Invest
Age 9+To put your money somewhere (like stocks or a business) hoping it grows bigger over time.
At a glance
To invest is to put money somewhere — a stock, a fund, a business, a real estate property — with the expectation that it grows in value over time. Investing is different from saving: saving keeps your money safe at low growth, investing accepts some risk in exchange for potentially much higher long-term returns. Investing started young is the single most powerful wealth-building habit known.
Example sentence
"Investing in a company means you own a tiny piece of it."
Why this matters for kids
Investing is how most wealth is actually built. The math is unforgiving in favor of starting young: $100/month invested from age 16 to 26 (just ten years of contributions, then nothing) ends up worth more by retirement than $100/month invested from age 30 to 65 (35 years of contributions). The earlier years of compounding do disproportionate work. Most adults grasp this intellectually but didn't start in time; their kids can. A teen who opens a custodial brokerage account at 14, contributes whatever they can from earnings and gifts, and lets it sit in a low-cost index fund will have a structural advantage by 30 that few of their peers will match. Beyond the wealth math, investing teaches a different relationship with money — money is not just for spending or saving, it's a tool that can grow on its own. Kids who learn this aren't intimidated by the stock market as adults; they've been participating in it.
How to teach it
Open a custodial brokerage account through a kid-friendly broker (Fidelity, Charles Schwab, Greenlight all offer custodial accounts). Buy a single share of a company the kid recognises and likes — Apple, Nike, Disney, McDonald's, Roblox, anything they have a real opinion about. Check the price together every few months — not daily; the goal is long-term thinking, not day-trading. When the price moves, talk about why: company earned more, sector did well, broader market correction. Then introduce the alternative — index funds. Explain that buying one share of an S&P 500 ETF gives them tiny ownership of 500 companies at once. For older teens, set up a Roth IRA the moment they have earned income — even $50 of dog-walking income qualifies for a $50 Roth contribution, and the tax-free compounding from age 14 to 65 is staggering. Use our compound-interest calculator to show the projection. Whatever you do, do not pull the money out for years; the lesson IS holding through the ups and downs.
Common misconceptions
- Investing is gambling. Day-trading individual stocks looks like gambling because the time horizon is short. Long-term diversified investing in index funds is closer to "owning a tiny slice of the economy."
- You need a lot of money to start. $50 in a kid-friendly brokerage gets you started. Fractional shares now make even $5 enough.
- You should pick winning stocks. Most professionals can't reliably do this. Index funds (own everything cheaply) outperform stock-pickers over long horizons.
Related terms
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