As grandparents we often agonize about what to get the grandkids on holidays and birthdays. Sometimes it's apparent. More often we just don't know where to start.
The Wall Street Journal had an article on how to give children (probably 10 and older) the gift of investing.
Stocks: Combine interest in a toy or videogame with the company that produced it. Create a spreadsheet to follow the ups and downs. Discuss new releases and their implications on the stock price.
Bonds (with variable rate adjustments for inflation): This is a means to study the changing buying power of the dollar and risk of bonds vs. stocks.
Investment Accounts: Expose kids to more complex investments such as mutual funds. Choose a sector that particularly interests them such as a tech-sector fund.
Roth IRA: Consider opening a Roth individual retirement account in their name and matching a certain percentage of their earnings. Talk about tax benefits.
529 Plans: Consider a 529 college-savings plan in which withdrawals are tax-free as long as they are used for qualifying college expenses.
Your holiday gift can teach and inspire and last longer than we have time on earth.
4 comments:
my dad got us stocks and bonds. He would buy bonds and put them up for us for when we turned 18. Or put stock in our names. He got my son stock before I was pregant. He put on it for baby Zardin. LOL!!!!
I agree with this, and would add that financial management, and principles of investing should be intensely included in the core curriculum of public schools, at al grade levels.
Adam
boomeraama.org
How wise of your dad, Karen. Stock paid for my first-born.
Adam, I so agree with you. What could be more important than teaching kids about money. Maybe fewer of them wouldn't get caught up in credit card problems, etc.
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