As a parent, of course, you want the best for your child. You want to ensure that they have a bright future and are financially secure. One way to achieve this is by investing in stocks for your kids. Investing is a powerful tool that can help your child build wealth over time. Not only that, but it can be a daunting task for many adults, let alone kids. Introducing children to investing while young can provide them with valuable financial information and set them up for a secure financial future!
Stock investing for kids
For the most part, parents don’t even think about investing on their child’s behalf. However, with parental support, it is completely possible and easy to get your kids started with investing. Custodial accounts are perfect if you want to ensure your child can be a part of the process, with parents approving and monitoring transactions. Custodial accounts generally are like savings accounts that an adult controls for a minor. It is then transferred to the minor once they turn either 18 or 21, depending on what state they reside in. You can find custodial accounts through investing apps for kids as a way to teach them about money management, investing, and saving.
Can kids invest in the stock market?
I bet many people haven’t even heard of kids investing. Growing up, I always thought investing was way too complicated for a kid or teenager to understand, so I just assumed that I could leave that up to the adults. I mean, none of my friends did it! But did you know that it is possible for kids to invest? In fact, the earlier, the better!
OK, let me back up a little. In order to start investing by yourself, you need to be at least 18 years old to open a brokerage account. However, there are alternative methods so that people under the age of 18 can invest too. It’s important to note that even if you’re underage, you can still participate in investing indirectly. For example, you can ask your parents or guardians to open an investment account in their name and manage it on your behalf. This allows you to contribute funds and propose investments you would like with their guidance.
An easy way for teens who want to begin their investing journey is by getting a parent or guardian to open a custodial account on their behalf, a great way to do this is through Invstr Jr! For parents, Invstr Jr works as a custodial account and investing app for minors and can be used as a tool to learn about financial management with the help of an adult. On the other hand, investing for teens can be a great way to have a financial advantage in the future.
What are the benefits of a stock investment app for kids?
I already mentioned a major benefit for both parents and teens in the fact that it is great preparation for the future, but stock investment apps for kids can offer several other benefits as well. Here are a few of them:
1. Financial Education: Stock investment apps designed for kids often incorporate educational resources to teach them about investing and financial literacy. These apps can help kids understand basic financial concepts, the stock market, and the importance of long-term investing. Invstr’s Academy offers an interactive 10-module course written by market experts that covers everything there is to know about investing. It’s jargon-free, easy to understand, and you get a certificate when you graduate! The best thing – it’s free!
2. Hands-On Experience: Investing apps allow kids to gain hands-on experience in the world of investing. They can explore the stock market, research companies, and make virtual investments. This practical experience helps them develop a better understanding of how investments work and the potential risks and rewards involved.
3. Simplicity and Accessibility: Kids’ investment apps are typically user-friendly and designed with simplicity in mind. They provide an intuitive interface that makes it easy for children to navigate and use the app. These apps often offer a streamlined investing experience, making it accessible for kids to start investing with their parent’s guidance.
4. Parental Supervision: Many kids’ investment apps allow parents or guardians to oversee their children’s investment activities. This feature ensures that parents have control and can monitor their kids’ investments, providing an additional layer of security and guidance.
5. Long-Term Investing Habits: By introducing kids to investment apps, parents can help instill the habit of long-term investing from an early age. Kids can learn about the potential benefits of patient investing, compound interest, and the importance of setting financial goals for the future.
Remember, while investment apps for kids can provide a great learning experience, it’s crucial to involve parents or guardians to guide and supervise the process. For more information, you can check out our How a Kids’ Investment App Can Help Your Child Learn About Financial Responsibility blog!
Why should parents teach their kids the value of investing in stocks?
Teaching kids the value of investing is crucial for their long-term financial well-being and overall development. Here are several reasons why parents should consider teaching their children about investing:
Investing introduces children to fundamental financial concepts, such as saving, budgeting, and the power of compound interest. By understanding these concepts from an early age, children can develop good money management skills, make informed financial decisions, and avoid common pitfalls.
Long-Term Financial Security:
Investing is a key strategy for building wealth and achieving long-term financial goals. By teaching kids about investing, parents can empower them to take control of their financial future, helping them plan for major life events like education, buying a home, starting a business, or retirement.
Instilling Discipline and Patience:
Investing requires discipline and patience. Children who learn about investing early on can develop the habit of setting goals, making long-term plans, and waiting for the fruits of their investments to grow. These qualities can be beneficial not only in financial matters but also in other aspects of life.
Investing can foster an entrepreneurial mindset in children. They learn to assess risks, evaluate opportunities, and understand the potential rewards of investing in businesses or innovative ideas. This mindset can inspire creativity, critical thinking, and a willingness to take calculated risks, which can be valuable in various professional pursuits.
Understanding Economic Concepts:
Investing introduces children to the basic principles of economics, such as supply and demand, market trends, and the interplay of various factors affecting financial markets. This knowledge helps them develop a broader understanding of how the economy functions, preparing them to navigate the complex financial landscape as they grow older.
By teaching children about investing, parents can pass down valuable financial knowledge and strategies that can lead to generational wealth. The ability to grow and preserve wealth through investments can provide future generations with opportunities, financial stability, and the freedom to pursue their dreams.
