We all know that the easiest way to get rich is to start investing early and let your returns compound over time. The only problem is that it is hard getting the youth interested enough to get started on their wealth building journey. They are more likely to watch the news than actually learn about investing and the benefits it brings.
In my experience, the best ways to teach kids about investing is to make it relevant and fun.
A good example for this is having a discussion with them on whether they would buy Sony which makes PlayStation or Microsoft which makes the Xbox. Ask them about the two game consoles and why they think one is better. Ask them what impact other companies products – like the Nintendo Switch – will have on either the playstation or Xbox. By making investing fun and relevant, you will be surprised at how engaged your children are and how they think about stuff. And it might help you as an investor too as what better way is there to research Sonys and Microsofts game consoles than the people which use them.
I tried this technique with a nephew of mine and it went so well that I bought some shares in EA sports which makes his favourite game; FIFA! Every time I see him, the first thing he always asks to do is to go and see the share price of EA sports. We than go and look at the upcoming games the company is about to release and he gives me his analysis on how the games will do.
As a result of that initial EA sport stock selection, my nephew is now looking to add a second stock to his portfolio. And this time he will be investing his own pocket money. At the moment he is looking into Disney and Netflix. Both are good companies but one is by far better valued than the other. With this purchase, I will teach him the importance of valuation. As Buffet succinctly put it ‘ price is what you pay, value is what you get.’
By making investing relevant, you will notice that children will take a greater interest in personal finance and you’ll be surprised by the analysis they come up with. I for one didn’t even know about Roblox Clorp but it is one of the largest game developers in the world! By getting the younger geenration involved, you might just learn one or two things yourself!