Things parents need to know before teaching their kids about investing

Things parents need to know before teaching their kids about investing

The following blog was written by SEONG  RYOO, our 2020 Summer Instructor and rising senior at Emory University pursuing a BBA in accounting, Finance and Accounting.

Investing is always one of the most popular camp topics at Wealthy Habits.

Here are some basics we want parents to know before starting their investing journey:

Being young is a huge advantage when it comes to investing. Being young means that you have more time to make more profit, and you have more time to learn from mistakes at less cost.

The recipe to build wealth is no longer a secret. The ingredient needed for you to become wealthy is time. Time is something that even the richest person in the world cannot buy. It is something even the smartest person on the Earth cannot invent. Time is extremely valuable in investing because it is the basic law of growing the profit from an investment. Investment is like a snowball rolling down the side of the mountain. It gets bigger at a faster speed as the snowball has been running down the slope for longer. And this is why it is more advantageous to start investing early. The younger you are, the more time you have.

No one can guarantee that you’ll always make a profit from your investment. Sometimes people make mistakes, and kids have the advantage to fix them. They can learn from past mistakes and make better investment choices in the future. It is easier to fix a mistake you made when you are younger and have relatively fewer responsibilities than when you are older and have a family and other obligations. You can learn from your mistakes at a cheaper price when you are younger.

Investing is a double-edged sword. There are certainly benefits to investing, but it is important to understand the risks. A clear benefit from investing is that you can build wealth without having to work for it. The negative aspect of investing is that you may lose money. Some investors get addicted to investing and spend most of their day looking at the graphs and following the stock market. Some investors leverage more than they can handle and fall into huge debt. Investing can be very dangerous if it is done irresponsibly.

Investing is more than just buying an asset. Investing is a mental game that involves a lot of emotion. It requires confidence in your research and your decision-making as well as devising and sticking to an exit plan. Check out our blog that explains why buying low and selling high is harder here.

Endurance is important in investing. Remember that it takes time for your investments to grow, so don’t let your feeling get the best of you. Don’t make irrational decisions because you are happy or scared. As if you are growing a tree, there will be sunny days and rainy days before you will be able to taste its sweet fruit.

Making decisions is an extremely crucial part of investing. You should never just follow other people and jump on a bandwagon. Those people will not be responsible for the consequences of your action. You should always do your own research, build your own opinions, and make your own decisions. Because you are the one who is taking on the responsibility, you should be in charge of all of your investment decisions.

Investing is not speculating. Many people confuse investing with gambling. I agree that both investing and gambling have uncertainty in common. However, investing and betting are different because you can manage and adjust the level of risk when you invest, and investments have a higher chance of success than gambling.

I want to share a line that I always keep in mind when I think about investing: It is not the smart one making a profit. It is the humble and disciplined one making a profit.

If you’d like your child to learn more about investing, check out our programs for one that fits your family’s needs.

Going to College Out of State

Going to College Out of State

By: Pooja Parmar

Going to school out of state can be extremely nerve-wracking, but being able to explore different parts of the country (or the world) can be one of the most exciting college experiences. There are several factors to consider when deciding whether or not going to college out of state is for you. 

An out of state college experience is a dream for many students, but typically the biggest concern is whether or not the cost of an out of state school is worth it. A way to keep student loans to a minimum is to start looking for scholarships and other opportunities early on. Many students make the mistake of looking at scholarships after they finish their college applications, but scholarship deadlines coincide with college applications or can even be before those deadlines. Scholarships can be found through your high school counselor, clubs you are involved in, and numerous online resources. Because I started searching for scholarships as soon as my senior year had started, I was able to pay off all of my college expenses, and going to college out of state became a reality. However, if the scholarship route does not work out for you, look into negotiating the financial aid offers from schools and consider whether or not taking out student loans is something that is appropriate for your situation. 

