What Age You Should Start Teaching Your Children About Investing?

Invest, invest, invest.

Back when I was in middle school, I first heard about Warren Buffett and how he became a billionaire from a friend's dad. According to him, the rumor has it that when Warren Buffett was a kid, he had a small paper delivery route that he used to do. When he earned money, he'd invest it all.

Admittedly, I'm not sure whether what he said was true or not. However, what I *do* know is that the guy who told me that story believed that teaching your children about investing should start sooner rather than later.

I believe he's right. But, how young is too young? How old is too late? Here's the real scoop that parents should understand about raising good investors.

There's no perfect time to talk to your kids about investing or come up with a time to get them to understand the importance of money. It's also a scary thing for parents to discuss, primarily because it's intimidating for adults, too.

The hardest part about parenting is trying to teach your kid everything you know when you're unsure of whether you know the facts well enough yourself. If you're insecure about beginning the talk, you might want to read Beth Kobliner's Make Your Kid a Money Genius for great tips on how to teach kids about money.

Just like with teaching any skill, a lot of experts would tell you that baby steps are the best way to do it. Teaching your kids about the foundational concepts of investing isn't too hard, and in most cases, they can grasp some of it when they're as young as three years old.

If you really think about it, teaching your children about investing always has to start with teaching them about saving. After all, if you aren't saving up money to invest, you're probably not going to have too good a portfolio.

The easiest concept to teach them is delayed gratification, also known as, "If you save later, you'll get even more!" Most of us started to learn about this concept with a piggy bank—and that still remains the easiest way to show them that today. Of course, a savings account works well too.

When you think about it from that perspective, encouraging them to save up their allowance for a toy is a great way to ensure they'll have the right mindset later on. Child to Cherish's personalized piggy banks are great choices for parents who want to make saving up fun.

Now that your kiddo has an idea of how fun saving is, you might want to start teaching your kids about investing's perks. In fact, you might want to take a while to show them that investing can be fun.

Believe it or not, Warren Buffett has come to the rescue here. The world-famous investor has actually taken it upon himself to help teach kid how to invest by creating a series of colorful cartoons that are perfect for grade schoolers and show how cool investing can be.

His series, The Secret Millionaires Club, teaches kids how to invest like Warren Buffett and why it's so cool to be a millionaire. This show doesn't require you to be a brainiac to invest—and when they're older, they can also enjoy the SMC business guides!

In a Yahoointerview, SIMFA thought leader Melanie Mortimer explained that she suggests teaching your children about investing around the 4th grade.

Her reasoning is that this is the age when kids start to learn how to use fractions and percentages—and it's also an age where kids actually want to learn. On average, this is a great time to talk about how investing works and get kids interested in the math behind investing.

When it comes to the actual nuts and bolts of investing, this is a great age. However, you really should start showing them the ropes of good financial habits earlier.

A head start is never a bad thing, though, and experts will happily back that up! The Kids Money Book is a great picture book for kids under the age of 10 that covers everything from saving to investing.

Every kid will eventually want to be a millionaire or a billionaire. Whether it's due to watching Richie Rich or just watching YouTubers who made a ton of money doesn't matter. What matters is that you notice when they're getting thirsty for cash.

Teaching your children about investing is way easier when you get them interested in the bottom line. James McKenna's How to Turn $100 into $1,000,000 is a great way to grab their attention and get them asking how they could invest fast.

It's all about compound interest, and why you can grow money over time. What's cooler than that?

If you're wealthy enough to do so, you might want to start teaching your children about investing by letting them look at their own stock portfolio accounts that you set up on your own.

This is a hands-on way to show kids how important it is to invest and how they personally benefit from it. Better still, it can help pay for your child's college!

Doing this is fairly easy and is low-cost. Sites and apps like Stockpile allow you to gift stock shares to your kids, or even set up an account that they can access when they turn 18.

Though it'd be ideal to start teaching your children about investing around grade school, the fact is that it's never too late. Teenagers are in a perfect position to listen to parental advice about investing since they still have time to learn about the worst financial mistakes to avoid in their 20s—and since they could still benefit from the perks of investing.

Early teenagers can have "the talk" with their parents about investing, and also get a head start on their own. For younger teens, we suggest reading The Teenage Investor by Timothy Olsen. It basically walks teens who are new to the concepts through the basics of investing, saving, and building a better future.

Part of teaching your children about investing should be about interest rates, loans, and what it means to invest in yourself. When they are 18, they will most likely be pressured to go to college. Seriously—student loans could wipe out all the progress their investments will make.

So, you might as well refer them to a book that can help them avoid the crushing debt others have experienced. Beating the College Debt Trap by Alex Chediak will help them explore other ways to get the degree they want without getting into debt.

The most important thing to remember is that you need to be teaching your children about investing, period.

The "real world" is not a good place to be without serious financial knowledge. A lot of people end up inadvertently shooting themselves in the foot simply because they don't know how to manage their budget.

A lack of knowledge can and will hurt your kids, sooner than you think. The amount of time that your kids have to let their investments compound will make a massive impact on how much they gain.

The problem is, most people don't know how to invest, period. This means that they will take longer to make the same returns. If you look at how much Millennials know about stocks, you'll realize how bad the situation is.

Less investing time means fewer returns, which could curb their ability to retire. By teaching your kids about money sooner rather than later, you can help them avoid those problems.

Too many young adults have no idea how to invest—and that will hurt them sooner than they think. If you didn't teach them while they were kids, or neglected to talk to them when they were students, it's still never too late to talk to them.

At the very least, consider gifting them the Beginner's Guide to Investing by Alex Fray. It's a great start, written in plain English that everyone can enjoy.