Episode 107: I often receive questions about how to teach kids to invest…but I prefer to teach them to SAVE. Remember a key wealth building principle is that you must first learn to Earn & Save and only then Invest. It’s the same for kids. Especially since their time reference is so SHORT.
- Parents should teach by example.
- Have money and economic conversations with them that teach them HOW TO THINK with logic and reason.
- Explain the principle of SCARCITY.
- Encourage them to save money they receive from gifts or working.
- Make them wait an appropriate amount of time before purchasing something with “their” money. [Maybe one day for a child that wants a toy and weeks/months for a teenage that wants a car.]
- Provide them opportunities to experience INCENTIVES.
- Pay them for chores or help them find jobs.
- Match their savings.
- Chip in to help them with a purchase once they’ve met a threshold.
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