Headstart

Young investors funnel spare change into the market

about $200 invested in Disney and another $1,500 invested in Lucent Technologies (NYSE: LU). The second grader understands that technology and telecommunications are hot industries. Better still, he knows that by buying tech stocks, he is making money from his fondness for cable and the Internet. Martin has also jumped on to the craze over Nintendo’s popular game Pokemon by purchasing $200 in shares in the company behind the mania, 4Kids Entertain-ment (Nasdaq: KIDE). He also has about $9,000 invested in a growth and income mutual fund.

Most of the money he uses to invest comes from birthday presents and cash gifts at Christmas-about $4,000 in total over the past four years. Martin also snared a gig as a model for trade books targeting school districts across THE country; a big chunk of his income from this job went into the stock market. At the tender age of three, Martin was big on saving. During family outings to McDonald’s he would ask for the change. When his mother inquired what he planned to do with that money, he told her: “Put it in my bank account.” The aspiring pilot often explains to his peers, and even to adults, that as a shareholder, he is an owner of two major corporations. He holds steadfast to principles he learned before he was five. Take whatever money you get and divide it among three things: (1) saving and charitable giving; (2) spending and (3) investing. He’ll be able to use the money he makes from his investments to help pay for his college education and obtain the necessary training to fly, says Grace.

IN THE MARKET AT 16
Khari May and his younger brother, Osei, have been investing since they were 16. The two brothers, now 22 and 18, respectively, received a cash Christmas gift from their parents for the sole purpose of plowing it into the stock market. It was in December of 1993 that Khar
i received $300 from his parents and was told that they would match any money he added to the account. He put in $200 from his savings, bringing his total initial investment to $700.

The oldest May son bought shares in three companies he was familiar with: Block-buster, a unit of Viacom (NYSE: VIA.B), Snapple, formerly owned by Quaker Oats (NYSE: OAT), and Disney. He faithfully reads stock tables and reviews annual reports and other financial data he receives as a shareholder to keep abreast of the stocks in his portfolio, which is now valued at more than $1,000. His brother also has stock in such companies as Washington, D.C.-based savings and loan Independence Federal Savings Bank (Nasdaq: IFSB), biotechnology firm Immune Response (Nasdaq: IMNR) and retailer Kmart (NYSE: KM).

The May brothers are learning firsthand the power of investing and compounding from their father, Abraham. One portion of the elder May’s portfolio-an IRA account he opened in August of last year-had a return of 25% in the first nine months. A city administrator, May has been investing in the stock

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