How to Teach Kids about Investing

Sometimes, it can seem like the only thing your child is interested in is playing games on his tablet or texting his friends. And, while these may be the types of things that most captivate today’s youth, you, as the parent, do have some control over what your kids learn and encounter in their lives. Thus, it stands to reason that, if you want your child to grow up and be a smart, financially sound individual, you should make a concentrated effort to start teaching him or her about investing and the value of a dollar. Fortunately, no matter how young your child is, there are a variety of creative and interesting ways to  make this happen.   

Try an Investing Game

As mentioned earlier, kids love online gaming, so what better way to teach investment strategies than through the use of an online game? There are actually many websites that have investment games, including Kapitall, which is basically just like the stock market except in game-style, kid-friendly format. The site even features practice trading, as do many other similar sites. If you really want to get your kids into investing, let them try these fun games; they’ll be hooked in no time, and, unbeknownst to them, they’ll be learning in the process.

Buy Some Real Stocks

For older kids, consider letting them try out the stock market for real. Parents can easily buy their kids simple, cheap stock in kid-friendly companies like Disney or Mattel. Then, together, parents and kids can work with the shares, talk about what happens, and discuss what it all means. This is a great, fun, real-life way to get kids interested in and educated on investing, and it’s not a bad way to spend time with one another either.

Help Kids Invest in Things they Believe In

One final way to help kids learn about investment is to have them invest in something they believe in. This could be giving money in the church offering, donating to a charity, or anything in between. Let your child pick the organization and how much he or she can give. Then, together, talk about what the organization will and can do with that money and how that is a “return on investment” in a very meaningful way.

If you can follow these tips and try out these strategies with your kids, you should see them develop good investment habits by the time they reach adulthood.

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Baby Boomers: They Know What's What When it Comes to Retirement

Baby boomers may seem “old-fashioned” or”uncool” to millenials, but these older people actually have some pretty awesome advice to offer, especially when it comes to saving money. See, baby boomers have been through it all, financially speaking. They’ve been through periods of inflation, they’ve been through times where interest rates were falling, and they’ve also been through a recession or two. And, while, as far as boomer financial trends go, there have definitely been some ups and downs, members of this generation have made it through and, surprisingly, have, for the most part, done quite well for themselves, all things considered.   

So, what kind of advice would boomers give to millenials? Well, for starters, the vast majority of them say that they believe in sticking with their investment strategies, even when times get tough. Of course, before doing that, you should have a good investment strategy in place, but if you can get that down, preferably with the help of a professional, then there’s certainly no harm in sticking with what works.

Baby boomers also believe in saving, especially for retirement and for the hard times too, and in starting to do so as early in life as possible. And, furthermore, they believe in never expecting the good times to last for too long.And, while that may seem dismal, it’s true that you should never get too comfortable and should always prepare for the worst, just in case.

The bottom line is that baby boomers know what they’re talking about because they’ve lived through it, so it’s not a bad idea to follow their financial advice when given, as well as the advice of a professional. With these forms of help on your side, you’re likely to be a lot better set up for the future.

Investing Throughout Your Life

Investing your assets isn’t something that you should just do once and then never again. No, on the contrary, it is something that you should do throughout your life. And, as you age, you will find that your investment needs and abilities change, so it just makes sense that your investment strategies should also change through each phase of your life.   

 The best course of action to help you and your investments change and grow as they should is to work with a financial adviser who you can trust to guide you through each stage of life and of investing. And, in addition, you should also be aware of where you should ideally be at each stage of life so that you can constantly check in with yourself and your investment strategies and see how you’re stacking up.

When You’re 25 to 35....

In this stage of the game, your concerns are probably things like paying off old debt, like college debt; saving up to buy a home; saving to put your kids or future kids through college; and even starting to plan for retirement.

At this stage of the game, at least 10% of your income should be going toward retirement, and it’s also a good idea to start investing in an employer sponsored 401(k) or an individual retirement account (IRA). While retirement might seem very far off, and real life and its demands might seem more pressing, you’ll be doing yourself a favor by getting a jumpstart on retirement planning and savings.

When You’re 35 to 55....

In this “middle age” stage, it’s time to up the ante on your savings.After all, you’re probably making more money and you’re probably also getting more serious about paying for your children’s college education and saving up for retirement. At this point in the game, you should aim to have at least 20% of your income going toward retirement, and you should also focus on diversifying your investment portfolio so that you have a lot of different investments “in the works” and working for you and your future.

