Headstart

Young investors funnel spare change into the market

DIS), wireless communications firm Datalink (Nasdaq: NETD) and fashion powerhouse Donna Karan International (NYSE: DK).

Like most of his peers, 13-year-old Amadi spends his allowance and cash gifts on PlayStation video games and sports apparel. The young athlete plays power forward on his junior high school’s basketball team. But he also diligently sets aside at least 25% of his $15 allowance every two weeks to invest in the stock market.

Amadi, who’s following in the footsteps of his mother, Janice, co-founder of Main-stream Investment Club, says he wants to learn as much as he can about investing so that he can build a solid financial foundation for the long term. That could mean saving money to help buy a car down the road or help his parents send him to college.

“I like investing and buying different stocks, because it’s a good way to [accumulate wealth] and to put money back into your own pockets when you purchase shares in companies whose products you buy all the time,” says Amadi. Members of the Young Investors Club take what they do very seriously. Dues are $7 a month, and anyone who fails to come up with his share of the pot gets hit with a $2 late fee.

Each month the members meet and report on their stock of choice. Amadi was eyeing Wendy’s International (NYSE: WEN), Sara Lee (NYSE: SLE) and Coca-Cola. After examining the stocks’ fundamentals-their price and earnings histories-he settled on Coke, but not for the club’s portfolio. Instead, he decided to purchase shares in the soft drink maker through his parents’ broker for his personal portfolio.

“I have been following Coke for a while,” the junior high school student explains. “We buy a lot of Coke for the house. The company also puts out a lot of other products that we buy. So I felt it was a good stock to buy.”

Amadi and his fellow club members are putting into practice many of the principles outlined in past issues of Black Enterprise For Teens and Kidpreneurs News(tm), sister publications of be. These include tips on how to invest, start your own investment club and how to manage your finances.

INVESTING IN MICKEY MOUSE
Every time someone shouts, “I’m going to Disney World,” even-year-old Martin Wilson knows he’s getting paid. It was a year ago that he noticed his mother, Marjorie Grace, looking at the stock tables in the Wall Street Journal. At that time, he realized that he didn’t have to read words, but that he could read numbers. “I explained to him that there were some interesting companies in here [the paper]. And I cited Disney as an example,” explains Grace, president of Grace Financial Royal Alliance, an investment firm in Oakland, California. “I told him that you can buy interest in Disney. He asked if that means he got to go there every day. I said no, but people who do have to pay you. He rubbed his hands together and re-plied: ‘Well, let’s get some of that [stock].’”

Today, Martin has

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