5 Ways to help your family learn the concepts of investing
Children often get their first lessons about money from watching their parents handling the family budget at the kitchen table. What will your children learn about investing by watching you? If you want to teach your family about investing, it takes time and consistent effort. The following are 5 things parents can do to teach their family the basic concepts about investing.
Find an easy to understand book on investing. Spend some time a few nights a week reading and discussing it together. This will help your family, including the children, to become familiar with the terms and concepts involved in investing. Look at market news on television and in the newspapers together and discuss what the results mean and how they affect people’s money.
3. Set Up A Simulated Portfolio Online
Set up a simulated portfolio on a stock market game for each family member. Make it a game to see who can manage their portfolio the best. Make it a rule they have to briefly explain to the group why they are taking a particular action. It’s a great way for novices to learn about the types of investments available and their risks and rewards.
4. Begin Real Investing, But Start Small And Safe
Once each person has saved some money, set aside some money to set up a brokerage account to use as a practice investment vehicle. The goal is to teach them about the process of tracking and studying a stock before investing money in it. Help them to understand how world events affect stock prices.
5. Take The Plunge Slowly
As a group pick 5 stocks, mutual funds, ETFs or a combination of them all in which to invest. Encourage them to start with 4 safe investments and one aggressive one. Express to them the need to continue watching their investments and the overall market. Discuss regularly how they think particular world or national events will affect the stock market and what action, if any, they think you should take on your investment portfolio before taking any action.
Continue to talk to your family about investing. Discuss your successes and failures with them. If you want them to be better with money than you are share your wisdom. Give your family the gift of investment knowledge and the chance at a better life.
Categorised as: Finance