Novel Investing Tips for Kids
In Elissa Brent Weissman's "The Short Seller," a seventh-grader named Lindy Sachs discovers a way to keep herself occupied while she's home sick from school: day trading. She logs into her father's account (with his permission) and is soon buying and selling shares of the companies she likes best. She ends up learning about the ups and downs of the stock market, the dangers of insider trading and what's really at stake when you place bets on the market.
Weissman, a children's book author who lives in Baltimore, says books can teach kids a lot about money, and she added her own favorites to our growing list of best money books for children. She suggests "Lily B. on the Brink of Cool" by Elizabeth Cody Kimmel as a great book for talking to middle schoolers about money, spending and con artists. Laurel Snyder's "Bigger Than a Bread Box" explores the true value of "stuff" when the protagonist finds a magical breadbox that she can fill with whatever she wants. "Framed" by Frank Cottrell Boyce explores the concepts of money and insurance (and insurance fraud) in a laugh-out-loud way, Weissman says.
U.S. News spoke with Weissman about how to talk to kids about money so they listen, and how she came up with her investing-themed plot. Her responses have been edited.
Where did you get the idea for this book?
A few years ago, my husband called me from work and asked me to place an order in our online stock trading account. Before this, I didn't even know we had an online stock trading account. While I was logged in, I pressed the refresh button on the browser, and the price of the stock changed by a few cents. I pressed it again, and the price changed again. I knew that stock prices varied throughout the day, but I had no idea that they changed so quickly.
I thought to myself, "If I buy 5,000 shares right now, and then I sell them in 10 seconds when the price goes up by a few cents, I can make a ton of money in just 10 seconds!" I could absolutely see how someone could get hooked on day trading. And I thought that that someone could be anyone with access to a computer -- even a kid.
Were you at all worried that the investing theme would be boring to young readers?
The world of investing that Lindy dives into is fast-moving and high-stakes, which comes with built-in suspense, so I didn't worry that her adventures would be boring. That world is great for fiction, but very stressful in real life. Now that you mention it, having your investments be boring is not a bad goal in real life -- if your money grows slowly, steadily and safely, you're in pretty good shape.
But I can see how kids would find that boring, and, in fact, it's that perception that gets Lindy into some serious trouble in the book. Her parents want to hold onto investments for years; Lindy wants to get rich quick. Her friends don't see the allure of her new hobby, so that adds to the tension as well. And, not to give too much away, but when she has to testify at the Securities and Exchange Commission, she admits to the commissioners that she didn't know about insider trading because she skipped the "boring" parts of her stock-trading book.
I did worry a little bit that having to explain so much about investing and, later, the SEC would turn off readers, either because it was tedious or confusing. I hope that's not the case. My editor also helped me balance the day-trading plot with the school/friendship plot, which I think helps a lot. Peer dynamics in middle school can be just as tumultuous as the stock market.
Since the book has come out, I've also been surprised by how strongly kids are drawn to money. I initially thought it was strange that the cover design played so prominently on the allure of money, especially for this age group. But I have "Short Seller" bookmarks that look like dollar bills, and kids go crazy when they see them. Their eyes go wide, they start drooling and they say, "Moooooneyy!" If I'm sitting at a table with some copies of my book and the bookmarks, kids will take some bookmarks and attempt to "buy" a copy of the book with them. This happens a few times per event, without fail!
If a parent is reading this book along with their child, how do you think they could use the book to impart some financial lessons?
In many ways, Lindy's story is a cautionary tale, so parents could talk with their kids about the dangers of taking the sorts of risks she takes. (Kids have a strong moral compass, and they won't need parents to point this out. I'd wager they'll recognize the danger long before Lindy does.)
But in other ways, Lindy's interest in investing is something to encourage - if kids want to learn more about the stock market and the way our economy works, and even invest themselves, with oversight, that's a great thing! They can use the book as a gateway to discussing long-term investing versus short-term investing, and even a philosophical debate about the morality and legality of day trading, short-selling or insider trading.
Do you think books like this can help kids learn about money and investing?
Absolutely. In addition to the obvious information about the stock market, there are many more subtle financial elements at play in the book. For example, Lindy's parents are fairly conservative with their money, while her friend Steph seems to always have more to spend. Lindy's concept of money and its worth changes throughout the book, and I think readers' will, too. I know mine did when writing the story.
Twitter: @alphaconsumer
