How To Teach Your Children About Investing

How To Teach Your Children About Investing

Do your kids recognize the value of money and investing? 

The interesting thing about investing is that the more time you give your investments to grow, the larger is your reward. 

Now, with the changing world, you must be noticing the people’s changing approach towards investing. Crypto, NFTs and other investing adventures provide ample opportunities to make good money with small investments. Even the teens are now interested in investing but not of them hesitate to do so as they feel unconfident.

So this is high time to introduce your children to money and other financial concepts. Here are a few things you ought to teach your children about investing that could potentially help them in their future pursuits.

Indulge the kids in financial conversations

Generally, people don’t like to talk about money in front of their kids. No doubt your kids are young, but they must be comfortable about money being the topic of discussion.

You can get kids to understand topics like what it takes to earn money, the process of good budgeting, saving and investing over dinner. Just casual talk can help them a lot to understand the concepts of money.  

Start investing with a financial goal

Be a financial advisor to your kids. Just as financial advisors help their clients achieve their financial goals based on what’s important to them, you can do that as a parent. 

You can guide your child on what they’d like to save for in the future. It can be a toy or a visit to their favourite place, but the lesson they learn is the most important one. They learn to save and invest their time towards something they love.

 As a parent, you can easily develop responsible financial habits in your kids. Give them the chance of practical learning by establishing a spending, saving, and giving system.

Investing is not a get-rich-quick scheme

When you start teaching your kids about investments, make them understand that money is only a tool to help them succeed in life. 

The best way to talk about investment is to treat them as long term programs rather than get-rich-quick schemes. Your kids must see the importance of planning thoughtfully, investing wisely and saving money steadily over time to have money when you need it.   

Explore their interest With things they already know

Today’s kids are skilled online researchers and are fully aware of product branding. So when you start educating your kids about investing, ask them about which companies they already know. Then, once they show you their interest, give them the task of researching the company’s stock price for some time. 

Once your kid finds the relevant information, discuss its price today to what it was worth one year ago or five years ago. How did it change over time? Offer your kid insights into how the system works and identify the patterns. Investing in what you know can help your child become a long-term investor.

Let your child face the risk

And eventually, when you think your child is ready, let your child buy their own stock. Of course, the ideal case is that your child has saved enough money to invest over time. Otherwise, you can lend them some of the money as an investment.

Furthermore, do not go all in. set a percentage for the kids to compare the profit and loss over a certain period. This will help your kids to experience the risk and make decisions accordingly. 

The bottom line

So, we have shared some tips to help you teach your child about investing. It’s not an overnight process so you need to take things slowly to help your child.  What do you think of our tips? Let us know in the comments. 

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