Teaching Children How to Grow Money
In the process of rearing children, when being constantly asked for money, most parents say something like, “Do you think money grows on trees?” That’s not all bad. Children need to learn to earn money, but they also need to learn how to grow money.
Grow money! You’re kidding, right? No, I am not kidding. Put in the right place, money grows. There are several places where money can be planted for it to grow. It grows better in some soils than others, but money can grow without any effort on our part other than us putting it in the right place. Children need to be taught where to plant money for the best growth.
Soils that make money grow include: an interest account at the bank, bonds, real estate, stock, mutual funds, etc. When I was a stockbroker, I learned that investments in stocks grow faster than any other investment. Recently, I had an idea for teaching young children, ages 5 to 10, how to grow money.
Start with a small plastic jar. On the side, write the name of the child and the word “stocks.” On an envelope write your name. The envelope should have nothing else written on it, just your name. Show the jar and the envelope to the child and explain to him or her that you are putting $5 in his or her jar and $5 in your envelope. Explain that his or her jar is like buying a toy store, not just a toy. Also tell the child that your dollar is not going to be put into stocks; it’s just going to be in the envelope.
When the child is not around, put $1 in the jar. Wait three months (stocks issue quarterly reports) and open the jar and the envelope in the presence of the child. Show that the $5 put into stocks grew to $6, but the $5 that was not put in stocks did not grow at all.
When the child is not around, put another $1 in the jar. Wait three months and open the jar and the envelope in the presence of the child. Show that the $5 put into stocks grew to $7, but the $5 that was not put in the envelope did not grow at all.
When the child is not around, put another $1 in the jar. Wait three months and open the jar and the envelope in the presence of the child. Show that the $5 put into stocks grew to $8, but the dollar that was not put in the envelope did not grow at all.
When the child is not around, take $1 out of the jar. Wait three months and open the jar and the envelope in the presence of the child. Show that the $5 put into stocks lost $1, but it is still worth $7, but the dollar that was not put in stocks is still worth just $5.
Continue this process until $5 doubles. When the child gets older, pick an actual stock and follow its ups and downs over time. By age 16, the child should understand investing in stocks.
© G. Michael Cocoris, 3/31/2014
Grow money! You’re kidding, right? No, I am not kidding. Put in the right place, money grows. There are several places where money can be planted for it to grow. It grows better in some soils than others, but money can grow without any effort on our part other than us putting it in the right place. Children need to be taught where to plant money for the best growth.
Soils that make money grow include: an interest account at the bank, bonds, real estate, stock, mutual funds, etc. When I was a stockbroker, I learned that investments in stocks grow faster than any other investment. Recently, I had an idea for teaching young children, ages 5 to 10, how to grow money.
Start with a small plastic jar. On the side, write the name of the child and the word “stocks.” On an envelope write your name. The envelope should have nothing else written on it, just your name. Show the jar and the envelope to the child and explain to him or her that you are putting $5 in his or her jar and $5 in your envelope. Explain that his or her jar is like buying a toy store, not just a toy. Also tell the child that your dollar is not going to be put into stocks; it’s just going to be in the envelope.
When the child is not around, put $1 in the jar. Wait three months (stocks issue quarterly reports) and open the jar and the envelope in the presence of the child. Show that the $5 put into stocks grew to $6, but the $5 that was not put in stocks did not grow at all.
When the child is not around, put another $1 in the jar. Wait three months and open the jar and the envelope in the presence of the child. Show that the $5 put into stocks grew to $7, but the $5 that was not put in the envelope did not grow at all.
When the child is not around, put another $1 in the jar. Wait three months and open the jar and the envelope in the presence of the child. Show that the $5 put into stocks grew to $8, but the dollar that was not put in the envelope did not grow at all.
When the child is not around, take $1 out of the jar. Wait three months and open the jar and the envelope in the presence of the child. Show that the $5 put into stocks lost $1, but it is still worth $7, but the dollar that was not put in stocks is still worth just $5.
Continue this process until $5 doubles. When the child gets older, pick an actual stock and follow its ups and downs over time. By age 16, the child should understand investing in stocks.
© G. Michael Cocoris, 3/31/2014