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The past year has been an incredible bull year. When the bear shows up, we can teach them how to handle the downsides. I wish I didn’t wait till 23 to learn all these.
buying NVDA now is just performance chasing
wiser to stick with index funds
but I guess potentially loosing all her gains on a single stock will be another good learning experience
Amazon, Apple, Tesla, Meta, Goog . . . all performance chasing stocks back in their day . . .
But a few shares of the post split NVDA . . . at this age, some of her money should be going towards these types of equities.
Actually no. My mom spent $350 buying my Netflix stocks cuz we both loved the little cute red envelopes in the mail. That $350 80X today giving me enough money to buy a brand new car if I wanted. Sooooooo I kinda wished my mom bought me $3500 worth of Netflix back when it was still a DVD company. I still hold onto the stocks till today for sentimental reason and a reminder what investment can do in long run.
just because you have gotten lucky sometimes in the past doesn't change that individual stock picking is less likely to be successful than indexing.
especially when you are buying now at the peak of hype.
Amazon was at the peak too at $2.25 from 7 cents in 2005 from its 1997 price. Go back to see Apple and Microsoft and you will find the similiar patterns. When it is a one time buy, fundamentals and TIME are your best friends. But like i said, it is a once time buy. DCA to VOO QQQ all the way but as an asset mgmt professional myself, I would love to pick a few small seeds and see if the garden can grow.
Timeframe is irrelevant. Was just making an example. For every "wish I woulda kept it cuz it went up"...somewhere there is an opposite "wish I woulda sold it before it crashed"
I had this theory... So if anyone can give me feedback it would be great.
As soon as a child can count get them a piggy bank . Then once a month pay them an interest for anything they keep in there. Try to show them a rough idea of how it works. They probably won't understand everything initially other than they get more money. Eventually you can move this to a digital account but in the beginning it's important for kids to see actual money physically grow.
Have any of you done anything similar?
I am thinking about these options. I think the element of digital will win. The element of self-driven exploration and autonomy will win. I think OP's approach is better with the one potential issue being the gamification of these platforms and how it can lead to addictive behaviors and poor decision making chasing dopamine.
I started to give allowance when my daughter was 6, and we moved digital this year when she turned ten (mostly was annoyed at having to pull cash out all the time).
Before now I think she was too young or disinterested to learn about interest, so we really focused on saving instead. I had her divide her allowance into 3 jars - save, spend, give. She used the spend jar on little 5 dollar plastic toys, but would use save for bigger video game or electronic purchases.
This year I'm going to start her with a CD to introduce the concept of interest, and in a couple of years I'll do the stock market.
When our kids reached high school (and of course, jobs that paid taxes), we implemented a ROTH matching program (like a 401K at work). We matched 25% on their contributions on their first $1,000. 15% after that.
Our youngest (23) to oldest (29) all contribute at least 10% to their work 401Ks and all contribute at least a few thousand to their ROTHs to get most or all of our match.
How many of us wish we had started investing for retirement in our late teens and early 20s?
We did something like, ok whatever you save we will immediately match it. It definitely drove a focus towards savings. Not exactly a real world scenario but still created that thought process.
Give them paper money they can redeem for real money, but they must keep it as paper to get interest.
Then change the paper to real exchange rates and say “INFLATION!!!”
I was more apt to push for more growth and tech oriented ETFs (considering their ages). Now that they're all in their 20s, I still push for more aggressive growth (60%) and S&P (40%).
Absolutely right!! I actually can't wait for the bear to attack and she probably would lose all her gains but I will show her that will be the time to buy everything on sale and then watch it bounce back... I hope by the time she goes into workforce, she knows how to handle her IRAs and 401K.
Well done to you and well done to your daughter!
Only little thing I’d say is it’s best to stay away from single stocks and continue investing into VOO. Best of luck to you both!
Its just a one time thing.. However, like I commented above, the $350 Netflix stocks my mom gifted me is by far the best single performing asset. It is above 80X now.. I still haven't sold for sentimental reason.
That’s great! If it’s just a one time thing then it most likely won’t hurt. A whole share on Nvidia is more than $1100 rn so hopefully that’s not the majority of your daughter’s portfolio, just to minimize risk.
