I have tried something similar but not with money (I find my kids aren’t very motivated by money—not sure why). In our case the losing party usually has to formally acknowledge the victor with some silly phrase—“Dad is an amazing human / genius” or “Mark is a pro and I’m a noob”. This doesn’t allow for different odds (maybe I could tailor different phrases to achieve this?) although I will sometimes offer it without them being held to anything if I am sufficiently confident.
I do think there is some risk with this approach that the child will have a bad time just to get the money
I was worried about this too but similarly haven’t actually experienced it—I don’t think my kids have the willpower / concentration to keep this up for long enough!
When my oldest son got 14 I gave him the opportunity to invest 1000 EUR any way he wanted. Invest, not spend, i.e. selecting any kind of investment opportunity with some more or less variable payoff. After at most a year he would then get five times the earnings paid out (5x to increase signal and motivation). I was expecting that he would select some common financial instruments like stocks or bonds or plain savings account but I was open to any halfway reasonable other option. So far he has not made use of the option and I am unsure why. I think he is waiting for the best possible opportunity.
In the meantime, his brother got 14. He researched and after observing some stocks selected S&P 500 and Nasdaq 100 and I added both to my depot at the end of October 2019. Already at the end of December 2019, after frequent monitoring, he chose to take his win of ~60x5=300 EUR—much more than I expected. I decided to keep them in my depot until I got my losses back. You know what happened.
This didn’t exactly go as I expected though not exactly worse. It has led to quite a few interesting discussions and I intend to offer the same to their younger brothers when they get 14.
I’ve made sure my child has a ‘budget’ they can spend – and some portion on anything (that’s not egregiously dangerous or inappropriate). That seems to have quickly demonstrated the value of money to them.
But I like betting with any kind of payouts too – and you can approximate ‘odds’ by agreeing to ‘lopsided’ payouts, e.g. ‘you have to give me a hug if you lose; I’ll take you to the Zoo if you win’.
I have tried something similar but not with money (I find my kids aren’t very motivated by money—not sure why). In our case the losing party usually has to formally acknowledge the victor with some silly phrase—“Dad is an amazing human / genius” or “Mark is a pro and I’m a noob”. This doesn’t allow for different odds (maybe I could tailor different phrases to achieve this?) although I will sometimes offer it without them being held to anything if I am sufficiently confident.
I was worried about this too but similarly haven’t actually experienced it—I don’t think my kids have the willpower / concentration to keep this up for long enough!
When my oldest son got 14 I gave him the opportunity to invest 1000 EUR any way he wanted. Invest, not spend, i.e. selecting any kind of investment opportunity with some more or less variable payoff. After at most a year he would then get five times the earnings paid out (5x to increase signal and motivation). I was expecting that he would select some common financial instruments like stocks or bonds or plain savings account but I was open to any halfway reasonable other option. So far he has not made use of the option and I am unsure why. I think he is waiting for the best possible opportunity.
In the meantime, his brother got 14. He researched and after observing some stocks selected S&P 500 and Nasdaq 100 and I added both to my depot at the end of October 2019. Already at the end of December 2019, after frequent monitoring, he chose to take his win of ~60x5=300 EUR—much more than I expected. I decided to keep them in my depot until I got my losses back. You know what happened.
This didn’t exactly go as I expected though not exactly worse. It has led to quite a few interesting discussions and I intend to offer the same to their younger brothers when they get 14.
I’ve made sure my child has a ‘budget’ they can spend – and some portion on anything (that’s not egregiously dangerous or inappropriate). That seems to have quickly demonstrated the value of money to them.
But I like betting with any kind of payouts too – and you can approximate ‘odds’ by agreeing to ‘lopsided’ payouts, e.g. ‘you have to give me a hug if you lose; I’ll take you to the Zoo if you win’.