Investing Wisdom from a 10 Year Old

I recently learnt of a competition called InvestWrite in the U.S. where young school children compete by writing articles related to investing.

In the 2012 InvestWrite competition, Joshua Zirkiyev, then just around 10 years of age, emerged as the winner with his essay about the importance of starting to invest from a young age. You can read his essay here.

Young Joshua’s essay was structured as an imaginary conversation that he’s having with his piggy-bank, the cookie jar. At the start of it, Joshua asked his cookie jar to release all his savings so that he can invest the money. He then went on to discuss the investments he’s going to make and his thought processes behind each of them.

Parents generally teach their kids about the act of saving through the use of a cookie jar or piggy bank. The idea is for children to learn how to save instead of spending all their pocket money. Joshua, however, has brought in a whole new level of thinking and highlighted to parents that they might be underestimating their kids. This is because instead of teaching them ONLY about saving, Joshua showed through his essay that children can be well-prepared to start the next step of the game – investing.

It is humbling to see the level of analysis that Joshua brought forth when he discussed his investment thesis for his stock pick – Joshua wrote about the popularity of the company’s products and its manufacturing-cost advantages – and how well he understand the time value of money.

As a parent myself, it is a revelation to know that it is never too early to teach our children about investing. In fact, the world-famous investor Warren Buffett bought his first stock at the age of 12.

The best weapon an investor has is time. If you’re an adult now in your thirties or forties, imagine what difference compound interest would have made to your wealth and investment education if you had started investing when you were a child.  Therefore, why not allow our children to make use of that time advantage they have as soon as possible?

Joshua’s article also reaffirmed my belief that investing need not be hard. We do not need to understand rocket science in order to be a great investor. Joshua has shown that – his picks in the essay included smartphone giant Apple and shares of the company have gone up by almost a third since then.

The most important thing is to get started, sooner rather than later. We at The Motley Fool Singapore have prepared a special free report titled What Every New Singapore Investor Needs To Know. It is a quick five to 10 minutes read on what’s really important about the share market and is a great guide for both new and experienced investors alike regarding the basics of the market. So, instead of reading a bedtime story to you kids tonight, why not read this together with them?

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Stanley Lim does not own any companies mentioned above