As one of the oldest millennials out there, I’m keenly aware that my children are growing up in an increasingly digital world and will need to make money online. In fact, if I don’t teach them how to make money online, I’m not sure how they will make money. College is getting so expensive it’s almost prohibitive. I don’t want to set my kids up for crushing debt the moment they put away their cap and gown.
My husband always wanted to learn how to trade stocks. He had a neighbor who bought stocks. One day, my sweet man-boy crossed his neighbor’s lawn with a Jackson burning a hole in his shorts pocket. He knocked on the door and when it opened, pulled the bill from his pocket and asked his neighbor to invest his hard earned cash in stocks for him. Although I’m sure this neighbor fellow was a nice person, I kinda want to reach back in time and smack him, because you know what that jerk did? He laughed at my now-husband! I know, right?!? Who laughs at the earnest trust of a child? Anyway, I’ll cool off while I tell you what we’re doing with our oldest kiddo.
We are currently day trading Forex (Foreign Exchange) which is the biggest exchange market worldwide. We started out with a paper (fake money) account where we were able to practice and get good at reading what I like to call the “language” of the market. We use a system that gives us more information than most traders have, we are able to see trends that others can’t, we are alerted to what the big buyers and the little buyers in the market are doing (hint: the big buyers control the market), we get to see 5, 30, 60 minute and 4 hour charts at the same time, and much more.
So we’re taking this learning and teaching our 8-year-old. He’s eating it up. Kids can understand so much more than we think they can. He has his own paper account now, and he makes his own trades. He goes over the indicators with us. We check the news and look for announcements that may affect the market. We set our resistance lines together. Then he decides what he wants to do. We guide him if we see something that we know he could learn from. But mostly he calls the shots for his own account.
Here’s the deal: once he’s proven to us that he is consistently making good, solid trades and that he deep down gets the concepts (based on trading side-by-side with us for however long it takes), we’ll put $1000 in his account. Once he doubles that (with our guidance), we’ll take our $1000 back out, and the $1000 that remains is his. He can then grow that to fund whatever he needs. The beauty of day trading is that it is based on compound interest (added bonus: math lesson!). So if he can grow his account by 1% every day or every week, without losing money, then his account will grow exponentially.
I know that this isn’t an easy or quick way for kids to earn money, but it is a long-term education that they can carry into adulthood. Knowing that my 8-year-old will be able to take care of my grandbabies even if he loses his job or can’t make his business idea work is a sweet solace. He can’t do it on his own, he needs us to teach him. But we are learning together and bonding.
And obviously, not every kid is going to be interested in trading. But I’d wager that most teens would be interested in it!
What do you think? Would your child be interested in learning how to trade?