Investing Through the Eyes of Children - Expert Edition Episode 46

Welcome to a special episode where we delve into the world of investing through the eyes of children. Today, I'm joined by my two young guests, Aya and Naima (with Zuri), who share their unique perspectives and experiences with investing. Aya, at five years old, explains her approach to saving and her favorite stocks, including Apple, while Naima offers insights into her investment choices like Roblox, Disney, and Tesla. As we navigate through their thoughts on saving for the future, the importance of recognizing company logos, and the early start to investing, this episode is not just about financial literacy but also about empowering the next generation to think like investors. Join us as we explore the simplicity and wisdom of investing from a child's viewpoint, aiming to change the narrative around money and consumerism for our kids.

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TRANSCRIPT:

[00:00:00] Naseema: Hey, hey, hey. So on today's episode, we are going to talk about investing, investing for a five year old, investing with a five year old, I should say. So Aya, can you tell your name and how old you are? Um,

[00:00:17] Aya: I'm five years old and my name is

[00:00:20] Naseema: Aya. Aya. Do you know how to invest, Aya?

Okay, can you tell everybody how you invest? And this is Zuri. Zuri is 7 months old.

[00:00:31] Aya: I put my, um, coin in my bank. And then I wait until I have enough money.

[00:00:41] Naseema: Okay, so what is your favorite stock to invest in? Um,

apple. Why do you always like to invest in Apple?

[00:00:50] Aya: Uh, because, um, I love to eat apples, .

[00:00:55] Naseema: And then what kind of phone do you have? Well, I

[00:00:58] Aya: have two

[00:00:59] Naseema: apples. Apple, you have two Actually. She does have, she has two iPhones by Apple. Um, and what kind of tablet do you have? The iPad, right Susan?

[00:01:10] Aya: Apple, apple,

[00:01:11] Naseema: iPad. And since you have all of that stuff that you buy for yourself, you might as well own part of the company, right? Yes. Yes. And did you know that when you buy stocks and something, you own it, right? Yes. Okay. Tell us something else about investing.

 When you, um, when you get more money that, that's the best

[00:01:35] Naseema: thing. That's right. So we invest to grow our money, right? Yeah. Can you say that?

[00:01:41] Aya: We are investing to grow

[00:01:43] Naseema: money. That's right. We invest to grow our money. And investments are usually things that are long term, which means that you hold investment for A year or longer.

Do you know when you'll be able to get your investments when well, you'll get your investments when you go to college or you turn 18. So if I gave you a big chunk of money right now, what would you do with it? I put

[00:02:12] Aya: it in my piggy

[00:02:13] Naseema: bank. No, what, what's one thing you would want to spend it on?

When you're, say you're a teenager, what's something that you would buy if you're a teenager? A hamster. A hamster? You think you'll still want a hamster then? Yeah. What about a

[00:02:33] Aya: car? Yeah, a Tesla

[00:02:35] Naseema: car. You want a Tesla? What kind of Tesla do you want? The white ones. Oh, you like the te white Teslas? Yeah. Why do you like Teslas?

[00:02:46] Aya: Because, um, I, I know how to open

[00:02:50] Naima: them.

[00:02:50] Naseema: You know how to open the door to Tesla, huh? Because it's cool. All right, so not only do you want a Tesla car, but you also own Tesla stock, don't you? Yeah, you invest in Tesla sometimes too, right? Yeah, that's something that you like and you know, what Tesla looks like What does the Tesla symbol look like on the car?

What does the Tesla look like on the back of it? Yeah, the symbol does it look like a T? Yes. Yes It does look like a T so you can recognize what a Tesla is, right? Yeah, my rule of thumb is if A child can recognize something from the emblem or from the signage. It is your sign that they are ready to invest.

Naima,

what does investing do to your money? Oh,

[00:03:43] Naima: so, investing, say this, you have like a thousand dollars,

Those thousand dollars, if you invest, it could turn into a hundred thousand

[00:03:54] Naseema: dollars. So it makes your money right? Okay. What are your favorite, some of your favorite companies to invest in?

[00:04:04] Naima: So there is Roblox, Disney, uh, Netflix. Wait. Yeah, Netflix. And then I also, um, then I also like to invest in Nintendo.

What,

[00:04:20] Naseema: do you know what your top stocks are? Like, what, the stocks you own the most of? Uh.

[00:04:27] Naima: Tesla. Like, Tesla. And Apple. And Apple. And then I think I, uh, and then what about Disney? Do I invest a lot in Disney? Mm hmm.

