Raising a Future Investor

future investorWhen I was a teenager, my grandmother gave me a couple shares of Limited Brands. I had worked at The Limited that summer, and while I was focused on my employee discount, she was trying to get me to think bigger.

At the time, I was nonplussed. But today I so appreciate the sentiment.

If you’ve got kids, they probably aren’t learning much (if anything) about investing at school. And many parents are reluctant to teach them since they feel fairly clueless themselves, says Hollis Page Harman, author of Money Sense for Kids. Big mistake. Some ideas:

  • Talk investing. Don’t make investing a taboo subject—even if you don’t know all the answers.
  • Stock-pick for fun. No money trading hands here. Each family member picks a stock, tracks it and discusses it, says Harman. After a few weeks, see who’s up, who’s down—and why.
  • Invest in a Roth IRA. Older kids with earned income from, say, a summer job can put cash into an IRA. (Accounts for minors need to be set up as custodial accounts.)
  • Buy a share. This can be tricky due to brokerage costs and other fees. Websites like OneShare.com make this a nice gift, but generally aren’t cheap.

Child’s Play: What tips do you have for teaching kids good money habits?