As I talk to people about the best techniques to invest, I am disappointed at the understanding that many people have about finance. Many of these people are younger and they simply did not understand the realities that their parents were dealing with in their daily lives. Maybe the parents thought that education of their children was up to the local school system. While I don't want to condemn most school systems, it is not likely that they are the best at educating young people on markets and finance.
It also could be that the individual parents may have felt inadequate to discuss the issues. I assure you, if you care enough about finance and the stock market that you regularly read this site, you are well on your way to give your children a jump start!
I recently came upon an article titled, "14 Secrets Every Parent Should Know Before Talking To Their Kids About Money" on the site Man Vs Debt. I am not going to copy the entire article here but the 14 points are below.
- You can’t be a hypocrite.
- Treat them like adults.
- Know when to shut up.
- Tell them why.
- Stop chasing them out of the room.
- Let them watch you negotiate (and fight “nicely” over money).
- Show them the checkbooks.
- Be humble with the good.
- Be honest with the bad.
- Make them feel like a member of the team.
- Teach them concrete tips, not vague clichés.
- Help them get started.
- Let them know it’s OK to screw up.
- Let go.
I think the most important thing to remember in this entire exercise is to communicate to your children. This way they learn from your learning and your mistakes. You want your children to have advantages that you did not have - teach them about money so that they can live a stress free life. If you really want to help them, I suggest that you give them a copy of my book, The Confident Investor.