The talk about money most parents leave until too late

How do we teach our teenagers a healthy attitude to money when the online world is full of gambling, cryptocurrencies, and social media get rich quick schemes? When should we start talking to our kids about investing? And what if we don't feel like we know enough ourselves? If you've ever asked those sorts of questions, then keep on listening. Hello and welcome to Teenagers Untangle, the audio hug for parents going through the teen and tween years. I'm Rachel Richards, journalist, parent of two teenagers and two bonus daughters. With me today to help us think about this topic is Sonia Beardsmore, mother of two kids who spent 22 years trading UK European and North American equities, ending up at CIBC, a leading Canadian investment bank. She's written the book Raise a Mini Investor, which is designed to give our kids the financial education the school system simply doesn't. Welcome to the podcast, Sonia. Now, what made you write the book?

Because actually the foundational concepts are quite simple to understand. And as my children have grown up, I always thought by the time they got towards senior school that they'd already be in the curriculum. And it's still not, it's a massive gap. And so I've tried to look for resources that I could use to help my children learn about it more, and there was just nothing there. So I decided I would take it upon myself to try and write something. I love that.

This is what we're all about, this community. It's like we parents battling with something and then going, where's the information? Then discovering there isn't any and then fixing it ourselves. So we can all help each other by seeing the gaps and then filling them. So yes, I've read your book. It's really accessible without talking down to kids. And I'm a massive believer in financial literacy because I remember being a teenager and thinking, well, how does this work? And not having that information. So what are the basic things that you think could be conveyed, which would make such a difference to their understanding of investment?

Key Concept: Compound Interest & Example (£20/month)

Well, I think one of the magic ingredients that is really important for children to understand quite early is that of compound interest. Because this is why time is really important. And actually, if they start young at 12, 13 years old, teenagers, then it can make a massive difference to what they have later in life. And what compound interest is, is where whatever they earn, they actually start, you know, they are investing on that same amount. And then that itself is earning money. So to give you an example, say if a teenager at 12 years old started with just £20 a month, say it's £240 a year, it's not much, is it? It's it's it's you know, it they're not going to even notice that. It sounds trifling, doesn't it? Absolutely. And if they invest that from the age of 12 to the age of 65 years old, and if that earns around a 7% return, which is the average, um, the historical average over years in terms if they were in a um uh like one of the FTSE trackers, that would build up around 136,000 by the time they're 65 years old. Now, if they invested the same amount from the age of 25, that would only end up with 53,000 at the age of 65. So that's the major difference of why time is important. But also, I think, you know, in terms of helping them understand this isn't difficult. There's a misconception that you need a lot of money to start investing, or you need specialist knowledge, and that is just no longer the case. So when you talk about investing, what are we actually discussing here? So within the book, I actually go through different companies. I look at brands that teenagers would be aware of, so like Nike, Spotify, Greg's, uh, Microsoft, all the ones I've heard of, and I really try and break it down for them so that they can see why a company's share price would go up and down, what the major catalysts are, um, and I talk about dividends and why they're important and what they actually mean. Um, and then we actually go right through to P ratios because actually they're quite it sounds complicated, but actually it's quite simple to understand when you go through those steps to get to the end. But then I also talk about funds in terms of ETFs and investment funds, because actually diversification is really important. So when you're beginning, they're probably the easiest tool to use. Um for my kids, ISIS is just in trackers, it's just in an ETF. And and that's been in there for like five or six years. Um, and that's done really well over that time. So it's really breaking it down as to how to invest, and then there is there's actually some steps about how to open an account and how to approach that conversation with a parent. Um, if the teenager gets to it first, but hopefully if the parent gets to it first, then they're already that step ahead to discuss it with their child.

What Investing Actually Means: Shares, Dividends, P/E Ratios

Yeah, it's interesting, isn't it? Because I um when my kids turned double digits, I sat each of them down and went through um handing over a chunk of money per week to them that was basically what I was spending on them anyway, and saying, that's you're up to you now to do what you want with that money. I want you to start to understand it, which has been very effective. And now I've got girls who are very interested in investing and very uh they were open. They were I an ISER is just simply a a means of actually investing your money and sheltering it from tax in the UK. So if you're listening from abroad, you will have the same sorts of things in your own countries. Um, but it's it's definitely helped them understand. I think what they didn't understand, and I hadn't been able to fill in that gap, was how to understand the different uh instruments that are available to them and what they what the differences are. I think teenagers are a lot more aware of money and a lot more aware of investing because I think social media covers it a lot. But I'm getting a lot of I um feedback that they're really interested in gambling. Because they see that as the way of accessing the the markets, accessing opportunity to make money. What would you be saying, if you know, if your kids said, Oh, I'd like to actually use some of this for gambling, what would you how would you approach that?

