At what age did you start thinking about investing? Is it when you started college? Maybe its after you started your career. What about high school? Maybe, but not likely. Last year I was asked to be a guest speaker of a class of high school students at Carbondale Community High School. Before I came, I had the teacher take a poll of the students on the top five reasons why they think they should invest. The overachievers that theywere, they gave me their top six reasons. Here are their top six reasons, and their reasoning behind them. I think you’ll crack a smile on a few.
1. Turn a Profit, or in Their Words, “Make Some Money.
Can’t argue with that, can you? Sure, having an income to sustain you through retirement is the driving force to why most people invest, but the only way to achieve that is making money, right? The students were just a little more direct with their logic. I can always appreciate that.
2. Retirement.
I asked the kids how they thought they were going to have an income when retirement came. One student responded that she expected to get money from her job or her employer when she retired. That led into discussion in talking about pensions, and how pensions have greatly reduced over the years. We then talked about 401k’s and how they have evolved. I made it clear that it was on them to coose their own investments and take charge of their financial destiny.
I then was able to bring a copy of my most recent Social Security statement, and showed them how much I would expect to receive if I retired at the age of 62, 67, and 70. I think it was a real eye opener for many, seeing how little that I would expect to receive by waiting 32 plus years, to start drawing my first Social Security check. One students comment of, “That’s it!” was priceless.
3. Bragging Rights.
This was by far my most favorite of their reasons. The logic behind the bragging rights was that the students felt that if they had investments that they could be able to boast to their family or friends about certain investments that they owned. While I never encourage this as a reason to invest, I get some humor out of this.
4. Tax Breaks.
All the students were in agreement that they don’t want to pay more tax that they have to. They all felt that investing would somehow decrease the tax they had to pay. We talked a bit about investing into dividend paying investments and also the rules on the Roth IRA. Not a better tax break than the tax free growth of the Roth.
5. Cash Flow/Real Estate.
One discussion that we had with the students was that I told them that investing does not always mean investing into the stock market. There are other ways to invest. You can invest into a business idea, you can invest into themselves, and they can also invest into real estate. I actually have many clients and acquaintances that have been very successful with real estate and have made, have been very successful without actually ever investing in the stock market.
6. For Children’s College.
Many of the students knew that college was around the corner and that was obviously on their minds. Knowing that student loans were in the foreseeable future they hoped that their kids would have just as good if not better opportunity that they will.
All in all, I think the students had some good reasoning on the why you should invest. They all admitted that they still have a lot to learn. If you have a child that is high school to junior high age, ask them why they think they should invest. I’d be curious to hear some more reasons and the support behind it.
Thanks to Mrs. Wilson’s class for participating! You all were great.
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“Bragging rights”- Let me guess that’s what most of the male students said? I remember hearing guys brag in high school about the stock market and what not. The only problem was that they didn’t know that I have always been reading about personal finance and securities. When their bragging was done I would ask how many shares they had or through which brokerage they made their purchase only to receive the usual look of confusion. My little brother is starting high school in a year and he will definitely be reading personal finance blogs such as this one.
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Maybe its because they see what their parents are going through saying, hell no, i don’t want this. But the other question is, how many of them actually do it?
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I remember back in high school I loved to learn about investing and whenever I would chat with my friends, they had no clue what any of the things I was talking about. From simple money market accounts to CDs, I’m almost positive 5% or less of high schoolers could tell you what one is.
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When I was in middle school, our social studies teacher ran a stock contest. At the end of the school year the returns would be tabulated. The winner would get a certificate while the student with the worst return would get a ‘dollar’.
Who won? A student named Chris won because he put all his money into the stock of Chrysler. By the time the school year ended, Chrysler had gotten a bailout loan and the stock price recovered handsomely. Needless to say, I lost having put most of my money in U.S Steel.
Those were the days, when a billion dollar loan to Chrysler was real money.