Investing teaches children the importance of financial independence. By investing wisely and making their money work for them, they can reduce reliance on others and create a sense of financial security. This understanding fosters self-sufficiency and empowers children to make choices based on their own financial goals and aspirations.
It’s important to tailor investment education to a child’s age and understanding, making it engaging and relatable. Parents can start by explaining simple concepts, introducing saving and investing through activities like Fantasy Finance®, a simulated stock market game where you don’t have to risk real money, or encouraging them to save money for a specific goal. As children grow older, parents can gradually introduce more complex investment concepts and strategies.
Invstr Jr: Our investment app for kids
A money and investment app for kids, teens, and everyone in between is beneficial for people who want to grow their wealth. Invstr Jr is a perfect way to manage stocks for kids! As an added positive, your kids learn about money management and smart sending, through Invstr Academy, and Fantasy Finance, which will help them save for a rainy day.
Invstr Jr also helps kids bank on their future by setting up recurring or one-time allowances to reward them for completing Goals. Parents and children can send money anytime, anywhere! Another advantage is that Invstr Jr offers easy stock trading for kids, where parents and guardians can carry out trades on their children’s behalf. You have total oversight! That way, if you want to surprise your child with a new stock, you can! Crypto included! No wonder it’s rated the best educational app by Bankrate!
The best part is that Invstr Jr works for more than one child. For up to four kids, an Invstr Jr account costs only $7.99 – which includes debit cards, goal setting with rewards, and a custodial account for parents and kids. If you are not an existing Invstr customer, you must open an Invstr+ account first. If a link has been shared with you, follow the link to download Invstr from the Apple app store or Google Play Store. You will need to go through the onboarding process for opening an Invstr Jr+ account. After entering your details, please have the following information for setting up the account:
Child/Children Full Name
Child/Children Date Of Birth
Child/Children Social Security Number
Once a minor reaches the age of majority (currently 18 years), Invstr works with them to transition the account.
We have an in-depth article on how to open an investment account for your child here!
When it comes to your family, there’s no better way to give your kids a head start than by investing in their financial future. With Invstr Jr’s custodial account for parents, you can create a stock trading account for minors, help them invest, and teach them about money management, smart saving, and more!
The importance of your kid’s first stock
As it goes without saying, a child’s first stock is arguably one of the most memorable experiences for an investor. That’s why it has to be a good one! It can be the decision that makes or breaks their investing future. So, you’re probably wondering, how do I find the best stocks for kids to invest in?
What do kids like?
A good place to start is to consider their interests. For example, do they like movies and princesses? Disney or Dreamworks might be the perfect choice.
Disney stock (ticker symbol DIS) is the publicly traded stock of the Walt Disney Company. The Walt Disney Company is known for its diverse portfolio of media and entertainment businesses, including theme parks, film and television production, streaming services, and consumer products. Disney owns popular brands Pixar, Marvel, Star Wars, and National Geographic: The stock has historically been a solid performer and had paid dividends to its shareholders in the past.
Netflix stock (ticker symbol: NFLX) refers to the publicly traded stock of Netflix, Inc, a leading global streaming entertainment service provider. It is a subscription-based streaming platform that offers a wide variety of movies, TV shows, documentaries, and original content across different genres and languages. It operates in over 190 countries and has millions of subscribers worldwide. Netflix has experienced significant growth since its initial public offering (IPO) in 2002.
Hershey (ticker symbol: HSY) is a publicly traded stock on the New York Stock Exchange. Here’s some information about The Hershey Company stock has historically been considered to be a fairly consistent investment. Hershey is a leading player in the global chocolate and confectionery industry. They have a history of paying dividends to its shareholders.
The Kellogg Company (ticker symbol:K) is a well-known American multinational food manufacturing company. It was founded in 1906 and headquartered in Battle Creek, Michigan. It specialized in the production and marketing of breakfast cereals, snacks, cookies, and Kellogg’s. Special K. Corn Flakes, Rice Krispies, Pop-Tarts, Pringles, and Cheez-Its. Kellogg stock’s performance can be influenced by various factors, including the company’s financial performance, market conditions, and industry trends.
Is your minor into cars? Tesla or Ford could be more their speed. Music? Spotify or Apple could adhere to their interest. The list goes on and on. The point is, there is a wide selection of companies to choose from.
While choosing one stock is great, having more in your portfolio is even better. This brings me to my next point, how do you even buy a stock?
How to buy stocks as a kid?
The first thing I recommend is to educate yourself. Before venturing into choosing a stock for your child, educate yourself about investing basics, different investment options, and the risks involved. This knowledge will enable you to make informed decisions and guide your child effectively.
The next thing you need to think about is setting investment goals. Determine the purpose of the investment. Are you aiming for long-term growth, dividend income, or a combination of both? Clarifying your goals will help you narrow down your options. Emphasize the importance of diversification. This can be achieved by investing in companies across various sectors or by considering index funds or exchange-traded funds that offer board market exposure.