Gambling vs Investing: How to Frame the Difference

Well, I think it comes down to education because if they don't know, they don't know. You know, they don't realise that investing is an option if all they are taught at school is saving, budgeting, you know, mortgages. Um that they don't recognise that actually by investing they can grow their pot. That and and on the other side of the coin, they don't recognise that if they are saving that actually inflation is eroding that. So they've got this misconception that they could save or spend, but they don't realise actually by saving, they've got to look at what the inflation rate is as well and what that what happens to that money. So I think it comes back to education, and I think if we educate them about investing so that they recognise that that is a thing. There was a saying um I heard just recently, somebody used it, and it really resonates with me, is if you can't see it, you can't be it. And that's exactly why this matters. I think if a teenager grows up teenager grows up never seen investing as something available to them, something that normal people do, not just city professionals, they'll never consider it as an option. So I think that's what I'd do if somebody was showing interest in gambling. Gambling's speculative, you really can just lose your money. Whereas investing, if it's done with some education behind it, then actually it can be quite a safe thing to do. Don't get me wrong, investments can go down as well as up. But because a teenager and because a child has time.

Importance of Time & Starting Early

Yes, yes, exactly. Yes. And they have time. That's the thing we can't get, right, as parents. We, you know, when we're adults, I mean, my my 31-year-old said to me recently, Oh, I feel like I've missed the boat. I've there are lots of things I would think I should have done when I was younger and I didn't think about them. I think it it doesn't just naturally happen. You try and talk to your kids about investments, but it they they need to have the structure and the understanding for themselves to see why it why it helps,

Teen Interest & Lack of School Financial Education (Stats)

right?

Yeah, and the but the interest is there. There's there was a stat out um when I was looking um at details and it um it said that 80% of teenagers want to learn about money, but only one in four received any financial education at school. So the interest is there, but it's just not being taught. And um my son's uh 11, he's uh he's almost 12, and when I advertised the book through one of the WhatsApp groups, um one of the mums came back and said, Well, it'll make a difference from the boys all talking about it in the changing rooms, because apparently they'd all been talking about how they can make some money. So the interest is already there, even at 11, the interest is there. Um, and my son's read about half the book, most of the concepts he understands. Compound interest. Right. It's taking a bit more. Um, but he can explain to you what supply and demand is, he can identify companies, and now when we're walking around, that's the other thing, it sparks that curiosity. So when we're walking around and he sees a Starbucks or sees, you know, be like, is this company listed? Is this company? It's really interesting seeing what's coming back after having these conversations with him.

So the interesting

Sparking Curiosity: Connecting Brands to Investing

thing so interesting. Yeah, so it's connecting them to the products of the companies they're consuming rather than just being a consumer, they're now sort of seeing it in a different way and how the the high street, how the what's happening online actually functions. I think very often people look at people making money and they don't understand how those people came to be where they are. And the work that's gone in behind the scenes to actually get to that level, like you know, how you raise money from investors in order to make a company the one of these big behamoffs that they see now. They can't see it starting out and how they've managed to get there. Yeah. Um yes, interesting. So should teenagers learn investing before they learn about credit cards, or is that all one of

When to Teach Investing vs Credit/Banking Topics

a piece? I think it should all be done at the same time.

And then there have been some changes that are coming around in the curriculum. Um they're due to be implemented in 2028. But one, that's still quite late, that's still quite some time off. Um, and secondly, it still doesn't include investing. And other countries are already doing it, other countries are getting well ahead in America. Um, they have gone from the number of states making it compulsory has jumped from eight to over 28. Oh, really? Yeah. Um, and then in Finland, they're now teaching 13-year-olds stock market investing. Um mission to become the world's most financially literate by 2030, um, they're actually taking that on. And the UK didn't even enter those rankings. Wow.

Because of course, yes. Um, because we need people to invest in these companies so we can grow the companies and then we can actually have a flourishing economy. Um so how would you help a parent who's not actually very financially literate, who sort of found investing a bit confusing anyway? How would you help them distinguish between investing platforms and gambling? Because when you invest, you're still gambling a bit. Because if you're gonna you know invest in a company, that company could not turn out to be a good company, they could fold. How are we to understand this ourselves and and perhaps this discuss it with our kids?

