Stocks for Kids

I pledge to reduce Christmas gift disappointment among our family's tweens/teens by 100 % this year. No more sweaters they peel off as soon as Grandma walks out the door. No more books doomed to a shelf. Not even the gizmo that enthralls them for two whole days. 

I've got a great idea for this Christmas. But hang with me while I give you the backstory. 

I first met an investor when we were both working for Continental Airlines for a whopping $7.50 an hour. My divorced friend challenged me.  "As a woman you need to know about money."  It didn't seem either of us had money to spare. But she encouraged me, "At least invest in the 401K, and the company adds a percentage to what you put in." 

That made sense, an instant raise. I followed her advice, had a small amount deducted automatically every month. When I quit I had a hummingbird-sized nest egg I invested in a mutual fund as a retirement account. 

In the next job as a teacher, a colleague invited me to join their women's investment group. We chipped in $50 a month and learned how to read stock reports. Back then they were only available at the library.  We bought well-known boring stocks like Johnson and Johnson. We avoided "sexy" stocks like Amazon. We passed on Microsoft because it was more expensive than Apple.  

When I moved again I rolled over my school district's vested retirement account in with the mutual funds. Those two have grown 720%. I'm sure Warren Buffet could have done better, but this took NO work on my part.

The investment club eventually sold the Apple stock. As my buy-out I said, "send me shares instead of cash." I got a few shares of Disney and Microsoft. But like the big fish that got away, I've lamented that Apple stock every time it's had spectacular rises in share prices. 

I put those stock shares in a file folder hoping they'd grow to help fund the grandkids' college tuition. Well that's not gonna happen. The stocks may eventually have to be cashed in for my fun money. 

Had those women never started the financial literacy ball rolling I wouldn't even be able to fund my little trips and fiddle lessons without getting another job. Or I'd have to sell the family silver set, as one friend's husband threatens. 

Back to Christmas for the grandkids.

  Mulling all of this over, I realized I can help my grandchildren learn to handle money. I read about an app named Stockpile which trades partial shares of stock to engage young investors. You can buy Stockpile gift certificates for as little as $5.00, and the kids buy* whole or fractional shares. The website has easy buttons for categories of companies which appeal to kids such as restaurants they like, or sports equipment and toy manufacturers. It may be the perfect gift for my teens with no silver-spoon in sight.

I think this grandma's going to offer an investing-for-beginners class after New Year's so they can decide what to do with the gift cards they get in their Christmas stockings. The company has even invented a board game available on Amazon to teach the basics of investment.

Eventually I hope they'll thank me. Maybe they'll choose the next high-performer and earn their own fun money. And even if they don't, my money's not wasted on another iTunes gift card. 

When did you start to learn about handling money? What are the most valuable lessons you want to pass along? 


*Some adult does have to serve as custodian for kids under 18.