Why Teach Kids to Invest in the Stock Market?

Learning to save and invest are valuable lifetime skills, just like reading. The better teens become, the more success they’ll see. It’s never too soon to make that first investment. Since time is a great friend when it comes to making money grow, the sooner one becomes an investor, the better. But where to invest?

In the last 75 years, the stock market has been among the best investments. True, risk is associated with owning stocks. But it’s also risky to drive a car or raise a family. The bigger risk is actually lack of investing knowledge.

Unfortunately teens receive small doses of that, because schools and parents often don’t know where to start. Plus, several myths contribute to reluctance to dive in:
1) “Stock investors need big bucks.”
2) “The market is too high; later will be better.”
3) “We aren’t experts.”
4) “We might make mistakes.”
5) “There’s too much to learn.”

Since most youth cite parents as their primary resource for financial knowledge, parents must take responsibility. Investing needn’t be complicated or intimidating. Even young children can grasp market basics. Here are some beginning tips:

1) Invest in learning to invest. Make it a habit to read articles in the Wall Street Journal, and learn the lingo. Use the library. Join an investment club. Talk to other investors.

2) Practice what you learn. Like good baseball players, good investors don’t swing at every pitch and don’t get a hit with every swing. Practice makes perfect, so practice. It’s okay to make mistakes…most investors do. Concentrate on investing in what you understand, not what others say is great.

3) Start small. Parents don’t expect toddlers to run before they walk. Becoming a good investor is a series of learning steps, too. Dividend Reinvestment Programs (DRIPS) are excellent learning tools. Check resources such as www.dripinvestor.com or www.sharebuilder.com.

4) Stick with it. Develop the habit: invest often and continue for a lifetime. Ordinary people in ordinary jobs can—and have—amassed fortunes by investing small amounts regularly. You can too.

Everyone has a vested interest in helping teens become good investors. They will make better employees, landlords, employers, philanthropists, legislators, entrepreneurs, and citizens.

Thousands of dollars are spent to build children’s music and athletic skills. Learning to invest doesn’t require fancy equipment, uniforms, or lots of money. Teaching skills to help teens become wealthy is not an expensive proposition…but failing to teach them is.