International Curriculum Examples (US, Finland)

It can, and that's why I talk about funds as well, because then you are getting that diversification. But already I've had a number of parents come back to me who have read the book and said, Oh my god, I did not know this. Right. And actually, no, one one uh friend of a friend actually um bought the book and they don't have any kids. So they've they just decided that if a 12-year-old could read it, they could read it and understand. Um, so what I'm finding is is most parents are going through this book first by themselves, and then they're actually going through it with a child. The intention was always it was aimed at teenagers, but it's brilliant that parents are actually reading it too. Um, so a lot of the um information I'm putting out on social media or on Instagram is very much aimed at the parents as well to help with their education and really get behind it. So, this this book is really providing a framework for them both to go through together. And that's the other thing. It's a great learning experience to do together. Um, there are plenty of worksheets throughout um the book, um, and it will help both of them in their education.

Parents Learning Alongside Kids & Book Usage

So when you talk about worksheets, it's interesting, isn't it? Because I one of the things my daughter did was she you can actually get these apps now where you can practice trading, for example, um without actually spending any money. It's just it's just a a non-existent currency, but it's to try it out. And um I do think these work having a chance to work through this stuff is very valuable. But yours is more, it's actually just understanding the nuts and bolts of investing,

Paper Trading & Practice Platforms (Trading 212)

right?

It is, absolutely. I do actually go on to talk about some of the platforms um that allow uh that kind of paper trading. Um so trading 212 is a perfect example. They provide you can literally it feels it's feels real when you're doing it. You can actually put an amount that you'd like to invest and then go through how you'd invest it and then watch it, and it'll really help you cement um your understanding of it. So it's great. And nowadays, as well, you can invest with as little as one pound. That's another misconception, is that people think you need a lot of money to do this, you really don't. Um, and you know, that platform, InvestEngine, Vanguard, all offer very low-cost accounts um where you can invest. Um, and again, you know, going back to differentiating between gambling and these platforms, if you understand what you're investing in and why you're making those investment decisions, then I think that takes away from it being being gambling. I think gambling is speculative, um, and investing in companies is just that it's you know, it's something tangible as well. Like there's a lot of talk about cryptocurrency, but there's nothing tangible there, and it really is just what people think of crypto, not to say people haven't made money out of it, a lot of people have, um, but this is really just trying to cement the understanding of buying into a company and looking at the fundamentals.

Low Minimums & Accessible Platforms (InvestEngine, Vanguard)

Yes. A mother contacted me to say that her son had uh he was about to inherit from a trust because he was about to turn 18. Um personally, I wouldn't have a trust where my kid could inherit the money at that age, but hey, and she was panicking because he had been following somebody on Instagram who had been selling the this scheme where the boy could invest his money and he guaranteed really great returns. Um, and we've seen these sorts of things. There's that, and then there were also the kind of pyramid schemes where they look really good, the great returns. How would you spot perhaps not a particularly good scheme for a young person to be investing in?

I think

Spotting Scams & "Too Good To Be True" Warnings

I've come back to if it sounds too good to be true, hit for the others. Yes. And that's why I just think if you understand it better, you will recognise these signs very quickly, and you'll recognise that it isn't possible. Some people do have platforms that might recognise patterns and technical trading, and that's what they're trying to sell. But at the same time, there's a lot that don't. Um, and they just simply know what to say. And I think that's again another big misconception is that it's the jargon that's used within stock market trading that can be quite confusing. Um, so if somebody bomboozles you with loads of terminology and just says, Yeah, that's gonna make you a ton of money, and I think kids are dragged into that and just think, Oh yeah, this sounds amazing, let's do it. Um, and that's that is the scary thought. And again, I feel that if the parents are a bit more um uh uh a bit more informed, and the child is, then actually together they can look at that and have those conversations. And hopefully at that point the child can go to the parent and say, Well, I've seen this, and hopefully the parent feels informed enough to make that decision as well.

Practical Advice: Read, Learn, and Talk to Parents

Yes, I think that's uh knowledge is so important, isn't it? And I did actually say to that parent, you know, like get him to start trading himself without money to see actually how this this turns out. I I think it can be really, really tricky with a parent, uh, with a chit child who's got a child like that. I do know another teen who um inherited money from their grandparent and has dropped out of university and is using the money that's coming through to day trade, uh, attempts day trading in the currency markets, which is a closed market as far as I understand. And I, you know, I worry that these kids don't have full access to the information that professional users have. So, what would you say to a kid who is really keen to learn about trading?

Opening Junior ISAs & Learning Together as a Family

Um, read the book.

