HOW DO you teach children about money and investing? While saving money is relatively easy to explain, investing is more difficult.
Regarding saving, have your children put their spare coins in a jar. When the jar is full, they can buy some of the things they want.
"To teach kids the value of saving," says Adriane Berg, financial writer, "show how interest works, namely, that 'saved' money makes money. Pay your children a small amount of interest each month on the cash they collected."
Regarding investments, read the financial pages and stock listings with your children. Point out familiar companies they recognize such as Disney (Walt) Co., Toys 'R' Us Inc., Coca-Cola Co., Hershey Foods Corp. and so on. Follow a favorite stock in the newspapers. Together, monitor the stock's progress daily.
Write a record of the stock's ups and downs on your refrigerator door by having your children post new prices, with a graph, every day. Look for newspaper and magazine stories that relate to the company, then read them together.
When your children show enough interest about investments, buy them a few shares of real stock.
Although most trading is electronic and investors' shares are generally kept with the broker in "street name," ask your broker, in this case, to have shares registered in your children's names in "certificate form," with either father or mother as custodian under your state's Uniform Gifts to Minors Act.
HINTS FOR KIDS: Keep your eyes open for what people are eating and buying. Then read up on the stock. That's how Fidelity Magellan Fund former manager Peter Lynch made a fortune in McDonald's Corp. stock.
As soon as you can, form an investment club at school. Here you share information and often show a profit, real or imaginary.
Start young! If you put just $25 a week in stocks that grow 10 percent a year, you'll have $103,000 in 22 years, considerably more than your $28,600 investment.
Pub Date: 1/30/98