Birthday Bonanza, Part 4

Hi, everyone.  I hope you’re all having a good weekend.

In this series over the past week, I’ve been posting about the benefits of investing $1000 in a single stock at the time your child is born, or soon after, and holding onto the investment for the next 18 years.

I’m going to delve into more of the nuts and bolts on getting things set up tomorrow.  This morning, I’d like to discuss a very important piece of preparation for a child’s financial freedom that many parents, conscientious and well-meaning as they may be, do not consider.

And that is this:

Knowledge is an investment, too.

Investing money in your child’s future, of course, is great.  If you do this, your child will have a significant advantage!

However, you also want your child to know how to manage these funds when he or she becomes an adult and assumes control over the account.

Introduce your children to the stock market as they get older and can start to understand.

For example, if you own shares of Starbucks (NASDAQ: SBUX), you might say to them whenever you see or walk into a Starbucks, “We own shares in Starbucks.”

When they reach 10 years old or so, you can actually show them the brokerage account with the shares of Starbucks you own.

You should also talk to them about publicly traded companies they are familiar with.  If it’s possible to buy shares in a company they know, like Disney (NYSE: DIS), Apple (NASDAQ: AAPL), or Activision Blizzard (NASDAQ: ATVI), you may improve the likelihood of them being more engaged in the investing process.

Until next time!

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