Read the book and get educated, really. Um this is um it is a framework, it is the foundation, it's only the first step. There are lots of other material out there, but I feel like it's a big leap going to some of that other material. When I looked through it myself, I couldn't really find anything. Um, and what I could find was very much aimed at adults. So don't rush. There's there's no rush getting into it. I'm saying it's a great time to start looking at it at 1213, but if it's a year different, it doesn't make a massive difference. If it's 10 years different, then it does. Um, so I would just try and encourage any teenager to want to get educated and want to have the conversation with the parent because if the parent is happy to be involved and actually open a junior ISA

Modeling Money: Pocket Money, Saving & Investing Rules

where the they can both then talk about their investments, that sparks even more curiosity and then they can look at different things. Um, and then they can look at currencies, commodities, anything else that they they want to look at. But just get if you've got a good understanding of the foundational concepts, well, everything else builds from that.

Yes, yes. And I I love that point that actually as a parent, if you can have conversations about this, so you start piecemeal. So maybe you don't know a lot about investing, but you choose one thing like an ICE, and then you start seeing how you know you start searching between the different ICEs, you know what you're looking for because you have the information. And then once you start seeing the money coming in, which is what my daughters have done, and they're gone, oh, look at this money I'm getting. Um, then you can it can start to encourage you to delve more deeply into these other things. So learning together as a family can be really powerful. Because I think the scary thing for parents is if we weren't taught this stuff when we were younger, it can feel very um challenging to have to sit down with a kid who seems to know more than you, even though they maybe don't.

Yeah. And the cycle perpetuates itself as well, doesn't it? It it it compounds itself. Um, and I think it is it is scary, but the first step is just having that conversation. Um, and that's why I say, you know, anybody, any parent that is buying the book for their child, I would encourage them to go through it first. Um and it's not a 300-page book. It's that's it's really simple and easy to yes, I like it. It's and very useful. Yep, and that's why I've made

Book Design: Simple, Worksheets, Parent/Child Use

it that that length. Um, and I actually got a ton of people to go through it before I actually put it out there. Um so any concepts that were too difficult or too tricky or felt like it was the next step up, I pulled them out. So I have made it as as easy to understand as possible um to make it more accessible to law.

So do you have these conversations with your kids around the table? Yes. We do. How do you broach it? How how do you bring it up without sounding like you're lecturing your kids?

Well, I think because when we're when we're just walking around the streets, we'll talk about uh you know like uh Starbucks was was one of them. Um and we'd have a conversation just saying, you know, do you think Starbucks is doing well at the minute or do you think Starbucks is doing badly? Or would Nike, Nike was the most recent one. Um and Theo was saying, he said, Well, I've not really seen them that I don't see, you know, Nike just used to be everywhere, but I just don't see them as much. And I funnily enough, I think that the share price has been coming under pressure. So we just bring it into conversations like that. I love that. And and I think because when we went through COVID, the children were at home, and even though they were very young at that point, um, they were asking what we were doing when we were working, so we were taking them through a little bit of it then. So perhaps they do have a little bit more of an understanding because they've seen it and heard it from us. Yes. But they are just genuinely interested now about how it works. And, you know, we will when they're talking about what they want to do when they grow up, they actually do say, and I'll have invested this much, I'll have made this much out of invested, and things like that. So the words are already coming. And again, it comes back to if you can't see it, you can't be it. And they now see it already. So I feel like we're already steps ahead because they they can see it in their

Everyday Conversations: Observing Companies & Share Prices

future.

Yes. Yes, modelling it as a parent's the most important thing we keep talking about, and curiosity and just being able to walk around the streets and going, Oh, I wonder how they're doing, and can we look up? You know, even understanding how to look up. Up, how are companies doing? So going to company's house and looking up who are the directors, how much money did they make last year? And absolutely yes, that sort of stuff is really useful.

Yeah, and it's not just about you know somebody going into finance at a later date. If if um children want to grow up and run their own companies, um, you know, they they need to be able to know how this stuff works. And coming back to what we were talking about earlier, um, in terms of like how a company raises money, why they raise money to be able to scale and you know how they become big brands, just knowing those first steps of what drives a share price helps them understand how they will progress later down the line. Um so it helps in everything. And I think maths is just critical anyway. And I'm a big advocate of um of of helping um uh children pursue maths past, say, GCSE. Um because I feel like maths is just such a foundation for any career that you go into, anything you do in later life, you need to know.

