Although U.S. trade secret case filings increased to 1,134 cases in 2017, individual businesses aren't the only ones who guard their secrets to financial success. For many Americans, the idea of investing in the stock market is an overwhelming and elusive one -- and the assumption is that it's only for the already-affluent. However, the recent scandal involving short sales, GameStop, and Reddit has shown that just about anyone can invest (and make an impressive amount of money) if they have access to the right information.
There were even children who turned a profit from investing in GameStop stock. One 10-year-old in Texas named Jaydyn Carr made an impressive $3,200 after making the smart decision to sell the 10 shares he obtained in 2019 as a gift (which cost only $60 at the time). Jaydyn's mom made the decision to purchase the stocks as a Kwanzaa gift for her son after seeing Jaydyn's enthusiasm for video games. Since one of the seven principles of the holiday is ujamaa, or cooperative economics, she saw it as the perfect opportunity to encourage her son's interests. And while data breaches exposed over 4 billion records in 2019, it's clear that some things on the internet can be trusted, as Reddit forums caused the stock prices to surge. When Jaydyn's mom, who kept alerts on her phone to track the progress of those GameStop stocks, realized what was happening, she actually pulled her son out of his online class and asked him whether he wanted to stay or sell. Jaydyn decided to sell and consequently turned more than a 5,000% profit.
While it was pure luck that Jaydyn's mom happened to choose those stocks back in 2019, there's a lot this can teach parents about kids and investing. What happened to these stocks may not necessarily be repeated any time soon, but that doesn't mean you can't use this situation to get your children excited about the stock market. Here are a few tips that experts might suggest.
Highlight Your Kids' Interests
Just as Jaydyn's mom chose business stocks her son already was familiar with, you'll also want to start out by getting some shares of companies your kids know and like. If your daughter loves sports, look into investing in Nike. If your son is obsessed with Star Wars, try getting your hands on some Disney stock. Obviously, you won't want to spend a lot per share, but you can pique your kids' interests in investing if they actually own a small part of a company they already love. This can personalize the stock market for them in a way that long-winded explanations of stocks and bonds will not.
Try Using an App or Game
Gameifying the stock market can be a good way to make investing fun for your kids. If you have teens who might be interested in investing, give the SIFMA's stock market game a try. And for both kids and teens, apps like Stockpile or BusyKid can help you find stocks and explain real-life concepts. There's also GiveAShare, which is a pretty basic site that will allow you to gift your child a stock; the fun part is that they'll get a framed certificate, which can instill a sense of pride in your child and encourage a long-term commitment to investing.
Show the Power of Saving and Giving Back
It's not all about making a quick buck, though that may be what makes your child's ears perk up. While the idea of making a few hundred dollars to splurge on toys might be alluring, it's important to drive home the idea of using investments like these to save for the future. Since fewer than one in five U.S. adults feels confident about their saving habits, it makes sense to start early to provide a sense of financial security later. Of course, your child might not care about saving for retirement, real estate, or even college at this point. But helping them gain some basic financial literacy from an early age can encourage them to start investing now.
With that said, you may also want to encourage them to give back to their community when they have the means to do so. Highlight some financially successful icons that might interest your kids and show them how they've used the wealth they've acquired to help others. That can keep your children from adopting a greedy attitude toward investing and allow them to see the bigger picture: that having all the money in the world won't do a thing unless you make that world a better place.
It's not always easy to make the stock market sound interesting. But the recent GameStop situation might make the idea a lot more accessible and fascinating to your kids. By seizing this opportunity, you can convince them to start investing early and set them up for a successful future.