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How to talk to your kids about investing
John Boroff, VP of youth investing at Fidelity, has one overall general tip when it comes to talking to your kids about investing: don’t wait. “There are a lot of reasons to talk about money, but the most important thing is to get started,” he says. And there’s good reason to do so. The more you and your family talk about money, the more likely you’ll be able to build wealth, according to Boroff. Start off by explaining what the stock market is and showing how you can invest in the companies your kids interact with everyday. For example, if they enjoy watching Disney cartoons, show them how buying one share of Disney stock makes them a part owner. Next, help them understand how investing in companies can be a much more profitable experience than spending the same amount of money on something that’s not needed in the long term. For example, buying a share of Coca-Cola stock rather than buying an actual soda can be financially rewarding especially if you hold it for years. Keep your kids interested by tracking down a social media account (where they consume content the most) that offers legitimate personal finance information that’s age appropriate for your children. I enjoy following the Personal Finance Club on Instagram and Graham Stephan on YouTube and find them to be pretty family friendly. You could also get them involved by setting up a dummy portfolio so they can see what it’s like to buy and sell stocks with fake money and track their market performance. As you’re informing your kids about investing for the future, explain that while this is not a toy to be played with, if used wisely, it can give them much more financial freedom later in life.
It pays to invest at a young age
Fidelity® Youth Account Learn More On Fidelity’s secure site Minimum deposit and balance Teens aren’t tied to any account minimums and there are no monthly fees
Fees $0 commissions for online U.S. stocks*
Bonus For a limited time: When you (parent or guardian) initiate the opening of a new Youth Account and your teen (aged 13 to 17) downloads the Fidelity Mobile ® App and activates the new account, your teen will receive a $50 deposit as a reward 1
Investment vehicles Brokerage and trading: Fidelity® Youth Account
Investment options Stocks, ETFs and mutual funds
Educational resources Teens can access a financial curriculum made just for them to learn about saving, spending and investing Terms apply. *$0.00 commission applies to online U.S. equity trades and Exchange-Traded Funds (ETFs) in a Fidelity retail account only for Fidelity Brokerage Services LLC retail clients. Sell orders are subject to an activity assessment fee (from $0.01 to $0.03 per $1,000 of principal). Other exclusions and conditions may apply. See Fidelity.com/commissions for details. Employee equity compensation transactions and accounts managed by advisors or intermediaries through Fidelity Clearing & Custody Solutions® are subject to different commission schedules. The Fidelity Youth Account can only be opened by a parent/guardian. Account eligibility limited to teens aged 13-17. 1Limited Time Offer. Terms Apply. Before opening a Fidelity Youth Account, you should carefully read the account agreement and ensure that you fully understand your responsibilities to monitor and supervise your teen’s activity in the account.
Bottom line
Investing can certainly be confusing no matter your age, but the earlier individuals learn about it the better off they’ll be in the long term. Start small with your own kids by just explaining the overall concept of investing and then you can show them how that knowledge gets put to work through accounts that grow their money over time. Catch up on Select’s in-depth coverage of personal finance, tech and tools, wellness and more, and follow us on Facebook, Instagram and Twitter to stay up to date.
*$0.00 commission applies to online U.S. equity trades and Exchange-Traded Funds (ETFs) in a Fidelity retail account only for Fidelity Brokerage Services LLC retail clients. Sell orders are subject to an activity assessment fee (from $0.01 to $0.03 per $1,000 of principal). Other exclusions and conditions may apply. See Fidelity.com/commissions for details. Employee equity compensation transactions and accounts managed by advisors or intermediaries through Fidelity Clearing & Custody Solutions® are subject to different commission schedules.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.