How To Teach Investing To A 3 Year Old

We tend to make investing more difficult than it really is. The goal of any investment is to make money.

Here’s a simple way to teach investing to a 3 year old.

  1. Select their favorite cereal
  2. Ask them, “Do you like this cereal?”
  3. Desired Response: “Yes!”
  4. Then ask, “Do you think other little boys and girls like this cereal?”
  5. Desired Response: “Yes!”
  6. Do you think there will be MORE little boys and girls in the future or LESS?
  7. Desired Response: “MORE!”
  8. Then maybe we should own part of the company that makes this cereal. Would you like to own part of the cereal company?
  9. Desired Response: “Yes!”
  10. Purchase stock (using your favorite stock trading company) – Maybe General Mills (GIS) or Post Holdings (NYSE: POST)
  11. Better yet, purchase a mutual fund that owns cereal companies within it

I’ve done this with my daughter when she was 3. I’ve continued the conversation. As a teenager, she is an informed investor who I’m proud to say is becoming a financially confident leader.

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