With Mellody Hobson, President Arial Management
Christmas is upon us and Hannukah has just passed but so most of us are focused on buying toys and the latest electronic gadgets for our children. The one constant we can count on is that there will always be another hot toy or new gadget introduced during the holiday season and that this year’s gift will be long be forgotten next year. So why not have a paradigm shift and think more long-term by investing in your child’s financial future rather than his/her toy box.
Recently, I went to a public event hosted by ING DIRECT USA’s ShareBuilder and Good Morning America’s Financial Contributor, Mellody Hobson, at the ING DIRECT Café in New York City for an evening of family-friendly investing fun.
I jumped at the chance to meet Ms. Hobson who I have been a fan of for many years. In case you are you are not familiar with Ms. Hobson. She is a nationally recognized voice on investing and financial education as well as the President of Ariel Investments in Chicago.
At the event, Ms. Hobson and ShareBuilder President Dan Greenshields offered step-by-step plans and answered questions to help families start investing in their children’s future.
Mellody Hobson and Dan Greenshields, President of Sharebuilder
During the event, children actually had their own event where they had the opportunity to learn about Planet Orange—ING DIRECT’s online financial education program for kids—and meet Cedric and Amy, the Astronaut Guides of Planet Orange. To learn more about Planet Orange, visit www.orangekids.com for more information.
Cedric and Amy, the Astronaut Guides of Planet Orange
Questions asked during the session:
Q: What is the appropriate age to begin discussing financial matters?
A: Start as soon as kindergarten, start discussing in basic terms.
Q: What do you think about giving allowance?
A: Giving the gift of stock would be better.
Q: At what age should they begin buying stock?
A: Earlier than you think, kindergarten or first grade.
Q: How involved should the child be in picking the stocks?
A:Completely involved, let them choose the stock based on what they know and use. For example, do they play with a Nitnendo DS, then invest in Nitendo, watch Disney Channel then buy Disney. Sounds simplistic but they need to be able to relate to the stock.
Q: What if you don’t want to invest in that stock because you know more about the financials about the company than the child?
A: Let them still choose, let them see how the stock is doing. They need to be invested in the stock and it will provide motivation to learn more about the company. It will provide a way for both of you discuss more about the financials of the company. They can learn to read brokerage statement at an early age.
Q: What if you yourself have no idea how to read a brokerage statement?
A: That shouldn’t stop you, you can learn together.
Q:What if your child chooses a stock that might be more than you want to spend? Sharebuilder offers the ability for you to buy partial stocks because there are no minimums.
While I am went to the event to meet Mellody Hobson, I walked away from an “aha” moment. Like Ms.Hobson, I did not grow up with parents who invested in the market. I have no idea if they even knew how. Now mind you, it’s so much easier to invest in the market because in the past, you could only buy through a broker and there were minimums to invest. I, personally have used sharebuilder.com for years when I found out that that you could actually invest on a monthly basis in any stock you want and there were no minimums. They really make it super easy to do. When I started investing, I only invested $100/month in a stock and frankly, that wasn’t even enough money to buy 1 share of the stock. I am of the mindset pay yourself first, if money is being automatically deducted then you can’t spend it.
From listening to Ms. Hobson, it made really realize that two things are going to happen for my daughter’s birthday in March, we are going to invest her birthday money in stock and I am going to ask her godmothers not to buy gifts for her birthday and next Christmas but invest stock in their respective companies. Seriously, if they invested 2-3 times a year, compounded over the next 10 years, she will actually go to college with money She may not be happy with not receiving “toys/gadgets/clothes” for the next 10 years but oh well. She will thank us in 10 years.
The one thing I like about this idea is that frankly, it provides a starter and ongoing conversation about money. My parents never discussed money with us which would have been helpful after they both died.
Finally, I went to the event for my daughter. There are so few women of color in finance and business and even the ones who are hardly get written about in the press. Sorry, I digress. I wanted my daughter to meet Mellody Hobson for that reason and to show her that she too can major in math, go onto to work in finance and finally, reinforce to her that investing is important.
Want to get started?
ShareBuilder’s Gift of Stock, a physical kit to help simplify and get a jumpstart on investing for a child’s future is available this holiday season at https://shop.ingdirect.com/ for $45, a $125 value.
The Sharebuilder Gift of Stock package includes the following:
- Quick Start CD
- Motley Fool Video Series – Provides a help in developing the right financial portfolios for your financial goals
- $50 Sharebuilder Gift Card for you to start a stock portfolio with Sharebuilder for you or your child
- 5 Automatic Investment Plan Credits – Free trade credits allows you, your friend or family to build wealth over time. Sharebuilder’s automatic investment plan allows investors to set up recurring invesments with a dollar amount you can afford
Change the Financial Paradigm in 2011, Invest in your child’s future.
Disclosure: Level 1 disclosure. Click here for NYC Single Mom disclosure policy. And for the record, I have been a sharebuilder and ING Direct customer for years.
