Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
Silver Short-Term Trend Analysis - 26th June 19
Iran and the Dying Days Of the US Empire - 26th June 19
Why a Saturated Online Gaming Market Spells Good News for Gamblers - 26th June 19
Natural Gas Sets Up Bottom Pattern - 26th June 19
Has Gold Price Broken Out Or Not? Technicals And Fundamentals - 26th June 19
Stocks and XAU Gold Miners Next Bull and Bear Markets are Now Set Up - 26th June 19
Gold Price Trend Forcast to End September 2019 - Video - 25th June 19
Today’s Pets.com and NINJA Loan Economy - 25th June 19
Testing the Fed’s Narrative with the Fed’s Data: QT Edition - 25th June 19
What "Pro Traders" use to Find Profitable Trades - eBook - 25th June 19
GDX Gold Stocks ETF - 25th June 19
What Does Facebook’s LIBRA New Crytocurrency Really Offer? - 25th June 19
Why Bond Investors MUST Be Paying Attention to Puerto Rico - 25th June 19
The Next Great Depression in the Making - 25th June 19
The Bad News About Record-Low Unemployment - 24th June 19
Stock Market New High, but…! - 24th June 19
Formula for when the Great Stock Market Rally Ends - 24th June 19
How To Time Market Tops and Bottoms - 24th June 19
5 basic tips to help mitigate the vulnerability inherent in email communications - 24th June 19
Will Google AI Kill Us? Man vs Machine Intelligence - 24th June 19
Why are Central Banks Buying Gold and Dumping Dollars? - 23rd June 19
Financial Sector Paints A Clear Picture For Stock Market Trading Profits - 23rd June 19
What You Should Look While Choosing Online Casino - 23rd June 19
INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - 22nd June 19
Here’s Why You Should Drive a Piece of Crap Car - 22nd June 19
How Do Stock Prices React to Fed Interest Rate Cuts? - 22nd June 19
Gold Bull Market Breaking Out! - 21st June 19
Post-FOMC Commentary: Delusions of Grandeur - 21st June 19
Gold Scores Gains as Draghi and Powel Grow Concerned - 21st June 19
Potential Upside Targets for Gold Stocks - 21st June 19
Gold Price Trend Forcast to End September 2019 - 21st June 19
The Gold (and Silver) Volcano Is Ready to Erupt - 21st June 19
Fed Leaves Rates Unchanged – Gold & Stocks Rally/Dollar Falls - 21st June 19
Silver Medium-Term Trend Analysis - 20th June 19
Gold Mining Stocks Waiting on This Chart - 20th June 19
A Key Gold Bull Market Signal - 20th June 19
Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - 20th June 19
Investing in APPLE (AAPL) to Profit From AI Machine Learning Stocks - 20th June 19
Small Cap Stocks May Lead A Market Rally - 20th June 19 -
Interest Rates Square Minus Zero - 20th June 19
Advice for Financing a Luxury Vehicle - 20th June 19
Stock Market Final Blow Off Top Just Hit… Next Week Comes the FIREWORKS - 20th June 19
US Dollar Rallies Off Support But Is This A Top Or Bottom? - 19th June 19
Most Income Investors Are Picking Up Nickels in Front of a Steamroller - 19th June 19
Is the Stock Market’s Volatility About to Spike? - 19th June 19
Facebook's Libra Crypto currency vs Bitcoin: Five Key Differences - 19th June 19
Fed May Trigger Wild Swing In Stock Index and Precious Metals - 19th June 19
How Long Do Land Rover Discovery Sport Brake Pads Last? - 19th June 19
Gold Golden 'Moment of Truth' Is Upon Us: $1,400-Plus or Not? - 18th June 19
Exceptional Times for Gold Warrant Special Attention - 18th June 19
The Stock Market Has Gone Nowhere and Volume is Low. What’s Next - 18th June 19
Silver Long-Term Trend Analysis - 18th June 19
IBM - Watson Deep Learning - AI Stocks Investing - Video - 18th June 19
Investors are Confident, Bullish and Buying Stocks, but… - 18th June 19
Gold and Silver Reversals – Impossible Not to Notice - 18th June 19

Market Oracle FREE Newsletter

Gold Price Trend Forecast Summer 2019

How to Teach Your Children Financial Independence

Personal_Finance / Educating Children May 02, 2008 - 04:32 AM GMT

By: Money_and_Markets

Personal_Finance

Best Financial Markets Analysis ArticleNilus Mattive writes; My daughter is only 10 months old, but my wife and I are already anticipating the day she comes asking us for money to buy the latest designer handbag. Disha is making a list of her favorite stores. Me? I'm envisioning how I'll use the request as a way to talk about the importance of money and sound spending habits.

Last time I checked, very few elementary schools — or even high schools, for that matter — were teaching kids anything about finance. And that's a real shame.


Few students will ever use their knowledge of frog anatomy. But every single student will have to make major financial decisions for the rest of their days!

So, if you have a child or grandchild in your life, I encourage you to do all you can to help set them along a path of financial independence. Today, I want to give you ...

Six Ways to Teach Children About Money and the Financial Markets

#1. Get them started on an allowance early.

