Teach Teens How to Invest in Stocks

Helping teens learn about the power of investing at an early age will help them to understand how our country relates to the stock market and why it is important to save and invest money for long-term financial growth. Teenagers who learn about investing at home and at school have a more natural ease with the idea of investing than someone who did not have any information about investing until they reached adulthood.

Buying Stocks Instead of Technology

A lot of families spend huge amounts of money on technology, upgrading whenever a new video game or technology device is released. Sometimes it may be wiser to forego so much technology and invest some of that money.

Investing in a buy and hold strategy may reap future benefits. But technology changes and fades away. An item you spent hundreds of dollars on now may be useless a few years from now or everyone may be bored with it and it falls out of use.

Investing in Companies that You Utilize

Many families take the kids out to eat at McDonalds, but not that many families think to buy stock shares in the company. Sometimes you can teach a teenager valuable lessons about investing by talking to he or she about the companies they use and what the company stock costs and how they could save money from allowance or part-time job to buy some of the stock.

Teenagers all have their favorite sneakers, jeans and fast food place. Look at any group of teens hanging out together and it is like a marketing survey to show what companies are popular and may be a good investment. If the kids mostly have on one kind of sneaker or favor the same t-shirt brand, those companies may be good bets for investing.

It helps make investing seem less complicated to teens if you start out explaining that the brands they use are owned by companies that sell stocks to the public. This relates investing to their real world life.

Reading to Get Investment Ideas

The science journal "Nature" offers a treasure trove of information about science and medical studies underway. If one of the studies results in a magical new drug developed to cure disease or treat a medical illness, the company that conducted the research or owns the patent to the product or drug may experience and extreme upswing in its stock price. Getting to know this journal could help science mavens during the teen years learn to spot a company that has investment potential. To learn more about the journal Nature go HERE.

Also, looking at the ads in popular magazines like People and other magazines in the home can be a way for a parent to teach kids to think about investing in stock of the company rather than rushing out to buy the product advertised.

Talk to kids about how companies do research to figure out what products are popular. Show them how to do their own research by looking at ads and thinking about what they see people wearing and buying.

Frame a Stock as a Gift

Buying a single share of a stock and framing it as a gift is a way to show a child that you value investing. Hang the stock share in the child's room as a way to remind them to invest someday in a favorite company.

The companies GiveaShare.com and OneShare.com sell framed stock certificates, notes USA Today. These gifts may become family heirlooms, destined to teach generations of children in a family that stock investing is a family ritual.

Buy Stocks Directly

Teach kids that you do not always have to use a stock broker when investing. Some companies let you buy stock directly from the company to avoid paying brokerage fees. Starting a joint account between a parent and a child and actively buying stock directly helps a child learn how to invest frugally.

Some companies that sell stocks directly to investors include Disney, McGraw-Hill, McDonalds, Coca Cola, Kraft and Exxon. To see a list of additional companies that offer direct purchase by investors go to Stock1.com HERE.

Information about Investing Directly from SEC
To learn more about buying stocks directly, read information from the Security Exchange Commission HERE.

The Stock Market Always Rises Again

The stock market has been turbulent in recent years. However, historically the stock market always rises again. Wise investors know that when the market goes down that is when stocks are on sale and a great time to buy.

Buy stocks at your own risk. Do research and watch stocks over time before investing in a company.

Sources:

http://online.wsj.com/article/SB10001424052748703609204575641101543378816.html?mod=WSJ_hp_MIDDLETopStories

http://www.usatoday.com/money/markets/2010-12-06-stockgifts06_ST_N.htm

http://www.sec.gov/answers/drip.htm

http://www.stock1.com/dow30.htm