Investing for Kids: How to Save, Invest, and Grow Money

What the book teaches

Investing for Kids starts with earning money and making a savings plan, then moves on to the main ways people invest: stocks, which are small pieces of ownership in a company, and bonds, which are loans to a company or government that pay interest. Along the way kids meet risk and reward and diversification, the idea that spreading money across many investments lowers the chance of losing a lot at once. It lowers risk but does not remove it.

Two characters, Mr. Finance and Investing Woman, guide readers through the chapters. The book also introduces newer ideas such as impact investing (choosing companies for the good they do as well as their profits) and online trading, and uses stories of famous investors and historical events to make the ideas concrete. Remind your child that famous investors are standout stories, not what usually happens.

Talking about risk and online trading

This is the part of the book that most needs you. Stocks can go down as well as up, and nothing is guaranteed. Money in a savings account at an FDIC-insured bank is protected (the US government insures bank deposits up to $250,000 per depositor, per bank, for each account ownership category, if the bank fails), but investments are not, and savings accounts usually earn less over the long run.

Online trading apps make buying and selling feel like a game. Explain that investing works best slowly, over years, and that quick trading is closer to guessing. Kids can't open a brokerage account themselves; any real investing happens in a custodial account a parent opens and controls. Money put in is a permanent gift that legally becomes the child's, and they take control of it usually at 18 or 21 depending on your state, or later (up to 25, or 30 in Wyoming) if the account was set up that way.

Tell your child that anyone online promising to make their money grow fast, or asking them to send money, gift cards or crypto, is running a scam.

Reading it together

Read a chapter at a time and do its activity together. The ideas build on each other, so it helps to go in order the first time and come back to the risk chapter later.

Questions to talk about: What is a company you know well that you might want to own a tiny piece of? Why might a stock go down? Why is it safer to own a little of many companies than a lot of one? What would you rather invest in, and why?

For a hands-on start tonight, try a pretend exercise, not a list of what to buy: pick three companies your child knows, such as the maker of a favorite snack, toy or game, and check that each is listed on a stock exchange. Look up each share price together on a plain quote page rather than a trading app, check again once a week for a month, and talk about why the prices moved and why one month tells you very little.

Who it's best for

The publisher recommends it for ages 8 to 12. It is ideal for a curious 9- to 11-year-old who has some savings and asks what investing means. An 8-year-old can enjoy it with a parent reading along.

For a 10- to 14-year-old who also wants earning, first jobs and starting a business, our review of How to Turn $100 into $1,000,000 is a better fit. If your child finishes this book and wants to try investing, open a small custodial account together and start with money they can afford to see go down, or keep a pretend portfolio on paper, which teaches most of the same ideas for free. Check your public library before you buy; there is one edition, from 2020.