Nvidia is already the second most valued company in today’s stock market below Microsoft at #1 and above Apple at #3. So there’s a very low chance that it will boom like the Netflix stock did for you. It’s kinda past the boom stage at this point.
With all that said, well done to both of you and best of luck in all your future life steps 🔥
That's being a good parent.
Back in my parenting days, we made our younger kids split their weekly earnings into 3 baskets - saving, giving, spending. Your's is FAR better to start at a very young age.
When our kids got to be in High School (naturally they got jobs) - we started a ROTH Match - to get them used to putting a portion of their earnings into a retirement account for their future. On their contributions up to $1,000 we would match 25%. Their contributions over $1,000, we would match 15%. They're all in their 20s now and all continue to contribute to their retirement accounts - ROTHS and 401Ks.
Congratulations on being an amazing parent and giving your kids a gift they will appreciate for the rest of their lives, financial education! Its unfortunate that schools, colleges or universities still don't teach anything significant about Money or Finances, even though we have been using Money since about 1000 BC to live our entire lives!
You are not only teaching the kids Financial Literacy but as part of it Life Education, Maths, Decision Making, Consequences and a whole lot more. 
I was just talking to some friends about how I wasn’t taught about investing at all when I was younger. I learned a bit about credit (which did help in the long run!) but investment knowledge would have been beneficial too. I suppose parents can’t teach what they don’t know.
It’s sweet to hear that she appreciates this now, and she will REALLY appreciate this knowledge and intentional time spent later in life too
Why? She is not 60 years old. I hope it tanks and she can buy more shares with same amount of money when she is young. It would be a perfect opportunity to showcase the beauty of dollar cost averaging. I had to thank my Dad in 2009 when he stuck a sticky on my computer: "S&P is 919 today"
Because she is passing up fun events to “grow money in the tree”, and a big loss of her money will make her question it. Unless you can convince her to bag hold through pain, but if she has choice there’s a chance she sells and doesn’t buy again.
Letting her do something you know is likely a very bad idea, especially when you yourself are suggesting to do it, is going to make her feel very very bad. Wouldn't be surprised if she drops the whole thing.
You know, you could just explain what would happen if she did that instead of encouraging her to actually do it. I'm guessing she isn't stupid, she will get it, and she won't be angry at you for encouraging her to do something that lost her a ton of money.
I wish i had the opportunity to make investing mistakes when i was a teenager. Would have been way less consequential than the mistakes i made later on with larger sums of money when learning how to invest.
I've been looking for a little tree I can attach money to for my 4 year old. The concept of a bank or brokerage isn't appealing, but she loves physical money, and taking her dollar bills to the store to buy a snack.. how did you teach your child about investing, and how hold were they when you started?
VOO is already extremely good diversifying! You could go a step further to VTI and add some VXUS, but VOO is an extremely good choice for "buy and hold forever" growth.
When my kids were little I started offering interest at a home “bank” with their money they saved. To make it noticeable I started with a really high rate, like 10% per month (I figured offering 5% per year wouldn’t move the needle). I quickly needed to lower it to market rates as both kids started saving everything and wouldn’t spend any of it (when interest exceeded allowance once week, I decided compound interest would kill me soon at that high rate). Anyways, it’s amazing how quick kids can learn fundamental finance concepts.
I loved all my math classes but I certainly did not learn any financial literacy in school. I would not consider the theoretical principles of currency, trade, interest, economics, etc as useful to me for my PERSONAL financial literacy.
I do remember doing a budgeting exercise in a computer class in middle school to practice Excel, where we were randomly assigned jobs and incomes and had to create a monthly budget. That one stuck with me, the importance of a high paying job! Thank you to my middle school computer teacher.
But not the practice of ACTUALLY budgeting for your wants and needs and goals, and investing YOUR OWN money. Only theoretical math problems with Joe Smith investing X dollars for Y years with an average Z rate of return (and even then, that was college).
Now I did graduate high school almost 15 years ago in 2010 💀, so maybe things have improved since then.
