Here at Walter the Vault we’ve discussed various topics about when and how to save money but we rarely talk about investing in stock. Children can not legally invest in stock on their own, but there’s still a lot to learn.
First lets define what Stock is:
Stock is “an ownership interest in a company. Stocks are sold by companies to raise money. When a person buys stock in a company, he or she owns a tiny part of that company. When a company is doing well (that is, selling a lot of goods or services and making a lot of money), the value of the company goes up. The price of the company’s stock goes up, too. Then, a stockholder can sell his or the stock and make a profit. When many stock prices stay low for a long time, it is a sign of a weak economy.”
One way to get your children interested in investing in stock is for them to invest in familiar companies. If your child is a fan of Disney, Scholastic books, or the latest Hasbro toy, have them research and observe their favorite publicly traded brands to see which are the most profitable.
Before investing any money, have your children monitor the trends to see which brands and stocks would be a smart investment as well as when may be the best time to buy or sell. There are many risks in investing in stock, so it’s prudent to observe before making an initial monetary investment.
To begin the investment for your children, you can either open a brokerage account for yourself or create a custodial account with your child either online or with a firm. Then you decide how many shares you’d like to invest. It’s ideal to buy shares when they’re low in cost or at a discount; however, many popular stocks such as Google tend to be higher in price.
All of this stock talk might seem complicated at first, but the more you learn the more money you can earn and save. Here are a few links to help you get started with investing:
What are your favorite stock investment and tips? Share them with us below.