Investment Book for Teens - Mini Review

[TromboneAl]

The 17-year-old sax player in my group is off to college, and I wanted to get him a book that could push him in the right direction, money-management-wise. So I checked out The Motley Fool Investment Guide for Teens: 8 Steps to Having More Money Than Your Parents Ever Dreamed Of from the library to evaluate it.

It's a good book. It covers all the kinds of things that most of us find important to get a across: The power of compounding, LBYM but not so much that you feel deprived, handling credit cards, stock market is best in the long run, etc.

It's written in a style that a teenager is likely to read, although the critical first pages could have been a little more cool and engaging. It has a lot of sidebars from teens, relating their actual experiences (how I lost money day trading, etc.).

The only downside is that the last third of the book is about investing directly in stocks. I'd rather that they had stopped at the point where they say "investing in index funds is good."

Here's the table of contents:



And here's a sample passage that explains a good example of the power of compounding:




-----------------------------

Bottom line: I recommend the book, and will buy one for the sax player, and one for my daughter.

 

[modhatter]

The trick however, is actually getting them to read the book. At that age, retirement is an eternity away and not even in the thought process. A pity young people can not and usually will not listen to the voice of experience.

 

[Rich_by_the_Bay]

Wish I had that book in my teens.

 

[SamHouston]

I just wish that I had had more money to invest when I had all that valuable compounding time ahead of me...and that someone had offered me the right kind of advice.

I preached the "start early" philosophy to both of my married daughters and their husbands and they are a lot farther ahead in the ER game than I was at their age, so I think you're doing the kid a huge favor, Al. I hope he listens.

 

[unclemick]

"Do or do not ---there is no try." Yoda from Star Wars.

Don't screw around reading - you have already posted the salient example. If required draw him a picture with a no 2 lead pencil and a sheet of engineering graph paper - so's he can fold it up and carry it in his wallet.

Do a psssst! - Target Retirement. Depending on his size you 'could' whop him up the side of the head till he gets religion and invests.

Reading is optional.

heh heh heh -

 

[Nords]

The trick however, is actually getting them to read the book. At that age, retirement is an eternity away and not even in the thought process. A pity young people can not and usually will not listen to the voice of experience.

Our kid has read this book and it was a great springboard for discussion. She's already decided that she's not very interested by individual stocks (not everyone is wired to be Warren Buffett) so she had no trouble deciding on an index mutual fund, which I nudged to the "international" asset allocation. She's decided that later on she'll add a small value fund.

She's seen enough of our ER lifestyle to know that she's the one making the choices...

 

[Brat]

I gave my nephews a similar book for Christmas last year (somewhere in our threads is the name). One of them immediately said that it helped a lot because it covered things like auto insurance, bank accounts that paid interest, warnings about credit card debt.

My theory is to offer the information in a format they are likely to use, all the rest is up to them.

Now if they were my kids..... [who of course walk on water and are world class financial managers] they would have been spoon fed this stuff from the get-go.

 

[Delawaredave5]

Great excerpts. Thanks.

Funny story what not to do: my friends boy is in college - debt, 2 years to go, no savings, mediocre job, studying English.

He wants a new car. Asks his Dad to take him to bank to "get a loan".

Loan person takes his information - they call him back before he even got home saying, "no way we'd loan you money without co-sign".

Kid can't believe they wouldn't give him money !

My friend knew he wouldn't get money- took him for a "learning experience" (which it was).

 

[Alan]

Good reference Al.

Our son graduated a couple of months back, moved back home, got a job within 6 weeks at a local bank and is about to move into his own apartment on July 1st. Unlike daughter he is so naive about money matters and just doesn't care. However, books like this might just peek his interest, if I can get him to listen and read a little. (Daughter graduated and started work a few years ago and is very money savvy, so no worries there)

 

[ESRBob]

My 15 year-old has read most of the book and liked a little organizer that can be bought with it. But he still comes in and asks me questions like "How can I get people to just give me money?". Still I think he's got the basics of investing down from the MF book. After he read it, he decided he wanted a Penfed CD...

 

[sgeeeee]

. . . But he still comes in and asks me questions like "How can I get people to just give me money?". ...