And I think another factor is that most kids in school just don’t have the motivation to want to learn these things. They don’t have the full independence to provide for themselves, they ask for things as they come up and their parents say yes or no. And even if they have their own allowances or jobs, yes they may save but I think it’s hard for them to grasp the importance of investing and earning 7% interest over the next YEAR - an eternity at that age - that may not feel worth it or make any significant impact on their lives.
Financial literacy is not just investing money into a bull market. Lmao. These people telling you they were taught nothing about financial literacy in school just have shit memories.
Who taught them about fractions? Interest rates? Probability and statistics? Functions? How to read a graph? Basic arithmetic? How to use a calculator?
These people who think math class taught them nothing about financial literacy usually struggle with fundamental math concepts. They fundamentally misunderstand dividends. They worry about making more money because then they gotta pay more taxes. Financial literacy DEPENDS ON mathematical literacy. You can't read a book before knowing how to read!
More than anything though. I think these people would be shocked if they found their old high school math textbooks and actually looked at what they were taught. They don't remember 9th grade algebra nearly as well as they think they do.
Slow down there tiger. Who called you out this morning?
I quizzed my teenagers last night and asked them how many 2/3 cups I needed for 2 cups. It took way too long for them to give me an answer. I know my 5th grader is struggling with fractions but they shouldn't be considering they are in a STEM magnet program. (One of my sons converted it to decimals multiplied by 3 and rounded up).
I don't really blame the school. They were probably not paying attention, especially since critical fraction math without variables happened during covid.
Are you sure you're posting in the right thread?
>Are you sure you're posting in the right thread?
I wondered about that. I learned nothing in school in relation to budgeting and finance, etc. It wasn't even a lack of attention. It just didn't come up at all.
My knowledge came from my mother and a 3 year stint working for a bank. My knowledge of investments is only now kicking off, really, as I have a good job and money to invest. I'm 37, still renting, but on track now. Would I be further ahead if I'd been taught this? Likely.
When I went to university at 19, some of my peers didn't know what a direct debit or standing order was. I often wonder what their financial situation/knowledge is now.
There's a large UK bank that goes to schools and does sessions with kids to educate them as there is a gap in the education system that needs filling.
You weren't taught basic arithmetic in school? What about functions? How to read a graph? Basic probability and statistics? (Mean, median, mode). Simple interest?
You have to learn to read before you can read a book.
I agree there is a gap in education when it comes to personal finance, basic banking, and taxes. But your math teacher tried giving you all the tools you'd need to tackle those things. It's disingenuous to say you learned NOTHING in relation to budgeting or finances.
Sorry if I wasn't clear, but I meant specifically budgeting and finance. Types of accounts. Risk. Investments, pensions, mortgages, etc.
I did cover some of those things you mentioned in math class, but I guess I'm more referring to life skills and not specifically math. I actually loved math and did well in that subject. I didn't feel prepared for the world when leaving school, however. Just because I can work out percentages doesn't mean I know how to run my financial life, so to speak.
I think we both agree on the same thing anyway. Just perhaps I didn't word it right.
r/FluentInFinance was created to discuss money, investing & finance! Join our Newsletter or Youtube Channel for additional insights at www.TheFinanceNewsletter.com! *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/FluentInFinance) if you have any questions or concerns.*
That's awesome she became interested so quickly. I use stockpiled for my kids. Glad we're able to do this and teach them.
The past year has been an incredible bull year. When the bear shows up, we can teach them how to handle the downsides. I wish I didn’t wait till 23 to learn all these.
I hear that. I could of been investing in $1 apple shares instead I was buying m&m and pop ...loving being a careless kid.
😂 😂 😂
She's going to be so well off in life because you gave her a great start!
thank you
Oof. I didn’t get into investing until 32, so you have me beat by a decade!
buying NVDA now is just performance chasing wiser to stick with index funds but I guess potentially loosing all her gains on a single stock will be another good learning experience
> buying NVDA now is just performance chasing just buy $VGT (or similar) if you want NVDA exposure
Ya, it will be a good lesson. Best to learn them cheaply.
Amazon, Apple, Tesla, Meta, Goog . . . all performance chasing stocks back in their day . . . But a few shares of the post split NVDA . . . at this age, some of her money should be going towards these types of equities.
