“It’s not often that you hear girls saying that they want to grow up to be traders,” says Jackie Cummings Koski, personal finance educator and author of Money Letters 2 My Daughter. Indeed, there are still a lot of gender role disparities when it comes to finance. They start early and, too often, last a lifetime. It’s time we focused more on teaching girls about investing, and teaching them early on, so that we can help girls reap the benefits of two of our favorite words: compound interest.
Here’s some of the best advice to give girls an early, fun and promising start with investing.
There are numerous ways to make learning about investing fun, which can help boost interest when teaching girls about investing. “Family games, such as Monopoly or Life, introduce financial decision-making,” suggests Tiffany Lam-Balfour, investing and retirement specialist at NerdWallet. “These games bring up important financial topics in a fun way and can segue into more meaningful discussions,” she adds.
You can also create a mock investment portfolio to experience investing without taking on actual investment risk, says Lam-Balfour. Check out The SIFMA Foundation’s The Stock Market Game, which simulates the global capital markets online to teach children about economics and finance.
Other ways to experience the ups and downs of the stock market without the risk include How The Market Works, a website with a free game that lets people practice trading with virtual money, or free classes via Wall Street Survivor, which offer useful, user-friendly lessons with videos and interactive activities, says Siva Mahesh, CEO of personal finance website Dreamshala.
KEEP IT REAL
Investing can be easier to understand by finding tangible ways to make it relatable to real life. Julia Carlson, Founder and CEO of Financial Freedom Wealth Management Group, used “real world examples,” when she started teaching her 4th and 5th grade girls about stocks. “I brought it down to their level,” with stock picks like Facebook, Nike and Mattel for Barbie Dolls and their American Girl dolls. Restaurant and food company stocks are another great way to whet girls’ appetite for investing.
“We opened custodian investment accounts for them and purchased shares in what they know and love, what our family uses and then also an index fund. Over the years they have seen Mattel drop (they lost money) and Facebook and Apple go wild. They also learned that their diversified index funds were a lot more steady, teaching them not to put all their eggs in one basket,” says Carlson.
The other big benefit that comes with opening any type of account, is “pride of ownership,” says Koski. “Seeing their name on the account, even when they are young,” can help kids get more excited, she adds.
“Invest in what you use,” suggests Joy Stephens, VP-Branch Manager at Charles Schwab. Stephens also encourages parents to “meet your child where they are,” to help latch on to intangible investing concepts. She recommends purchasing Schwab Stock Slices, a way to but a fractional share of a stock, which is a “slice” of stock that represents a partial share, for as little as $5.
Caroline Galbraith, partner and wealth management advisor with HawsGoodwin Wealth similarly recommends connecting investing to things kids are interested in. For example, she suggests finding a stock connected to your daughter’s interest and doing some math to figure out how much $100 invested on your child’s birthday would be worth today. For instance, if your daughter was born on December 10, 2010 you could explain that $100.00 invested in Disney stock would be worth $371.29 on her 10th birthday (selling at $38.87/share, you bought 2.57 shares), explains Galbraith. Just be prepared for your daughter to get upset with you if you did not invest in a winner for her when she was young.
If you do opt for a custodial account, NerdWallet’s Lam-Balfour suggests online brokers that don’t charge account fees, have no minimum initial deposit and low or no trade commissions.
If the advice so far sounds intimidating or if you just want to learn more, fear not, there are numerous resources. Indeed, investing in stocks is just a small taste of investing and “ideally, you’ll go on to teach your daughter about long-term investing, which is likely to include products like index funds which aren’t necessarily meant to be traded on a regular basis, and are less volatile than individual stocks over a longer time horizon,” says Brynne Conroy, owner of financial site Femme Frugality and author of The Feminist Financial Handbook.
Conroy suggests picking up a copy of one or more of these great books, all written by financial experts who are also parents:
- Money Letters 2 My Daughter by Jackie Cummings Koski
- How a Mother Should Talk About Money With Her Daughter by Aja McClanahan
- The Simple Path to Wealth by JL Collins
Trying to teach girls about investing doesn’t need to be challenging, if you remember to “keep it really, really simple,” says Koski. Hopefully, by following some of our tips you can find easy, fun ways to invest in your daughter’s future, literally and figuratively.
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