Teaching your teenager the importance and responsibility of investment is a vital part of your child flourishing into a young adult. It’s never too early to start your student’s education about investing into the stock market and stock trades. There are plenty of ways to assist your teen in the learning process.
Learning the Basics
The stock market is a collective complex system where shares of companies are traded, bought, and sold. Many factors play into determining whether stock prices rise or fall, some of these include things such as the media, natural disasters, political or social unrest, and of course supply and demand. If there are more buyers than sellers, stock prices will tend to rise. Buying when stock prices are low and selling when stock prices are high is the key to making a reasonable profit.
Paper trading is a way for future investors to practice the trading system without the risk of using real money. Paper trading is an age-old practice of writing down a fixed sum of money on paper and pretending to use it the way that one would in a real stock market scenario. Participating in paper trading is an easy thing to do alongside your teenager. Choose a few stocks that you would like to invest in, and write down the current stock price next to each name. Remember that you are buying a finite number of shares based on the current market conditions.
To figure out how much money you’ve spent, divide your total investing money by the number of stocks that you’ve purchased. Once that stock has sat at a value that you would wish to sell it at, make sure to subtract $10 – $20 from your figure. Most brokerage accounts charge a fee per trade. Divide your per-investment figure by the actual share price and you have the profit that you’ve earned!
Gather the Funds
In our current society, you need to have money to make money. Investing in smaller trades will lead you with a smaller profit, but it may take some time before your investment can return a profit. Consider taking out a small personal loan for investment purposes through ukhomeandpersonalloans.co.uk/. Fixed payments of a personal loan are easy to budget, and stable interest rates allow you to pay it back over a set term.
Teach the Responsibly of Investing
Investing money that you can’t afford to put away is a dangerous risk. Pulling out of a stock too soon or being too emotionally attached to an investment that is failing are two of the biggest downfalls to investing. Make sure your teen is aware of the risk that investment brings and to not be afraid to cut loses when a stock isn’t going well.
Helping your teen to get started with the stock market will be an investment in itself. The skills that they will learn and the responsibilities that come with investments are life skills that will stay with them as they progress in their careers.