Youth investment clubs

Investment clubs are broadly designed to educate members and facilitate their investment activities (1). Among the types of youth clubs are family investment clubs, which allow children and teens to be members, and student investment clubs, which restrict the membership to students (2). Adult clubs generally invest in securities, real estate, private business, or a combination of these investments (3).

Student investment clubs primarily function as learning laboratories for investing in stocks (4-9), running a business (10,11), or understanding finance (11-13). Participation in any of these activities is almost certain to improve students’ investment and money-management skills. Student clubs generally provide simulation games or trading experience.

Simulation games

Stock market simulation games with pretend investment portfolios are especially suited to school clubs of all ages (8,12). Community organizations also sponsor investment clubs, business training, and money management training (6,7). Students of all ages can also participate in online club activities offered by the Future Investors Clubs of America (FICA) (13). The Secret Millionaires Club (10) is an online club that trains young entrepreneurs in the ways of running a business.

Trading experience

Participants in market simulation games may wish to apply their research to buying securities in a personal custodial account (14-16). Some high school (5,8,9) and college (4) clubs purchase securities with real money. When real money clubs are funded by private donors, the profits are retained by the club and may be used for charitable causes (9). When real money clubs are funded by the members, the legal structure is based on custodial accounts for minors (2,14,15) and the tax structure is based on the “kiddie tax” (14). Children at least 14 years of age are required to pay taxes on unearned income over $650 (14). One concern about real money investment clubs is that they teach youth to “trade”, not to “invest” (readers’ comments to Ref. 8).

References

1. Investment clubs and the SEC. U.S. Securities and Exchange Commission. http://www.sec.gov/investor/pubs/invclub.htm

2. Douglas Gerlach, Can Kids Join an Investment Club?
http://www.douglasgerlach.com/clubs/askdoug/kids_and_clubs.html

3. Investment club. http://en.wikipedia.org/wiki/Investment_club .

4. Syracuse University Investment Club, http://www.suinvestmentclub.com/ .

5. Charity student investment project, Grossmont High School. http://grossmont.guhsd.net/index.php/student-organizations/165-student-investment-club

6. Literacy Institute for Financial Enrichment (LIFE). http://www.financialenrichment.org/yip.shtml

7. Teen Investment Club, Indianapolis Jewish Community Center (JCC). http://www.jccindy.org/page.aspx?id=170436

8. Hibah Yousuf, School gives 16-year-olds $100,000 to invest. CNN Money, June 13, 2013. © 2014 Cable News Network, http://money.cnn.com/2013/06/13/investing/high-school-investing-club/

9. David Brancaccio, At a Texas private school, the investment club actually invests. August 27, 2013. Marketplace® Morning Report. http://www.marketplace.org/topics/economy/texas-private-school-investment-club-actually-invests .

10. Secret Millionaires Club, ©2010 A Squared Entertainment LLC. http://smckids.com/episodes/.

11. © Junior Achievement USA®. https://www.juniorachievement.org/web/ja-usa/home

12. The Forsyth Country Day School Investment Club. http://www.fcds.org/academic/upper/upper_school_clubs.asp

13. Future Investors Clubs of America (FICA). http://www.futureinvestorsclub.com/index-programs.cfm

14. Brenda Watson Newmann, 401Kafe.com: Getting Kids Interested in Interest and Investing! Infoplease.com, Copyright © 1996 – 2000 mPower. http://www.infoplease.com/finance/commentary/feature/feature_3kids.html.

15. Gail Sessoms, How to start kids investment. eHow. http://www.ehow.com/how_5088565_start-kids-investment.html

16. Investment clubs for teens. © 1995 – 2014 The Motley Fool. http://www.fool.com/search/solr.aspx?exchange-input=&q=investment+clubs+for+teens&source=ignsittn0000001

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2 Responses to Youth investment clubs

  1. wilsongamble says:

    Youth investment clubs should be encouraged across the globe. Youth are the pillar of the present and the future success. If they learn how to invest, organize personal finance etc , then poverty across the world will be reduced.

    • Wilson. I read your good brief on investment clubs and, of course, agree with your entire comment about promoting youth investment clubs. One way of promoting youth investment clubs might be to develop online games that attract young participants. Thanks for your comment. Doug

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