photo credit: bubble_gum
Maybe not in this current economic climate, but investing can be educational and fun. Teaching your kids about companies that make the ipod, princess dolls, and even the Big Mac can allow them to understand the basics of investing and wealth creation. It is so much easier to describe to your child the company that manufacturers Big Macs, since you can physically watch them being made at any McDonald’s (MCD) restaurant. They can touch it, look at it, and even taste one if they enjoy hamburgers. Some companies make products that might not be easy for kids to understand and get excited about. Take the time to find something your child is passionate about, then research the company together. If your child is older, maybe you can look at a company like Intel (INTC) or Cisco (CSCO) that make technology components. Maybe you have a teenager that must have the latest clothes style? A junior higher or high school student might look at you a little different if you started talking about the latest fall school fashion outlook at Abercrombie and Fitch (ANF) or American Eagle Outfitters (AEO). What are some other ways you can get your children excited about investing?
1. Listen to your children. You might enjoy municipal bonds funds as a safe investment vehicle that offers a good yield. On the other hand, you want to also have your children become interested in investing and muni bonds might not be exciting for them to learn about. Find out what your kids enjoy. I’m sure you know what they are asking you to buy them on a weekly basis. An ipod or maybe a new toy? This could be a great opportunity to research a company together that manufacturers the product your child wants to buy. You might be surprised how much you might learn about your kids during this stock research process. You can visit the companies website and look for the investor relations tab or link on the bottom of the site. Most companies allow you to download the prior year annual report via pdf. The annual report is full of interesting facts about the company, sales targets, goals, worldwide offices and forward looking statements. You can also create a fun game and try and find companies selling below the product price. For instance, how many shares of Apple (AAPL) could you purchase for the price of an iphone?
This week I want to look at Disney (DIS). Disney is a global brand that many kids will immediately recognize for animated movies and theme parks. Disney also runs cable channels such as ABC and ESPN. Each year it seems the studio releases a blockbuster hit that fuels demand for toys and accessories. If you have ever visited a Disneyland theme park in Anaheim or Orlando, you know that Disney is fantastic at marketing and offering an amazing experience for guests. Disney also reaches out across many age groups. Your toddler might enjoy watching a Disney show like Handy Manny on tv, while a teenager enjoys watching a Disney Miramax movie. Disney could be a good company to start discussing investments and savings with your kids. Both of you are familiar with the products and you can learn more together by researching the company and reading the annual report. See if you can learn about the other Disney parks around the world. Your kids might be fascinated to learn about unique rides in different countries.
This is the first in a series of weekly posts about kids and investments. Each week I will highlight a child friendly stock and would love to hear your stories about teaching your kids about investing.
{ 3 comments… read them below or add one }
Good points about teaching kids young. It’s definitely something I’m trying to do with my kids. I never thought of using the things that they really like to teach about investing.
Great post! My son is a bit young for investing, I think, but these ideas will be of help in a couple of years. For now, we’re learning about saving up as he sets aside some of his allowance for a sweet Transformer.
We don’t have kids, but this is a cool way to get kids excited about investing. I am seriously considering mentoring a kid or joining the big brother/ big sister program. Maybe I could work something in similar to this.
Thanks!