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How would you teach children about investing?


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It's useful to remind yourself that you're really teaching kids to think for themselves.

Investment is just one of the many tools by which to do it. All our family learn't to play chess first before they learnt investing, and continue to play to this day - even at 80.

 

You have to walk the talk.

Investment isn't just buying/selling assets, it's also continually DEMONSTRATING re-investment in yourself to replace obsolescence.

The message you're trying to 'sell' is that wealth is not the size of your bank account; it's ability to do what you want, when you want - without having to rely on someone else.

 

Talk business, tell stories, and don't shield kids from the experieces of life.

Bit more interesting though when one end of the family bar-bell is more 'open minded', and the other is 'by the book'. When our nephews were 17 & 20, 'grandma' arranged for them to visit a friend of hers in Paris - a retired madam in her 70's, and her daughters. While both nephews can speak french, the eldest was horrified; wheras the youngest was clearly impressed - and tried to convince me that this was a business we should be in!

 

SD

 

 

 

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Not sure if this was already mentioned but "The Little That Beats The Market" by Joel Greenblatt is written in really simple language.  Off the top of my head, the first example is about a kid who buys packs of gum and then sells each stick for 25 cents.

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My kids hear me talk s our business constantly and how to make a buck etc.

 

My son brought up supply and demand and its impact on pricing/profit at 7-8 years old. He’d heard the concept somewhere and discussed it with us.

 

Hopefully all of my kids will get it. To me the most important thing is teaching them basic financial skills as others have described. That will benefit them regardless of their ultimate interests. All of them won’t gave the desire to be rich.

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I think I will focus on compounding, deferred gratification stuff, maybe the bit about owning a slice of business.

 

I have 3 boys 8, 6, and 5.  I've had success with the 8 and 6 year old (sort of) on the delayed gratification.  My kids are required to do chores around the house.  Scrub toilets, take out garbage, scrub the bathroom sinks.  They are also required to help set the dinner table and put away their laundry after I fold it.  (I have not had success on either loading or unloading the dishwasher or the washer/dryer. 

They also get a weekly allowance (its currently $9/week) and they have a 3 part piggybank - 1/3 for stuff they can spend right away, 1/3 for something they want to save for, and 1/3 for "grown up fund" (college fund).  If they ever want something at the store they can spend their $3 on gum or whatever.  The other money goes and they save up for a video game or more likely Legos.  I don't push the term college fund because I believe that if you push that term that is maybe what they think they have to go into when they get older. 

 

I recently ran across a situation where a guy is selling a bunch of old unused gumball machines for about 1/4-1/2 of what they go for on Ebay but its a lot of units (45).  I've offered to buy 5 and then have my kids and I go out and place them.  It would be a bunch of work to find spots but I think the business side of it would be beneficial.  I'd help them upfront but after a while they would have to do all the work.

 

 

 

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Hey ditto on chess. First things I learned to play with the old man were chess and stratego. Great way to teach critical thinking, anticipation, etc

 

Interesting thing we found was that this is very cultural; folks from the former 'east block' and the various 'asia's' all play the game very differently. The hardest part was always trying to find someone who played the same way you do - but better than you. There's never a Gretzky around when you want one!

 

SD

 

 

 

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Hey ditto on chess. First things I learned to play with the old man were chess and stratego. Great way to teach critical thinking, anticipation, etc

 

Interesting thing we found was that this is very cultural; folks from the former 'east block' and the various 'asia's' all play the game very differently. The hardest part was always trying to find someone who played the same way you do - but better than you. There's never a Gretzky around when you want one!

 

SD

 

Once I started kicking my old man's butt I would play with a buddy from school - Chinese kid (I'm Italian) - we played completely differently. Went about 50/50 because for the few months that we occasionally played, we couldn't figure out what the hell the other guy was doing.

 

15 years later we do essentially the same thing for a living. Life is weird but chess may be weirder.  ;D

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My son started a company in elementary school (http://www.bluelvo.net/index.html)  - we parents just helped him along the way. I do an investing class for him every weekend with different topics. It covers not just basic finance but also personalities, events and history. Obviously Munger and WEB are prominent characters - my virtual teachers!.

 

We covered BH last week. We read Farnam street's parable first and then I put names into the characters. We then looked at BH and its financials.

 

When we look at bubbles, we looked at the crypto mania. It is easy to relate as kids in middle school are putting their piggy bank into crypto with the help of their parents.

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The best person I ever played was a very old babushka who escaped the former East Germany just as the wall was going up. As a female in the east block - she wasn't 'allowed' to do many things, & her grandfather/father (mathematicians/engineers) had trained her 'on the side' in chess and the sciences.

 

It was like playing several people at once, from the super aggressive to the typically defensive, & all of them very good. Got my but kicked until I worked it out, but thereafter it was a 50/50 split. Needless to say we got along famously and I learned a thing or two. She was also the only person I've ever come accross who could play just as well hammered out of her skull, as she could sober!

 

Life experience.

 

SD

 

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