Why I'm Not Teaching My Kids How to Invest
A fun podcast on investing, parenting, and what money skills I really want my kids to learn.
I recently got to do something fun: I was a guest expert on an investing podcast, The Real Investment Show from RIA Advisors. The host, Lance Roberts, has wonderful perspectives on investing and was a ton of fun to chat with. I really enjoyed this opportunity!
Watch our podcast episode on YouTube here:
This opportunity came about because of my work as a freelance finance writer. I recently wrote an article for Business Insider about Why I’m Not Teaching My Kids How to Invest. The RIA Advisors team enjoyed my article and invited me to be a guest on their podcast.
A few of the key points that I made on the podcast (and in my article) include:
I don’t want my kids to worry about investing yet.
They’re still in school, they don’t have part-time jobs, they’re at a stage of life when they don’t even have income yet. Even though I learned priceless life lessons while working part-time jobs in high school, I’m fine with my kids focusing on their studies and extracurricular activities for now. Once my kids are ready to start their first jobs and open a Roth IRA or 401(k), I’ll be right there standing by, ready to help them choose the right index funds. But for now, investing isn’t relevant to my kids’ lives and it’s not a big priority compared to their education and their personal development.
I worry that today’s young investors are taking too many risks.
On the whole, I think it’s a good thing that more people are investing, that investing apps have gotten easier to access, that the stock market is more democratized for retail investors. But stocks don’t always go up. I’m concerned that too many young people are taking big risks that they can’t really afford. I worry that the long bull market and recent uncertainty in the job market have encouraged young people to adopt a get rich quick, “YOLO” approach to investing, and an impatient attitude toward careers and life. I don’t want my kids to lose a bunch of money on a day trading app, or believe that short-term gains from memestocks and altcoins are the best and only way to invest.
I want to teach financial values, not stock picking.
Yes, some people make a lot of money trading options, picking stocks, or making leveraged bets on speculative assets. But most people don’t — not in the long run. We often hear about the big winners on Wall Street, but we rarely hear the stories of people sharing the grim details of how much they lost while playing the markets. Most professional investors fail to beat the S&P 500 for long. Instead of getting my kids hyped up about investing, I want them to learn the sturdier, steadier, sustainable values of hard work, diligence, diversification, and a long-term approach to investing and building wealth — not by get rich quick schemes, but by the slow, steady “boring” accumulation of compounding returns over time.
Want to read more? My Business Insider article also appeared on MSN.com and AOL.com.
If you prefer to listen to your podcasts without video, my episode of the Real Investment Show is also on Apple Podcasts.
Many thanks to Lance Roberts and the team at RIA Advisors! They have an impressive professional media operation; it’s like a real radio studio that’s also an investment advisory firm. Doing this podcast really inspired me to get more serious about my online presence — it made me want to have a place where I could encourage people to go follow me. I’ve published a lot of freelance writing articles over the years, but often I lurk behind the scenes; I haven’t built much of an audience or a platform that’s all my own. I hope to do more podcast appearances like this in the future.