I’ve been having thoughts about how to interest my kids in finance when they become teenagers. I know it’s still pretty far away since they are only 3 and 5 but maybe seeing my son entering pre-school this fall got me thinking about how fast time passes by! Being a financial planner and a blogger as well, I can’t picture my kids having problems with managing money. On the other hand, even if I had all the knowledge in the world, I won’t be able to get them on the right track if they are not interested in finance!
So here are a few of my thoughts about how to interest (my soon to be) teenagers to finance:
#1 Have Them Buy Companies They Like
If you talk to any teenager, he will probably tell you how boring investing sounds. They don’t really get what would be useful or how to get ahead, they would rather use their money to spend on clothes, sports or going out. However, if you take the time to make a list, together, of what he likes, you will probably be able to find 4-5 great company stocks to buy.
He can’t go out of his bedroom without his iPod? Maybe investing in Apple would be interesting for him. He likes his shoes? Nike wouldn’t be a bad pick. Just think of the face your Teen would have made if he had bought West 49 Stock (WXX) when Billabong made an offer on the company? The stock went from $0.55 to $1.25!
The key here is not to make a huge profit since you are making stock picks with a biased portfolio model. However, it doesn’t mean that you can’t have fun with a small amount while teaching your kids how to deal with the good and bad side of the stock market.
#2 Do a Virtual Competition
You have a good relationship with your Teen and he is competitive? Open up 2 virtual trading accounts (you can use Google Finance, Yahoo Finance or Globeinvestor) and set the rules for a friendly competition.
I remember doing that at school when I was 16. We could pick any stock from the TSX60 (4 of them) and we had a set time frame for the competition. It was just nice to pick stocks and look at them go up and down. While we didn’t really understand how it worked back then, we could at least see that you can make money one day and be in the hole the next week.
I think that trading with your teen could be very interesting and he will be at an age that beating up their parents on something is greatly motivating ;-).
#3 Share the account with him
Your teen doesn’t like competition? He is probably the cooperative type then. Team up with him and both invest money in an investment account. You can match or increase his contribution like an employer in a group RRSP. Taking trading decisions together can be a lot of fun and could be a way of communicating with your teen at the same time.
Slowly but surely, he will understand how stock trading works and how it can be fun to see your nest egg grow over time.
I hope that one of these 3 options will be enough to convince my teens to invest when they will be older! Do you have any other ideas?
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