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  • Family Plans at Your Local “Wealth Club”

    By Patty Mayeux

     

    Move over, Dr. Spock, the Beardstown Ladies are here to help you raise your children. What? Well, not exactly, but the now famous group of women who began meeting to learn about investing may be a good source of advice for instilling savvy investment practices in your children.

    Back in 1983, the Beardstown Business and Professional Women’s Investment Club was formed to teach members how to invest. The women tapped into the National Association of Investors Corporation (NAIC) for guidelines to get them started, but a healthy dose of good sense is what helped them average more than 20 percent annual growth. By 1991, the ladies had realized nearly 60 percent profit.

     

    Getting Started

    Joining an investment club is a great way to get your feet wet in the wild and scary world of the stock market. Monthly fees are low, and therefore, so are risks. Members meet to share research on potential stocks and follow their investments. Speakers from local investment houses may visit to share their knowledge of Wall Street.

    Susan Smith was asked to join an investment club five years ago by a friend. She did, at first she felt intimidated because she didn’t know anything about investing. The club and the NAIC proved to be a valuable source of information through speakers, software, and the NAIC national magazine, Better Investing. Soon Susan had learned so much she was asked to take a leadership role in the club. 

    “It demystified the process,” says Susan, adding that her experience with the club encouraged her to invest on her own. She chose stocks according to the products she used or liked. “The Beardstown Ladies invested in Wal-Mart because the parking lot was always full,” she adds. Susan reached her goal of doubling her original investment in just three years, much sooner than the five years she had predicted.

     

    Focus on the Long-term Gain

    Despite a recent downturn of the stock market, Susan says she is not too worried. She is investing for long-term gains. Downturn or no, Susan’s daughters, Maggie and Allie Cawood-Smith, are impressed with her success. Impressed so much that the 13-year-old twins are now investing some of the money they earn from their business, Beet Lips.

    When parents are involved in an investment club, the dinner conversation often turns to financial matters. Children of investing parents become comfortable with the terms and idiosyncrasies of the stock market. As children become well versed in the ways of Wall Street, they may be ready to invest some of their own hard-earned money before they turn 18.

    Although they will not be able to invest on their own, parents can open an investment account for them. You will have the final authority on investment activities, but it can be a great learning experience for your children to watch their money grow.

     

    Go With What You know

    Allie says she has learned a lot about the investment world from watching the stocks she has chosen. She and Maggie chose companies whose products they used. Their strategy is doing well for them, and they have recently purchased some technology stocks.

    “I’m a little worried about the recent downturn in the stock market,” says Allie. Even though she is saving up to buy some stock in another company she has been researching, Allie says she will wait until things calm down a bit. Like her mom, Allie is looking to the future with her investment plan. Her advice to other teen investors? Don’t buy everything at once, and build a portfolio that is diversified enough to survive a slump.

     

    Please Pass the Financial Section

    So if you’re running out of things to talk about at the dinner table, consider joining an investment club. Your family may soon be fighting over the Wall Street Journal instead of the remote control for the TV. At the very least, your children will learn that there are many ways to make your dollars work harder for you rather than putting them in the cookie jar, or watching them disappear in the world of fast food, videos, and other “necessities.”

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