar 06, 2012 9:22 pm

Re: It's fascinating to get your kids involved in investing

Post by arcticpineapplecorp. »

Grt2bOutdoors wrote: Thu Sep 03, 2020 3:42 pm
arcticpineapplecorp. wrote: Thu Sep 03, 2020 2:47 pm
GoldenGoose wrote: Thu Sep 03, 2020 2:40 pm Great lesson today. Today their account went negative. So far they are down $50. They panicked and I had the chance to tell them "If you haven't sold yet, then it's not a loss. If you get out now, then when the market goes up again, you will lose out". They understood that and left the account alone! Win!
"But Mommy/Daddy, why did these 4 companies go bankrupt?"
"Mommy/Daddy, what is bankruptcy?"
GoldenGoose wrote: Thu Sep 03, 2020 2:40 pm At first they are reluctant. So to tempt them, I show them my investment account. Seeing what kind of gains I have, they relent and let me have the money. So we open an account and buy stocks from 4 companies in approximate equal amounts
"But Mommy/Daddy, you never told us we could lose money. You only showed us your account that had gains. You tricked us!"

Later in life...
"But Mommy/Daddy, you never told us we could own 8734 stocks. Why did you have us buy 4 stocks when we could have owned 8734 stocks???"
https://investor.vanguard.com/mutual-fu ... view/vtwax
Mommy/Daddy: what is ArticPineapple talking about? Are they financially illiterate as to not understand the difference between unrealized and realized losses? None of my companies are bankrupt, it’s just silly people selling because they needed the money to buy food or pay rent. That’s just like when ArticPineapple sells their index funds to get cash!

Mommy/Daddy - why doesn’t the index heads know how the stock market works? :twisted:
I'm not saying the companies went bankrupt today...

but I was imagining how the conversation will go when the companies go bankrupt:
The single most frequent outcome (when returns are rounded to the nearest 5%) observed for individual common stocks over their full lifetimes is a loss of 100%.

Individual common stocks tend to have rather short lives. The median time that a stock is listed on the CRSP database between 1926 and 2016 is seven-and-a-half years.

source: https://papers.ssrn.com/sol3/papers.cfm ... id=2900447
It's "Stay" the course, not Stray the Course. Buy and Hold works. You should really try it sometime. Get a plan: www.bogleheads.org/wiki/Investment_policy_statement
chw
Posts: 837
Joined: Thu May 24, 2012 4:22 pm

Re: It's fascinating to get your kids involved in investing

Post by chw »

Teach them right, invest in VTI etf. Boring but steady. I did something along this line, but offered a to match whatever they decided to invest (the Dad match). The match grabbed my kid’s attention more over the years than their returns.

Fast forward about 25 years now, those accounts grew into Roth IRAs in their teens, which have continued to grow into substantial balances with their annual contributions into their early 30s. One child follows a simple 3 fund portfolio (VTI, VBR, Total Intl), other child is 100% in ESGV to reflect his desire to invest socially responsible.

Both children are thoughtful planners with their money, and not inclined to spend frivolously on things.
User avatar
SmileyFace
Posts: 5703
Joined: Wed Feb 19, 2014 10:11 am

Re: It's fascinating to get your kids involved in investing

Post by SmileyFace »

