Teach Your Kids How To Invest
These Web Sites Show Youngsters Money Management Skills That Could Benefit Adults, Too
If you find yourself in the position of trying to teach financial discipline to young people, I can sympathize. When I was just a "Russell sprout," I was more into spending money on mutual fun than mutual funds. But if you make investing sound like "fun," your kids might just want to wade in.
To help you educate your children about investing, there are several Web sites full of practical investment knowledge and general tips for young -- in some cases very young -- investors.
The best young investor sites avoid pandering, "investing-is-way-cool" talk, silly animations (like ours, at right) or overly complicated explanations that may be over the head of the average kid. Or you, for that matter.
Here are some Web resources for young investors:
Investing for Kids -- Explains what investing is, how to set your goals and how your money can grow over time. There's a chart that shows how to channel your earnings from gifts you get, allowances you earn or services you provide into savings, and then how to take some of that money and invest it.
Moneyopolis! -- A service of consulting and accounting firm Ernst & Young, Moneyopolis has a My Money area with a worksheet that is divided into four how-to areas. They are "set my financial goals," "determine what I have," "set a plan for meeting my goals" and "keep track of my spending and monitoring my progress." Good advice for adult investors, too.
Motley Junior
The Motley Fool Teens & Investing -- You may have heard of the highly successful Motley Fool series of investment how-to books. The books, some of which have been written by founders Dave and Tom Gardner, are an extension of the Motley Fool site of which Teens & Investing is a section.The self-declared goal of this resource is to be a place "to come to learn all about money" -- how to make, save, invest, grow, spend and enjoy it. The "Why Invest?" article, for example, uses charts to explain how and why commonly seen rates of return (how much profit you make on your investment) enjoyed by many stocks are likely to earn you money faster than if you had put the same amount you invested in a savings account instead.
The tone is aimed at teenagers. "If you don't learn about investing when you're young, you lose out on an amazing opportunity that you'll never have again," the site counsels. "You're very lucky because you're getting a chance to learn some important things that most people don't figure out until much, much later -- if ever." An explanation follows about how easy it is to save money from part-time earnings, or even from an allowance or baby-sitting.
Strongkids.com -- Don't worry, we're not talking weightlifting here. This site, a service of mutual funds company Strong Investments, Inc. treats investor education as a formative process with several steps. There's counsel on what goals for which you want to save your money, how to get an after-school job to help you get enough money to save and investment vehicles that may be open to you after you start accumulating some earnings.
The generically named The Young Investor Web Site, from Boston-based money management firm Liberty Financial Companies, uses interactive cartoon character guides to set the tone. The Kid To Kid area offers posts and discussions, mainly along the lines of how to get that cool after-school job and how to save the money you make there. On a somewhat more serious tone, there are links to the Stein Roe Young Investor Fund section of the site, which has a kid-friendly description of how it works, and how to talk to your parents about opening up a custodial mutual fund account for you if you're under 18.
Take it from me, you'll never know when that money will come in handy.
--Financial journalist Russell Shaw is author of "Official Netscape Guide To Online Investments" and is a regular contributor to Investor's Business Daily.
First published February 25, 2000.
Who do you like? We still want your opinions on which brokerages and financial services are the best. Which firms respond to the needs of beginning investors? Send your opinions to this column by e-mailing russellshaw@ibsys.com. We'll print your comments in a future column. Include your full name, city and state or province.
