Teaching Kids to Invest - 5 Simple Rules To Get Started
Jun 21, 2021
A few years ago, T. Rowe Price conducted a Parents, Kids & Money Survey with some unsettling results. For example, just over half of parents surveyed have talked to their children (ages 8-14) about investing. Yet, 44% of parents haven’t discussed or taught any of those investment topics with their kids. In this article, I’ll cover 5 simple rules for teaching kids to invest.
One of the biggest mistakes parents make today when trying to instill financial literacy into their children is trying to run before their kids can crawl. Teaching your kids to invest in individual stocks before they have a basic foundation of some core financial principles is like trying to teach a youth basketball player to dunk before you teach them how to dribble the ball. Dunking is cool, but there is no dunking until they can dribble the ball to the basket to make that dunk.
What other financial topics are there that should be in line ahead of investing? It’s is debatable, but one would have to consider issues such as: receiving an allowance, the miracle of compound interest, and inflation. There are probably a few more, but those are examples of items you’ll want to make sure your child has a grasp on before you venture down the road of creating the next Warren Buffett.