When it comes to money, I think it's important that kids get their hands dirty. They need to receive a set amount of cash to call their "own." Heck, it's easy to ask Grandpa to buy something for them. It's a little different when Grandpa gives them the money and makes them spend it on their own. The personal connection with the exchange becomes far more real.

Depending on the child's age and inclination, you may even let them direct many of their own basic purchases (for example, school clothes) as long as they stay within predetermined criteria.

#2. Help them establish a budget.

This dovetails with the idea of an allowance. Children, even at a fairly young age, are perfectly capable of keeping a little notebook that tracks how much money they've been given and what they've spent it on. Have them write down a future purchasing goal, and then help them track their progress toward that end.

#3. Open up a savings account ... and let them see the progress.

If you've established some sort of savings account — whether a tax-sheltered college plan or a regular passbook account — that's terrific! But I think it's equally important that you show the beneficiary the account's progress. Nothing brings home the power of compounding interest like seeing it in action. You might even consider doing a simple chart that shows how the account is increasing, and what it will likely become a few years down the road.

#4. Explain your own choices and purchasing decisions.

Every child should be taught the importance of money and sound financial habits!
Every child should be taught the importance of money and sound financial habits!

Is it time to shop for a new car or dishwasher? Major purchases are a great way to teach the importance of research, comparison shopping, discounts and negotiation. Ideally, you can have them help you read through reviews, calculate price discrepancies, or even accompany you on the actual purchase day.

I'll never forget sitting with my dad during a particularly tense negotiation with a car salesman. It was a real lesson in holding out for the very best deal.

#5. Show them how the markets work.

When I was young, I was fascinated with the business section of the newspaper. I would watch the prices of various stocks every day. These days, it's easier than ever to teach children about the markets. They can create dummy portfolios through various websites, check real-time prices online, or use the old-fashioned route of looking up prices in newspapers just as I did. Having some adult guidance to explain the various moves would be a terrific learning experience.

#6. Give them an investment of their own.

Watching those stock prices got even more exciting once I owned a few shares of IBM. Sure, when the value fell, I was upset. But it also taught me a great deal about risk and volatility. Heck, model portfolios only go so far ... and that's why, if you have the means, I suggest giving a child a few shares of a major brand-name stock.

Plenty of kids know about Disney, Nike, and Coca-Cola. So why not let them "own" a little piece of the firm, and explain the benefits, especially the importance of dividends !

Don't know how to give a child some stock?

If it comes from your own portfolio and you have the physical certificate — you'll have to sign the certificate over in front of a guarantor (such as a bank or brokerage). There may also be a form to fill out that declares the transfer of ownership ... look on the back of the stock certificate.

If you currently own the shares, but they're held electronically by your broker — you'll have to notify your broker of the transfer and provide them with details on the account receiving the shares.

Keep in mind that gifting stock you've owned for a long time can also offer you significant tax advantages. For example, you may be able to pass along appreciated shares and avoid paying substantial taxes in the process. Talk about a win-win!

Lastly, if you want to give a share (or more) that you don't currently own — plenty of websites specialize in this kind of thing. They'll register the share in the proper name, and even send a nicely mounted stock certificate right to the person's home. Three sites that I came across are www.giveashare.com, www.oneshare.com, and www.giftsofstock.com. Those are good places to start.

Would you prefer to give a bond instead? Then you might consider a Series EE or Series I savings bond. They don't quite foster the same level of excitement as a stock certificate, but they are nice little investments that can be held for long periods of time. To buy them online, or for more information, visit treasurydirect.gov. Alternatively, you can buy paper bonds from your local financial institution.

Those are just six ways to get a child started down the path to prosperity, and surely there are plenty of others. You may have your own approach or various ways to tweak my suggestions. That's great — every child is different and every person has their own teaching methods.

The important part is showing our kids how to make sound financial decisions before they come asking to borrow our credit cards!

Best wishes,

Nilus

This investment news is brought to you by Money and Markets . Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com .

Money and Markets Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Barbara Shaughnessy
02 May 08, 18:57
stock for grandchildren

I have been trying to find a way to give one share of stock to my four grandchildren - I found E-Trade, but have not used the service yet but then thanks to my son I read all the places I can go to check my desires out. I thank you for the info and will check them out.


Sarah Jones
03 May 08, 07:13
One Stock

There are quite a few online stores from where you can purchase a single stock in a frame with accompanying literatire to get your child interested in finance.

One such site is www.oneshare.com

SJ


reality check
08 May 08, 13:12
School of Hard Knocks

Don't forget to factor into the equation the strong desire to rebel. Many of us who had parents who were thrifty saw blowing cash as rebellion. Teaching your child not to be a sucker is rocket science. It took going through the proverbial school of hard knocks for me to learn that being cashless turns you into the invisible man.


debtdoctorsfoundation
22 Apr 10, 08:07
children's saving literacy

We are 'debt doctors foundation' based in Uk and really enjoyed reading your article about how to teach children financial independence. We are trying to raise awareness in child from 4 years old through meetings in large number of private and public schools in London. Our first book ' The Lost Money Box' is a funny story about one girl becoming aware of the value of the money while taking care about one money box that contains her money collected in her birthday and from previous familiar events.

It's a delicated way to teach children how important is money in the life.

Link us:

http://www.ddukonline.org/moneypenny.html

and buy the first of the 10 books that will be published very soon.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules