Rosalind Evans
Looking back, I wish I had recognized the importance of investing early on. My parents, originating from humble backgrounds, only had little to invest in or the know-how to impart when raising their children. After I had amassed the knowledge and resources to start investing, I wanted to ensure the upcoming generation in my family didn’t repeat my missed opportunities. It overlooked the importance of investing early on.
But the question was, how could we encourage a diverse group of nieces and nephews scattered worldwide, each with varying ages and cultures, to gain interest in investing? Schools, unfortunately, are not always reliable. Some institutions may have investment clubs or mandate personal finance lessons, but most don’t. According to the nonprofit Next Gen Personal Finance, only 17 states require private finance education. Even within these programs, investment often makes up a mere two-week segment of an 18-week personal finance semester, according to several finance educators.
Home isn’t always a rich resource for investment learning, either. A survey by T. Rowe Price discovered that 57% of parents were hesitant to talk about financial matters with their children. Even more concerning was that 40% of pre-teens and teenagers gather financial information from social media.
A search on Google suggested investment clubs, where families could motivate kids to participate in stock research and mutual investments enthusiastically. While this works for some, an individual competition was a more suitable approach for my family.
So, in December 2014, I initiated an informal family investing competition. Lacking extensive resources, I dove in, opening a dedicated account with an online brokerage and starting with $400. I offered the eldest three members of the next generation, aged 11 to 13, a holiday gift of $100 each to invest in any stock of their choice. An additional $100 was set aside for my investment, adding a layer of fun to the competition as they could outperform me. I nudged them persistently until they decided on an investment.
From that hesitant beginning, the competition has evolved into an engaging activity, roping in cousins, uncles, and other family members. Now, we have ten participants aged 12 to 79 from four different states and Scandinavia.
The competition has yielded numerous rewards. Our initial investment of $400 has grown to $720. While we might have earned more by investing in a broad index fund over the past 9 and a half years, the knowledge and stronger familial bonds we have built are invaluable.
Elias, my 21-year-old nephew, has performed exceptionally due to his investments in his favourite computer game companies (Activision and Sony). He says, “Our contest is more fun because it is real.” It has kindled such an interest in him for business and economics that he plans to major in these fields in college. He has doubled his money and discovered a life-long passion – an incredible return on a $100 investment!
Here are some lessons I’ve gathered along our journey for those considering a fun, affordable way to introduce young individuals to investing and foster intergenerational connections.
- Start frugally.
- Don’t overstep.
- Be patient and persistent.
- Serve as a counterpoint.
- Keep up the conversation.
Our family’s investment game has been an enjoyable platform for fostering investment knowledge, building better family ties, and teaching important life lessons. As Elias’ experience shows, it’s about more than the monetary returns; it’s about the life skills and passions the participants develop.
