Dabbling in stocks is certainly risky business. However, people invest in the stock market day in, day out and often, children too become curious about it. They hear these cryptic conversations about stocks “rising” and “falling” and money gained or lost – no wonder their interest is often piqued.
A lot of times, parents are very hesitant to discuss and educate kids in this regard and that’s understandable. You don’t want kids to be undertaking high-risk stock exchanges or getting obsessed with money matters at a very young age. But you must acknowledge that mastery of the stock market comes with time and experience and if your child shows a keen interest in its operations, it may not be such a bad idea to start early. Teaching your kid(s) about the stock market may prove to be a difficult task so you’ll have to do it intelligently. Here are 6 steps you can go by in doing the same.
1. Start Slow, Be Systematic
First of all, you’re going to have to be slow and systematic in teaching your children about stocks. If they have not had much experience with money before, give them an allowance and explain the principles of healthy spending, saving, lending and borrowing with them. If your kids are already precocious and well-informed about such things, move on to the fundamental mechanics of the stock market. Teach them how it works, what the risks involved are and alert them of both success and horror stories related to stock trading. And do not worry about your child becoming too materialistic in the bargain – an interest in the stock market exhibits an innate entrepreneurial proclivity.