I have a 13-year-old son who is interesting in investing for himself. He has a small amount of money he has gotten for birthdays, allowance, odd jobs, and various and sundry get rich quick schemes that he has undertaken. I have bought a few shares of BRK-B for him with some of the money. However, he wants to start investing some of the rest of it for himself. He even wants to play around with some options trading. I am a "buy and hold and diversify" type of person. I have neither the time nor interest in learning how do do more sophisticated trading, and I have found that every time I have gotten emotional about the market (2008) and pulled back, I have missed out on opportunities.

My son reads at a very high level. I have told him that he needs to read some books before he delves into anything at all sophisticated. Any recommendations for a good book he could read before he blows his lunch money and has to live in a van down by the river, eating government cheese, in order to support himself? Something that doesn't just blow smoke up his proverbial dress and overpromise on investing?

Thanks in advance.

"One Up on Wall Street"
by Peter Lynch

https://amzn.to/2LAddke

I just finished Simple Path to Wealth, I feel like the book gives you another perspective on the "buy and hold" mentality

I know you said he wants more complex, but i'd start with the warren buffet way. Those principles like investing in things you know can help even on the more technical stuff later on.

Also it's probably not a bad thing to lose 500/1k now trying things vs 10k or whatever later on in life. Better to learn those lessons young and smaller amounts of money than later on.

How to do life, Marty nemko

I am going to go a different direction.

Have him listen from episode 1 of The investors podcast. Then as he works his way thru there will be plenty of reading material identified for him to read.

Have him take a look at madazmoney on Twitter and YouTube (and the internet). Been following this guy for well over 5 years and he's the most transparent, honest, and overall can teach a system. He's gone through rough patches and I've seen him own up to losses that have been 50-100k in 1 day. He's great. I'm not huge on the fact that he started a trading chat room for a membership fee, however, he is successful trading and I think a lot of people make more money on publications than investing / trading. Max (madaz) was trading a system a long time ago and it's not changed much today!

Disagree

Take on as much risk as he can now. He has a lot of life to live.

Although he would have to do all of his trading by proxy through a legal guardian.

TriAg2010 said:

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If the objective is to provide a teachable moment - i.e. touch the hot stove now and learn it's hot - then sure, let the 13 year old trade options.

If the objective is to start building up some money, then allowing a 13 year old to trade options is biblically stupid. That money is as good as gone.

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or, he could be successful
Or, he could lose it all

The point is, at 13 the world is big and wide and he has plenty of time.

Only trade with cash he has. And be diligent in those trades. But I wouldn't say absolutely do not trade this strategy because, gasp, he could lose it.

Ragoo said:

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Disagree

Take on as much risk as he can now. He has a lot of life to live.

Although he would have to do all of his trading by proxy through a legal guardian.

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In my view, it's not about risk. It's about building bad habits at a very young age

Ya, I mean at 13, he probably has like 200-300 bucks.

Huell Babineaux said:

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Ragoo said:

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Disagree

Take on as much risk as he can now. He has a lot of life to live.

Although he would have to do all of his trading by proxy through a legal guardian.

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In my view, it's not about risk. It's about building bad habits at a very young age

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well, he has to do any trading through a legal guardian. So I would think the legal guardian starting this thread will make sure his son has done the proper research in order to execute the trade. Sounds like an opportunity to develop really good habits, regardless of the strategy being used.

In fact, it is a much better way to build financial and investing literacy than just blanket buying the S&P or Apple, etc.

I bought him the Peter Lynch book. As far as his nest egg goes, God willing I will leave him something once I'm gone. As for now, he has 4 shares of BRK-B that I hold in a custodial Schwab account. He has another approximately $800 that he has earned and I'd like for him to learn from that and compare his earnings to the Berkshire money.

TriAg2010 said:

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If the objective is to provide a teachable moment - i.e. touch the hot stove now and learn it's hot - then sure, let the 13 year old trade options.

If the objective is to start building up some money, then allowing a 13 year old to trade options is biblically stupid. That money is as good as gone.

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The goal is the former. He isn't gambling his lunch money. But if he loses it, that's fewer dollars he can spend on "hookers and blow", so to speak.

Ragoo said:

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Huell Babineaux said:

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Ragoo said:

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Disagree

Take on as much risk as he can now. He has a lot of life to live.

Although he would have to do all of his trading by proxy through a legal guardian.

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In my view, it's not about risk. It's about building bad habits at a very young age

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well, he has to do any trading through a legal guardian. So I would think the legal guardian starting this thread will make sure his son has done the proper research in order to execute the trade. Sounds like an opportunity to develop really good habits, regardless of the strategy being used.

In fact, it is a much better way to build financial and investing literacy than just blanket buying the S&P or Apple, etc.

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Using all the money in his piggie bank to trade options is building good financial and investing habits? In what world?

Ok

When I was that age I kept everything in a savings account. I'm still somewhat risk adverse, so I didn't read any investing books until my 30s. That said my grandfather left an investing how to. Basically invest based on your risk profile a percentage in stocks & bonds and recommended a bunch of Vanguard and Schwab funds he recommended investing money.

Its a fairly common strategy but it stuck with me as I read it the first time around his age. I would say start with trading stocks. If successful move onto options, but again risk adverse over here.

The Little Book that Beats the Market.

Simple to read and understand.

Start with the intelligent investor as a basis point, it will help with fundamentals needed for all the other stuff.

"VOO" and just get him started.

Getting my MBA I had a bond valuation professor who heard us talking about our stock investment challenge. He just rolled his eyes and wrote the 800 number for Vanguard on the board. That was the best investment advice I've ever gotten.

Look at investopedia.com. that site once had, and i assume it still does, a section where you could basically invest and manage a portfolio in real time .. but no money involved. Great way to get a real view of how it would play or in real life.

Uncertain if options and such are part of that.

Also, in my opinion, best thing that could happen (greatest lesson at a time when it doesn't matter) to him during this time is that he loses everything!

You might try "A man for all markets" by Ed Thorpe. It gives a different side of the coin to the intrinsic value crowd, and it's written by the guy who basically invented option pricing before black / scholes (sp?). Funnily enough Ed and Buffet crossed paths and have a lot of mutual respect even though they approach markets so differently.

I've heard of "a simple guide to wealth.". "The latte factor" might also be good for a kid. I haven't read either though.

op -

let us know what you pick and if your kid enjoyed it.

Aggie95 said:

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op -

let us know what you pick and if your kid enjoyed it.

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I already purchased the Peter Lynch book. His school lets out late - he just had his last final today. I've made him focus on school until now, and he will start reading it next week.