In 1961, my eighth-grade homeroom teacher devoted a week to the stock market. He explained the Dow Jones, mutual funds, annual reports, proxy votes, and dividends. And to build more enthusiasm, we had to pick a company and follow its market price through the semester. Come June, whoever had the best-performing company received a small prize. 

I didn’t win, but what stayed with me was the energy in the room each morning. “General Motors went up,” said one girl, the smartest in the class. “So did AT&T,” another said. My choice, Universal Oil Products, rose at most an eighth, but at least it was moving in the right direction. Almost everyone came away with a lasting interest in finance and an understanding of how investing can work for us. 

Unlike me, a product of a privileged public middle school, children in underserved communities don’t receive an adequate financial education, if they receive any at all. Stocks and mutual funds remain a foreign concept, beyond their world. ABC News reports that “only 33.5% of Black households owned stocks in 2019, according to data released recently by the Federal Reserve. Among white households, the ownership rate is nearly 61%. Hispanic and other minority households also are less likely than white families to own stock.” As a result, they miss learning how to invest and create wealth. ABC News goes on to say that “Americans who own stocks are pulling further away from those who don't, as Wall Street roars back to record heights while much of the economy struggles. And Black households are much more likely to be in that not-as-fortunate group that isn't in the stock market.” According to a Brookings Institute paper last year, “on the basis of 2016 data, the net worth of a typical white family is $171,000, ten times greater than that of a Black family ($17,150).” This gap is due to multiple reasons, including as ABC News says, “decades of discrimination and fear.” But also, “many were never taught what they were missing out on.” Hence the need for education.

These facts sprang to life recently, when I gave a talk attended by the fellows, staff and others associated with Harvard’s Advanced Leadership Initiative. “Is there anyone here,” I asked, “who’s never owned a share of a stock or mutual fund?” In an audience of just over fifty people, the only hand to go up belonged to a young African American woman. Later she told me she regrets that neither her family nor anyone in her school introduced her to investing. Now navigating adulthood and trying to learn about investing on her own, she admitted that “asking questions the answers to which seem completely rudimentary to those raised in a social ethnic group where such subjects were known of and learned about very early on was quite discomfiting.”

While many organizations promote economic literacy and sponsor “stock market games,” middle schoolers from low-income communities deserve a stronger nudge. That’s the belief that triggered my ALI project. My theory of change is that by giving students real shares of stocks and mutual funds, held in trust until they become adults, we can cultivate their interest in investing and creating wealth. Along with their investments, teach them the basics about the market and business in general. Offer follow up sessions each time they receive a dividend and an annual report. Then, shortly before they reach adulthood, offer a course in money management. 

Like other shareholders, students should have voting rights. Not only would this give them an opportunity to learn more about their company, it would also provide the company with a window on the attitudes of a group of teenagers whom they ordinarily would not hear from. 

This idea is not new. At least one group, First Generation Investors, gifts shares to students, but they operate only in high schools and in pockets around the country, with students who are close to adulthood. We need this practice to become commonplace earlier in the education process. What’s more, we need to reach people in their middle school years. That period stands out as crucial in a child’s development. It’s a time when students try to find their identity, to discover who they are. Equally important, it’s the most opportune time for them to learn about and profit from the magic and power of compounding interest.

Yes, obstacles exist: Who will teach the teachers? What stocks and mutual funds would be included? Who pays for the shares? At least on a small scale, there should be answers. Joseph Walcott Lewis, Associate Director of Harvard’s Crimson Summer Academy, has already prepared a curriculum any teacher may use. Brokers and analysts could be recruited as volunteers to select assets to buy. At least on a small scale, various foundations may be willing to pay for the shares. The biggest hurdle involves who holds the shares until middle schoolers become adults. The Uniform Gifts to Minors Act authorizes several choices of custodians. At least one professional fiduciary has expressed a willingness to be a trustee. 

A program like this is worth trying and then measuring its impact. If successful, it can expand and scale. Maybe local or state governments would appropriate funds, or even merge the concept with baby bonds, an idea already under discussion.

A real investment, however modest, would make middle schoolers want to learn more about the stock market and finance. Imagine their excitement at having an interest in companies they know, like Nike, Disney, Apple, and so many others. 

Let’s help students from underserved communities play for keeps. The earlier we can bring them into the world of business and investing, the more we can empower them and give everyone, regardless of background, a stronger chance to achieve financial security.

About the Author:

Anthony J. Mohr is a 2021 Harvard Advanced Leadership Initiative Fellow and has over twenty-six years of service within the criminal and civil justice system at the state level. He most recently sat on the Superior Court of California in Los Angeles County, where he presided over civil and felony trials. Earlier, he was a judge of the Los Angeles Municipal Court, and in private legal practice. Among his numerous professional affiliations, Anthony served on the Executive Committee of the Los Angeles Superior Court and chaired both the Superior Court’s ethics review and response committee and the statewide Committee on Judicial Ethics of the California Judges Association. He serves on the Regional Board of the Anti-Defamation League’s Los Angeles Region.