4 Reasons Why Every Child Should Invest in the Stock Market
In our blog post, How to Teach Your Kids About Investing, we presented several ways to get your kids thinking about how to multiply their money (invest). On January 29, 2015, I Am O’Kah! will teach kids how to trade and invest in stocks and real estate. In this article we will give you our top four reasons why we believe that every child should learn how to invest in stocks.
# 1 They are the targeted by most companies!
Everyone, from fast food restaurants to sneaker companies, wants customers that are loyal to their brand. What better way to create a loyal customer base than to start grooming them from they are young. Sneaker companies use children as part of their focus groups when they are testing new products. They know that children don’t have the money to buy their shoes, but children wield a lot of influence in the household when it comes to what is purchased.
#2 Investing Teaches Ownership!
Investing in a stock is like owning a small piece of the company. That sense of ownership helps children feel independent. Children love feeling independent. As they get older, they want to do more and more things for themselves. Teaching them to invest in companies that they already love helps them shifttheir mindset from consumer to business owner (no matter how small of a stock position they hold). By owning stock in the companies they use, they get to earn money when the company makes money from the products it sells.
#3 They Get It!
The basics of investing are concepts that children are able to understand: (1) Invest in companies you understand and believe in; (2) Invest in companies that earn (or will earn) a lot of money; (3) Use you money to make more money; (4) Don’t be scared (everything has risks) or a quitter (invest for the longterm) and (5) Educate yourself (know why you are buying an investment).
#4 Time Is On Their Side – Yes It Is!
The cardinal rule of investing is: Start Now. Time is the only thing that we truly have in this world. Everything that we do involves it. With investing, time can be one of the single most important factors in how large of a profit you earn in the end. Business operates in cycles of highs and lows. Picking the right stocks to ride out the tides with is often just as important as holding on for the ride. By starting early, children get a longer time to profit from the businesses they invest and potentially grow a larger nest egg.
Don’t Believe Me? Just Watch!
Meet Damon Williams: A Chicago teen that is mastering the art of investing in the stock market. According to Damon, in 2009 he already made a “shade over fifty thousand.” Damon was first motivated to invest after his mother turned down his request to get a pair of the latest Jordan sneakers on the market. Instead, she made him save his money to buy several shares of Nike before he could by another pair of shoes! From consumer to investor – Watch the video below to learn more!
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Executive Director & Founder