I’ve been writing a lot about investments lately, but I’ve come to realize that I’ve been neglecting my own kids’ investments. This Friday we’re off to the English countryside to visit them at boarding school for the mid-term break. I’m planning to take this opportunity to fix this.

But before I get into that, let me sketch the bigger picture. Bomad helps kids to understand what money is. When kids have their own money and make choices with age-appropriate support, they build confidence and learn from mistakes.

Typically this process involves setting up a weekly allowance and then letting them make some spending choices. If they get any money gifts for birthdays, Christmas, etc, you can add these to Bomad, and you can encourage them to use the savings goal feature to save for bigger items.

I really believe that this is the best way for them to learn.

But once you’ve got that sorted, you want to start encouraging them to build some long-term wealth. If they just hold cash, it will lose value to inflation. You could help them to buy gold or silver, which have historically been good hedges against inflation, but I think it’s a good idea to get them started in stocks as early as possible.

Andrew

Andrew’s had exposure to money from a very early age. We first used a spreadsheet, then an app called “Rooster Money” (now defunct), and then Bomad. He recently turned 16 and I think he’s got the basics nailed. 

He’s still prone to the occasional bad decision, like when he bought a set of second-hand bagpipes off of eBay for £80 with the money he earned from babysitting. This is him trying to play them on a video call with me:

It turns out they’re really hard to play, and he’s not even sure if they work properly. His mom is a bit frustrated by this, but I think he learned a valuable lesson. If we hadn’t given him the freedom to make such a mistake now, he would have just deferred it to later as a young adult, when the stakes are much higher.

Anyhow, the external section of his Bomad shows a summary of his investments. Currently his brokerage account at Interactive Brokers (IBKR) holds £171 worth of stocks:

However, he hasn’t really used it much. You can see that he has only done 5 trades, and they are all from 2023:

So he hasn’t really gotten into it, although I’m sure he hasn’t forgotten about it since he can see the value of his portfolio move up and down in Bomad. He needs more encouragement and support from me.

In the future, I plan to sit down with him every few months to discuss and review. I’ll help him choose stocks, and I’ll encourage him to channel more of his cash into investments. I suspect he’s been earning quite a bit from babysitting and I’m hoping he might consider putting that into stocks instead of bagpipes 🙂

He has some extra cash in his Bomad, so I think he'll be open to the idea:

All together, it’s around £318, which is about $400. I think he should aim to invest half of that into stocks.

What to buy is a different question, and a bit beyond the scope of this post. I did write a little more about that here though. I’m leaning toward suggesting Tesla stock. I see it’s currently trading at $170, so I’m basically done if he’s keen on that. 

Michelle

Michelle is 10. I keep her shares in my brokerage account because I haven’t gotten around to opening a separate account for her yet. Her portfolio is only worth £109. She has around £100 of savings and I’m also going to encourage her to invest half of it.

She, however, only has Roblox stock. This is the spreadsheet I use to keep track:

The last time she bought anything was back in January 2023 😱 This is actually very bad. I can’t believe I’ve been neglecting this so much. I’ve had the basics so well covered, but I’ve completely failed to capitalize on that. Thankfully she’s only 10, so there’s plenty of time to fix it.

I’m not sure what stocks I’ll suggest to her. Certainly no more Roblox. I’d like her to hold at least 7 different stocks so that she’s well diversified. My business partner has been buying some cannabis stocks recently - perhaps she’ll get a kick out of owning something like that? Otherwise, I’ll suggest something from the list I made here. That should get her back on track.

How to open a brokerage account

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. Do it for your kids.

How to track stocks in Bomad

Start by adding an “external account”:

and then follow the instructions and samples from there. Please get in touch if you need any help.

I’m looking forward to seeing both my kids over the mid-term break, but also to addressing this nagging gap I’ve neglected for too long. I’ll let you know how it goes next. time. In the meantime, I hope you’ll be inspired to take whatever investment action is appropriate for your kids.