What better way to help your children become financially successful than to teach them about investing.
They may be a little young to understand the finer details, but it's a great way to show them another way to save and even make money. It could be the one gift that they take into their adulthood to build their own lives on.
I talk to my kids about companies and even try to get stock tips from them by asking them where they shop or what they like to buy. It can be a two-way street once they're older.
They might return the favour and give dear old mum and dad some good investing tips as well!
Here are three successful companies that are easy to understand and which children and young adults may be familiar with already. (They may be great for your portfolio, too!)
1) Premier Investments Limited (ASX: PMV)
Your kids may not be familiar with retail guru Solomon Lew and fashion brands such as Portmans, Just Jeans and Jacqui- E (unless they go shopping with mum a lot), but they probably know Smiggle, the hot stationery store chain popular with children. With 200 stores in Australia, the successful business is expanding into the UK in a big way. The company projects to have 200 stores there within five years. The stock pays a 4.0% fully franked yield and is trading at 19 times earnings.
2) Greencross Limited (ASX: GXL)
When the family dog needs a new collar or the cat gets sick, then you might be going to a Greencross veterinary office or a Petbarn and City Farmer pet supplies store. Greencross acquired the two growing supply store chains recently, adding a big retail business to its expanding pet healthcare network. The stock is down from about $10.60 to $8.00 since August, but it could be consolidating after the two acquisitions. Earnings are forecast to rise as much as 19% annually over the next two years, so there's still good growth to come.
3) Domino's Pizza Enterprises Ltd (ASX: DMP)
This could be one the kids could tell the parents a thing or two about! Here's a kid analyst's take on the stock- Kids like pizza, Domino's makes a lot of pizza, Dad or Mum pay for the pizza, Domino's makes a lot of dough. Anyway, the company is expanding rapidly in Japan, with plans to more than double the current 320 store count in the next five years. Its Australia and New Zealand division racked up 6.3% same-store sales growth and added its 600th ANZ store in FY 2014. The stock is still at a high 43 price-earnings ratio, almost double the forecast 24% annual earnings growth in the next two years. Tell the kids it may be better to wait for a pullback for now.