Investment a Family Affair

Ways to make investment a family affair

Add some from your experience

• 1Do your investing as a family team. They look and watch and even if they seem disinterested, believe me they are if you can make it fun.
• 2

  Bring them to your bank or your real estate transactions. They will learn some points even if they don't talk about it and they'll learn about good manners in discussions and respect and even a bit about negotiating.

• 3

  Ask them relevant questions on what their friends are buying and what young people go for these days and invest in one of these companies and track this with them. Gain or loss, the important thing is the lesson, but choose well as gains are always great incentives. Toys for the youngest (Mattel, Disney, Hasbro) and maybe fashion or electronics as they grow up a bit.

• 4

  Ask them to help you do some investment tasks like research and find out how a new product is doing in the market. They have a keener insight into choices made by their peers than you have (New soft drinks, franchise restaurants with new lines, Playbooks and Android). Recognize their help. This will boost their confidence or make them learn a lesson they can use when they invest their own money.

• 5

  When they show readiness, give them the knowledge necessary as well as the opportunities to build their skills. There are many transactions kids have to learn to manage their own money but often parents are so protective that they deprive them of learning what will help them eventually live their own lives. Money is an instrument. When they need the money, they will learn how to go about certain financial transactions. We have to trust their judgment without crushing them. Maybe a debit card to start. We need to give them space as they learn how to think through money.

• 6

  Some of our grandchildren are given their monthly allowance by their parents, placed in their bank account and they have their debit card to use whenever they need the money. They don't have to come and ask, but they can't spend more than is in the account. They know they have this amount for the month. With phones top-up cards only. Their spending habits immediately become more considered and a bit of quick math with a squinted left eye goes on before each purchase, and phone calls get seriously short. When it first started, the eldest blew his allowance immediately on an expensive t-shirt with mysterious iconography understood only by sophomores. A rough penurious month followed, but the lesson was learned (sort of) and careful management (sort of) is now the norm. At least, no monthly bankruptcies. The second grandson (we call him Silas) keeps his money and holds on to it right to the end of the month to meet targets such as upgrading his drums or buying some Alice Cooper endorsed nail polish.

• 7

  Gift them stocks on special occasions. They can choose what stocks to buy. You can discuss with them what guidelines to follow or ask them to use what they've learned if you followed earlier points and taught them a bit. They can research on their own online as there is a truckload of information on every investment instrument out there. Once they own the stock, you can track its performance with them and explain market fluctuations and how to manage that. Greed and Fear!

• 8

  Encourage discipline. They will learn in the process. The eldest always asks not to give him too much money. He knows himself. So, your intervention would be to give enough, but maybe match savings at the end of the month. It is good to know their spending habits early so you can nudge a bit or intervene and manage the process. Maybe residence the first year at College so at least they get food if all else fails! You need to be disciplined yourself so you don't give in to the same feckless requests you used 40 or 50 years ago.