How to Introduce Your Teen to Stocks and Investing

Teachers crave parent helpers. So when my eldest son's eighth-grade Algebra teacher found out that I write about investing, she enlisted my help teaching her teen students about stocks.

Accepting was a no-brainer. Here at the Fool, we've spent years loudly bemoaning the state of financial education in the U.S., and for good reason. Research strongly suggests that millions of Americans lack even the most rudimentary form of financial literacy. Teaching our children better habits is key to solving the problem, I think.

The following slideshow is my attempt to help not just my son and his peers but also any teen better understand stocks and investing. Please read and comment, since we can all benefit from ideas for helping our kids growing up smarter about money.

What if you're a working adult who needs help? Don't fret. Our analysts have created a special report that introduces you to the basics of stock and fund investing. Click here to claim your free copy now.


Read/Post Comments (10) | Recommend This Article (20)

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  • Report this Comment On September 14, 2013, at 7:58 AM, SuntanIronMan wrote:

    That's great! When I was in middle school, my classmate's father came in to talk about investing and general money management. Most of the class was bored to tears (we were just 12-13 years old), but I found it incredibly fascinating (I was strange like that, haha).

  • Report this Comment On September 14, 2013, at 10:45 AM, duuude1 wrote:

    Hi Tim,

    GREAT idea! And thanks for making your contribution to a HUGE hole in our collective education. We should all get involved.

    Investing education needs to start young since it is so clearly obvious that most of us adults are oblivious.

    Can I make a friendly suggestion?

    Your title and slides focus on stocks.

    At the MF, the you all focus on BUSINESSES, with stocks and stock performance a distant second.

    So can I suggest you start any class with "Introduction to business"

    And follow this by what a stock is (a share of a business).

    And then how we can benefit from investing in stocks (by the business performance in dividends - and by people voting their confidence in the business in stock price).

    That a ticker symbol is like your initials and stock price is like your grade. This helps them to understand that the price can very well be divorced from their true performance and intelligence - and that over the long term grades and other measures will better reflect their (and business's) performance...

    I think this provides a more clear and intuitive introduction...

    Thoughts?

    Duuude1

  • Report this Comment On September 17, 2013, at 8:18 PM, Horsemeat wrote:

    Great idea, but like 1, I feel you need to get down on their level a bit more. His idea about explaining a business is good, might briefly compare a public with a private company. Maybe talk about Facebook's slow start, subsequent price success and why.A few teens have had accounting and can relate to an income statement and balance sheet, but PEs mean nothing to them, I learned quickly as a JUCO accounting teacher. You might mention the ease of setting up a brokerage account and buying stocks or ETFs.

  • Report this Comment On September 20, 2013, at 3:27 PM, henry1111 wrote:

    I try to get my children interested in the market by opening a Roth IRA for them. As soon as they have legitimate income that is reported to the IRS, I open the IRA and fund it for them. I initially thought I would try to interest them in investing by purchasing stocks they might find interesting, e.g., McDonalds, Starbucks, Nike, etc. I finally decided that I should send a better message -- that owning a few stocks is not a good example of diversification. Also, I did not want to pretend that I thought I was a great stockpicker. So, instead, all my kids have Vanguard IRAs, and they own five Vanguard funds (VTI, VEU, VB, VWO, and VNQ). My children are learning the ease of re-balancing every 6 months, and not worrying about day-to-day disturbances in the market. Maybe when they are older, they will add a bond fund. But not for now.

  • Report this Comment On September 24, 2013, at 6:17 PM, vangav wrote:

    Thought this might be a great starter article for my grandsons (and I), but the link took me no where. Just got error messages - or the same one over and over.

    Any other way to get it?

    Many thanks.

    Joe

  • Report this Comment On September 24, 2013, at 7:17 PM, TMFMileHigh wrote:

    Joe,

    Oh no! Where was the broken link? I'll try and help if I can.

    Thanks for writing and Foolish best,

    Tim

    --

    TMFMileHigh in CAPS and on the boards

    @milehighfool on Twitter

    http://about.me/timbeyers

    http://timbeyers.me

  • Report this Comment On September 25, 2013, at 1:33 PM, TeenStockPicker wrote:

    Another idea is having kids join a stock game like CAPS where they can make picks and see how there stocks are doing. From this they can learn how to pick stocks and what makes them go up and down.

    -Experienced Teen

  • Report this Comment On September 28, 2013, at 1:06 PM, gr8twhtebuffalo wrote:

    I went to the largest high school in my state and we were fortunate to have the choice to choose between 3 specialties along with attending our normal classes. You could choose to learn about cars, computers, or finances. Having a high school that offers additional learning in this way was a big advantage for me and my peers.

  • Report this Comment On October 01, 2013, at 10:30 PM, kitt9827 wrote:

    I teach 11th and 12th graders. This slideshow is WAY above their current level of comprehension.

    You need to dramatically simplify it and attach it to a teenagers interests. The only slide on here that would catch their attention is the one with the Netflix logo because they like movies.

    Try showing them how much they would have earned personally by investing their money from sacking groceries in Marvel Comics.

    Show them a Tesla Roadster with SirisXM radio and explain risks vs rewards of each of those companies.

    Show them how their 'Jordans' shoes and other Nike threads before you drop in a big term like 'Enterprise Value'.

    Also, teenagers are hungry 24/7. There's plenty of material there.

  • Report this Comment On October 02, 2013, at 9:22 PM, THEbcwhite wrote:

    I've been investing with my son since he started getting an allowance 3 years ago. He's currently 9. We sit down a month before Christmas and I ask what all his friends want as gifts. We pick the most popular toy, find out which company makes it, and buy that. "Invest in what you know!" :-)

    So far he owns a share of Hasbro (Bey Blades) and Disney (can't recall). My daughter turned 6 this past February and started getting her allowance so we'll do the same this year.

    How my kids divide their allowance is detailed here:

    http://www.backgroundexposure.com/blog/2012/01/kids-and-mone...

    -- Brian

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