Investment 101: Teaching your kids the art of investing

It is never too early or too late to think about the future and plan for it. Children, while they are children, don’t think much about the issues and problems that are spinning in the minds of adults. But they are on the way… and it is a good thing to have your children be preparing for the future by learning new things. As our life, in this modern era, is not imaginable without finance and everything that is associated with it, we have to help our children develop some analyzing habits or techniques (logical reasoning) that would be useful for them in the future.

As we know, on a global basis, most of people are earn money by breaking a sweat. But it is not always possible, and sometimes very difficult, to be always in a good shape often working until later years in life. It would be very advantageous to have some extra income that could support us as well as our children. To start off, it is important to start teaching your children about money from a young age. To be more specific, you should start talking about money when the children start noticing money. When they see you dealing with money and they can identify it, then it is a good time to begin the education. It will have at least two results, both immediate and long term. As for the immediate effect, they might stop wasting money as easily, and even start saving it. They can probably even probably understand, after a time, why they can’t have all they want at once. As for the long-term effect, they can learn what “investing” means, how to purchase wisely and how to plan for their financial futures.

Teach them to save money when they are pining for toys or other material possessions. Implant in them an idea that they should save money for that certain purchase. Let them feel that it requires some patience and discipline. Talk to them about difference in priorities. Have them think about the importance of the things in their lives. They can compare the usefulness of some of their toys with more essential things, or even other toys. The techniques above will help that child more fully appreciate what they have. As we can see, here, we are dealing with and beginning to shape the moral values of a child. Some illustrating stories will be of help as well. So, to cut a long story short, your children must realize that money is earned and saved for a definite purposes, buying essential things, investing for the future, and for enjoying material things in moderation. As they get older, talk to your children about banks and securities. They might not understand everything, but later it will be easier for them to understand these concepts as they become more relevant. Paying your children for chores they do is always an excellent teaching tool. It will give them an impression how it feels to be earning money, and help them become wiser consumers.

You can also take them to the bank where they could open a savings account. Of course you can seed the account, but they should also bring the money they saved. Even as teenagers, teach them also about the risks and rewards when investing in stocks, mutual funds and so on. They need to know that they can’t risk more than they can afford to lose. All of this financial education can be a major asset as your children progress to adulthood and become financially independent.

The information supplied in this article is not to be considered as medical advice and is for educational purposes only.