How to Teach Children about Investing in Stock Market

Compound interest is the eighth wonder of the world. He who understands it, earns it…he who doesn’t…pays it.
Albert Einstein

When children start growing up, parents get concerned about the profession they will take up to earn a living. The next thought is about how they will save money and where they can invest to achieve this goal.

One answer to these thoughts is educating them about investing in the stock market as they start understanding the financial world. You can start building up their interest by explaining the different products offered by these markets. They can then choose the best option once they start investing.

✔️ Investment Basics

A few basic points can be taken up as stepping stones toward investing in the stock market:

Educate your children about the avenues of investments, like stocks and bonds, and essential concepts in finance, like profits and losses, risks, and portfolio creation.
Show them the process of investing, the importance of making wise decisions while investing, and how they can benefit from market movements.
Ask them to develop a habit of maintaining a record of movement trends for the stocks they are keen on investing in.
With basic knowledge imparted and absorbed, you can explain modes of investments, including online and traditional investing.

✍️ Practical Experiences Shared

Most parents prefer to give their children a sneak peek into their investment strategies.

As a beginner, you can show your child how you started with your investment, including which parameters you checked before investing (e.g. company analysis, industry information, growth potential, sometimes study of the annual report, etc.) and when is the right time to invest into that stock or specific product.
Ask them questions about different scenarios and how they would react to them.
Informing about the latest stock market events or company-related news is another good idea to keep them updated to make well-informed decisions.
As a practice, follow these points regularly and keep track of your child’s understanding.

These exercises bring more confidence to the young investors, as they can see the actual working of this process.

Once your child has understood and agrees to follow the basics diligently, you should then facilitate a investment platform where they can invest.

How Dhan Can be a Good Investment Platform?

Dhan is a user-first and tech-led platform for investing in stock market. Built with super useful features, Dhan’s investing platform is one of the best for young and new investors.

The super features include:

1️⃣ Get deep insights 📝
2️⃣ Track the returns easily 🧐
3️⃣ Get instant custom alerts
4️⃣ Start daily, weekly, and monthly Stock SIPs

Think that’s all? Think again. Dhan also gives you access to:

5️⃣ Find out of your portfolio is beating 12+ indices
6️⃣ Place buy/sell order after market is closed
7️⃣ Create basket orders for same or different stocks
8️⃣ Place an Forever orders in their trading system until it get executed

The Bottom Line

The basics can be taught when kids are quite young 🙂 Parents can give their child a head start in wealth creation by helping them access the right resources for investing, starting with learning about how investments work and eventually spotting the right investment platform.

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Happy Investing 💰

Disclaimer: This blog is not to be construed as investment advice. Trading and investing in the securities market carries risk. Please do your own due diligence or consult a trained financial professional before investing.