[00:04:38] Naseema: Thanks. Alright. And why do you like to invest in those companies? Uh, I like to

[00:04:44] Naima: invest in those companies because, uh, uh, uh, because I use them daily.

And, uh, and they're kind of like, um, known. And they're actually pretty nice.

[00:05:00] Naseema: So, do you understand what all those companies do? You understand what Tesla does. What, what does Tesla do?

[00:05:07] Naima: Uh, they sell electric cars.

[00:05:09] Naseema: What does Disney

[00:05:11] Naima: do?

Uh, they make, uh, they basically make fairy tales,

[00:05:15] Naseema: kind of. Movies, right? Yeah, movies. And shows, right? Alright, and what does Roblox do? Uh,

[00:05:23] Naima: It's a video game.

[00:05:25] Naseema: So my rule of thumb, and what I like to tell people is, is if they can't explain what a company that they're investing does in a couple of simple words, it's probably not a good investment.

So like, when people ask me about Crypto or they ask me about nfts and all of this kind of stuff if I can't explain it Or if they can't explain it back to me exactly what that company does I usually say it's not a good investment. Do you agree? Yeah Yeah, and so you have three different kinds of investment accounts Do you know what the difference is between all three of them?

Uh,

[00:06:02] Naima: so There's my safe building No savings account.

[00:06:07] Naseema: No. So you have a regular brokerage account. A regular brokerage account. And that's the one where you pick your that you pick your own stocks in,

[00:06:16] Naima: right? Uh huh. And then uh, there's also my college fund.

[00:06:20] Naseema: Yes. Uh huh. And in your college fund, what kind of When you're college fund, what kind of stocks do you own?

You own index, what? Uh, index funds. Right? Mm hmm. And then what's your third investment account? I think It's when you get older, right? It's your re Uh,

[00:06:39] Naima: uh, retirement

[00:06:40] Naseema: account. Mm hmm. And then what kind of funds are you investing in your retirement account? Same. Yeah, right. So the only reason why I let the kids pick individual stocks and it's only a small portion of their portfolio is because I want to train them to be owners and not just consumers because we're inundated with messages to just buy, buy, buy everything they watch.

They have, they get advertised. And it's like they understand like Barbie and all of that kind of stuff just by the logos just from the commercial. And so if they can recognize that from the commercials, then I really want them to be able to understand that they can own these companies. And so it trains them to look differently about consumerism and kind of use it in their favor.

Anything else you wanna add about investing Naima? Mm.

[00:07:37] Naima: Oh, investing is actually really good if you start early, because then you could, uh, because then you could build more and more money. Say this. I started investing when I was six. I would get more and more money each day. But if I invested until I was like 30 or, 60, then I would have less money, but I would still have a

[00:08:01] Naseema: lot.

Right. So in, in essence, the earlier you invest, the less you have to invest, the less of your money you have to invest for it to reach these nominal numbers. So if you started at six, you might only have to invest 5 a day. As opposed to get to the same number as if you started at 30, you would probably have to invest 100 a day to catch up to where she's at, at that same time.

So that's why starting to invest early and often is super important, even if you only have a little bit of money to invest. So that's a very smart lesson.

Aya, anything else you want to share about investing? Yeah. Okay, what

[00:08:42] Aya: else? Well, Your money gets to go. Mm hmm. And it keeps on getting bigger.

 And, um, and when you're 19, you didn't get your money. And go and buy something,

[00:08:58] Naseema: That money in your account is yours to go and buy.

When you have a custodial account, like a custodial brokerage, after your child reaches the age of consent, they are able to withdraw that money. So that's something to keep in mind. When you think about custodial accounts for kids, it's legally.

There's 529. you can change the beneficiary at every any time. So, whoever the beneficiary is, they're able to use that, but it's only for educational funds. So that's something else to keep in mind. But I have a comprehensive ebook about this. If you guys are interested in learning how to invest for your kids, I have a ebook.

So it's at, financiallyintentional. com under the shop. You can find it there. But yeah, let me know if you guys have any questions about investing, investing for kids. As you can see, my kids have kind of been inundated with these messages. And so they kind of know it, but I'm trying to normalize these conversations.

So I can change the narrative for my kids and hopefully it'll help you change the narrative for yours.

Hey there I’m Naseema

My dream is for everyone to know that financial independence is attainable with a little intentionality. Learn how I can help you finally break the cycle of living paycheck to paycheck.

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