CNBC’s Jim Cramer suggested investors introduce their children to stocks by making it fun and simple.
Cramer recommended first explaining to children the most basic principle of investing: a company can be owned by the public, and you can own a share in that company. He suggested parents then buy their kids shares in companies they might recognize from their own lives: playing with toys (Mattel), eating cereal (General Mills) or personal hygiene (Johnson & Johnson).
“I don’t know about Johnson & Johnson’s Bandaids and shampoo, they were staples, and they’ve since been moved to Kenvue,” Cramer said. “I knew them as well as I know now that Kleenex is something that you use to wipe your nose, there’s a good company, Kimberly-Clark. These are things we aren’t even taught— they’re imprinted.”
Once children have a few shares in a name brand company that makes products they can see and touch, wait and watch what happens.
“The stock won’t always work out, but think of what you liked when you were little or what your parents liked when they were little. See if it trades,” he said. “You more than likely have a long-term winner. More importantly, you’ve got a great hook to get your children into a lifetime of investing.”
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Disclaimer The CNBC Investing Club Charitable Trust holds shares of Johnson & Johnson.
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