Financial Lessons and Investing Basics for Kids

My kids had seen me trading for years, and they had a rough idea of what it was I do, but recently I decided to get serious about teaching them about investing. I opened them their own Stockpile accounts and we set a goal to go over their stocks every Friday. Since then I’ve found that it’s interesting enough to them that they come to me multiple times a week. I’ve even overheard my nine-year-old daughter asking Siri for stock quotes. That was a proud moment.

On October 17th, with their accounts fully funded, we set about buying their first stock and hit upon the idea of Fitbit. Their grandma had bought them Fitbit juniors about two years earlier. They had gone through phases using them, but recently got into using them for tracking their chores and earning rewards for them. And like everyone, they love to see the daily step counter.

So we were set on buying FIT for $3.89 that day as their first trade. We discussed it for a while. I showed them the chart and we talked about some of the things that make a stock go up and down. My wife captured a little of our conversation:

Unfortunately, Stockpile doesn’t deal in every stock. Investing with stockpile allows you to buy partial shares, which is hugely beneficial when trading for a kids’ account (i.e. buying a partial share of Amazon stock versus whole shares at $1700), but unlike a traditional brokerage not every stock is available on their platform. Turns out Fitbit is one of those they don’t carry. I should say, they didn’t carry FIT, though they do now.

We scrapped the FIT trade and bought DIS instead that day.

Two weeks later Google announced they were buying Fitbit for about $2.1 Billion and the stock shot up to ~$7.10, a full 83% above where my kids had tried to buy it just days earlier.

Fitbit Trade

So, instead of someday telling the story of how their first purchase in the stock market was an 83% two-week winner, they can tell about the Disney stock they bought that was dead flat over those same two weeks. Such is the life of a trader.

Hey, we’re supposed to teach our kids important lessons, right? What better lesson than a good “shoulda-woulda-coulda” stock market story at such a young age?