More and more 20-somethings are getting in on the stock market game. In fact, parents are now teaching their pre-teens and teens the ins and outs of the Dow Jones and NASDAQ.
The first step is start with an allowance. The app, BusyKid, allows parents to match chores with your child’s age, and suggests the allowance amount and the frequency. So, what’s the rate for cleaning the toilets? $2.50. Folding laundry is worth $4.00. Pulling weeds, $2.00.
Next, have your kids deal with debit and credit cards. Greenlight is an app where parents can pay their children through their bank accounts. Kids can have their own debit cards, get cash back, and even invest their money.
The key here is every trade needs a parent’s approval. And when they do make money, have them use it for something important.
Roth IRAs can be set up for kids of any age. With an initial invest of $500, and just an additional $500 investment every year, in 50 years at 5%, they could have $120,000.
Also, to spark interest, set up a siblings or cousins investment club, or your child can start one at school. The value comes from being able to share ideas, debate the importance of facts they learn about the companies and then vote on the best moves to make.