Stories like the one we are about to tell today illustrate the best technique parents can use to start teaching their kids about investing and even prepare them for financial success.
Damon Williams was 6 years old when he bought his first share of Nike stock (NKE). It all started with his addiction to Michael Jordan’s Nike shoe line. However, his mother April, told him that if he wanted a $70 pair of Jordan’s, he would have to save his money and buy a share of Nike stock first. “I was determined to get the Jordan’s. I really didn’t care too much about the shares,” he admits. “My mom taught me about ownership and investing, and that I don’t have to provide free advertising for these corporations. I can make money with them.” He capitalized on his shares, earning a gross total of nearly $55,000.
14-year-old Damon’s profound knowledge and passion for investing gave him the potential of what PBS claims to be a “millionaire in the making.”
Damon had no idea that a single $30 stock purchase would be the foundation of nearly $55,000 portfolio just a few years later. “Anybody can do this. It’s not just for the affluent,” he says.
Damon Williams gives speeches to other children his age to show how they too can make an earning. His core strategy is not to buy and sell quickly but rather to become a long-term stockholder and make a bundle over time.
Financial experts agree that stories like that of Damon and April Williams illustrate one of the best ways to begin teaching children about investing and personal finance. “Parents should encourage teens to invest in companies they know,” says Mellody Hobson, president of Chicago-based Ariel Investments L.L.C. (www.arielinvestments.com).