The Sort Test©

I understand High, Medium, and Low Risk.  What is Balanced Risk?

Balanced Risk is that set of Coping Strengths in which Mom and Dad show Agreement on how to invest money set aside here.

Some families decide to use a part of the money set aside in Balanced Risk to provide for the child’s college.  Mom and dad can say, “This money is set aside for your college!”  Tell the child that when s/he learns enough about investments s/he can buy a stock!

Why would mom and dad do this?

This is a huge incentive for a child to learn about investments.  It is a very empowering way to teach a child wisdom about money.   Kids see it as a game – and enjoy competing to do better than anyone else.

How do we teach a child how to invest?

1.  The financial planner and mom and dad clients discuss risk tolerance and investments with their child. 

2.  Then the child gets to select an investment based on what s/he has learned so far.  Now s/he has an active role in getting the most money for his/her college education!

3.  As s/he watches the stocks, has experience, and gains knowledge over time s/he will see how to make increasingly wiser choices.  For instance a young child might select Disney. 

4.  The parents and the financial planner now have a way to help a child learn how to evaluate an investment as the child watches his/her stock grow.  After watching what Disney does for a while s/he might buy another stock.  And ask, “How well is this stock doing when compared to Disney?”

How does having an EBook for High, Medium, Low and Balanced Risk help the whole family learn more about investing?

1.   Parents use the 4 EBooks to learn more about the 4 kinds of risk tolerance.

2.  Then they can use it teach it to their children about investing. 

3.  There are about 25 pages of exercises in each EBook.  You can print them out for each member of the family.  Fill them out and discuss each of your thoughts as you learn.

4.  A Chart

• Explains each risk tolerance
• Discusses each one’s goals
• Tells typical professions for each tolerance
•  Lists each one’s strengths
• Explains each one’s communication methods

5.  The exercises

• List each one’s strengths so a person can select which ones he most wants to develop
• Offer specific activities that will appeal to them in doing family investment planning
• Invite people to plan what they want to learn now and what they want to learn later
• List specific options to think about which ones they would enjoy doing
• Offer investment strategies to consider for each risk tolerance
• Identify common sayings that help everyone better understand each risk tolerance
•  Invite people to consider ways in which they can use each risk tolerance to mature over time

6.  Not only does learning about investments empower a child to earn the right to invest money, but the skills she learns help her make the best use of money across all of her life. 

7.  Now the child will mature as an investor across the years as s/he matures in every other area of life.  Won’t that be fun for everyone?

8.  Each of us uses our Coping Strengths And Risk Tolerance (CART) Profile for all of the roles we play – as a parent, at work, at school, as a son or daughter, as a grandparent, as a team member, as a manager, etc.  Won’t that be fun for everyone, too?