What is another important point to teach children so they may begin to understand some basic principles of investing?
Bogle suggests teaching and showing a child the value that is created simply by compounding interest. He uses the example of a $10 investment, earning only 7% interest, that will double in ten years. He also suggests opening an investment account with your child's saved money, and purchasing an index fund. This index fund and its performance can teach your child how an investment may grow (or not) over time.
What is one of the most important lessons I need to teach my children for them to incorporate investing ideas into their own lives?
Children observe the behaviors and values of their parents, such as delaying immediate gratification, saving regularly, and patience. Bogle feels that if parents' actions match their words, children will learn by observing good behaviors over time.
What do experts at Kiplinger's say is the best approach to teach children about investing?
According to experts at Kiplinger.com, in order to teach children about investing effectively, it is best to understand this is an ongoing practice that occurs in small steps. It is best to engage children at different points in their lives, when they are ready to learn important lessons.
Into what three groups can we categorize children who actually own stock?
Experts at Kiplinger.com assert that children who own stocks in companies are a minority, but may fall into one of three categories: children who start a traditional savings account, notice they are earning only a few cents in interest on their accounts, and wish to see this amount grow; children who have significant adults in their lives who have an interest in the markets, such as grandparents, parents, aunts, and uncles, or other friends and relatives; and entrepreneurial kids who have managed to earn and save money from their odd jobs or business ideas at a young age, and wish to earn more money on their savings, rather than earning only interest on their money while deposited in a bank.
To help your children understand money better, you can play games with them to familiarize them with different coins and denominations.