Updated: Oct 28
Raise your hand (virtually) if you learned about compound interest in school! Let's be honest...most of us didn't!
Compound interest has been referred to as the eighth wonder of the world. Simply put, compound interest is “interest on interest.”
For example, just imagine your original $100.00 investment for your child growing into almost $12,000.00 without you doing anything else!
How it works:
(Assuming a 10% return on your investment):
Year 1 you would earn $10 = $110 total
Year 2 you would earn $11 = $121 total
Year 3 you would earn $12.10 = $133.10 total. And so forth!
Now we used a small number for this example, but imagine how your money could grow as you add larger lump sums of money each day, week, months, & over the years?
This is why the EARLIER you start, the BETTER! AND this is why we strongly urge parents/guardians (yes, YOU) to start your kids early!
Can you imagine how your child's portfolio could look when they turn 18? Not to mention that if they hold their investments until retirement age, it could potentially grow into a seven-figure investment. Your child or teen could possibly reach millionaire status in their 20s & 30s (of course depending on how much is contributed and your investments choices) all because of the seeds that YOU planted today!
And the best part is that you can start with ANY dollar amount! This is why investing is for EVERYONE including your kids!
Teaching kids and teens about compound interest is a gift that will keep on giving throughout their lives. By starting early, using relatable examples, and providing hands-on experiences, you can instill a strong understanding of this important financial concept. Emphasize the power of time, regular contributions, and patience, and demonstrate the positive effects of compound interest. By doing so, you equip them with the knowledge and skills they need to make informed financial decisions and secure a more financially stable future.
The best time to start investing for you and your family was yesterday, but the second best time is NOW!
MONEY MANAGEMENT AND INVESTING FOR TEENS
View our financial education resources for kids and teens then teach your kids personal finance and how to invest by clicking here.
If your school or group is looking for a finance curriculum to teach your students about how to manage money, click here to learn more on how to integrate KidVestors into your program!
Parents, teach your kids money and make money conversations normal in your household by visiting here.