Warren Buffett bought his first stock when he was 11 years old. I’m no genius, but I bet Buffett’s experience at such a young age probably helped him understand stocks more than most. Studies have shown the single most important factor when it comes to business success isn’t IQ, it isn’t the grades you got in business school, it is the age you started your first business. The younger you were, the more success you have in business.
I have no doubt that teaching your kids investing and exposing them to the idea of stocks will have a positive affect; just like it does on business success.
Here is how you can teach your children about investing for under $100.
Step 1 – Sit down with your children and help them pick companies they are excited about.
Teaching your kids investing is supposed to be fun! You should sit down with your kids and go over some different companies for them to invest in.
A few companies your children may like include:
- Alphabet (Google)
You have the option of investing in thousands of companies, so develop a shortlist of companies and ask them what their favorite four are.
Step 2 – Buy your children stock in four companies.
This is where many of you parents get stuck. You don’t know how you can purchase your children stock in companies to fit inside your budget. There is a company called Stockpile that can solve this problem for you; it is perfect for purchasing your children stock as a gift.
For example, let’s say you your kids decide they want to purchase stock in: Apple, Amazon, Chipotle, and Disney.
The current prices for the company stocks are:
- Apple: $154 per share
- Amazon: $1,011 per share
- Chipotle: $472 per share
- Disney: $106 per share
Total: $1,743 to buy one share of each company!
If you purchase just one single share of stock in each of these companies, it is going to cost you $1,743! (as of when this article was written) That’s a lot of money.
Now, for most of you, this is just too much money. Enter, Stockpile, and you can purchase fractional shares! Instead of having to purchase one share of each company, you can purchase a half a share, or a quarter of a share, etc… This allows you to buy as little as $20 or less worth of each stock, even if the stock price is $1,000!
You can purchase the following amounts instead of full shares:
- Apple: $20 = .13 shares
- Amazon: $20 = .02 shares
- Chipotle: $20 = .047 shares
- Disney: $20 = .18 shares
Total spent = $80
I don’t know about you, but for most families, $80 is more affordable to buy multiple stocks than spending over $1,700.
Once your children have decided the stocks they want, head to Stockpile to purchase them.
Make sure you use this link so you can receive an extra $5 to add your account thanks to my relationship with Stockpile (this is will pay for the entire cost of trading the stocks at 99 cents each trade).
Step 3 – Monitor the companies with your kids and teach them about the investments.
I suggest each quarter sitting down with your kids and showing them just how much money their stocks have gained or lost. If you use Stockpile to purchase the stock, you can easily monitor the gains and losses by using their technology. Simply log in and you can view the progress along with your children.
You can do this every month, every quarter, or every year. The more often you go over it with them the more they may remember and learn. However, you don’t want to look at stocks too often when investing long term, so every quarter should be ok to do.
Related Article – 5 Reasons Why You Need Buy Your Kids Stock for Their Birthday
Step 4 – Each birthday and/or holiday, purchase your children additional stock!
Each year you can add to the shares your children own. You should sit down with your children and have a conversation about the stocks. Show them how they have performed, and ask them if they want to purchase more of one of their companies. Or, maybe they wish to own stock in a whole new company? You can have the conversation with them so they can be a part of the investing decision.
That is it! If you do this over time, your children will learn about investing in real companies with real money. There is no better way to learn about investing than to participate in the stock market. So teach your children young, expose them to investing in their youth, and you may help the financial success of your children far into the future!
Thanks for reading!
Disclaimer: These are the ideas and opinions of the author. The author is not responsible for the actions of those who read the posts on this blog. Each individual reader has a unique situation and unique needs. This blog is not intended to solve those unique situations of the readers. This blog is not liable for decisions made by the readers of this blog.
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