NEVER TOO YOUNG TO LEARN

By Jason Reed | Spring 2021

Printer Friendly

Page 2 of 2

Kids and Investing:
A Primer

Here are the basic steps in getting your child started as an investor:

Do some reading — and assign it to your child as well.

I suggest “The Little Book that (Still) Beats the Market” by Joel Greenblatt, founder and managing partner at Gotham Capital, and “The Little Book of Value Investing” by Christopher H. Browne, managing director of investment firm Tweedy, Browne Company. Both explain the basics of investing in a style that is easy to read and understand.

Set up a custodial stock account for children under the age of 18.

Two of the most common types of custodial accounts are the Uniform Gift to Minors Act (UGMA) and Uniform Transfer to Minors Act (UTMA). There are some differences between them, but essentially they are brokerage accounts administered by an adult on behalf of a minor. They offer enormous flexibility in terms of contribution limits and types of contributions. There are stipulations about the funds when it comes to paying income taxes and how they figure in when calculating college financial aid, so it’s best to work with a financial adviser in setting up the accounts.

Invest in an index fund that tracks the whole market, where the fees are likely to be low.

Perhaps most importantly, use this as an opportunity to get involved in teaching your children good financial habits from an early age. Investing is not only a great joint activity, but also an opportunity to connect to things they care about and to show them how they can support companies or sectors such as tech by investing instead of spending.

Categories

  • Features2
    CENTURY MARK 18387
    2020 HINDSIGHT/FORESIGHT 18389
  • Family6
    NEVER TOO YOUNG TO LEARN 18390
    EDUCATION AS LEGACY 18391
    WEALTH CREATION AND HUMAN RIGHTS 18392
    CHURCH BUSINESS 18393
    SNAPSHOT 18394
    IRISH UNICORN 18461
    ND BUSINESS BRIEFINGS 18581
  • Faculty News1
    FACULTY & TEACHING 18380
  • Profiles2
    EDUCATION AS LEGACY 18391
    IRISH UNICORN 18461
  • Editor's Letter1
    EDITOR'S LETTER 18375
  • Mendoza News1
    STUDENT LIFE 18382
  • Mendoza Profiles1
    SNAPSHOT 18394
  • Alumni Community2
    CENTURY MARK 18387
    IRISH UNICORN 18461
    ND BUSINESS BRIEFINGS 18581
  • First Person4
    NEVER TOO YOUNG TO LEARN 18390
    EDUCATION AS LEGACY 18391
    WEALTH CREATION AND HUMAN RIGHTS 18392
    CHURCH BUSINESS 18393