Make Investing for Kids a Teachable Moment
My daughter received $50 from her great-grandfather for Christmas and we all agreed that there was absolutely nothing left on her list that she really needed. I pitched the idea of buying a share or two of stock with the money so she could watch it grow over time. Honestly, I thought this would be a great way to introduce her to some investment concepts, and when I was her age I thought the idea of owning stock was cool.
I offered up a short list of kid-friendly stocks that I thought would provide good growth and dividends over the long term, nothing too speculative for her first pick. She settled on Disney and we were off to ING Direct to open a savings account and Sharebuilder trading account. The thing I like about Sharebuilder is that you can buy partial shares, so by committing the $50 for her first purchase she should be able to buy around 1.4 shares of Disney stock (trading around $32). I decided to keep this money out of the Educational Savings Account, and her 529 College Savings Plan, because it may not be used for educational purposes down the road. Who knows…maybe this will buy her a car in ten years (with a little help from Mom and Dad, and a few more contributions from Papa).
I can’t wait to show her “DIS” in the stock report of the newspaper and begin explaining what happens when stocks go up and down, etc. My wife is convinced I am WAY more excited about this whole process than my daughter is! She’s right, because no one ever explained these concepts to me and what a leg up I would have had to have someone “coach” me on such financial matters a young age.
Technorati Tags: stock, investment, Sharebuilder, Educational Savings Account, 529 College Savings Plan
What a great idea!
I’m definitely going to be using that with Ian and Dylan, my 11 and 19 year old step-sons.
What a neat activity to share as a family.
Thanks for stopping in and commenting the other day; I appreciate it.
On the run - take care,
Tracy
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