How to Teach Kids About Money, Saving & Investing

How to Teach Kids About Money, Saving & Investing: Lesson 7

By Mr. Refined · January 5, 2021 · Updated January 12, 2021

What Stocks To Invest In For Kids

We discussed a lot in this series but there are a few more important points to cover. What stocks to invest in for kids is a keystone to this entire conversation. As you know, I am an insatiable optimizer, so, what complicated derivatives and cover option did we go with? Well, hold the phone, this is not my investment portfolio this is my kids’ investment portfolio the investment products must be suitable for the investor, so let’s look at how this all played out there is a lesson to be had. But, before we get there, one must inspire before one empowers.

Now, I could put my kids in a boring ol’ index fund for low fees and the simplest possible management over time. But that is zero fun for a kid. These may be popular investment products in the FIRE community but that simply won’t cut it for an eight-year-old.

While JL Collins makes many great points in his book The Simple Path to Wealth for that being the lowest effort and lowest cost path to market returns, I knew that approach was never going to get the kids’ wheels spinning.  It was not going to elevate my kids’ excitement level to the critical mass necessary for my kids’ to not only stick with investing but also have something to brag to their friends about. No worries, I have a solution for that.

What Did My Kids Invest In

After opening their investment accounts and transferring in money, I had to wait a few days for the account’s funds to settle. I was driving the kids home one day while the funds were settling and I decided to make that day into an investment field trip so that is exactly what I told the kids. I told them it was time for a spontaneous field trip to their favorite stores to learn about investing in companies.

We passed all the storefronts as we drove through town. I asked the kids if they could own any company they wanted, which companies would they own? They shouted out McDonald’s, KFC, and several others. So, we pulled into McDonald’s I told them they could eat there if they could tell me enough reasons McDonald’s was a smart business to own. While we don’t eat there often, it is OK to spoil them a little around the things that you want them to take an interest in.

The Incentive Determines the Outcome

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https://refinedbyfire.co/how-to-teach-kids-about-money-saving-investing-lesson-7/