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8 Reasons Every Child Should Learn About Saving & Investing: Part 2

Tia Gao

5. Investing Introduces Variety
We all know—or should know—that a diversified portfolio is a stronger portfolio. Spread your risk and your opportunities around, and you have more chances to gain without the worry that one major upset will wipe you out. This is a great way to approach some of the milestone decisions as kids transition into adulthood, too: pursuing a variety of interests to see what life has to offer, trying different courses in high school and college to develop a more informed view when choosing a career path, and even making sure they have a range of professional skills.
6. Investing Sets Goals
Setting goals is one of the keys to achievement in any endeavor, and investing is no different. The most solid goals in the investing world are long-term and portfolio-wide rather than short-term and stock-specific, but even these can be translated into kid-friendly lessons. After six months, is your portfolio on track for the growth target you set for the year? What small adjustments might be made to better reach those goals? Learning how to manage investments means setting, tracking, and working towards goals, and that will help kids throughout their lives.
7. Investing Requires Lifelong Learning
From researching funds, industries, and companies to keeping tabs on boardroom shakeups, splits, and dividends, conscious investing—including long-term buy and hold investing—takes constant learning. Like anything else in life worth doing, there's always room for improvement when it comes to investing. There's always more information to gather about your investments, too; when kids get engaged in the companies they own, they learn that stewardship and awareness go hand in hand.
8. Investing Builds Confidence and Self-Sufficiency
When you—or your kids—invest in mutual fund or an individual stock, you are taking a real ownership stake in a business. You're taking responsibility for your money, your future, and your capability to make real-world decisions with real-world benefits and consequences. There's a pride that comes with being an investor that has nothing to do with gains or losses; a pride borne of the self-sufficiency that making an investment stands for. When you put kids in charge of their own portfolios, even if there's a lot of guidance and oversight involved at first, you're giving them the confidence and control they need to become responsible adults.
Start Them on the Right Path with the Gift of Stocks
There's plenty more to recommend an early start in investing other than these eight life lessons for kids, though these reasons alone should be enough to convince anyone that the gif of an investment is a gift that truly pays lifelong dividends. If you're ready to give the gift of stock ownership to a child in your life, it doesn't get any easier than with SparkGift. Take a look around to see what we can do, and feel free to contact us with questions any time.
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