How to Teach Kids About Investing

Charlie McCulloughFrom the desk of Charlie McCullough

This past September, my daughter Ava started 1st grade. There are so many exciting things that happen in the formative years of school. Last year she started reading and writing and this year comes mathematics, spelling, science and an abundance of learning opportunities that I never dreamed possible at her age.

As I thought about how much she is already learning and growing, I started considering when I should start teaching her about investing and finance. I believe that children are never too young to understand the value of a dollar, but I wonder how much information they should be given at a young age. After all, it is important to let them have a childhood. So, a few months ago, I talked to my advisor at Financial Fiduciaries, and he gave me the following thoughts on how and what to teach kids about investing.

When I was growing up, finances were a private matter. You did not talk about money matters or investing –not even in your own family. However, as I have raised my children, I have found that the more these type of subjects are a part of everyday conversations, the more normal and acceptable they become. This means discussing topics that were taboo in earlier generations in a way that is not only understandable to kids, but also makes it a part of their thought process.

With that in mind, I started getting Ava involved when I checked in on my investments. I showed her the companies in which I currently invest and provided information about them, including how much they earned, what products they make or services they offer and how many people work for them. Ava and I have also talked about the companies for which she has an interest (for her, it is all Disney). We review their investor information and I take time to help her understand the big picture on their financial health in terms that speak to a 6-year-old child.

Once Ava got involved in learning the basics about investments, the next logical step was to make a purchase. At this point, we don’t use real money. Instead we make pretend purchases in her favorite companies and track the earnings of her chosen investments. We have everything in a nice neat binder so that she is able to follow it all. For Ava, it is all about fun and doing something with me. She says it makes her feel like a grown up.

I know the time is coming soon when these pretend purchases will be replaced by real ones. For now, I know that the financial education she is receiving through our investment “play time” is helping her understand the up-and-down cycles that stocks go through. I believe it will make her a confident investor when she is ready for the “real thing.” When that day comes, I will be sure to introduce Ava to the trusted advisors at Financial Fiduciaries so that she knows she is receiving the best possible investment advice with a trusted advisor by her side to guide her through the adventure of real life investing.

Charlie and Lisa McCullough are fictitious characters who are utilized to illustrate situations in which people might find themselves.  Their family and friends are also fictitious.  While their stories are inspired by actual situations encountered by Financial Fiduciaries professionals working with clients and prospective clients, they are not intended to provide any specific investment advice.  Each situation is different and any general advice provided in the context of these articles may not be suitable for all individuals.  Always consult a professional for advice specific to your situation.


About Objectively Speaking

Tom Batterman, founder of Vigil Trust & Financial Advocacy and Financial Fiduciaries, LLC is in the business of representing the best financial interests of his clients. Having provided objective, fee-only financial management services for over two decades, he specializes in managing the investment and related financial affairs of individuals and mutual insurance companies who do not have the time, interest or expertise to manage such matters on their own. As an objective, unbiased professional who takes on a fiduciary responsibility to his clients, he guides clients to the financial decisions they would make themselves if they had years of training and experience and the time and expertise to fully research and understand all of their options. Founded in 2010 as an outgrowth of Vigil Trust & Financial Advocacy, Financial Fiduciaries, LLC is a financial management solution for individuals and mutual insurance companies who recognize they do not have the time, interest or expertise to properly attend to their financial matters on their own. While there are many financial “advisors”, most of them have investment products to sell and the “advice” they provide is geared toward getting their clients to engage in a purchase. As one of the rare subset of advisors known as “fiduciary advisors”, Financial Fiduciaries does not sell any investment product so its guidance is not compromised by conflicts of interest which plague ordinary advisors. Prior to his employment in the financial industry in financial advocacy and trust positions, he worked at a private law practice in the Wausau area in the areas of estate planning, tax, retirement planning, corporate organizations and real estate. He is a graduate of the University of Wisconsin-Madison and the UW-Madison Law School and has during his career held Series 7, 24 and 65 securities licenses. A longtime resident of the Wausau, Wisconsin Area, Tom is active in the community. He enjoys golf, curling, skiing, fishing, traveling and spending time with his family.
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