No Better Time Than Now

When I was 14 I started my first job as a busboy at Outback Steakhouse (which I love reminding my kids about) and was motivated to start investing in its stock.  It was the perfect time before rocketing higher along with all other companies in the mid 90s.  My father's investment advisor recommended I read the Wealthy Barber and that was the start of a long series of reading books and investing in other stocks.  I want to pay it forward and teach the next generation the value (and joy) of investing!

Open an account

Get a job! Or earn allowance money using the Mydoh app. Parents sign up and, add up to five kids. From the parent account they load money, then work with their children to setup tasks, allowances, savings goals, and other activities that help their kids learn to manage their own money.

Kids 0-12 can open a free bank account called RBC Leo's Young Savers Account.

Anyone over 14 can open a Direct Investing practice account. Its a free clients and provides you with $100,000 of "practice money" to invest in stocks or options.

Anyone over 16 can open a DS Investment account (with parent signatory).  Alternatively, your parents can hold stocks for you in their account or an in-trust account can be opened.

Invest in what you care about

You possess insights that many institutional portfolio managers would envy. The latest trends! While there are many factors that influence stock prices, identifying trends and earnings inflections is likely the most crucial. Which products do you love, and can you invest in them? Begin tracking the performance of your favorite stocks and discuss with your parents the possibility of setting up a portfolio.

Challenge yourself.

Be humble.

Learn!

Test Your Knowledge

See answers at the bottom.

1) Which is the cheaper company? Stock A at $100 or Stock B at $1,000?  

2) If you want to become a millionaire, how much would you need to invest each month until you retire in 50 years? 
    (Assume an annual return of 8.7% which is the 50-year average of the S&P 500)

i) $100/mo., ii) $500/mo. or iii) $1,666/mo.

3) If you earn an extra 2% per year on your investment (for example, earning 8% instead of 6%), how much more would your investment be worth after 40 years?

i) 50%, ii) 80%, iii) 100% or iv) 110%

4) Assume you buy a house for $1,000,000 (or a parking space!) with a loan for $750,000.  If the price of the house drops by 10%, what percent did your investment decline?

5) What is the biggest single-day gain in the S&P 500 history? Largest decline?

6) Since 1975, what has been the worst performance of the S&P 500 over a 5, 10, 15, and 20 year holding period?

7) What has been the better investment since its first day of trading in 1972: Coke or Pepsi?

 

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Click to See Answers

 

Suggested Books

Key concepts to learn about in all the books are Compounding returns, Dollar cost averaging for new purchases and re-balance frequently (returning to the mean).

My All time favourites

Beating the Street (Peter Lynch)

The Wealth Barber (David Chilton)

The Psychology of Money (Morgan Housel)

The Most Important Thing: Uncommon Sense for the Thoughtful Investor (Howard Marks)

Thinking Fast and Slow (Daniel Kahneman)

Age appropriate suggestions

Kids 10+: From Piggy Banks to Stocks, The Ultimate Guide for a Young Investor (Maya Corbic - a Canadian CPA)

13-16: A Rich Future: Essential Financial Concepts for Youth (by Noah Booth - teen from Kingston, ON)

16+: Seventeen to Millionaire (Douglas Price)