The Young Investor
The Indiana sun started to set over the corn fields.
James walked over to his basketball hoop to shoot some balls before dinner.
He loved to play after a long summer day working on the farm.
As he shot, James noticed that his basketball hoop was falling apart.
The paint was faded, the wood was cracked, and the rim was rusted.
Realizing he wanted to fix it, James went inside the house to look for his dad.
Finding his dad in his favorite chair, James asked, “Dad, could you please buy me a new basketball hoop?”
His dad replied, “Did you know I played on that hoop as a kid? James, I know it’s old, but you’ll need to pay for it.”
“How can I pay for a basketball hoop? I only have a few dollars left over from my birthday?” James said, looking down.
James dad smiled, “You can invest those dollars!”
Confused, James asked, “What does it mean to invest?”
“It means to place your few dollars into something that can create more dollars over time,” replied his dad.
Surprised that his few dollars could turn into more money, James said “I don’t understand. How can my dollars grow over time?”
His dad replied, “It depends on where you place your dollars. For example, every year I buy corn seeds. Over time, these seeds grow into corn which we sell to the local store. Since people will pay for the corn, we can sell the corn for more money than the small amount we used to buy the seeds. Each year, my small investment in seeds grows into a large amount of money.”
His dad continued, “Here’s another example. Let’s say our neighbor, Mr. Cotton, created a machine that quickly plants corn seeds in the ground.
Since I believe farmers will want to buy Mr. Cotton’s new machine, I can invest by giving Mr. Cotton money to make more machines to sell.
Mr. Cotton and I will then agree to split the money he makes from selling the machines. My money is growing!”
“Even buying a new basketball hoop is an investment. Over time, you will play better and may even play in the pros,” his Dad finished.
James was amazed at all the different ways he could grow his few dollars into more money.
He walked around the room and started to think of different ways he could invest.
Looking at the wall, James saw the picture of chickens he drew for a school project when he was younger.
“Dad, I have an idea! How about if I invest in chickens and sell their eggs to our general store,” said James.
His dad smiled with pride, “That’s my young investor!”
The next day, James and his dad built a chicken coop, with laying boxes, next to the barn.
When they were finished, James and his dad went to buy a couple dozen young hens.
James looked forward to seeing his small investment in chickens grow into enough money for his new basketball hoop.
Almost every day, each chicken laid an egg, and soon James had enough eggs to sell.
With his dad, James introduced himself to the owner of the market and asked if he would buy his fresh eggs.
The owner smiled, “Folks in town have been asking me to sell fresh, local eggs. I would love to buy them James.”
Three times a week on their way to school, James and his dad would drive by the general store and deliver the eggs.
Over time, James’s investment of a few dollars grew to over two hundred dollars!
With the money he saved up, James bought his new basketball hoop.
However, James realized his investment was not finished.
His chickens would continue to lay eggs and his money would continue to grow.
He started to think of the new basketball shoes he’d been wanting.
If James became a young investor, so can you!