Introduction to Investing for kids | GoHenry Money Missions

 Introduction to Investing for kids | GoHenry Money Missions

 

Our new, in-app Money Missions are designed to accelerate your child’s financial education, and help us achieve our mission to make every kid smart with money. Now, when they log into their GoHenry app, kids can watch fun, animated videos, take quizzes and earn points and badges. You can use your GoHenry parent app to track your child’s progress; when each lesson comes to a close, another one begins, and your child will unlock new levels as they progress. 

 

 

Investing might seem like a complicated topic to discuss with kids, but there are lots of different ways of investing – and it’s never too early to start. In fact, as investments grow over time, the earlier you start the better! Read on to learn more about how to make money grow, and investing for kids.

What is an investment?

When we put our saved money to work, so that it can grow and earn more money for the future, this is called investing. Thanks to the magic of compound interest, putting money in a savings account is one way to make it grow – the longer you keep it there, the more the interest will compound and grow. 

 

Some people decide to open a child investment account, but we can also invest by buying things - or ‘assets’ - that could be worth more in the future. Assets can be anything from a house to artwork, NFTs, cryptocurrency, limited edition trainers, or even collectible toys. If the price goes up you’ll get back more money if you sell it, but the price could also go down, which means the value of your investment would fall. 

 

What are stocks and shares?

A stock is a small piece, or a ‘share’ of a company – so when we buy stocks we own a small slice of that company. Buying stocks and shares is a popular way of investing.

 

There are thousands of shares to choose from, and they are bought and sold at a stock exchange. You might have heard of the New York Stock Exchange, or the London Stock Exchange, which handles stock trading in the UK. We can also use apps that are connected to a stock exchange to buy and sell shares. 

 

When you buy shares there are two ways that your money can grow. Firstly, the company you own shares in might pay money, known as ‘dividends’, to its shareholders. So the more shares you own, the more dividends you could receive. 

 

Secondly, you could sell your shares – sometimes for a lot more money than you paid for them. But if the company doesn’t do as well, the value of their shares could go down, which means the value of your investment would fall, too. 

 

The price of shares rises and falls all the time, which makes this a more risky way of investing than putting your money in a savings account. For this reason, investors often buy stocks that they know a lot about, and invest in lots of different ones – that way, even if the value of some goes down, the value of others might go up. 

 

Stocks and shares can be a good way to grow your money, especially if you are patient and plan on holding on to your shares for a long time. 

 

Want to teach your kids about investing, earning and saving money?

Create a GoHenry account today and gain unlimited access to our new, in-app Money Missions. These feature fun videos and quizzes, designed to teach kids about finances and build crucial money skills from an early age. 

 

 

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Written by Ceri Roberts Published Dec 21, 2021 ● 3 min read