“Be a rich dad, not a poor dad”, that’s the tagline a fellow entrepreneur suggested when I asked for some ideas for the Bomad subscription page.

For those that aren’t familiar, it’s a reference to Robert Kiyosaki’s book “Rich Dad, Poor Dad”. Here’s a brief summary: Robert had 2 dads growing up: his real dad (“Poor Dad”) had a high-paying job but spent all his money. His friend’s dad (“Rich Dad”) bought assets that produce income, primarily property. The book explores this in detail, and it is a classic in investment circles.

The idea tickled me. For fun, I did a quick mock-up of what the subscription page might look like:

Ultimately I decided not to use it because I felt the reference was a bit obscure. But it got me thinking: what would Rich Dad’s advice to kids be?

Well, I guess he would encourage them to buy income-producing assets. Of course buying property is a little beyond what kids can do, but they can buy stocks. I’ve tried to encourage my own kids to do this. My daughter Michelle has some Roblox shares, which I just keep in my brokerage account on her behalf. My son Andrew has his own brokerage account and owns a handful of shares.

Something like Roblox is a great starting stock for kids. They know what it is, and you can explain to them that whenever they or their friends spend some money on the game, some of it comes back to them as part owners of the company.

Now, I have no special insight into Roblox, the company. It could go bust tomorrow, for all I know. So it’s probably a bad idea to let your child buy only Roblox shares. You should split it up a little. Here’s a list of companies kids can relate to and their stock tickers:

You can also ask ChatGPT if there’s a stock to buy that relates to their favorite game or toy:

I suggest buying 7 different stocks. Remember to pick stocks from different sectors though. Video game stocks like Roblox and Activision Blizzard (makers of “Call of Duty”) will tend to move together. A combination like Roblox, Disney and Nike is more diversified.

I remember that my son Andrew used to follow the Roblox share price quite closely and tell me that he wanted to sell whenever the share price dropped. With a more diversified portfolio, drops in any single stock affect the total value less and are much less likely to unnerve your child.

I realize that my own kids’ stock portfolios are a little too concentrated at the moment. It’s strange how easy it is to forget to apply what you know in your own life. I’ve made a note to address this with them. I’m glad to be writing this letter - it forces me to introspect and practice what I preach 😀

How to get started

Create a savings goal for your chosen stock. Press the “new savings goal” button at the bottom of the screen:

and set the goal amount to the current stock price ($31 in the case of Roblox):

Discuss with your child and agree on a plan to achieve the goal. It could be transferring a certain percentage of their gift money (birthday, Christmas, etc) whenever they get some to the savings account, or you could set up a repeat transaction to contribute more regularly:

When your child reaches the goal, buy the stock for them and start saving for the next one!

If you don’t have a brokerage account, open one now. I use Interactive Brokers. They are US-based, but they open accounts for residents of almost any country, and their fees are really low. They are a great choice for both US and non-US residents. The process is entirely online and they accept local bank transfers for many currencies. They also give you access to US stocks, which is where the companies your kids will recognize are listed.

If you open an account using my referral link, you could earn up to $1,000 in Interactive Brokers shares. I will also receive a referral fee.

But if you feel more comfortable with a different or local broker, that’s fine too. Just open an account. Even if you don’t own any stocks yourself. Set yourself a goal to help your kids buy 7 stocks they can relate to.

A quick word of warning though: don’t let them start trading stocks. Buy and hold. Like Warren Buffett does. 

And don't invest all at once. The market moves in cycles. Buy over a period of months and years. That way you even out the cycles and reduce the risk of buying at the top.

I really think this is the best way to use Bomad: use it to track your kids’ income (money gifts, allowances, etc) and spending, but encourage them to save for assets, and then help them buy those assets. That’s what Rich Dad would do 😉

If you’d like to read more about kids and investing, check out this older blog post.

Good luck! Let me know how it goes, I’d love to hear from you.

P.S. Here’s a picture of me with Rich Dad himself 🤗