Q: This question comes from Joann. She writes: My 15-year-old granddaughter is eager to start investing. What's a good way to help her begin?
A: Teaching kids the value of investing is crucial for their financial independence. So, hats off to you, Grandma!
Simply discussing investment concepts with young girls builds their confidence and knowledge. Providing her with direct experience in stocks — like owning shares in companies that produce her favorite movies, cereal, or shoes — enhances her understanding. This approach will encourage her to think like an investor throughout her life.
At this stage, establishing a personal investment account (commonly a custodial account) is ideal. (Opening one is as straightforward as setting up a bank account, and can be done through budget-friendly online brokers such as Fidelity or Schwab.)
Funds in a custodial account are legally owned by your granddaughter but are taxed at her rate. The adult custodian (parent or guardian) manages the account and ensures investments align with her best interests. When she reaches adulthood, she'll have full control over her account — don't stress, it's just a phase!
If she's keen on popular stocks like Amazon or Alphabet (Google), there are affordable ways to invest. Consider fractional shares, which allow her to buy portions of a stock for whatever amount she can spend. This makes investing accessible and is a perfect way for young ones to start.
