What is Investing? A Simple Explanation for Kids and Teens (2024)

Introduction to Investing for Kids and Teens

This video explains the concept of investing in a simple, concise way for kids and beginners. It could be used by kids & teens to learn about investing, or used as a money & personal finance resource by parents and teachers as part of a Financial Literacy course or K-12 curriculum.

Suitable for students from grade levels:

• Kindergarten
• Elementary School
• Middle School
• High School

The topics covered are:

• What is investing?
• An example of how money grows when invested
• How much money is needed to start investing
• Who should invest: Only adults, or kids too
• When should investing be started

Infographic: Click Here to Download

What is investing?

Investing is an action you take with your money to make it grow. There are many things you could invest your money in. Some popular options for investing are stocks, bonds, and real estate, all of which help your money grow.

When you put your money in these avenues they become your investments.

Can you give me an example of how my money could grow when I invest it?

On average, the stock market provides a return of around 11% per year over the long term.

If you invested $5000 in the stock market today, then in 20 years, you would have around $40,000. And in 30 years, you’d have well over a hundred thousand dollars!

All from just the original 5000 dollars. That’s the power of investing. You could turn $5000 into well over $100,000.

How much money do I need to start investing?

There is a common misconception that you need a lot of money to start investing. But that couldn’t be farther from the truth. Even if you set aside just one dollar every day for investment, that money could grow into over seventy thousand dollars in thirty years.

Who should invest? Is it only for adults who have a steady income?

Absolutely not. Everyone can and should invest whatever amount they can.

Doesn’t matter whether you are a kid, teenager, young adult, an employee, an entrepreneur, or a stay-at-home parent – you should invest your money so it can grow into a lot more money over time.

When should I start investing?

The best time to start investing is now! The earlier you start investing, the more time your money has to grow.

Let me give you an example.

If you invested $1000 when you were 40, the money would grow into over $40,000 when you are 60. But if you invested the same $1000 at age 20, you’d have over four hundred thousand dollars when you’re 60. That’s the power of starting early.

But, like we mentioned earlier, you don’t have to wait until you save up $1000. You can start by setting aside as little as one or two dollars a day and invest the savings at the end of each month.

Now you have no excuse to not invest!

Video Featured in the Below Financial Literacy Course for Kids & Teens

• Course: Basics of Investing

Download Transcript: Ideal for Use by Teachers in their Lesson Plan to Teach Kids & Teens

Podcast: What is Investing for Kids