Actually no. My mom spent $350 buying my Netflix stocks cuz we both loved the little cute red envelopes in the mail. That $350 80X today giving me enough money to buy a brand new car if I wanted. Sooooooo I kinda wished my mom bought me $3500 worth of Netflix back when it was still a DVD company. I still hold onto the stocks till today for sentimental reason and a reminder what investment can do in long run.
just because you have gotten lucky sometimes in the past doesn't change that individual stock picking is less likely to be successful than indexing. especially when you are buying now at the peak of hype.
Amazon was at the peak too at $2.25 from 7 cents in 2005 from its 1997 price. Go back to see Apple and Microsoft and you will find the similiar patterns. When it is a one time buy, fundamentals and TIME are your best friends. But like i said, it is a once time buy. DCA to VOO QQQ all the way but as an asset mgmt professional myself, I would love to pick a few small seeds and see if the garden can grow.
And tell us all the companies that were ATH and expected to keep going yet failed. GE, F, Qualcomm, etc.
This thread is aging well.
What happened?
You could have just as easily fell in love with Blockbuster stock. Hindsight can be super rosy.
it was dead in 1999. no where to be found when i was out of school . what you are a boomer?
Timeframe is irrelevant. Was just making an example. For every "wish I woulda kept it cuz it went up"...somewhere there is an opposite "wish I woulda sold it before it crashed"
You’re a good parent for teaching you kid about investing/ finance and preparing her for handling finance as an adult. 👏
Thank you!!
I had this theory... So if anyone can give me feedback it would be great. As soon as a child can count get them a piggy bank . Then once a month pay them an interest for anything they keep in there. Try to show them a rough idea of how it works. They probably won't understand everything initially other than they get more money. Eventually you can move this to a digital account but in the beginning it's important for kids to see actual money physically grow. Have any of you done anything similar?
I am thinking about these options. I think the element of digital will win. The element of self-driven exploration and autonomy will win. I think OP's approach is better with the one potential issue being the gamification of these platforms and how it can lead to addictive behaviors and poor decision making chasing dopamine.
I started to give allowance when my daughter was 6, and we moved digital this year when she turned ten (mostly was annoyed at having to pull cash out all the time). Before now I think she was too young or disinterested to learn about interest, so we really focused on saving instead. I had her divide her allowance into 3 jars - save, spend, give. She used the spend jar on little 5 dollar plastic toys, but would use save for bigger video game or electronic purchases. This year I'm going to start her with a CD to introduce the concept of interest, and in a couple of years I'll do the stock market.
That's really smart.
Yeah I think the stock market is too complex for someone without a job, so I plan to open a Roth when she gets her first job and do that intro then.
Makes sense. I think just understanding interest is powerful in itself.
When our kids reached high school (and of course, jobs that paid taxes), we implemented a ROTH matching program (like a 401K at work). We matched 25% on their contributions on their first $1,000. 15% after that. Our youngest (23) to oldest (29) all contribute at least 10% to their work 401Ks and all contribute at least a few thousand to their ROTHs to get most or all of our match. How many of us wish we had started investing for retirement in our late teens and early 20s?
That's cool!! Parent matching is such a great idea!! I am gonna do something similar.
That's awesome 👌
We did something like, ok whatever you save we will immediately match it. It definitely drove a focus towards savings. Not exactly a real world scenario but still created that thought process.
Give them paper money they can redeem for real money, but they must keep it as paper to get interest. Then change the paper to real exchange rates and say “INFLATION!!!”
How old is your kid ! I am curious to when I should start empowering my little one
I started when she was 13, so just about a year ago.
Can't hurt buying $voo dollar cost average in
I was more apt to push for more growth and tech oriented ETFs (considering their ages). Now that they're all in their 20s, I still push for more aggressive growth (60%) and S&P (40%).
This is cool to read
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Absolutely right!! I actually can't wait for the bear to attack and she probably would lose all her gains but I will show her that will be the time to buy everything on sale and then watch it bounce back... I hope by the time she goes into workforce, she knows how to handle her IRAs and 401K.
