Kids Stock Portfolio – Growing, Just Like Them!
Kids Stock Portfolio – Growing, Just Like Them!
The other day I was listening to Mikes @ dividend stocks rock podcast’s – The dividend guy blog podcast. I really enjoy his episodes but one in particular stood out recently How to get your kids to invest. It was a great one.
Last year I did a post about us getting our kids into stocks, you can find that post here. At the time it was just my son, but our daughter is now investing as well.
For the record my son is 9 and our daughter is 4. They have a longtime frame for investing and I cannot wait to see their portfolio grow before they will need the money in the future for possibly their first car or a house etc.
Mike teaches his kids a little differently then we are, but they are also older. My son could probably go that route but our daughter is too young. Personally I started this to show them cash flow for doing nothing and just get their feet wet into the world of investing.
He actually opened separate tfsas for his kids while I just keep their stocks in our portfolio in our tfsa’s. I created a google sheets spreadsheet to keep track of their buys and dividends they received. I actually like his way more, but for now I pay my kids the cash dividends whenever they receive them. While Id love for the cash to stay in their investing account, they always got the choice to reinvest it once they get enough for a full share.
If you know me, you know I’m a massive fan of drip investing but at the moment they don’t make enough to drip any shares. They prefer the cash and to be honest I like giving it to them. Money for doing nothing. Its a learning lesson and it also teaches them to spend the money or save it.
The kids birthdays are both around Christmas. They get flooded with gifts and “stuff” so much stuff… They don’t need as much as they have. Most kids don’t! Luckily some family members give cash and we tend to give stuff and cash now as well. (no cash on Christmas, but their birthdays we give them some)
I then give them the option to buy some more stocks or keep it. Sometimes they want to keep it, but once I pay them a cash dividend they often ask if they can get more stock. With stocks like Algonquin power at less than 20 bucks a share, it is affordable – even for them.
They bust out their piggy banks and see what they can come up with. 1 year ago we started to get the kids into investing and things keep growing for them.
Kids Stock Portfolios
Yesterday my son and daughter gave me some more money to invest. I bought our son 2 more algonquin power and 1 suncor and our daughter 1 algonquin.
I then went over their portfolio to show them the growth.
My son currently holds these shares
- 3 tc energy
- 5 algonquin power
- 9 suncor
- 2 td bank
Total Capital Invested = $729.09
Value on March 13th 2022 – $865.66
A 18.73% increase in value not including dividends since last year. A great start. He has received $14.52 in cash from dividends resulting in a total increase of 20.72% since he started his journey in investing last year.
Our daughter currently holds these shares
- 3 Suncor
- 3 Algonquin
- 1 Td bank
Total Capital Invested = $248.66
Value on March 14th 2022 – $274.27
A 10.32% increase in value. A lot less but her portfolio really didn’t start until October last year. Most of her holdings were purchased after Christmas 2021. She has received 78 cents in dividends.
The cool thing is her face still lights right up when she gets her dividends. The dollar value doesn’t matter so much to her now, its the habit that she is starting to build that is important.
Some of you are probably wondering how my kids came up with their holdings. Right now I pick what they should buy. I buy value and also want there to be a decent yield and dividend growth. Of course I want stock appreciation as well but these holdings are in no way growth stocks.
I feel at this stage of the game its all about building habits. The reason I really enjoy dividend growth investing is the growing cash flow. If their portfolio was made up of just growth stocks they wouldn’t get those smiles when I hand them the cash payments every time they get paid. (Not to mention their portfolio would of gotten killed, and that would be a hard sell – you had x now its worth half wanna buy more?)
With their long term investing horizon would they be better off with growth names? Maybe but they could only buy 1-2 high quality growth stocks and they would get paid peanuts. Maybe in the future once my son gets a little older we will talk about going that route but for now the biggest windfalls they get is a hundred bucks here and there
Showing my son yesterday his portfolio he was shocked to see how much money he has and also that he has gotten paid and the overall value has went up. I don’t think he even realized the stock price can go up as well, although we have talked about it. They can also go down I tell him….
My daughter really doesn’t care at all, shes basically like cool can we play barbies now? Fine, but I’m Chelsea!
Well there’s a little update on the kids portfolio about a year later. I recommend everyone start teaching their kids in some way about money. I know I would of benefited a lot with something like this growing up, but my family didn’t talk about money much. Ahhh well I’d like to think I turned out alright…….
Do you get your kids into investing or teach them about finances? I would love to know what you do, maybe I could try one of your techniques. I’m sure we all do things a little differently but if there is a learning lesson in there for the kids its all worth it.
Haha, have a great day
Hey I’m Rob, creator of Passive Canadian Income.
In 2011 me and my wife had almost $60,000 in debt and a negative $7,000 Net Worth. Through hard work and financial education we paid all that off. Now we are focusing on increasing our Passive Income Streams to make the money work for us. Feel Free to Follow along the Journey by clicking the Social Media links below or subscribing to get notified of new posts on the sidebar.