Considering their interests is a major variable in choosing the right investment. Choosing stocks for kids to invest in goes hand and hand with their daily interests. It can even prolong their interest in investing altogether. That’s why it is a good idea to choose one they are already familiar with.
Buying stocks for kids is super easy through Invstr Jr!
If you are a child requesting an Invstr Jr account, be sure to share the link via text/email with your parent or guardian to set up their Invstr account and then set up your Jr account. If you are already an existing Invstr customer, simply click the Jr link in the side panel and follow the steps in setting up your child’s account.
Why consider opening an Invstr Jr account?
Opening an Invstr Jr account, or any similar investment account designed for young investors, can offer several benefits:
Invstr Jr is specifically designed for minors, offering a platform that is tailored to their needs and level of understanding. These accounts provide a controlled environment where young investors can learn about investing and gain hands-on experience.
Opening an Invstr Jr account can serve as a valuable tool for teaching children about financial literacy and investing. The platform typically provides educational resources, tutorials, and interactive features that explain investment concepts in a user-friendly manner. It can help children grasp the basics of investing, learn about different investment options, and develop good financial habits from an early age.
Invstr Jr accounts include simulated or virtual trading functionality. This means that young investors can practice investing with virtual money, which helps them to gain experience and confidence without the risk of losing real money. Simulated trading can be an effective way for kids to learn more about investment strategies, track stock performance, and make informed decisions.
These accounts require parental consent and oversight. As a parent, you can open an account on behalf of your child and monitor their activities within the platform. This allows you to guide and supervise their investment journey, ensuring they make age-appropriate investment choices and understand the associated risks.
Investing at a young age can instill a long-term perspective in children. By opening an account, you are encouraging them to think about their financial future and develop good saving and investing habits early on. It can help them understand the benefits of long-term investing and the power of compound interest.
Invstr Jr offers features that allow children to set financial goals and track their progress. This can teach them the importance of setting objectives, planning, and working towards achieving their financial aspirations. It helps them develop a sense of purpose and motivation in managing their investments.
However, whatever choice you make, I hope your investing journey is a great one.
This article was generated using automation technology. It has been thoroughly reviewed, edited and fact-checked by an editor at Invstr.
All investing involves risk and can lead to losses.
Past performance does not guarantee future results.
Invstr Financial LLC (Invstr) is registered as an advisor with the SEC. Securities trading is offered to self-directed investors by Social Invstr LLC, a member of FINRA.
I'm an experienced financial enthusiast with a deep understanding of investing, especially in the context of teaching children about financial responsibility. My expertise is backed by practical knowledge and a keen interest in educating young minds about the world of finance.
Now, let's delve into the concepts mentioned in the article:
Investing for Kids:
- Investing for kids is presented as a powerful tool for building wealth over time.
- The article emphasizes the importance of introducing children to investing early on for a secure financial future.
- Parents can open custodial accounts for their children, acting as savings accounts controlled by adults for minors.
- Custodial accounts are transferred to the minor when they reach a certain age, usually 18 or 21, depending on the state.
Kids Investing in Stocks:
- The article challenges the misconception that investing is too complicated for kids.
- Kids can indirectly participate in investing by having parents or guardians open investment accounts in their names.
Benefits of Stock Investment Apps for Kids:
- Financial Education: Stock investment apps for kids often include educational resources to teach financial literacy.
- Hands-On Experience: These apps allow kids to gain practical experience in the world of investing.
- Simplicity and Accessibility: Designed to be user-friendly and accessible for children.
- Parental Supervision: Parents can oversee and monitor their children's investment activities.
- Long-Term Investing Habits: Introducing kids to investment apps helps instill the habit of long-term investing.
Why Parents Should Teach Kids about Investing:
- Financial Literacy: Investing introduces children to fundamental financial concepts.
- Long-Term Financial Security: Investing is crucial for building wealth and achieving long-term goals.
- Instilling Discipline and Patience: Investing requires discipline and patience.
- Entrepreneurial Mindset: Investing can foster an entrepreneurial mindset in children.
- Understanding Economic Concepts: Investing introduces children to basic economic principles.
- Generational Wealth: Teaching children about investing can lead to generational wealth.
- Financial Independence: Investing teaches the importance of financial independence.
Invstr Jr – Investment App for Kids:
- Designed for kids, teens, and everyone in between to manage stocks.
- Offers financial education through Invstr Academy and Fantasy Finance.
- Provides easy stock trading for kids with parental oversight.
Choosing Stocks for Kids:
- Suggests considering children's interests when choosing stocks.
- Examples of stocks related to interests such as Disney, Netflix, Hershey, and Kellogg.
How to Buy Stocks as a Kid:
- Recommends educating oneself about investing basics before choosing stocks.
- Emphasizes setting investment goals and the importance of diversification.
Opening an Invstr Jr Account:
- Highlights the benefits of opening an Invstr Jr account for young investors.
- Emphasizes parental consent and oversight in managing the account.
- Features simulated or virtual trading for kids to practice without real money.
In conclusion, the article provides a comprehensive guide for parents on introducing their children to the world of investing, emphasizing financial education, hands-on experience, and the long-term benefits of instilling good financial habits from an early age.