A high school kid I know in our neighborhood recently received a gift of $1,000 cash for his birthday. He asked his parents for permission to use the money to "learn how the stock market works" and his dad mentioned this to me the other day. I thought this was a really cool thing for his parents to let him do. So...if this was your kid...how would you advise him?
Where should a kid start with $1,000 to learn how everything works?
What should his expectations be (he is 16 now) over the next couple of years before he graduates?
How awesome are his parents for letting him do this!?!
With $1000 it's hard to invest in more than one stock. If you invest in two, you'll need probably need a ~3% gain, depending on how much the commissions are, just to come out even. I'd put it in 1-2 stocks and then play around in a simulated account.
With what MMBanker said, giving him 1000 dollars to play with in the stock market is almost the same as giving him 1000 dollars to go to the casino with.
I'd recommend they say here's a paper trading account with 100,000 dollars in fake money. If you learn how the market works and want to invest in it.. if you can come back with X% gains after Y time, we'll give you $1000+ $Z to invest in the stock market.
Just the same as saying.... here little Johnny, take this go cart and get on the freeway to "learn how the freeway works".
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