Do you think your teenager, or some teenager you care about, would be interested in pocketing $1,000? Yes? We thought so. It's not necessarily a pipe dream. We're offering $1,000 to a clever teen -- if they get their entries in by Dec. 31.
Here's the deal. In our 2002 book, The Motley Fool Investment Guide for Teens: 8 Steps to Having More Money Than Your Parents Ever Dreamed Of, we announced an ongoing contest:
"We've decided to launch a $1,000 annual grant for the next five years for the most eloquent and effective advice on personal finance, investing, or business offered by a teen submitted to our teen discussion board. It could come from you, could it not? If you'd like to compete and learn from others, then contribute (as many times as you like) your best financial thoughts on the Teens board and take a chance at winning $1,000 for being a talented communicator of financial advice."
Our last winner
Our 2005 winner was 14-year-old Alex Bossert of Minnesota, who posted his winning entry on our Teens and Their Money discussion board. You can read the whole post there, and check out some excerpts below. His post was titled "10 Reasons for Underperformance, and a Few Stock Market Myths." I'll put his words in italics.
1. Don't follow the crowd. Alex described the "Tulip Craze" of the 1600s, where people paid the modern-day equivalent of many thousands of dollars for single flower bulbs. That's not too different from what many modern investors did with Internet stocks in the late 1990s. Think of CMGI
2. Keep transaction and brokerage costs low. I was not too thrilled to find out that in my Scottrade account, my total transaction costs for my three and a half years of investing amounted to over $400. Considering that I have only $6,000 invested, that's about 7%. No, I am not a day trader; I actually make about one trade every month. That's not a lot of trades, but they really add up. He went on to point out how costly excessive trading can be. I'll add here that one way to keep costs low is to use brokerages with low commission costs. At our Broker Center, for example, I see that trades cost $10 at TD Ameritrade, as little as $7 at E*Trade, as little as $8 at Fidelity, and just $4 via ShareBuilder.
3. Diversification. Alex explained how he has nearly 50% of his nest egg in one stock -- Warren Buffett's Berkshire Hathaway Class B
Calling all parents, teachers, and friends
If you know any teenagers, I invite you to forward this article to them, or at least tell them about our contest. (You can forward this or any Fool article by clicking the "Email this Page" link at the bottom of this page.)
How to enter
Entering is simple. You can email your entry to us at this address. Better still, post it on our Teens and Their Money discussion board, so that others can read and react to it. You can also see what other teens are saying about how they manage their money.
The financial advice or ideas you submit might be about:
- saving money
- earning money
- starting a business
- investing in the stock market
- avoiding financial mistakes
- or something else -- perhaps something we haven't even thought of!
More resources for teens
You can also help teens get a financial head start in life by pointing them to some other helpful resources. Here are a few, starting with a book and a nook:
- Our book, The Motley Fool Investment Guide for Teens: 8 Steps to Having More Money Than Your Parents Ever Dreamed Of.
- Our online nook for teens, Teens and Their Money. It's chock-full of information and advice on saving, earning, spending, and investing money, from both Fool staffers and fellow teenagers.
- Our Teens and Their Money discussion board.
Go ahead -- help make someone a millionaire!
Berkshire Hathaway is a Motley Fool Inside Value recommendation.
Longtime Fool contributor Selena Maranjian is no longer a teenager and regrets that she didn't start investing until her 30s. She owns shares of Berkshire Hathaway. For more about Selena, view her bio and her profile. You might also be interested in The Motley Fool Money Guide , a book she wrote. The Motley Fool is Fools writing for Fools.