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CNN Sunday Morning
Interview With Michael Stahl, Elijah James, Patricia James, Misty Elliott
Aired June 23, 2002 - 08:50 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MILES O'BRIEN, CNN ANCHOR: Well, when did you start saving for your retirement? Were you 20? Thirty? Was it yesterday? Believe it or not, there are some people who start investing in their teens. And don't you just want to kill them? No, just kidding.
They want to encourage other kids to do the same. We should be encouraging this.
Michael Stahl is the author of "Early To Rise: A Young Adult's Guide To Investing." He's in Kansas City this morning. Misty Elliott from Youngbiz.com with us here in Atlanta. And along with them, 13- year-old Elijah James and his mom, Patricia.
This is a gaggle of folks. I don't know if it's correct to say gaggle in this case, but where shall we begin?
I want to begin with the young man. Tell me about your portfolio.
ELIJAH JAMES, YOUNG INVESTOR: Well, I only have a few stocks in my portfolio plus one I Bond, which I purchased about a couple of years ago.
O'BRIEN: What sectors are you bullish on, Elijah?
ELIJAH JAMES: I don't know quite really. I just like sectors that are diverse.
O'BRIEN: Right. I mean, do you buy things you know, like if you're playing a Nintendo game do you go out and try to -- I mean how do you decide to pick stocks?
ELIJAH JAMES: I look for ones that I know of first, that I know, and I research them on the Internet, through newspapers, any way that's available to me.
O'BRIEN: And there's a lot of research out there. How old are you?
ELIJAH JAMES: Thirteen.
O'BRIEN: Thirteen. Many of your 13-year-old peers doing the same thing? ELIJAH JAMES: Not many of them.
O'BRIEN: Yes, I suspect so. Yes. So have you done well? You don't have to tell me numbers, but percentage gains have been good?
ELIJAH JAMES: Yes, sir.
O'BRIEN: I mean the market's been kind of rough.
ELIJAH JAMES: Yes, sir. I've been gaining quite a bit.
O'BRIEN: All right. Well, your mother is smiling broadly over your shoulder there. Perhaps this is her retirement plan, to have you out there trading stocks. Tell us, are you proud of your son so far?
PATRICIA JAMES, PARENT OF YOUNG INVESTOR: Yes, very proud.
O'BRIEN: What would your advice be to parents out there by way of encouragement here? I mean I suppose you could push a child too hard in this area and it could backfire.
PATRICIA JAMES: Well, I think my advice to parents would be, number one, you have to be an example. And when the young people, when your children see that you're saving and that you're managing your money well, then it will, they will catch on. And, of course, you start the children when they're young learning about money, what is money and how to use their money wisely.
O'BRIEN: Well, so, and whose idea was it to start investing in stocks so early? Did this come from him or you or both?
PATRICIA JAMES: This really grew out of his interest from the age of 10 and 11. It was something that he picked up on his own. So I would guess his, both, and, of course, we encouraged it as parents.
O'BRIEN: So he's a prodigy, undoubtedly.
PATRICIA JAMES: Well...
O'BRIEN: Above average in every way, wouldn't you say, mom?
PATRICIA JAMES: Well, I think all children have gifts and I think once we see a gift or once we see a child has an interest in a specific area, then we...
O'BRIEN: Run with it. Run with it.
PATRICIA JAMES: ... then we need to promote it as parents.
O'BRIEN: All right, Misty, is this a typical story?
MISTY ELLIOTT, YOUNGBIZ: It is a pretty typical story. A lot of kids by nature are interested in money and how it works. A lot of parents sometimes are scared to teach their kids about money. They think they might get...
O'BRIEN: Why?
ELLIOTT: They think their kids might become too materialistic or they might be consumed by the idea of making money. But oftentimes that's a myth. It's not how things really work.
O'BRIEN: Let's send it out to Michael, who's out there kind of out in the zone there in Kansas City, as we have our little coffee (UNINTELLIGIBLE) here.
Michael, that point that Misty just brought up about how some parents are concerned they might turn their kids into money grubbers or something, we sort of have a love-hate relationship with money, don't we?
MICHAEL STAHL, AUTHOR, "EARLY TO RISE": That's certainly true. I think it's important for parents, as the mother earlier was talking about, to really set an example for their kids. They're an example in so many ways in their child's lives, and personal finance is one of the most important life skills we need to prepare young people for when they move out into the real world.
O'BRIEN: Well, how do you know, though, and we'll keep it with Michael for one more here. How do you know e\when it's too early and it's too much or it's, perhaps, overpowering a child or becoming too much for a child, like, you know, like video games might be for another kid?
STAHL: I'm not so sure teaching your kids about personal finance is a question of too early and too late. There are different things that you can teach them at different ages. I mean I can remember at a very early age, preschool age or into early elementary being taught about the banking system, going to set up a savings account and so forth.
Later in life, adolescence and teenagers can learn about investing and savings in more detail.
