"When do I start teaching my children about saving money?". Bruce Whitfield presents The Money Show on Talk Radio 702, and he was asking this question in the context of investing, and not simply teaching children how to save. He played this clip on YouTube from Jason Moser, an analyst at The Motley Fool.
Jason Moser simply posted a video asking, "How Old Do You Have To Be To Start Investing"? The video clip is below, and I found his eight year old and six and a half year old daughters taking on the question with great enthusiasm. They have basically grasped the concept of "invest in what you know".
At the time of recording this video his daughters, Hannah and Ainsley, had been investing for over a year. Being in America, one would say the advantage is the stock market is bigger (as in it has more companies listed), and there are a lot more brands, that are a good investment, that the children are familiar with. It's hard not to know Nike, Starbucks, Apple or Disney. Remember not all good brands are a good financial investment, so that is an important part of the lesson.
Bruce Whitfield then asked an interesting question to his audience, which was "what companies in South Africa could children relate to, to invest in?"
He was looking to see if we could have the same philosophy in teaching our children to invest, or whether our companies were not cool enough. I was baffled at the response he got via SMS. The first company I thought of was Tiger Brands. The easy money is gone in terms of the share price outlook. Having said that, the management have been great so far, and people will not stop eating. So prospects of growth are still good looking forward.
Of course the children would not relate to that. The children will definitely relate to the food brands though, and based on that they invest. That is the principle if I look at the way Jason Moser has guided his children.
No other food is as dominant at meal time than cereal! Is Jungle Oats really that much out of favour in terms of share of mind for the parents that responded? Black Cat peanut butter on your Albany bread, or any bread? My daughter has nut allergies, but she knows Black Cat peanut butter!
The response Bruce Whitfield got was McDonalds and KFC to start with. Well that is not a real option because there are no entities listed that give you benefit of those business profits. The closest was SABMiller because through ABI bottling Coke, you get the exposure to Coca-Cola products. So the best things parents think their children associate with is in the Junk Food category from a consumer perspective?
I am not a big consumer of all the brands above, so I can't say my bias of thoughts is a function of my consumption habits. It does say a lot about what thoughts dominate our mind. What dominates our mind is what we teach our children. I would be very afraid, if junk food is what I am teaching my children when I think of consumer stocks.
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