How can I get people to just give me money? I'd like to have that question answered too.

 

[ESRBob]

I never figured that one out, but maybe choosing your parents? In my kids' case, they're barking up the wrong tree. I'm much more inclined to give 'lessons'. Yuck!!!!

 

[megacorp-firee]

How can I get people to just give me money? I'd like to have that question answered too.

Mask and gun come to mind

 

[sgeeeee]

Mask and gun come to mind

 

[kaudrey]

Sounds good, I just wish they wouldn't use the non-word "ain't". The English language is butchered enough these days. Sigh.

(Pet peeve, sorry).

 

[Nords]

Sounds good, I just wish they wouldn't use the non-word "ain't". The English language is butchered enough these days. Sigh.
(Pet peeve, sorry).

http://www.m-w.com/dictionary/ain't

I think "ain't" has achieved legitimate status as a "real" word.

If English was a static language then we'd all sound like Quakers or Puritans or, even worse, like Hamlet or Beowulf. I'd rather have a part in guiding English's l33tspeak evolution than be a security cop enforcing a dead tradition!

 

[Independent]

I noticed that you included LBYM as one of the topics in the book. It seems to me this is the place most people need to start, but I rarely see it mentioned in the articles that urge people to start investing when they are young.

There is no point talking about the power of compound interest on your savings without talking about the power of compound interest on your debts. The logical first step in investing is usually to pay off the credit cards and the auto loan.

 

[unclemick]

I noticed that you included LBYM as one of the topics in the book. It seems to me this is the place most people need to start, but I rarely see it mentioned in the articles that urge people to start investing when they are young.

There is no point talking about the power of compound interest on your savings without talking about the power of compound interest on your debts. The logical first step in investing is usually to pay off the credit cards and the auto loan.

Technically speaking(hindsight being 20/20) it is the rational and logical thing to do .

I never let that bother me - I ran up credit cards/auto payments on occasion and partied in New Orleans for thirty years - with severe periods/bouts of LYBM. I had this 'godfather who took his cut to max DCA all tax deferred vehicles availible' before I got my pittance to party/live on/ and for reasonible stretches(when the light eventually came on LYBM) to engage in cheap bastardhood.

heh heh heh - as mentioned on other threads/posts in the past - theoretical purity is not one of my strongpoints - even though I may be in screaming agreement.

 

[kaudrey]

http://www.m-w.com/dictionary/ain't

I think "ain't" has achieved legitimate status as a "real" word.

If English was a static language then we'd all sound like Quakers or Puritans or, even worse, like Hamlet or Beowulf. I'd rather have a part in guiding English's l33tspeak evolution than be a security cop enforcing a dead tradition!

Well, that pretty much makes me sick. Using that word makes people sound uneducated. Just MHO.

 

[Nords]

Well, that pretty much makes me sick. Using that word makes people sound uneducated. Just MHO.

You'd be a big hit among my [-]pidgin-speaking[/-] Hawaiian-creole-fluent bilingual friends...

 

[REWahoo]

Well, that pretty much makes me sick. Using that word makes people sound uneducated. Just MHO.

Say it ain't so!

 

[kaudrey]

You'd be a big hit among my pidgin-speaking Hawaiian-creole-fluent bilingual friends...

----

Well, it's not like I'd say anything to them, or make a face at them or anything. And I didn't say it means that the people are uneducated, just that it makes them sound that way. To me.

 

[Brat]

Topic morf here: "Ain't" is at best what I would call informal English. It isn't a word executives and HR staff want to hear tumbling out of the mouth of a job candidate. If there is a comparably qualified candidate that person will be passed over.

Believe it or not, wise or not, language use matters in business. What I find odd is that among educated men foul language is more acceptable than the use of 'ain't'.

 

[Darryl]

Al, I'll have to check this out. DW wife and I have been giving copies of Dave Ramsey's Total Money Makeover as graduation gifts for the last few years. Perhaps a little twisted but I always throw a $20 bill in the middle of the book. Seems like a chance to enforce a natural law if the kid has enough interest in personal finance to read the book they find the $20 and have an instant win. If they don't read the book the first person to take an interest (who knows might be years) finds the loot.