Sep 08, 2011
Working Mom magazine article on Raising Teen Investors, September 2011

For the September 2011 issue of Working Mom magazine (with Jinkee Pacquiao on the cover), my youngest son Anton and I were interviewed for an article about investing. I wish to share that article with you.

            For most parents, the importance of saving and prudent spending is the extent of teaching their kids about money. As my mom said, “Huwag ubusin ang biyaya.” Save enough for rainy days and spend only for essentials.

            Rose Fres-Fausto, author of the book Raising Pinoy Boys and former AVP of Corporate Finance in one of the top investment houses in the country, advocates developing children’s Financial Intelligence Quotient. Her counsel is “Don’t just save, invest!” Early on, she taught her now grown up kids, Marty, 21, Enrique 18, and Anton, 14 and a half, basic money lessons and guided them about making investments. Today, her sons manage their own investment funds. Anton was even featured as “The 12 year-old Investment Whiz Kid” in the Inquirer blog, “Money Smarts.” Here, Rose Fausto shares six simple steps to raise investment-savvy children.

Step 1: Know your own money values.

It is important to know how you and your spouse feel about money, and what you think it will help you do or achieve. Will it buy you happiness, fame or power? What are your financial goals? How will you use the money that you will get? Are your values consistent with your spouse’s? Rose Advises, “Make sure that what you do with your money agrees with your core values. Because if what you do with your money does not agree with your core values, no amount of money in the world will make you happy.”

Step 2: Train your kids (and yourself) to be savers.

You can’t teach what you can’t do. Start giving them an allowance when they enter Grade 1. (Rose says she started getting one when she was in Kindergarten). Then teach them to save at least 20% of their daily or weekly allowance. This 20% savings rule must be applied to all the cash gifts or earnings (yes, even cash earned from garage sales), etc.

Step 3. Know your investment options.

Rose relates, “We taught them about fixed income and stock investments. Fixed income investments are instruments that give you a predetermined return. On the other hand, investing in stocks is buying a stake in listed companies and taking part in their growth, profit or losses. Hence, the returns are not pre-determined. Your estimated return may be higher or lower but in the long run, stocks give you higher yields than fixed income. Stock investment minimum these days is around P5,000, depending on the stock. Equity funds however, are sold in lots of P10,000. The thing to remember is that stock investments become risky when:

*You get into something you don’t understand but only based on a rumor from someone that this stock will shoot up.

*You use short-term money (money intended for your household expenses, etc.) for this long term investment.

*You borrow money to buy stocks.

Buy stocks that your children will understand. Take Jollibee, for example. All Pinoy kids know Jollibee so it’s easy for them to understand the business. You can even check their financial statements through the internet. If you’re convinced that this company will continue to be profitable and grow even bigger, then it may be good for your child (and you) to buy some shares. Buy a few shares regularly until you accumulate what you want.

Stock investments are really long-term investments. Place the stock certificate under your child’s name with Jollibee’s cute photo on it. Your child will be thrilled to know that he’s a part owner of his favorite restaurant! Our sons’ Jollibee shares were purchased at P13/share. Now the stock is P89, that’s a 585% return, excluding cash dividends.

Step 4. Make saving and investment regular and automatic.

Make it a way of life for you and your child. Encourage him to record his savings by providing a small notebook where he can list down his expenses and tally up his savings weekly. Check the prices of your investments together, so he can be informed of what is happening to his stocks.

Step 5. Use everyday things as teachable moments to hone their financial intelligence.

Take you child to the supermarket to give them an idea of how to budget. Let your kids pay half or a third of the price of a toy to give them a sense of pride. For older kids, discuss the household budget and expenses with them, and ask their help to stay within the family budget.

Step 6. Teach them how to make their own Balance Sheet.

A Balance Sheet is a picture of one’s assets, liabilities and net worth. Assets are the things of value that you own like bank accounts, fixed income and stock investments, etc. Liabilities are one’s debts and net worth is one’s total assets less liabilities.

            A final word of advice for parents when teaching kids the rudiments of investment: “Be careful not to overdo it so they don’t get too preoccupied with it. They should still do well in school and all that. Impart the benefits of having a healthy financial condition. An example is being able to pursue other interests because they’re free from financial problems. They can also help others because they have the means.”


Anton Fres-Fausto, 14, became an investor when he turned 1 year old. His parents, Marvin and Rose Fausto, both bankers gifted him with Meralco stocks, which at that time, cost P98/share. They trained their sons Anton and his older brothers Marty and Enrique to save, earn and use their savings to purchase fixed income and stock investments.

           Anton started with an allowance of P100 per week. He accumulated cash by saving at least 20% of all cash he receives (allowance, gifts, earnings, etc.) Once his savings reach P1,000, the amount is deposited in a savings bank account and later on used to purchase stocks and fixed income investments.

           Today, Anton is the proud stockholder of Meralco, Manila Water, Jollibee, SM Investments Corp., Ayala Corp., San Miguel Corp., Globe Telecom, Filinvest Land, Cebu Pacific, Alliance Global (owner of McDonald’s & Megaworld), URC and BDO Equity Fund which is managed by his dad.

           Growing up, dining at the Fausto household was peppered with discussions of the stock market here and abroad, and how their own stocks are doing. Anton says, “My brothers and I update our financial statements quarterly so we get to see how are stocks are doing.” Also, he regularly checks the prices of his stocks in the business section of the newspaper.

           When asked what advice he can give teens who’d like to learn about investment, Anton says, “Investing is like sports. Sometimes we win, other times we lose, but it is from our failures that we learn the most. Also, you have to weigh the probability of each decision you make. You can get lucky sometimes, but it is important to practice and have discipline. Good coaches help a lot, so since we are just minors, we should talk to our parents about investing, and get their support. When you invest, aim for long-term investments since you won’t need the money until you’re older. So don’t stress about it.”

           Update: Anton’s very first stock, Meralco, is now currently trading at P289/share – if you include all the cash and stock dividends earned, that’s a 290% return on investment!