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Talking To Your Children About Investing

Set children up for a successful financial future by teaching them about investing now.

As a 10-year-old kid, I remember my disappointment when I was told I would be getting stock for Christmas that year. Stock was not on my Christmas list, and I was not interested!

Honestly, I didn’t even know what stocks were. My father had worked for AT&T as an engineer for many years and had acquired shares of AT&T.

When the United States Department of Justice broke up AT&T with a 1984 anti-trust lawsuit he was left with shares of ‘Baby Bell’ stocks. My parents decided to gift each of their three children these shares to pay for college.

Financial Literacy Is Simply Not Taught

Fortunately, this turned out to be an incredible educational experience for me and impacted my future career choice. Each week I would look up the ticker for my stock in the newspaper.

I would track how it was doing and being a tad competitive I would also track how my brother and sister’s shares were fairing. Interestingly, I learned about dividends, capital gains, and corporate mergers. Even at a young age I remember being impressed that my money was working for me.

When the time to go to college got closer the shares were sold and along with scholarships, and part time work, paid for my college education. I was incredibly grateful to graduate debt free.

Since I had such an interest in investing at a young age, I assumed my children would as well. This was not the case. My son’s main interest was the online gaming platform called Roblox. My attempts to teach him about investing fell flat.

In a recent survey from EVERFI, 53 percent of college students reported they felt less prepared to manage their money than to face any other challenge associated with college. This is a troubling statistic but there are steps you can take to help now to change the trend.

What Can Your Family Do Today?

When I saw in the news that Roblox was going public I knew my opportunity had come. I purchased a few shares and casually mentioned at dinner time that evening that I was now an owner of Roblox. He was very impressed by this!

His interest was sparked, and he is now tracking the stock hoping to become an owner himself. This opened the door to teaching him about budgeting, saving, and not putting all your eggs in one basket. We have also had conversations about saving for college, his first job, and opening a Roth IRA.

In Conclusion

Financial literacy is not always taught in schools, so it is important to have these conversations with your children and grandchildren in a way that interests them. A resource that I have found helpful and recommend is Junior Achievement.

This organization does an amazing job putting together age-appropriate financial literacy programs. I had the chance to spend the day volunteering with one of their programs called BizTown.

This program is interactive and teaches kids about job interviews, paychecks, bank accounts, loans, and paying bills. It is also a lot of fun!
Teaching kids about finances and investing now will set them up for success in the future.

About the Author

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Susan Koe

Director of Financial Planning, CFP®

Susan is passionate about using her financial knowledge to help others achieve their goals. She began her financial services career when she joined Vanguard in 2004. At Vanguard, she provided data analysis and portfolio management for high-net-worth clients. Her 11 years at Vanguard taught her that every client has a unique situation and there is no ‘one size fits all’ solution. She believes that her job is to answer questions like ‘When can I retire?’ and ‘Can I afford to leave a legacy’ not just convey facts and figures. She also has a bachelor’s degree in finance and economics from Northwest Missouri State University and an M.B.A. from Northern Arizona University which gives her the depth of knowledge critical in the planning process. Susan lives in the Phoenix area with her husband, son, and daughter. Her interests include running, hiking, volunteering, and vacationing with her family.