You hear it quite often: We must invest in our children…or the money for their education is an investment. When we talk about the education we invest in, are we also clearly talking about the financial education of children and teenagers? And what do you do, if one day, your teenager sits down at the table and doesn’t just tell you how he was at school today, but instead says: I would like to … become an investor!
It would be nice that your reactions be balanced as a parent or guardian, regardless of the field in which you work or the possible/available amounts for investments. Ideally, you should not freak out and have negative reactions to such an initiative. As a parent – with “superpowers” in the unpredictable world we live in, you should make a pact with financial education. To be prepared to contribute to a much better future for your children.
And because you must spoil before you spin (/practice makes it perfect), if you feel that you are overwhelmed by the situation, ask for the help of a coach!
Is investing as an adolescent a good idea to consider? Let’s have a look!
Does your teenager want to become an investor? Dear parents, do not be afraid!
Easy to say, hard to do? Investing from a young age is the starting point for a more balanced life, and not just financially. But what does young age mean in investing? Are investments for adolescents even plausible in Romania?
Yes, they can be. Obviously, under the careful supervision of the parent or a financial coach.
The ability to manage our money from an early age is part of a healthy life. Children’s abilities to manage money will affect every step of their future adult lives. This includes getting a job, managing a career, renting an apartment, buying a house, and starting a family.
I reconfirm, the permanent need for financial education!
A necessary aspect of money management for teenagers is how to earn and grow their money. Most adults weren’t taught the basics of investing as teenagers. Forget about access to investment platforms in times when we didn’t have any clue about the internet itself.
“The right way” begins with financial education is the belief of Rich and Educated and also financial coaches with a focus on children, such as Eddie Behringer (the first registered investment advisor (RIA) focused on teenagers and children.)
Research shows that teens want to learn about finances early and are eager to start investing. Because finance is not taught in schools, most teenagers do not understand finance, and many ask their parents for help. If parents can’t do it, either because of fear or lack of investment education, they turn to a coach.
Data from several studies, published by Forbes in February 2023 shows:
- 74% of teenagers do not feel confident in their financial education
- 32% of teenagers cannot tell the difference between a credit card and a debit card
- only 27%: Young people know what inflation is and can hardly make a simple calculation of an interest rate.
With rising inflation and unstable times, teenagers are forced to deepen their financial education beyond simple notions of saving. They need to learn about wealth growth, implicitly about investing.
Teens need to spend time in the market and have the will to take some risks.
What do we do with the ‘’APPROPIATE’’ age for investing?
Young people who do not already have the legal age in their countries should not be discouraged because they have options. With a parent or responsible adult close, with their consent and close supervision.
For a young person who has already decided to invest, and has discussed this with an adult, the next question is: what’s next? Next is a coach recommendation.
The earlier you start your investments, the more time your money has to grow. This advantage for the teenage investor is amplified by the power of capitalization. As you reinvest your earnings and interest to generate additional profits, the account value can grow. This makes it even more attractive to start. Allow your teen to invest. Investing may seem too risky or intimidating to adults. However, if done right, early investing can help teens create the life they dream of.
I reconfirm, the permanent need for financial education!
How can a coach help the teenage investor? Let me help you! Start today!
Investment Education: There are plenty of books to help you understand the basics, but I can help you with personalized coaching sessions for you and/or your family to filter the information you need at this age.
Clarity on financial goals or/and setting financial goals: What is the main long-term goal(regarding your money)? Setting goals helps you determine an investment strategy that works custom-made for you.
Carefully selecting investments: Having so many options within our reach, researching good investment options can seem overwhelming sometimes. It is essential to ask yourself what type of investment has the best chance of helping you achieve your goals.
Advice for parents: parents may in some situations be concerned about the possible course (even very positive) of their children’s investments and require additional clear information about where their consent is essential, especially if the investments start under the age of age.
Disclaimer: Minors absolutely must collaborate with a parent or another adult/legal guardian to start investing!!!
However, teenagers have time on their side. Practically a big start ahead in building their future wealth. In the happy outcome life equation, money invested at the right time, consistently, can make all the difference.