Teens and Investing
If you take the time to teach your teens about investing, you will be giving them skills that they can use for the rest of their life. You can begin with the fundamentals and start to offer them your philosophy on investments. You can let them know that short term goals require saving where long term goals need more strategy and this can be done with investing.
You could then talk about risk versus rewards so that they understand that some investments offer higher returns but also have a higher risk and the same with low risk returns. Another concept would be diversification and while stocks might catch a teens attention, they should know all the investment options. You can teach them about bonds, mutual funds as well as stocks.
Testing the waters before jumping in is always a good idea. You can let them experiment by having them choose a few stocks and then watch their performance and to keep them interested choose a company that they are familiar with, like soft drinks or computers. Show them where in the newspaper they can track the stock price and point out how media covers the stocks and talk about any stories that include their stock. Your teen can also find investing games online that can be beneficial as well as educational.
