Introduction to Stocks for Kids and Teens
This video explains the concept of stocks in a simple, concise way for kids and beginners. It could be used by kids & teens to learn about investing in stocks, or used as a money & personal finance resource by parents and teachers as part of a Financial Literacy course or K-12 curriculum.
Suitable for students from grade levels:
- Elementary School
- Middle School
- High School
The topics covered are:
- What are Stocks
- Stocks and ownership of a company
- Why should you buy stocks
- Finding the trading price of a stock
- Where can you buy stocks
- Stock trading and brokerage commissions
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Howdy Wall Street Willy! I have a really big question for you.
Yes, what is it?
What is a stock?
Well, a stock is basically a very small part of a company.
Well, what do you mean?
So if I buy stock, I own a company?
No, you do not own the whole company – you own part of the company.
So, do I own part of a company if I buy one little baby tiny stock?
The answer is yes, you do own part of the company if you buy one little tiny baby stock.
I have another question.
Why would I want to buy a stock?
Well, you would want to buy a stock because if this company that you buy the stock in does well, then, the stock price – which is how much you bought it for – will go up.
Well then, if the stock price went up from what I bought it for, then do I make money?
No, you do not make money actually.
Well, why is that? Then what’s the point of buying a stock?
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Well, if it goes up, then you have to go to your brokerage account, then sell it, and after you sell it, you get the money that its now trading for or selling for. That way, you can make money.
Or, if the stock price went down or the company didn’t do well, you might lose money. But that’s ok because stocks are a risk, and you could make a lot of money.
Okay, now that’s real good!
So I could make a lot of money no matter what?
No, if the company stock goes up in value, then you can make a lot of money.
Oh, ok. Very good.
But how do I know how expensive one stock is?
Well, you can look online on Yahoo Finance or any other brokerage site to find out how expensive any stock is.
But where can I buy a stock?
You can buy a stock online.
Well, then how do I find the exact stock that I’m looking for?
Each stock has a specific stock symbol. That symbol is only entered for that stock.
So, let’s say I’m starting a company called Fun Time Party Places. I would choose a symbol for my company that is FTPP.
Then, if you entered FTPP, then you would find the share price or stock price of my company’s one stock.
Cool! But where can I buy a stock?
You can buy a stock online from your brokerage account.
What’s a brokerage account?
Well basically, you can’t buy a stock right out of your bank account.
You need to transfer your money into your brokerage account because the brokerage account has special brokers that make the transaction for you or buy the stock or sell the stock for you.
Whoa, that’s cool!
But do I have to pay the person who makes the transaction extra?
Yes, you do. The extra amount that you pay them is called a commission. The commission us usually $7-$10 per stock. Well, not really per stock, but for every amount of stock from one company.
For example, if you buy one stock of my company that I started, you would have to pay $7-$10 in the commission. But even if you bought a 1,000 stocks of the same company, you have to pay the same commission.
But, if you buy one stock of my company and another stock of a different company, you have to pay a commission for buying my stock and the other person’s stock because they are part of different companies.
Cool. Well then, if I buy the company’s product, do I own one stock automatically?
Well no, you don’t, because you are not paying to buy the stock or paying a commission.
Okay, now that all makes sense. Thanks a lot for showing me what a stock is!
Remember, finance is your friend!
Video Featured in the Below Financial Literacy Courses for Kids and Teens
Download Transcript: Ideal for Use by Teachers in their Lesson Plan to Teach Kids and Teens
Podcast: What are Stocks?
Fun, informative and concise episodes by a 10-year old, breaking down complex financial concepts in a way that kids and beginners can understand. Episodes cover personal finance topics like saving, investing, banking, credit cards, insurance, real estate, mortgage, retirement planning, 401k, stocks, bonds, income tax, and more, and are in the form of a conversation between a cowboy (a finance novice) and his friend, a stock broker. Making finance your friend, only at Easy Peasy Finance.
A little bit about me: I have been fascinated with the world of personal finance since I was 6! I love to read personal finance books, and keep myself updated on the latest by reading various personal finance magazines. My friends often ask me questions about finance because they find it complex and intimidating. That’s what inspired me to start my YouTube channel called Easy Peasy Finance when I was 8, and this podcast 2 years later.
Everything you would want to know about stocks – what stocks are, the concept of company ownership, why you should buy stocks, where and how you can buy stocks, brokerage account, commission, etc. Show notes and transcript at: https://easypeasyfinance.com/what-are-stocks/