Investing Facts & Worksheets For Kids | What is it? How does it work? (2024)

Our parents teach us to save and budget as early as they can. As we grow older and become independent, we think of ways we can grow our money. One way to secure and increase wealth is through investing, but have you ever heard of investments?

See the fact file below for more information on Investing for Kids, or alternatively, you can download our 22-page Investing worksheet pack to utilize within the classroom or home environment.

Key Facts & Information

What is Investing?

• Investing is the process of allocating resources to some endeavor or thing with the expectation of gaining profit or a positive return.
• Investments may come in various forms besides money.
• A simple example of an investment could be the time exerted to study something to get better at it.
• Financially, a person can invest money in buying assets that would increase in value over time or use their money to start a business.
• People who invest early can eventually achieve their long-term financial goals, which leads them to live a comfortable life.

Brief History of Investing

• The concept of investing can be traced to the 17th and 18th centuries.
• Around 1700 BCE, the Code of Hammurabi laid out a lawful framework for investment.
• Qirad, considered an essential financial instrument in the medieval Islamic world, was an agreement between investors entrusting their capital to the agents hoping to make a profit through trading.
• In 1602, the Dutch East India Company established the Amsterdam Stock Exchange, the oldest stock exchange in the world.
• During the 1900s, people who invested in securities, such as stocks and bonds, were called speculators.
• The term speculation was eventually used for securities with higher risk, while investment was used to define the more conservative ends of securities.
• The Industrial Revolution brought prosperity to the people, thereby accumulating more savings that could turn into investments and developing a more advanced banking system.
• In the 1800s, J.P Morgan and Goldman Sachs were two banks that led the world of investments.
• Around the 20th century, new varieties of investments were introduced, such as hedge funds, ETFs, and private equities.
• The Great Recession in the 21st century is one of the most memorable events which brought several investment failures, bank closures, and the fall of investment firms.
• Nevertheless, new kinds of investments were introduced and developed with the help of technology.

Kinds of Investing

• For some, investing can be self-taught, but others prefer seeking the help of a professional broker or advisor.
• Investing depends on the person’s financial status and stability.
• A person is strongly advised to invest in something that aligns with his savings or capital.
• It is also important to note the risk tolerance of an investor.
• Investing is a risky game because either you successfully gain from it or bear losses.
• Below are some examples of investments that people usually make:
  • Bonds
    • Buying bonds means you lend money to a government or business entity.
  • Stocks
    • Also known as shares or equities, these are considered one of the simplest and most popular investments.
    • If you buy stocks from a publicly-traded company, you also buy ownership in it.
  • ETF (Exchange-Traded Funds)
    • They are low-cost investments, which means they are also low-risk.
  • Certificate of Deposits (CDs)
    • This is also a low-risk investment in which you allow a bank to borrow your money for a time, and when this is over, you gain the principal and the interest back.
  • Mutual Funds
    • The money of several investors is pooled together and managed by a fund manager.
    • The money is used to purchase securities.
  • Commodities
    • This investment is common in the futures market.
    • Investors secure the price of commodities in advance just in case a natural disaster is likely to happen.
    • Investors invest in commodities such as metal, agriculture, livestock, oil, and energy products.
    • In cases where natural disasters are likely to happen, investors have already secured the prices of the commodities.
  • Insurance Plans
    • Insurance is the most well-known investment for employees and businessmen.
    • It assures financial security and growth, not only to the one who owns it, but also to his benefactors.
  • Options
    • These are contracts that allow an investor to buy or sell a security at a certain price at a determined time.
  • Other types of investments:
    • Dividend Stock Funds
    • Annuities
    • Collectibles
    • Short-term certificates of deposits
    • Real Estate
    • Bank Products
    • Cryptocurrency
    • High-yield savings accounts

How to Invest

• Before you take action in investing, you should first assess your financial capacity, goal, and how much you are willing to risk for it.
• Here are some tips you can take before investing:
  • Only begin investing if you are more than sure and ready to invest.
  • Identify your long-term and short-term financial goals.
  • Do your research and choose what kind of investment you are willing to make.
  • Be guided on the factors that would affect your investments.
    • You can read or watch the news and get updated on the world’s current events.
    • You should also know the stock market and company status because this will help you make a move and decide on the steps to your investment.
  • Be careful where you put your money.
    • As people always say, do not put all your eggs in one basket.

Investing for Kids

• