Now that our oldest son is a freshman in high school, I’m anxious to start teaching him more about money management, especially as it relates to investing. In fact, I would’ve been happy to start teaching him these things much sooner but he hasn’t really seemed ready and I haven’t wanted to push him.
This isn’t to say that we haven’t already been teaching him about money. We have. In fact, we started paying each of our kids a (small but gradually increasing) monthly allowance around age three. That’s been an effective tool for teaching them about saving and spending (not to mention basic math skills), but it only goes so far.
Over the years, our oldest has amassed a nice chunk of change — around $3k in the bank — thanks to birthday and Christmas gifts, saving a portion of his allowance, money he’s earned from various odd jobs, etc. Thus, he now has enough capital to think about doing more than letting is sit around in savings account.
So how will I know when he’s ready for more? Well, about a year ago I gave him a task. He had recently asked (and I answered) a few questions about investing so I bought him a copy of Stanley & Danko’s “The Millionaire Next Door” and told him that as soon as he read it I’d be happy to teach him more.
There’s nothing magical about this particular book, I just found it to be a good read. It’s both accessible and chock full of interesting insights, so I figured it would be a good jumping off point. And if he was interested enough to read the book on his own, I knew he’d be ready for more.
Well… That book has been sitting on a bookshelf in the living room ever since. But the other night, when he was looking for something to read, he decided to pick it up and give it another try. He flopped on the couch next to me and proceeded to read the first 25-30 pages.
As he read through it, he asked a few questions and seemed genuinely interested. So maybe this is it. Maybe this is the moment when he’s actually ready to take the next step and start learning about investing. If not, there’s always tomorrow. Or the next day. Or next year. There’s no real hurry.
My only real goal with this is to launch our kids into life with a solid financial footing. We’ve already made great progress on this so I’m not interested in pushing him before he’s ready and willing.
Relevant queries: allowance