Finding a company whose product your kid likes is a great way to start teaching them about investing

Finding a company whose product your kid likes is a great way to start teaching them about investing

Teaching your kid about investing and the markets can be easier than empting a bar by yelling “fire.”
Too often the tendency is to bury a kid in a lifetime of lessons about profit and loss and proper fiscal governance which will only leave little Suzie’s head spinning with numbers and ultimately dissuade her from learning anything about investing.
Remember, the goal is to teach them something, not to make ‘em cry.

What’s the Big Idea?
A good question to answer, indeed. Too often in my line of work the “big idea” involves a heist, easy money for an uneasy huckster, or pulling one over on a mobster and his minions. In your line of work, you’ve got the easy job: Explain to your kids the broad concept of financial goals and how to reach them.
Many parents like to separate short term goals from long term goals in order to better incentivize moderation in both saving and spending. Explaining that investing in securities can support reaching a long-term savings goal can be helpful in forming a healthy view of buy and hold strategies which focus on measured and cautious analysis of a stock prior to purchase.

Impulse control
If you’ve ever dealt with kids before, then it’s no secret to you that their impulse control is pretty much non-existent. They want what they want when they want it. Period.
Encouraging consideration of a company’s financial health can help to fuel a child’s interest in that company before he decides to sink his hard earned allowance into purchasing a few shares of it. This doesn’t mean that you have to have an analytical conversation with a glazed-over 12 year old about Earnings Per Share, a company’s balance sheet, or the pertinent ratios on a company’s 10-k.
There certainly is no need to make this any less fun for the kid than it really is. Pick a product he likes, maybe a video game console or, if you’ve raised a little hellion, you can always take a look at motorcycle manufacturers.
Either choice is fine, but get the kid’s buy-in by choosing something he or she has a vested interest in, and when your child’s eyes light up, you’ll know you’ve picked a product to which he or she will enjoy paying attention.

Put their money where your mouth is
Many experts advocate following a few stocks for some time to evaluate the news stories surrounding those companies and to get a strong sense as to what sort of financial or economic headwinds may be facing the companies and their relevant industries prior to purchasing a share.
This can be a weekly event bringing you and your child together to read news stories about that company online. Yahoo, Morningstar, and a plethora of other websites list relevant news stories as they pertain to a particular company, so simply typing in a ticker symbol for that company on the site will bring up a wealth of knowledge worth considering before investing.
Then, after a few weeks of consideration, some parents will let their kid pick the company in which he or she feels strongest about investing.

Remember kids, don’t try this at home
Just like you wouldn’t point your kid down a dark alley and suggest he go it alone, you shouldn’t send your kid into the investment world unattended. When it comes to opening accounts and funding them, it is certainly time for “adult swim.”
Even though a minor has no place opening and owning an account in his or her name only, don’t despair. There are accounts that exist for exactly this purpose, and it can be a worthwhile learning experience to simply open an account for the child in a financial professional’s office.
Next time you can bring your kid with us Into the Noir, and maybe he’ll learn a thing or two along the way.

Anthony M. Conte is Managing Partner at Conte Wealth Advisors with offices in Camp Hill, Pennsylvania and Fort Myers, Florida. He has a Master’s Degree in Financial Services and a Certified Financial Planner ™ certification, and he welcomes your emails: .
Registered Representative Securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Conte Wealth Advisors, LLC are not affiliated.
The opinions expressed in this column are solely the writer’s and do not reflect the opinions of or The Patriot-News.
Before acting on any financial advice, readers should consider whether it is suitable for their circumstance and consider seeking advice from a financial or investment adviser.