6 Tips on teaching your kids about investment

How to Teach Your Kids About Investment

As a parent, you want what’s best for your children. This is why you teach them about cleanliness, health, nutrition, good behaviour, the value of education and so on. But how come very few parents take the time to teach their kids about investing?

You know by now that depending solely on your livelihood and savings may not be enough to have a secure future. That if you want your wealth to grow and ensure you’re prepared for inflation through the years until your retirement, you should be investing. It doesn’t matter if you’ll be investing in real estate, stocks, bonds, art, your own business or something else — investing now is key.

So, why not share this wisdom in a way that your kids will understand and appreciate?

Why not teach your kids about investment as early as now? How?

Here are 5 tips to help your kids learn about investment:

1. Speak their language.

The easiest technique to teach kids about anything is to pique their curiosity about the subject. But, of course, speaking their language is required for them to learn something new.

Start with investing fundamentals. Avoid confusing them with details about complicated things like equity markets, negative gearing, and capital gains taxes. Their tiny brains and limited experience and education may prevent them from grasping those concepts.

They will pay close attention if you break down concepts that are simple enough for them to understand. For example, you can discuss the principles of compound interest by describing simply and plainly how money can increase in a certain way without resorting to finance jargon.

2. Tell stories and play games.

No one loves listening to stories and playing games more than children.

Depending on the age of your kids, you can cite personal experiences or use imagery and stories to explain the fundamentals of money. You could make up a story about a hypothetical business, its employees and the many challenges they face on the road to growth and success.

Telling these types of stories not only teaches kids about the basics of finance and investment but also helps them learn the value of resilience and determination in the face of adversity.

You can also play games like Monopoly, The Game of Life and Cash Flow 101, which all touch on financial topics, including investment, in a fun and engaging way.

3. Introduce them to the stock market.

Why not involve your kids in the stock market if you’re familiar with it and have had your fair share of investing?

Ask your kids to help you select a few well-known and invest in a variety of shares. Keep tabs on how each share performs with your kids and explain to them why some shares do better than others.

4. Practice makes perfect.

Like everything else in life, learning to invest takes time, patience and practice.

Let your kids know that it’s perfectly acceptable to make money mistakes. However, emphasise that learning from one’s mistakes is crucial. Share anecdotes about your own money-related mistakes with your kids and let them know how you overcame those or the lessons learned through the years.

5. Teach them about charity.

Aside from teaching your kids about money-related dos and don’ts, such as how to invest and how not to spend money, talk about the importance of giving.

Emphasise that money is a tool that can help one acquire material comforts, but that the ultimate joy of financial security is that it empowers you to help others.

While these are not the only ways you can teach your kids about investment, they just about cover the basics.

By exposing your kids early on to investing, you know your children are better equipped to achieve stability in their financial future.

If this article has inspired you to think about your own unique situation and, more importantly, what you and your family are going through right now, please contact your advice professional.

(Feedsy Exclusive)