How to teach son about investing?

[SnikPlosskin]

I read it’s very hard to break from one class to another, if not almost impossible. For example, my dad was not college educated and knew little about investing. Same with his dad, and his dad before him.

Other kids with white collar fathers benefited from what the discussed at the dinner table. They say what you talk about at the dinner table sets the course.

I know nothing about investing and my net worth shows it. I have to work til I drop.

I want my son to learn a skill that will be in demand (robotics or other tech skill) but equally about investing.

In terms of college, would that be studying “finance” or “business” or ???

I am even considering setting up an e-trade account and with each of us putting aside $500 and just going at it.

Any advice? How can he learn what dad doesn’t know?

[VITE1]

Show him the value of compound interest.

http://www.moneychimp.com/calculator...calculator.htm

Then buy a book on value investing.

https://www.google.com/search?q=valu...h=486&dpr=1.25

I was lucky. Both my Father and Mother understood the value of saving and compound interest. My Godfather was all about value investments.

http://www.1stock1.com/1stock1_139.htm

[DAB]

i had a BS in Mech. Engr.

never formally studied investing.

retired at 45, 10 years ago.

basics: find something you are good at. work hard. save some of each paycheck - the more the better. max out any retirement accounts, 401k, IRA, Roth IRA (some years, i dumped money in all 3), save other money in a taxable account. avoid stupid debt. getting a mortgage for a house is ok (don't get more house than you can afford), everything else - pay cash.

if i didn't have the money in my pocket or in my checking account, it didn't get spent.

wash, rinse, repeat for 20 or more years.

now i can do pretty much what i want every day.

that concludes your free lesson in finance. go apply it.

[Sea Six]

There is a really good game called Cashflow.

Fun game to play, and it teaches you how and why to invest through the play of the game.

All my investor friends love it, and I've even had non investor friends ask me when we are going to play the game again.

It was created by Robert Kiyosaki. I met him in person once. He wrote Rich Dad, Poor Dad which I recommend he read prior to playing the game.

[DAB]

"Robert Kiyosaki"

[mrvette]

The ex's, kids mom had a relative who was a financial wiz and investment counselor......just after the divorce I had some bux and asked for some advice....he refused.....been a disASSter ever since......$$$ wise that is....

[lspencer534]

Investing is pretty simple: Find a stock and buy it. If it goes up in value, sell it. If it doesn't go up in value, don't buy it.

[snide]

Buy low, sell high.

[CeeFour]

Originally Posted by DAB

i had a BS in Mech. Engr.

never formally studied investing.

retired at 45, 10 years ago.

basics: find something you are good at. work hard. save some of each paycheck - the more the better. max out any retirement accounts, 401k, IRA, Roth IRA (some years, i dumped money in all 3), save other money in a taxable account. avoid stupid debt. getting a mortgage for a house is ok (don't get more house than you can afford), everything else - pay cash.

if i didn't have the money in my pocket or in my checking account, it didn't get spent.

wash, rinse, repeat for 20 or more years.

now i can do pretty much what i want every day.

that concludes your free lesson in finance. go apply it.

I basically followed the same approach and retired 8 years ago at age 54. I trust nobody but myself as far as what to do and where to put my money.

My take on money is people are genetically predisposed to saving or spending (sort of like addictive behavior,) and it is very difficult (but not impossible) to alter the path those genes take you on.

[polarbear]

Originally Posted by DAB

i had a BS in Mech. Engr.

never formally studied investing.

retired at 45, 10 years ago.

basics: find something you are good at. work hard. save some of each paycheck - the more the better. max out any retirement accounts, 401k, IRA, Roth IRA (some years, i dumped money in all 3), save other money in a taxable account. avoid stupid debt. getting a mortgage for a house is ok (don't get more house than you can afford), everything else - pay cash.

if i didn't have the money in my pocket or in my checking account, it didn't get spent.

wash, rinse, repeat for 20 or more years.

now i can do pretty much what i want every day.

that concludes your free lesson in finance. go apply it.

Great post. And yes, it is really that simple. There's a lot of variations to this, but the bottom line is people borrow too much for crap they don't need, and as a result don't save enough for a time when they will need.

[DAB]

so an important question:

who do you want to listen to?

A) someone who has actually done what you seek to do?

or

B) someone who is still making money by selling you a book/program/seminar/etc?

[Milton Fox]

DRIPs

Long Term Investement

Gross Pay vs Net take home

Introduce him to FICA as part of his allowance (if he has one)

[polarbear]

Originally Posted by DAB

so an important question:

who do you want to listen to?

A) someone who has actually done what you seek to do?

or

B) someone who is still making money by selling you a book/program/seminar/etc?

My dad was fond of saying "if that Financial Planner was that good, he'd be managing his own portfolio instead of yours.

[markids77]

DAB has it exactly right. Save, save, save and do not incur foolish debt. Learn a trade... I was a mechanic (highly sought after and highly paid), and then a parts specialist after my back failed. Have him think hands on and specialized instead of IT based and he can pretty much write his own ticket if he is serious about acquiring a skill.

A person does not need the stock or bond market to save for a well funded retirement... it requires only a dogged determination to live well within whatever your means might be at the time, and a consistent savings program. That way there is no risk of a market event ruining several years worth of planning; cash will never suffer a market "correction". Start young, be vigilant and live long; the rest will take care of itself.

[Stangkiller]

I set up a 529 college plan for my son, started with $500 and put $50 a month in it, I’m hoping it grows enough to give a good lesson on time value of money. By my guesstimate it’ll be enough to cover around a third of his college costs.

[DAB]

Part of it is the money you earn and save. But the most important part is the self discipline in sticking to a life style and pattern of self denial, knowing that you are working toward a later goal.

Friends going out drinking? What are you going to do? Invited to play a round of golf that will cost you $250? How much is that worth later on?

Your goal is not to make them happy, it’s to make yourself happy now and later.

[Milton Fox]

Originally Posted by DAB

Part of it is the money you earn and save. But the most important part is the self discipline in sticking to a life style and pattern of self denial, knowing that you are working toward a later goal.

Friends going out drinking? What are you going to do? Invited to play a round of golf that will cost you $250? How much is that worth later on?

Your goal is not to make them happy, it’s to make yourself happy now and later.

You have to be able to make money before you can invest any.

Most people will just starting spending what they have when they start bringing in more money. Avoiding that is your best investment.

[snide]

As I recall, Enzo is an entrepreneur. Ensure that he learns how to think like an entrepreneur and not a consumer.

[Mike Mercury]

[DAB]

old story:

a young man's father passes away and in cleaning up the papers of dad, he discovers a stack of stock certificates. not knowing what they were or were worth, he takes them to a broker and asks "are these worth anything?" broker tells him that he'll have to look them up one at a time, could he come back next week? sure.

a week later, the young man returns to the broker, and upon entering his office, sees two stacks of his certificates. broker explains that one stack is worth nothing, those companies went broke, but the pretty certificates would make nice wall paper for a chicken coop. the other stack are successful companies, some worth tens of thousands of dollars, all together, the stack is worth several million dollars.

the man is astounded.

the broker explains that the dad had bought these over time when he was young, based on the dates on the certificates, and had just left them alone for many years.

the lesson: you will have some winners, and some losers, but if you are patient, and diversify, you'll probably do ok over time.

good luck.