When You’re 55 and Older....

Once you hit 55, it’s time to start getting very serious about saving for retirement and protecting your assets. It might be wise to put a lot of your assets into fixed-income securities, mutual funds, bond funds, annuities, and other investment options that can help you to achieve stability.

Hopefully, by the time you do reach retirement, if you have followed these tips and worked closely with a financial adviser, you will be ready to retire and to just plain enjoy those retirement years without a worry in sight!

The Investment Commandments

When it comes to investing, there are some rules that function more like suggestions. Then, there are others that are absolute musts, commandments if you will. Even if you think you know everything there is to know about investing, familiarize yourself with the investment commandments, and do NOT stray from them.   

Commandment #1: Thou Shalt Diversify

It is very rare that every investment you choose will pay off, just as it is (thankfully) very rare that every investment you choose will tank. However, since there’s a very good chance that some investments will go great while others won’t, it’s always, always smart do diversify your investments.

Spread your money across many different types of investment opportunities, including things like stocks, real estate, bonds, and more. When you diversify, you cut your overall risk and pretty much guarantee that you’ll never face a situation where all your investments fail at once.

Commandment #2: Thou Shalt Rebalance

In the investment world, it’s important to never get stagnant. After all, the investment scene is always changing, so it just makes sense that your investments should change over time too.

At least once a year, sit down and look over your portfolio. Get rid of investments that  aren’t performing well, and check to see if you have too many investments in one category or another. Also ensure that your investments line up with your overall goals, and get rid of the ones that aren’t serving your purposes.

By selling off unnecessary and/or unfruitful investments, you can gain the money you need to buy smarter, more relevant investments for your needs and thus continually strengthen your portfolio.

Commandment #3: Save and Spend Smart

Saving money is always important, even (and especially!) in the investment world. Save money where you can by engaging in money-saving strategies, like going through an online discount broker, working with a financial adviser who knows the ropes, and/or choosing low-fee index funds or no-load funds.

Also, spend your money wisely! Take advantage of dollar-cost averaging, a strategy whereby you avoid buying too high (or too low) by regularly investing the same amounts in the same investments or types of investments.

                                       

So, there you have it- the rules you must follow for successful investing. Armed with this knowledge, you’re now ready to get started!

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About Savings Accounts

Our entire lives, we’re taught to save, save, save, and many of us obey this rule well, stashing every bit of money we can in our savings accounts. However, while saving is usually a good thing, some savings accounts are not actually smart. In fact, they could be more detrimental to you financially than they are helpful. Check to make sure that you’re not dealing with any of the following “savings account disasters.” If you are, you may want to rethink your saving strategy.  

Disaster #1: Bad Interest Rates

In recent years, it’s become almost impossible to find a bank that offers high interest rates on savings accounts. So, while you shouldn’t expect to get a truly amazing rate, you definitely shouldn’t settle for very little interest, or, even worst yet, no interest. Your best bet for good interest rates, sometimes even higher than one percent, is to check out online savings account options, which tend to be the best in terms of interest.

Disaster #2: ALL Your Extra Money Goes in Savings

As mentioned, stashing money away for life’s little emergencies is smart, but be aware that there are more ways to save money than just putting it in a savings account. For best results, you should be using a diverse range of savings methods. You should have retirement accounts, stocks, and other investment strategies at work for you. Many of these will take your money and multiply it, making “future you” a whole lot happier than he or she would be if you’d stuck to just a standard savings account.

Disaster #3: Savings Accounts with Poor Security

These days, it’s easier for sensitive, personal information to get leaked than ever before- look at what recently happened with the Ashley Madison site hack! If your bank has had security issues and problems in the past, it’s not worth the risk of using that bank any longer; you need to find a different option. If you’re not sure how secure your bank’s online account systems are, ask! Any good bank that’s working hard to keep your data safe will proudly tell you about the security measures it has in place.

Disaster #4: No Convenient Access Options

Good banks are up to date on all the modern trends in banking and make it easy for you to access and control your account information anytime and from anywhere. If your bank is old-fashioned and doesn’t offer online banking, mobile apps, automatic payment features, or other “make-your-life-easier” solutions, then it’s time to look elsewhere.

As you can see, it’s important to demand only the best from your savings account and to use smart saving strategies. If you can do these things, you’ll find that your savings will become a lot more profitable for you both now and in the future.