Investing with Kids

Nine year-old Jarrod started investing two years ago. Now, his earnings total $7,000. His portfolio includes companies like Nike, Burger King, and Harley Davidson.

Jarrod's grandfather is his mentor and financial advisor. He guides Jarrod's investments and leads Jarrod's neighborhood investing club. At monthly club meetings, Jarrod's granddad teaches kids about short and long term investing, how to find solid investments and how to save using the stock market.

Sixteen year-old Christina is a member of Jarrod's neighborhood club. She says investing has taught her the value of money. "I probably would have just gotten my money and gone and spent it on something else," says Christina. "But I think it's taught me to save up for when I grow up," says Christina.

Financial Consultant Beverly Dabney says that before kids begin investing, they should practice with fake money and learn the ups and downs of the market. "You can never tell a child. They have to experiment and understand themselves," says Dabney.

Dabney says once kids grasp the value of money parents should have them make their first investments with money they have earned. Then, says Dabney, kids will understand playing the market is not easy money. "You work to get your base to put in there," says Dabney. "And then your base makes money for you."

Jarrod's investments give him confidence about the future. "Later I can retire and have a lot of money on and on and on," says Jarrod.

"I probably would have just gotten my money and gone and spent it on something else but I think it's taught me to save up for when I grow up."

--Christina, age 16

Web Site for Young Investors

MainExchange:
This site offers an interactive game where kids can invest 100,000 virtual dollars in publicly traded companies. Download it from the internet or for a CD-Rom, send a check for $3.00 to:
MainExchange Inc.
2 Dean Street
Englewood, NJ 07631

Investing for Kids:
This site is produced by kids and it offers investing basics.

Kids Bank.Com:
This site is for elementary school children. Characters called Penny, Dollar Bill and Interest explain where money comes from, how a bank works and how interest is earned.

Moneyopolis:
This site is for kids sixth grade through eighth. Using their math skills, kids solve real life problems of earning, spending and saving.

What Parents Can Do

Open a joint account. Overseeing a savings account with children allows parents to keep a watchful eye over how the money is spent and gives parents a chance to track interest and fees.

Give investments as gifts. Many parents invest in their children's future by giving U.S. Savings Bonds or stock investments as gifts to their children.

Choose stocks kids recognize. Often kids are more interested in following stock purchases and earnings if they know and are interested in a particular company. The following is a list of industries kids pay attention to: fast food, anything retail, clothes, toys, or entertainment.

Resources

"The Ultimate Kid's Money Book,"
by Neale Godfrey.

Stein Roe Young Investor Fund
(800) 338-2550

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Connecting with Kids