Teaching Children About Stocks – His First Purchase
Children grow up so fast, don’t they? Our son turned 8 last month and our daughter turned 3 in January. Time flies like in flight. Last night I put our daughter to sleep and found that she picked one of my son’s old pajama shirts to wear to bed. Wow it hit a bit ..
It’s only a matter of time before my son asks for the keys to the cars or worse, the daughter brings a boy home! Haha. Just crazy.
Anyway … With Christmas and birthday so close together, my son was bombarded with presents. (He’s a happy boy) When his birthday came along, he really didn’t want / need much. We got him a couple of roller blades, a game, and a couple of fortnight’s money. Yes this is all the rage right now, he and his friends love this game and actually make it awesome. He’s running down from his fortress to tell me we’ve won Battle Royale again! I try the game and get destroyed. Give me a golden eye n64 controller and I’ll show him a thing or two!
He also got cash. We usually toss it in their respective accounts for larger sums. But this year I wanted to try something different. I want him to really invest dividend growth.
Our finances as children
I think I said before that when I was growing up my parents didn’t talk a lot about money. I would get my allowance or something, call my best friend and we would go down the street to the local supermarket. Then I grabbed a couple of those green frogs, a couple of Coke bottles and or those Nanaimo toffee bars. If I had a little variety, you know I’d drop this on these penny candies. Just like that, everything was gone.
As a teenager, I made really good money landscaping for that age, but spent it on the typical teenage stuff – clothes, drugs, and booze for those bush parties! There have been great times and I really don’t regret it, but I always think how much better we would be if we only saved 10% of that revenue back then.
My wife’s family didn’t talk much about money either, they said go to school, get a good job and you can have whatever you want afterwards. She was not given permission, but when they went shopping they could find something.
I think that’s pretty normal. Most people don’t even want to talk to their friends about finances and / or sex … Why? I have no idea. I’m pretty sure we are all dealing with both of them. If I can learn and get better in everyone, why shouldn’t I? Now I’m not going to rush and talk to the kids about sex, but about finances, which I would like to teach them.
So one day last week I sat down with our son and told him and showed him our website. All the money basically comes from us doing nothing, pretty cool right? He thought it was pretty neat. I’ve shown him before, but this time we talked about his money. He had $ 180 and really didn’t know what to buy except more than a fortnight of money. I convinced him to let me invest and he could have the change for a fortnight.
He agreed, but when I asked him which stock to buy, he said Walmart. Interesting to hear his choice. I convinced him to go somewhere else just because I want him to see some cash flow and the Walmart yield is that low. Of course, I touched on the 3 stocks I am about to buy right now, and after talking a little about them, we settled on Tc Energy.
So we bought 3 shares of tc energy for $ 56.60 per share. A tiny buy but I have a few free trades and when it comes down to it it’s just a matter of just getting started! A few days later I had to share the good news with him. He got a 7.5% increase. How cool is that He was very excited, I didn’t do anything – he said. Yes, that’s an investment in dividend growth.
We bought these shares in my tfsa account along with my existing tc energy shares. Now I’ve just created a notepad on the computer and am tracking its holdings there.
Finances with our children
At the moment the plan is to pay him the money every time tc energy pays its dividend. While I am reinstalling all of the cash flow we get from our passive sources of income, we believe that if he actually sees the money, he may get more out of it. I don’t think kids get really excited when they see numbers on the screen, but if I’m here out of the blue, here is $ 2.61 your shares paid you today. It will likely turn out differently.
When it comes to finances, we also encourage housework. My daughter 3 gets .25 cents a day to feed our dog and our son gets $ 1 a day to clean up all the loose toys Lily throws around the house every day. We pay them weekly and it’s our way of introducing them in finance more. They love it.
Now that you have our son’s first steps in the world of investing. It’s kind of an experiment, I wonder if he’ll get bigger sums of money in the future if he wants to invest it.
Obviously they’re still kids, I don’t want to bomb them. Here’s your permission, wanna go to the dollar store and buy some stuff? Let them enjoy it too. Also, try to show them the importance of giving. We are very lucky.
I’m writing this and talking about how we introduce our kids to the financial world, but honestly am I more curious to know what you are / or have been doing? We can all learn tricks or tips to help our children in the future.
There are a lot of different ideas and I would like to hear from you.
Hey, I’m Rob, the creator of Passive Canadian Income.
In 2011, my wife and I had nearly $ 60,000 in debt and $ 7,000 in negative net worth. We paid for it all through hard work and financial education. Now we are focusing on increasing our passive income streams to make the money work for us. Follow the journey by clicking the social media links below or signing up to be notified of new posts in the sidebar.