How to Introduce Your Children to the Stock Market

Attending to your child's financial education is a parental responsibility. Lessons about saving, investing and financial planning are not a part of the curriculum in most schools. Helping children understand the world of investing while they are still young will help create a mind-set oriented toward putting their money to work. Stock market educational aids abound.

Step 1

Buy stock for your children. Numerous organizations and websites are devoted to so-called "kiddie stock." For a fee, these organizations will not only sell you one or more shares, but will provide a colorful, decorative paper stock certificate as a physical representative of the investment. Often, these organizations focus on companies children already know, such as Disney or Mattel.

Step 2

Review stock education websites with your child. Sites oriented to children teach the basics of stock investing in plain, easy-to-understand language. Review with your child the definitions of terms such as "share" and "earnings." Help them understand the concept of compounding. You can even find sites that are written by children for children.

Step 3

Engage your child in a stock simulator game. These online games give children perspective on the ups-and-downs of the market. In a game, you can choose stocks and track their progress over time. Though many online simulators are oriented to adults, teen and child-targeted games are available.

Tip

  • If you do not choose to buy children's stock through a specialized, certificate-providing source, you have other options: open a custodial account for your child through a broker and purchase stock for that account. Buy individual stocks via a direct stock purchase plan, available at more than 500 companies. Use a low-fee online brokerage.

Warning

  • According to Kiplinger, companies such as Disney may charge fees for an initial stock purchase, as well as for each succeeding purchase. To economize, look for companies that charge low fees or no fees.

About the Author

D. Laverne O'Neal, an Ivy League graduate, published her first article in 1997. A former theater, dance and music critic for such publications as the "Oakland Tribune" and Gannett Newspapers, she started her Web-writing career during the dot-com heyday. O'Neal also translates and edits French and Spanish. Her strongest interests are the performing arts, design, food, health, personal finance and personal growth.