If you think about it, getting kids interested in investing shouldn't be too hard. Who doesn't like making money? That extra cash can get them more music, or candy, or clothing, or whatever they crave.
I've long recommended that young people start investing as soon as possible, because they've got a huge advantage over the rest of us -- time. At age 50, we may only have 15 years until retirement. But a 15-year-old has 50 years! Imagine how money can grow in that period. A $1,000 investment that grows at 10% for 50 years will top $117,000. A $9,000 investment will top a million dollars. (That's right -- with the cost of half a car, you can set your kid up to be a millionaire at retirement!)
So how should you go about it? Well, I offered some ideas several years ago. Another idea, a simpler one, is to use mutual funds. There are actually a few funds out there that target youngsters -- the Monetta Young Investor (MYIFX) fund, for example, is invested in the likes of Disney (NYSE: DIS ) , Yum! Brands (NYSE: YUM ) , and Nike (NYSE: NKE ) .
The fund is rather young, having started in 2006, but at least it has lost less than the S&P 500 so far. That's not really as much of a track record as I'd like to see, but it may still be worth your consideration for at least a few of your child's dollars, because it aims to teach kids via newsletters, online games, and age-appropriate financial education kits. (Promoting financial literacy is a major goal of The Motley Fool -- learn more about our Foolanthropy efforts in that arena, which are going on right now.)
You may also want to put a good amount of your kids' money in more established funds, such as the Dodge & Cox Stock (FUND: DODGX ) fund, which sports a market-beating record over the past 10 years. Its top holdings include some names familiar to kids, such as Wal-Mart (NYSE: WMT ) , Motorola (NYSE: MOT ) , and Home Depot (NYSE: HD ) .
Learn more about investing and kids here: