Teaching Teens Money Fundamentals
by
Gregory Grant
Parents try to teach their kids many things as they get older. But what about how to invest and to understand finances?
Using simple lessons, parents can teach young children about money. But it is especially important in the teen years, when steering children in the right direction can pay off later.
"Young adults that have learned about money are a lot more confident in their investing practices," says Mitch Slater of Merrill Lynch. "We see that every day. I certainly see that with my clients, they understand the markets they understand what a bond is, what a mutual fund is."
Getting Teens Involved in Investing
How the market works can seem confusing to a teenager.
Mason Sexton has always taught his children about money & investing. For instance, he and his son, Keats flip to the sports section first and then check out the financial pages.
"The advantages of teaching my children about investing in the stock market are many fold," Sexton says. "First of all it gives you an intimate view of how the economy works, of the capitalist system, how to create wealth."
Making the market interesting and getting teens involved in investing and saving will make them more savvy investors as adults.
"If they've had some training in money they understand the markets to some ability," Slater says. "They understand the power of compounding. They understand what savings is all about. And many today are starting to understand about mutual funds and understand how to invest those mutual funds when they go to work and get a 401(k) plan. So you can spot the difference a mile away."
Teaching teens about money may well be one of the most important gifts they will ever receive. These are lessons that will stay with them for the rest of their lives, helping secure their financial futures.
In recent years, companies have flocked to the web to set up dot.com sites. Initially retail companies caught the attention of investors and consumers alike.
When to sell a stock is as important as when to buy a stock. The investor that goes beyond just looking at the financial pages will find that this kind of in-depth research will pay off in helping to make wiser investment choices.