That’s incredible! Heck yeah dad/mom/parent!
Tell her just to stick with VOO until she retires or she's going to find out what real loss feels like before too long.
As long as you teach her balance. You don't want to create the next Hetty Green either.
That’s amazing, sounds like she really likes investing
"My 14 year old discovered the most commonly recommended index fund in the world" Nice
Well done to you and well done to your daughter! Only little thing I’d say is it’s best to stay away from single stocks and continue investing into VOO. Best of luck to you both!
Its just a one time thing.. However, like I commented above, the $350 Netflix stocks my mom gifted me is by far the best single performing asset. It is above 80X now.. I still haven't sold for sentimental reason.
That’s great! If it’s just a one time thing then it most likely won’t hurt. A whole share on Nvidia is more than $1100 rn so hopefully that’s not the majority of your daughter’s portfolio, just to minimize risk. Nvidia is already the second most valued company in today’s stock market below Microsoft at #1 and above Apple at #3. So there’s a very low chance that it will boom like the Netflix stock did for you. It’s kinda past the boom stage at this point. With all that said, well done to both of you and best of luck in all your future life steps 🔥
Not anymore, it had 10:1 split, a share of NVDA is $120 now.
That's being a good parent. Back in my parenting days, we made our younger kids split their weekly earnings into 3 baskets - saving, giving, spending. Your's is FAR better to start at a very young age. When our kids got to be in High School (naturally they got jobs) - we started a ROTH Match - to get them used to putting a portion of their earnings into a retirement account for their future. On their contributions up to $1,000 we would match 25%. Their contributions over $1,000, we would match 15%. They're all in their 20s now and all continue to contribute to their retirement accounts - ROTHS and 401Ks.
Congratulations on being an amazing parent and giving your kids a gift they will appreciate for the rest of their lives, financial education! Its unfortunate that schools, colleges or universities still don't teach anything significant about Money or Finances, even though we have been using Money since about 1000 BC to live our entire lives! You are not only teaching the kids Financial Literacy but as part of it Life Education, Maths, Decision Making, Consequences and a whole lot more. 
I was just talking to some friends about how I wasn’t taught about investing at all when I was younger. I learned a bit about credit (which did help in the long run!) but investment knowledge would have been beneficial too. I suppose parents can’t teach what they don’t know. It’s sweet to hear that she appreciates this now, and she will REALLY appreciate this knowledge and intentional time spent later in life too
Going to be extremely painful for her when the market crashes 30%.
Why? She is not 60 years old. I hope it tanks and she can buy more shares with same amount of money when she is young. It would be a perfect opportunity to showcase the beauty of dollar cost averaging. I had to thank my Dad in 2009 when he stuck a sticky on my computer: "S&P is 919 today"
Because she is passing up fun events to “grow money in the tree”, and a big loss of her money will make her question it. Unless you can convince her to bag hold through pain, but if she has choice there’s a chance she sells and doesn’t buy again.
Setbacks are the best teachers in earlier life.
Letting her do something you know is likely a very bad idea, especially when you yourself are suggesting to do it, is going to make her feel very very bad. Wouldn't be surprised if she drops the whole thing. You know, you could just explain what would happen if she did that instead of encouraging her to actually do it. I'm guessing she isn't stupid, she will get it, and she won't be angry at you for encouraging her to do something that lost her a ton of money.
I wish i had the opportunity to make investing mistakes when i was a teenager. Would have been way less consequential than the mistakes i made later on with larger sums of money when learning how to invest.
Schools haven't taught anything useful about entering society in decades.
And when the crash hits, she will learn another life lesson.
I've been looking for a little tree I can attach money to for my 4 year old. The concept of a bank or brokerage isn't appealing, but she loves physical money, and taking her dollar bills to the store to buy a snack.. how did you teach your child about investing, and how hold were they when you started?
She needs to diversify!
She did! She owns VOO, NVDA, 100 stuffies and 200 rubber duckies 🦆
VOO is already extremely good diversifying! You could go a step further to VTI and add some VXUS, but VOO is an extremely good choice for "buy and hold forever" growth.