Why Math & Financial Understanding Matter for Life/Careers

Yeah, yeah. And it just makes it much more relevant because I think very often they feel like they're disconnected from the world, they don't really understand why this is important. Um, and I think what's really interesting with companies, my husband uh does a lot of work with companies at early stages and is the amount of money that's required to to make a set a company up and run it, and the constant need for more money because they'll be running out of money and they'll be working, you know, super long hours just to keep the company afloat. And I think people don't see that going on behind the scenes, they just see the success stories and they don't see how many companies have fallen at the you know, the hurdles as they've gone through. And quick question Do you give your kids pocket money?

Um, not at the moment, but only because they get so much from the grandparents. So London grandparents. I know, and every time you go around, uh um uh be I think because we're in London so long, since we've been back for like two years in in Yorkshire, they um the grandparents every time they see them now give them some like what when to. Um, but we did say once they hit senior school, we will. Um so the idea is, and we have always stressed, because we gave them pocket money when they were younger actually, then stopped. Um and we always stressed the you know, spend 25%, save a proportion and and try and invest a proportion.

I think that's the way it's gonna go as we

Pocket Money Practices & Spending Lessons

go forward. Yes, I love that. I didn't actually do, I didn't actually sit them down and say that's what you should do. I wasn't prescriptive about it. I just said it, I'm not giving you money to spend, I'm giving you money to learn. So do, you know, spend it wisely. And, you know, both of my girls, from the moment they got the money, started being crazy with it, right? Very quickly realized that they'd run out of money and they'd say, Can I have some more? And I'd say, that's a no. It dawned on them that actually if they saved it and they spent it more wisely, they'd be much more happy with the results. I think that's really great. Giving them a template for saying, you know, this is the best way to set it up so that you're actually getting a reasonable amount of payback in the end. And buy the things you really want to buy. Great tip. I love that. And just like any investment, don't put in investment money that you can't afford to lose.

Risk Reminder: Only Invest What You Can Afford to Lose

Correct. Correct. Absolutely. So if you can't afford for your kids never to give that back, don't give it to because you just don't know what's going to happen there. I love that. I love that. Sonia, such a great, really interesting discussion. Is there anything that I haven't covered that you think would be really helpful to parents?

No, I think you have covered everything. I'd just say have that conversation. Just start having those conversations and don't be afraid. Follow me on Instagram. I provide insights that are not just only in the book, but additional ones as well that are mainly aimed at the parents. I talk about some of the jargon so that you can have these conversations quite confidently and not and don't be afraid. Don't be afraid because it, as I say, I repeat it again and again until I'm booing the face. The foundational concepts are not difficult. And I would like to make it more visible and more accessible to to everybody.

How to Start Conversations & Follow Sonia on Instagram

And I really think that one of the things our schools are doing very, very badly is connecting our kids with the adult world, with the world of work, how it how it functions. And I think this is one of the really great ways of connecting our kids with the world around them and starting to understand and feeling like they've invested and they they have a say. Because the other thing that's really interesting is my friend runs a fund and she said that the people who've invested in the company, they want them to turn up to investment meetings. They're very interested in what the investors have to say. And there's so little interest, there's so few people who will engage when they ask questions or whatever. But that's actually another interesting thing kids can start doing. And they're they, you know, suddenly you have a voice, which is cool, right?

Yeah, absolutely, absolutely. And and that I think that's quite empowering for them as well, and will encourage them to ask more questions. And building that confidence will just help them in every area of life.

Empowerment Through Investing: Having a Voice as an Investor

Yeah, in a sense that it's not it's not just about like the way you have access to power and some kind of um control over your world isn't just through politics, is actually through you know, money and the companies around you and where you spend your money and choosing not to spend money in places that you don't agree with, and all that stuff. So brilliant. Sonia, thank you so much. If you love this, um I'll put the book uh links and the Instagram link in the podcast notes. So click on those and uh the places that so just you can say it. What where how would people find you?

So they can click onto my website, which is www.raise a mini investor.co.uk, and they can also find me on Instagram at raise a mini investor.

Fantastic. Great. If you found this useful right now, send it to at least one other parent who would also benefit, or a teenager who might want to get hold of this book. And uh you can find me at www.teenagersuntangled.com. I have I'm on Instagram, I'm on all the uh social media platforms, and I'm on Substack, which is where I write up notes about every podcast episode. So if you're one of those people I know who sits and writes notes as they go along, you don't need to just come onto my substack and you'll get the notes there. Teenagersuntangled.substack.com. That's it for this week. Thanks for listening. Uh big hug. Bye bye.