Getting kids investing

My smartest investment has been buying shares of companies such as Apple, Google, Disney and Nvidia for my kids in December 2018 and January 2019. They now think they are making money when they interact with these companies on a daily basis.

— C.E., online

THE FOOL RESPONDS >>

That’s very smart indeed. Turning your kids into investors can set them up to be financially savvy and secure for the rest of their lives. And starting by investing in companies they know, like and use is an effective way to build interest.

It’s never clear (and it’s not that important) how stocks will perform in the short run, but if they do well, it can generate excitement quickly. And since owning a share of stock in a company is an actual ownership stake (though admittedly a small one), your children really are contributing to the growth of their businesses when they patronize them.

Other companies that might interest young investors include Activision Blizzard, Amazon.com, Chipotle Mexican Grill, Coca-cola, Facebook, Hasbro, McDonald’s, Microsoft, Netflix, Nike, Pepsico, Snap, Spotify Technology, Starbucks, Target and Tesla. Make sure that they understand that some businesses they like are parts of other companies: Instagram is owned by Facebook, for example.

To learn more about investing, your kids might want to read “The Motley Fool Investment Guide for Teens” by David and Tom Gardner with Selena Maranjian (Touchstone, $17).