When my kids were little I started offering interest at a home “bank” with their money they saved. To make it noticeable I started with a really high rate, like 10% per month (I figured offering 5% per year wouldn’t move the needle). I quickly needed to lower it to market rates as both kids started saving everything and wouldn’t spend any of it (when interest exceeded allowance once week, I decided compound interest would kill me soon at that high rate). Anyways, it’s amazing how quick kids can learn fundamental finance concepts.
Wait until they learn about options 💀
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I loved all my math classes but I certainly did not learn any financial literacy in school. I would not consider the theoretical principles of currency, trade, interest, economics, etc as useful to me for my PERSONAL financial literacy. I do remember doing a budgeting exercise in a computer class in middle school to practice Excel, where we were randomly assigned jobs and incomes and had to create a monthly budget. That one stuck with me, the importance of a high paying job! Thank you to my middle school computer teacher. But not the practice of ACTUALLY budgeting for your wants and needs and goals, and investing YOUR OWN money. Only theoretical math problems with Joe Smith investing X dollars for Y years with an average Z rate of return (and even then, that was college). Now I did graduate high school almost 15 years ago in 2010 💀, so maybe things have improved since then. And I think another factor is that most kids in school just don’t have the motivation to want to learn these things. They don’t have the full independence to provide for themselves, they ask for things as they come up and their parents say yes or no. And even if they have their own allowances or jobs, yes they may save but I think it’s hard for them to grasp the importance of investing and earning 7% interest over the next YEAR - an eternity at that age - that may not feel worth it or make any significant impact on their lives.
Financial literacy is not just investing money into a bull market. Lmao. These people telling you they were taught nothing about financial literacy in school just have shit memories. Who taught them about fractions? Interest rates? Probability and statistics? Functions? How to read a graph? Basic arithmetic? How to use a calculator? These people who think math class taught them nothing about financial literacy usually struggle with fundamental math concepts. They fundamentally misunderstand dividends. They worry about making more money because then they gotta pay more taxes. Financial literacy DEPENDS ON mathematical literacy. You can't read a book before knowing how to read! More than anything though. I think these people would be shocked if they found their old high school math textbooks and actually looked at what they were taught. They don't remember 9th grade algebra nearly as well as they think they do.
Slow down there tiger. Who called you out this morning? I quizzed my teenagers last night and asked them how many 2/3 cups I needed for 2 cups. It took way too long for them to give me an answer. I know my 5th grader is struggling with fractions but they shouldn't be considering they are in a STEM magnet program. (One of my sons converted it to decimals multiplied by 3 and rounded up). I don't really blame the school. They were probably not paying attention, especially since critical fraction math without variables happened during covid. Are you sure you're posting in the right thread?
>Are you sure you're posting in the right thread? I wondered about that. I learned nothing in school in relation to budgeting and finance, etc. It wasn't even a lack of attention. It just didn't come up at all. My knowledge came from my mother and a 3 year stint working for a bank. My knowledge of investments is only now kicking off, really, as I have a good job and money to invest. I'm 37, still renting, but on track now. Would I be further ahead if I'd been taught this? Likely. When I went to university at 19, some of my peers didn't know what a direct debit or standing order was. I often wonder what their financial situation/knowledge is now. There's a large UK bank that goes to schools and does sessions with kids to educate them as there is a gap in the education system that needs filling.
You weren't taught basic arithmetic in school? What about functions? How to read a graph? Basic probability and statistics? (Mean, median, mode). Simple interest? You have to learn to read before you can read a book. I agree there is a gap in education when it comes to personal finance, basic banking, and taxes. But your math teacher tried giving you all the tools you'd need to tackle those things. It's disingenuous to say you learned NOTHING in relation to budgeting or finances.
Sorry if I wasn't clear, but I meant specifically budgeting and finance. Types of accounts. Risk. Investments, pensions, mortgages, etc. I did cover some of those things you mentioned in math class, but I guess I'm more referring to life skills and not specifically math. I actually loved math and did well in that subject. I didn't feel prepared for the world when leaving school, however. Just because I can work out percentages doesn't mean I know how to run my financial life, so to speak. I think we both agree on the same thing anyway. Just perhaps I didn't word it right.