Applying to schools out of state can also work in your favor. Many universities have scholarships specifically for out of state students in order to make college more affordable. These universities also deem that geographic diversity is important for their student body and want students from all over the country. These scholarships tend to be merit scholarships and may not even require an extra application. Therefore, it is a good idea to think about what out-of-state schools you want to go to and see the minimum qualifications in order to receive these special scholarships. This can help you set goals for yourself for standardized tests and other metrics as you navigate your high school career. 

Once all the financials are figured out, and you have accepted the offer to go to a university out of state, there are only logistical details that need to be figured out. 

First off, decide whether you are driving or flying for move-in day. If you are flying, set aside a budget to ship some items over to the campus, but only ship over the stuff you already have. If you need to make any purchases, go to stores near your school on move-in day so you don’t have to have to spend excessively on shipping items. If you are driving, you have more leeway with how much you want to purchase from your hometown versus near your school campus. Make sure to pack some items in suitcases you can keep with you on campus in order to travel back home for the holidays or other travel purposes. 

Once you get on campus, walk around the town or drive around the city in order to get a feel of the place. Figure out emergency contact information, and where the closest resources such as hospitals and banks are. Connect with any friends or family that you may have in the area. 

Throughout the year, new logistical issues or situations may come up such as transferring prescription refills over to the university pharmacy or figuring out summer storage. However, the most important thing to remember is that you may not be prepared for everything. Going to school out of state is a wonderful and enriching experience where students get to truly feel independent in a different way. Many circumstances may arise that you may not have anticipated, and completely expected, but you will be able to figure it out. It is important to set reasonable expectations for yourself in a new environment and allow yourself to take time to get comfortable. Be open and ready for an incredible new experience. 

Sources: https://blog.getintocollege.com/getting-a-scholarship-as-an-out-of-state-student/

Importance of Getting a Job as a Teen

Importance of Getting a Job as a Teen

By: Charlie Benedict

Getting a first job can be a daunting task for teenagers. Having a resume, asking for an application, and even completing an interview can all present unique challenges. Many times, employers are sympathetic to the struggles of the teenage employee – so don’t let anxieties deter you! Studies have shown that teens who find part-time high school employment have more success in their careers and lives. In particular, one study found that young people who work part-time on average make 22% more in their future career than non-working peers! Additionally, they are more likely to graduate from college and work in higher-level jobs. Despite this, teen employment is down nearly 50% since 1990! Employers still want to higher teenage labor, so the downturn in employment is more due to social changes than any policy changes.

It may be worthwhile to encourage your child to get a job. I worked at Chick-fil-A for three years in high school, part-time on the weekends and school nights. I truly believe that this experience helped me become more comfortable with public speaking and navigating complex interpersonal decisions. I started making minimum wage while cleaning the bathrooms and dining rooms, but with hard work and commitment, I eventually worked my way up the totem pole to the front counter, drive-thru and even a leadership position. I learned the fundamentals of customer service, gained experience working in a business environment, and created opportunities for positive references moving forward. I even earned a scholarship for college! My favorite activity was counting down the registers to make sure they reconciled at the end of the night.

If your child has even the slightest interest in finding work, encourage and support them. Interviewing and receiving an offer for a job can definitely be a challenge – but most employers have realistic expectations for employment experience from high schoolers.

The following is an action plan to get your kid started on the road to employment:

  1. Have a resume – include academic accomplishments, community involvement, and other activities that demonstrate responsibility and maturity. If you are on honor roll or have perfect attendance, there’s a pretty good chance you will show up for a shift on time!

 

  1. Be proactive – no employer will be turned off by seeing your interest in a job. Reach out to them if to ask about job openings, thank them if they interview you, and follow-up with them if you feel it’s appropriate!

 

  1. Think before you act – I know when I interviewed at Chick-fil-A, the manager offered me a meal. They wanted to see how good my manners were, whether or not I would throw away my trash, and how maturely I would act. They paid attention to whether or not I pushed in my chair, brought a pen, and dressed professionally. The little things matter – especially in interviews – so make sure you think before you act.

 

Getting a job, like most things you try for the first time, can be scary. But if your child has any interest in making money or working at a store, encourage them. I can positively attest that my employment at Chick-fil-A greatly contributed to my maturation and growth.

 

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