Last Christmas, I gave my 13-year-old son an unconventional present: $1,200 SGD to invest, with a specific focus on teaching him how to invest in stocks. This gift was more than just money; it was an entry into the complex world of finance and an opportunity for him to learn investing.

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Understanding How To Invest

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My son began his journey by learning the basics of investing. We discussed the risks and rewards associated with investing, emphasizing the need for thorough research and strategic planning.

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Selecting the Stocks

After extensive research, he chose three companies for to invest in, that was within his circle of competence:

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Alphabet (Google): He was intrigued by Alphabet's strong market presence, his strong usage of YouTube and given its widespread use among his peers he invested in it.
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Netflix: Based on his observation of my wife and I regular streaming habits, he believed in Netflix's growth trajectory.

Disney: Our family are marvel fans and that led him to explore Disney stocks. Despite some challenges faced by the company, he saw potential.

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Evaluating His Returns

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A year later, we reviewed his investments portfolio:

Alphabet: Alphabet's market movements, yielded significant returns of 50%.

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Netflix resulted in substantial gains.

Disney: The stocks dropped by 2%.

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Overall, his investing portfolio grew impressively by 27% over the year, demonstrating remarkable insight and strategy for a young investor.

This experience was invaluable in teaching my son about market dynamics, risk management, and circle of competence. 

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The key idea is always investing in what you understand and what you believe in. Sometimes just keep your eyes open to where you and your friends are spending their money. 

This is how even Warren Buffett and Peter Lynch invest.

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Join Our Community at Next Level Academy

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