Grt2bOutdoors wrote: Thu Sep 03, 2020 3:31 pm
DaftInvestor wrote: Thu Sep 03, 2020 3:19 pm
Grt2bOutdoors wrote: Thu Sep 03, 2020 2:40 pm
GoldenGoose wrote: Thu Sep 03, 2020 1:52 pm
DaftInvestor wrote: Thu Sep 03, 2020 11:26 am
I only used it in this instance. Since you disagree this was luck explain to me then how 4 stocks picked by children had an increase in these first 5 business days was something other than luck?
I'm not disagreeing with having luck in investing but it seems every time there is a success and it's not the bogleheads-approval method, then it's luck.
That is what’s known as rigid beliefs. They will stay on the ship and go down with it even if rational thinking says abandon ship. OP - you don’t need the forum to tell you how to accumulate assets, truth be told I’d be surprised if everyone on this forum is 100 percent truthful on the sources of income and wealth. Intentional or not, there’s almost always a bit of fudging. The best ones are those who say they did it themselves but omit the help they had or that it was RSUs and stock option lottery tickets that did 90 percent of the heavy lifting but they continue to believe that their work efforts was the sole source for the stock price moving - not speculation or plain luck they found a job that offered lottery tickets. No that was not luck right? Many roads to Dublin as they say, so OP you keep doing what you are doing as that will turn on a light switch for your child that an index in the current age will likely not. It’s all about identification and it is behavioral.
If favoring index investing in favor of 4 stock picks for your portfolio is a "rigid belief" feel free to call me rigid. And yes - I will certainly "Stay on the ship" of holding index funds before switching to a strategy of 4 individual stock picks.
Getting the RIGHT individual 4 stock picks will have a lot of LUCK involved. Indexing Investing has proven to be the solid path to actually "Investing". This belief doesn't make me Rigid - it makes me Smart :)
(I just checked the top of the page to make sure I was still in the right place).
You were a child once? Do you remember? What did you identify with at the age of 8? Was it index funds or even actual individual companies? Most kids at that age and even myself at the time were interested in Barbie Dolls and Tonka toys! So the child would identify with those toys and the companies that made them - probably Hasbro. This is the Bogleheads but it’s also a place where investors skew on the actual investments they choose including index funds, individual stocks, real estate, bitcoin/cryto, entrepreneurship. So you can choose the road you like but there are many roads on the journey to financial security and most investors will say they like to be well diversified. Holding 1 or a bakers dozen of individual securities in addition to what may likely be many different tools in the child’s lifetime is perfectly fine. Most people’s wealth will be in their primary home as is currently except in the Boglehead forum where it seems not to be and that’s fine but if you don’t like what the OP is doing at least acknowledge there are many ways to financial security.
I was merely pointing out that a 5-day increase in 4 individual stock picks was "luck" and is unlikely to have taught a 9 year much of anything (in fact - is more likely teaching the wrong thing). I seem to be told it isn't luck and my thinking is rigid. Being called "rigid" for this belief on a Boglehead forum blows my mind a bit.
User avatar
dratkinson
Posts: 5036
Joined: Thu Jul 26, 2007 6:23 pm
Location: Centennial CO

Re: It's fascinating to get your kids involved in investing

Post by dratkinson »

Had to search my offline notes. Found what I was looking for.

Four stockmarket lessons. Sixty+ years of academic research into investing success teaches four major lessons; ignore them at your peril.
--It's very easy to get the market return, just buy a market index fund.
--It's so impossibly difficult to get more than the market return, that it's not worth trying.
--The short-term return is mostly noise, so should be ignored.
--If you must reach for yield, can have a 5% (of total investments) play money account. Quit playing when you lose.


Best of luck with your kid's play money accounts, dad.


Since a rising tide lifts all boats, the current rising stockmarket is also lifting your kids' stocks.

Your kids' results must be measured to know their value. Therefore, it would be beneficial to your kids' investing education to compare their results to the market's return. Are your kids results ahead of, equal to, or lagging the market's return?


You can leave it for a later lesson to determine if their results were the result of investing acumen or luck.
d.r.a., not dr.a. | I'm a novice investor, you are forewarned.
StealthRabbit
Posts: 528
Joined: Sat Jun 13, 2009 1:25 am

Re: It's fascinating to get your kids involved in investing

Post by StealthRabbit »

I started my kids in Roths at age 12. (>20 yrs ago)

Some did individual stocks, others 'boglehead MFs'

It all worked out, except the 'trader' got burnt a lot, and eventually became a financial analyst and fortunately got a great 'very disciplined' job. All have done very well.

They all did a lot of trading during college (heyday of Netflix, Amazon, APPL). Made many times over their school loans which they consolidated at 2.7% for 20 yrs.

The 'boglehead' retreated to bogleways and is happy there, but not prosperous yet

The 'trader' just took his profits from $74 AAPL acquisitions done a few yrs ago. Well on their way to FIRE. But they have lived / invested during the 'golden age', things will change. All are prepared for that.
Kookaburra
Posts: 344
Joined: Thu Apr 02, 2020 11:14 pm

Re: It's fascinating to get your kids involved in investing

Post by Kookaburra »

GoldenGoose wrote: Wed Sep 02, 2020 11:09 pm Also apple is one of the holdings. We bought it before the split. When I told my son about apple splitting 4 for 1 his eyes popped thinking he would get 4x the money. So I used the opportunity to explain stock split to him. Now he knows.
I know adults who think that. And the still don’t believe me when I tell them how it works.
Post Reply