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Get Kids Excited About Shares

The new Hatch kids’ investment accounts let kids become shareholders in the brands they know and love.

19 October 2021

JUNO Summer 2020, in association with Hatch.

Nike shoes, Disney movies, online games, and space exploration are fun for kids.

Investing? Not so much. But not any longer.

After demand from Kiwi parents, the share platform Hatch is launching kids’ investment accounts that allow under-18s to buy and sell shares with their parents, for just 50 cents a trade.

Kids will be able to buy shares in their favourite brands. iPhone afficionados can buy into Apple and watch the company grow.

The accounts are in their name, but the kids don’t manage them; their parents do, says Hatch’s cofounder and general manager Kristen Lunman.

Kids can sit with their parents, talk about and choose the shares, and then watch how they perform. Parents transfer the money and place the orders.

Grandparents can give gifts of shares too, knowing the investments should grow in the long term.

Lunman says she thinks it’s interesting the demand for kids’ share investing has come from a generation who as kids weren’t introduced to the share markets.

“Hatch users tend to be between 28 and 60, and a large curve of these people were kids when their parents were burned in the share market crash in 1989.

“This is a whole new generation that has been raised to believe that on share markets you lose money.

“This has led to an obsession with property, but we’re discovering these people don’t see that as a pathway to wealth any more. It’s too hard and property’s very expensive, so they’re looking for other opportunities.

“These people have seen that share markets over the past nine years have performed incredibly well and are quite a compelling place to be for this new generation of ambitious Kiwis.”

Now they feel they have a responsibility to teach their kids another way of growing wealth, she says.

“There’s just a real sense of responsibility that we want our kids to be better off than we are.”

As a parent herself, she says it’s hard to teach your kids money lessons. “It doesn’t feel like money to them. They literally don’t understand it. They see us with cards, we don’t use cash, so kids have no concept of the value of money.

“But kids get enthusiastic when they can relate investing concepts to everyday life.

“These kids are surrounded by tech. They know these brands really well, and they understand future trends, like green, clean energy, electric vehicles, and even space exploration.

“I want to be looking at the brands that are surrounding my kids and getting them to really click as to what investment is. Because a share is really just a slice of a business that you anticipate will grow.

“Funds are really just slices of multiple businesses.”

Of course, shares sometimes go down, too.

“As the market goes up and down, it’s an easy conversation to have with kids about why.

“If they’re wondering why their shares went down, you can talk about how the coronavirus caused a crash across the wider market, or if Nike went up, you can say sales have rebounded because the economy’s opened back up.”

Shares are a long-term investment and teach kids patience, says Lunman. “Time is on their side. Giving their investments time to grow means they’ll ride out market waves and reap the magic of compounding returns.”

She recalls when her son realised his Take Two Interactive games shares had grown in value.

He said to Lunman: “Ooh, shall we sell it now?”

“I’m like, no, let’s think about this now. Over 10 years, think of how much more you could get.

“We could sell today, and you could get $1000, but why don’t we just ignore it and when you’re 20 years old, that could be tens of thousands of dollars.”

She suggests kids start small, build slowly, and let the markets do their thing.

“Regular, smaller amounts build into a sizeable portfolio over time, which is why auto-investing is a great way to get started.”

Pre-register at Hatch for a Kids Investment Account for early access. www.hatchinvest.nz/kids-accounts

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