So I think it's more what you teach them, not if you teach them.
O'BRIEN: Elijah, do you find it -- maybe this isn't the right term, but as kind of addictive? Do you sort of have to kind of stop and walk away from it every now and then? Or does your mom have to say, you know, only 20 minutes of trading now, Elijah, and then you've got to go to bed. Or how does it work for you?
ELIJAH JAMES: I usually just take it in doses, so I don't take too much.
O'BRIEN: So you're not day trading all day long?
ELIJAH JAMES: No, not day trading.
O'BRIEN: Yes. So you're a long-term investor?
ELIJAH JAMES: Yes, sir.
O'BRIEN: All right. But do you find it kind of consuming in a way?
ELIJAH JAMES: No, actually I enjoy reading all those numbers and stuff you may read in a newspaper.
O'BRIEN: Yes? You are an extraordinary kid, Elijah. Mom, you've got to be proud.
PATRICIA JAMES: Very proud. Very proud.
O'BRIEN: When, I mean do you enjoy reading those numbers?
PATRICIA JAMES: Some days. I would say this, that now on Sunday mornings there is a fight to get to the business page and now my 10- year-old and the 7-year-old are picking up on it.
O'BRIEN: Really?
PATRICIA JAMES: So it's who gets the business page first.
O'BRIEN: Misty, how typical is this scenario? This is a minority, I trust, of people.
ELLIOTT: It's more typical than you would think.
O'BRIEN: Really?
ELLIOTT: Kids are intrigued by the idea of ownership and like Elijah here, when they start to own their first stock, it really intrigues them and gets them interested in not only the market and the business sections of the newspaper, but also the daily news and how this affects the markets.
You know, you hear kids from two years old saying mine, mine, and when you get your first stock it's a great feeling to know that you actually own part of a company. So if kids get that opportunity, they often fly with it just like Elijah.
O'BRIEN: Michael, kids who are starting out right now are cutting their teeth in kind of a nasty market. I assume it's easy for them to get discouraged.
STAHL: Well, it's interesting you kind of bring that up, because I actually -- I built a teaching tool called Street Sage. That's the first teaching tool to simulate the investing stock market over a long-term time horizon, and it happens to be 35 years because, for this reason exactly. Kids normally are taught in real time using a 10 week program or so over the real market, and if it's a boom market they sometimes get the wrong impression in that sense, and if it's a bear market, they get the wrong impression and discouraged in that sense.
So with Street Sage, showing them 35 years of the ups and downs, they understand the long-term benefit but also understand the fluctuations in between.
O'BRIEN: Yes. And if we could take SP103, we'll show you Street Sage. There it is. There's your Web site. Streetsage.com is the place. What do you get here, Michael?
STAHL: One, excuse me?
O'BRIEN: What do you get on the site?
STAHL: Oh, well, right now you can find out some information about how teachers, educators and students, how they can sign up for the program, what the program is about, how it's different from the way we currently teach students about investing in the stock market. And we've just finished up some development and so we're getting ready for the fall school year and hopefully do some pilot programs and see how it goes.
O'BRIEN: All right. And, Misty, as long as we're on the Web site subject matter, Youngbiz.com is your location. Tell us what folks would find there.
ELLIOTT: Yes. Well, on the home page you'll see Michael Stahl with his partner, Ephren Taylor. This is, they started a business and were actually listed in our Youngbiz 100, a ranking of the top 100 young entrepreneurs. Like many young entrepreneurs, you have to find something to do with your money. So here's an example of Katy Beeman (ph), who is an 18-year-old investor that actually paid for her college education with her stock portfolio.
O'BRIEN: Very nice.
ELLIOTT: So you'll find information on our camps. We have investing camps across the country in six different cities this summer. And that's a wonderful opportunity for kids to really immerse themselves in a fun group environment, to play games and learn all about the stock market and get an in depth understanding of how the markets work and how they can start their own portfolio as a kid.
O'BRIEN: All right, Misty, thank you. That's Youngbiz.com. We've got Streetsage.com.
Elijah, have you paid for college yet with all this?
ELIJAH JAMES: Not yet.
O'BRIEN: You're working on it though, right?
ELIJAH JAMES: Yes, sir.
O'BRIEN: Are you going to go to one of these camps or are you going to teach one?
ELIJAH JAMES: I'll probably teach one.
ELLIOTT: He's actually teaching a lot of kids so.
O'BRIEN: There you go. He's a counselor.
ELLIOTT: Yes.
O'BRIEN: Thanks to all of you. I appreciate your insights on all of this, Michael out there in Kansas City.
STAHL: Thanks, Miles.
O'BRIEN: Misty, Elijah and Patricia, thanks for having a little investors' roundtable here for young and old.
ELLIOTT: Thanks for having me.
O'BRIEN: We appreciate it.
PATRICIA JAMES: OK, thanks.
ELLIOTT: Let's do more of it.
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