How I’m Teaching My Son To Invest Using Craigslist

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A number of months ago I was sitting in my living room reading The Richest Man in Babylon.  It’s the story of a man that learns to save and invest and learns the power of his “gold” working for him. I had stopped for a moment, reflecting back on my own life and all the wasted years of blowing all the money I earned or was given. Shaking my head with regret and resolving to change, I was struck by a powerful thought. Why not teach my children the power of saving and investing now?  (My three boys are 3, 6 and 7) What if, instead of being forced to save their money, they were taught that saving and investing could be exciting, and they embraced it?

I’ve long known that children will rise to the expectations or bar that you set for them. Since our children were young, we’ve taught them to sit quietly for an hour so they could sit through a church service, wedding or a meeting. As a result, from a little over a year old and on, they have been able to sit quietly for long periods of time.  If children can be disciplined and trained enough to sit quietly, where else could the bar be raised? I could teach them to save and invest, I thought.

First, I’ve got to share a few things I had to deal with.  When I was growing up, saving money meant having my precious cash taken from me and given to a dry, stuffy old bank that would send me a piece of paper once a year and tell me that my money had earned a few cents. That’s what I gave up buying a treat for. I hated banks because of this. Why give up some candy that I could eat and taste today for a piece of paper that said I had earned a few pennies of interest?  Kids like to see, touch and experience things. Besides the really dry experience, today’s savings accounts yield basically nothing.

On top of that, what is the point of saving money? You can’t give children some abstract reason to squirrel away their money. You have to give them a vision that they can believe in and embrace. So I told Moses, my seven year old, that I would like him to pay cash for a house before he’s 18 and rent it out. I explained to him the implications of doing so, and what a strong place financially that would place him in.  He couldn’t wait to get started and begin working with me.

Seed money

Moses started with ten dollars. He’s very generous and had recently given all his money away as gifts and even donated money to an orphanage. I wanted him to work for his money so I told him that if he cleaned out a fish tank a neighbor had given to us, he could sell it. After scouring it out, he took some pictures of the tank and with the help of his mother, posted the tank on Craigslist. It sold in a few days. Now he had $25 dollars. I told him I wouldn’t sell him an old dryer for less than $40 so he was going to have to earn $15 more. After agreeing on 5 cents a weed, he went to town. A few days later, our yard had no more weeds and Moses had his $15.

The next stage

Armed with $40, Moses was very persistent in asking me about buying his first appliance. How was I going to do this? I didn’t want to just sell him an appliance for cheaper than I would sell it to the public for. When I get an older or slower moving appliance, I discount it down to the price that would cause it to sell within a day or two. That was it. I would sell him these exact appliances for the price I would normally sell them for, and then allow him to set a higher price. I sold him a really old dryer that still worked for $40 which he then sold for $60 a few days later. His mind was blown. His $40 had turned into $60. He then used the $60 to buy another and has been repeating this process ever since. Just recently I sold him a nice Kenmore Gas dryer for $80 and three weeks later it sold for $140. He’s up over $500 now and I can tell you that he views money as a tool to make more money. (It would be much higher if he wasn’t so generous towards others. Generosity will reap more reward in the long run then being stingy, I’m convinced.)

For now, his main responsibility is cleaning the appliances he purchases. He also hangs around me during the sale and delivery. I’ve been giving him more responsibility as he can handle it.  Eventually he will be in charge of posting the items for sale as well. He’s already started finding good appliances himself using Craigslist’s item preview-image on the appliance pages to find the ones we usually sell. He can now read the brand name, price and part of the description. He looks for appliances all on his own initiative. It’s great to see his passion.

This is just the start. Over time, I will encourage him to start researching other items and bigger investments. I’m still learning and growing in my knowledge and understanding of money and investments. As I learn, so will he. Also, it’s worth noting that he’s still a kid, and my wife is very good about reminding me that. She helps me keep things in perspective.

How to get Started

First off, you need to be saving/investing yourself, for most of what children learn is caught rather that just taught to them. If you need some start up cash, start off by selling everything that you don’t actively use or need. I mean everything. Most of what is in your garage can and should be sold. Pick a few hobbies and enjoy those few, not ten. If you golf every 4 years, sell your clubs. If you use a boat once a year for a week, sell the boat. Have a garage sale every year. The point is, if you don’t have money to start with, sell some things. No excuses.

As far what to buy and sell with your kids, it can be anything. You can make money on just about anything if your patient. In the summer it’s as easy as going to garage sales where you will find a mountain of items to resell. Other times of the year, you will have to search Craigslist persistently, but you will find items. You might already an asset that you and your child can start making money with. The point is to teach them to save and how to make their money work for them so their money makes money. Buying items they can touch, see, clean etc is huge.  The process needs to be as real as possible.

You might start off with the grand vision of raising a future Fortune 500 CEO, but don’t be surprised if you end up with a great relationship with your child as well.  They will never forget the time you spend with them teaching them about life.  It’s a wise investment.

I would love to hear your thoughts and stories of how you’ve taught your children how to save, invest or start businesses.  It would be great to hear a few stories about how/what those people are doing now as adults having had such an early start.

6 COMMENTS

  1. Great post Ryan. I completely agree about kids not wanting to save their money. They like instant gratification. I’ve been teaching my kids; 9, 6, 4 , 4, to sell their old toys and clothes at a bi-annual children’s consignment sale so that we can buy new clothes and toys. Sometimes it’s hard because I want to hold onto things more than the kids. Books for example, my 9 year old has read everything in the house so he’s ready to sell them. But I know there are 3 more readers behind him that would like to read those same books. We just have to compromise a little.

    Thanks again for sharing.

  2. Thanks Ryan,

    An excellent post. You realize your now on the “bad list” of people who ACTUALLY intend on and teaching your children accoutability and responsibility. May you and your bride be blessed and may your grandchildren be blessed.

    Reeder Lyons

  3. Excellent and inspiring advice! We have just started to attempt to save money as an emergency fund at the same time that we are experiencing a period of the brokest that we have ever been. We are also starting to use Craigslist
    as a tool to shop as well as to sell items. I am hoping that we will have success as well.

    I am truly inspired by the lessons that you are teaching your children. excellent parenting and investing. You are teaching real world real life lessons. Great job! Thank-you for sharing this excellent post!

  4. Excellent advice, Ryan. Too many adults want instant gratification nowadays and this view gets passed onto their kids. That just creates the need for having the “next new thing” as quickly as possible. You’re training your kids to use money as a tool instead of just the reward which they’ll really appreciate as they become adults.

    This summer my son’s family was having a garage sale. My wife took a few items over as it was a neighborhood sale. Our 6-year-old grandson had set up a little stand to sell soda and water. He hand-printed his sign with backwards letters and all. It was really cute. He then offered the cans from the cooler at one price and the warmer cans that couldn’t fit in the cooler at a reduced price. He didn’t just sit there waiting for folks to approach him either. He would walk around with soda can in hand encouraging people to buy his drinks. He has done other things to make some money. I can see with him it’s more about the process as he isn’t someone who needs the next “shiny new toy.”

    • That’s a cool story. I love it. We can help our kids be leagues ahead of their peers by just teaching the basics and encouraging them that work can be fun, and to enjoy the challenge. Teaching a child discipline so they are able to show restraint, especially in the area of money, will pay off massively for them in the long run.

      Thanks for sharing.

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