Your days are full of work projects, carpools, busy to-do lists, and you haven’t had the time or the confidence to talk to your kids about money and investing yet. You don’t even know where to begin. I see you, and I get it. Because I’ve been there…But I’m not anymore.
What if I told you that teaching your children about investing in stocks didn’t have to be intimidating or time-consuming? What if I told you there is an App where your kids can start investing in 1000+ stocks and ETFs with as little as $5? Enter – Stockpile.
Stockpile lets you introduce your children to the stock market investing in an accessible and engaging way with little money which will help your kiddos learn important financial lessons and create healthy money habits for life.
Why You Need to Teach Your Children About Investing
Create Healthy Money Habits for Life
Teaching your kids about money is a part of modern parenting. Personal finance and money management should be taught in school, along with math, reading, and history. But for now, it is not the case. So, it’s up to you, mama, to introduce your children to the world of investing.
Teaching your kids good money habits from a young age will give them lifelong skills that will serve them well in their adulthood and most likely be passed on to your grandchildren and great-grandchildren. Instilling good financial practices now can mean the difference between a life of economic stability and one filled with financial worry.
I certainly wish I was familiar with investing way earlier. It would have helped me avoid several costly financial missteps, like not opening a 401(k) account at my first full-time job. Don’t you wish you were better at investing earlier on?
The Power of Compound Interest and Starting to Invest Early
Investing is a major vehicle for generating wealth over time. Time is the most important factor for investing because it lets the magic of compounding do its work and make you rich. If you start investing early, you will become wealthy over time. Children have a lot of time!
To illustrate the importance of starting to invest early, let’s look at the example below. We have three friends – Kim, Rachel, and Sarah. We will assume that their annual investment was $2000 each and they earned 10% on their money. Let’s ignore taxes for the sake of simplicity.
- Kim started investing early, at age 19. She invested $2,000 a year for 8 years (from age 19 to age 26) and then never touched her investments or added a penny to it. At age 65 she will have $1,035,160 in her investment account! Think about it! Over ONE MILLION DOLLARS! Her net earnings would be $1,019,160 (the value of her portfolio minus her total investment of $16,000).
- Rachel started investing later, at age 27. She contributed $2,000 to her portfolio for the next 39 years for the total investment of $78,000. At age 65 Rachel ended up with $883,185 in her investment account or $805,185 in net earnings. That’s $213,974 less than what her savvy friend Kim made!!!
- Sarah is a smart cookie. She started investing early, at age 19, just like Kim. But unlike Kim, she kept adding $2,000 to her portfolio every year until she turned 65. Sarah was able to take full advantage of the power of compounding and investing early. At age 65 she had $1,918,345 in her investment account! Almost TWO MILLION DOLLARS! Her net earnings were $1,824,345 or $1,019,160 more than Rachel’s!
I truly hope that the numbers in the chart below will motivate you to teach your kids investing early on.
Why I like Stockpile
Stockpile is an app-based brokerage that aims to make investing in the stock market less intimidating, more accessible and engaging for kids. Here are some of my favorite features of the App:
Instead of having to buy an entire share, Stockpile lets your kids invest any amount they want. They can start investing with as little as $5!
Many stocks are pricey these days, especially blue chips. Take Amazon, at +$3000 a share. Nathan owns about $100 worth of Amazon or 0.03 shares. Without a fractional share option, Nathan would not have been able to buy high ticket stocks like Amazon.
Stockpile offers shares of +1000 businesses, so your child will surely find companies he knows and loves. My boys jumped on Facebook, Google, Chipotle, and Netflix, to name a few.
Or your child can buy ETFs managed by experts like Fidelity, Vanguard, and Blackrock. Even buy Bitcoin or gold through exchange funds.
Fractional share orders must be bundled before execution, which is why Stockpile only executes orders at pre-set times. However, this is not an issue for me. First, my kids are not trading but investing. They are planning to hold their shares for a long time. Second, the educational aspect of investing is still there.
Think outside the gift box
Looking for a savvy gift for a birthday, holiday, or graduation? Give your kids a gift of stock instead of another Lego set or a Nerf gun. A Stockpile gift card is the quickest, easiest way to give someone a gift of stock! Just pick a ticker symbol and dollar amount and pay with a debit or credit card.
Stockpile is the only brokerage where you can give an e-gift or physical gift card redeemable for stock. You don’t need an account to give a gift.
Here is a real-life example that should inspire you. A good friend of mine, Brian, received $500 worth of Home Depot shares for his 18th birthday from his dad. Brian is in his fifties now and he made a killing over the years on that investment. But more importantly, Brian became comfortable investing from an early age. He has been a successful investor all his life. What a great gift to give to your child!
The best part, you don’t have to break the bank to set your kids on the path to a better financial future.
I am a huge fan of automating and simplifying your life. Especially automating your finances. Investing regularly and reinvesting your dividends is a very powerful tool to grow wealth over time. It lets you take full advantage of the power of compounding.
With Stockpile you can set up recurring deposits to your child’s account. Also, you can choose to reinvest the dividends he receives, for free.
Higher engagement from kids
Before I discovered Stockpile, I had opened custodial investment accounts for my kids at Fidelity. I tried my best to explain to them what an ETF (exchange-traded fund) is. So, my boys started investing a portion of the money they earn from chores in Vanguard’s Total U.S. Stock Market ETFs.
The time has passed, and they were making good money on their investments, but they seemed uninterested and unengaged. I personally love Fidelity’s dashboard and the way they present the information, but it isn’t laid out in a way a young person would understand or get excited about.
More importantly, I would not share my login information with my children, so they could not really access their investments independently.
Stockpile seems to solve both problems. First, Stockpile’s dashboard is very user-friendly. It allows your child to quickly see his current holdings and overall performance.
Second, you can download a Stockpile App on your child’s device and create separate login information for him. He doesn’t need to ask you to type in the login information every time he wants to check on his investments. This kind of independence is very empowering for the little ones.
Now my boys can monitor their stocks 24/7 and even place trades that go to my smartphone for approval. They love checking the App and seeing how their stocks are doing. Both Nathan and Milan are fascinated by the idea of passive income – their money making money for them while they play.
Mini-lessons on stock market investing
Stockpile was created for beginner investors. It is best for those looking to dip their toes into the stock market, especially kids and teens. To support your child’s growth and help him master the market, Stockpile has included mini-lessons on quickstart guides, stock market basics, and beyond. Examples of topics covered include what is stock and why own stocks; why stocks go up and down; how a trade is made; dividends and dividend reinvestment; earnings and even annual reports.
The Bigger Picture
Okay my friend, there you have it! Now you know that building your children’s financial literacy doesn’t have to be intimidating, time-consuming, or complicated. With Stockpile you can introduce your kids to stock market investing in an accessible and engaging way with little money which will help your kiddos learn important financial lessons and create healthy money habits for life.