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invest like a child...
July 17, 2009 - Steve Schulwitz
My girlfriend Andrea has two, lovely daughters from whom I dominate the television over. At first it was due to my addiction to sports. I did my best to explain the rules of the sport being viewed in hopes they would enjoy it, but before long ( about 30 seconds) they would come to the conclusion that watching Pokemon in their room was more entertaining than listening to my preaching. These days they wake up in the morning and before their little eyes are even in focus, they have the privilege of being made aware of in what direction stocks are headed in pre-market. I am convinced they care a little more about the stocks, because they are each invested in the market. The girls are just beginning to understand the basic concepts of investing. They know they can lose money one day, but make a profit the next. The concept of supply and demand has also been discussed. In their portfolio we have stocks that are easily recognizable to them.They understand the more Ford cars that are sold, the more money they could potentially earn, and vice-versa. When I walked them through their stocks for the first time, I gave them simple examples of what each stock represents. I used my iPhone and iPod to show them what products Apple produces. Now they will point out an Apple poster or commercial within seconds, knowing they have money in Apple. They also have stock in Caterpillar. That one was easy. I showed them that the stock letters were C-A-T and the rest was history. They know that CAT makes dump-trucks, cranes and tractors, but the visual of the word cat helps them to remember that they have stock in it. Stocks such as Disney, McDonalds, Mattel or Nike are recognizable to young children and it can help them to express interest in making money. Jade (10) and Caitlynn (7) each have access to my lap-top and are allowed to observe their shares. They don't often, but they do snuggle up to me from time-to-time when I'm doing my investing research and ask how CAT is doing. It doesn't take a huge investment to begin a well organized, children's portfolio. Pick out out five stocks you think your child can relate to and purchase one share of each. Do subtle things like remind them when you go through the drive-thru at Burger King that 'we are going to help your stock by buying lunch here.' It doesn't take long before they catch on. Their eyes light up on the smallest of gains and their shares have increased in both value and number. It is my hope these stocks will be managed by them through college and beyond. Now if they would just pay attention to me when I explain how to lay down the perfect bunt.
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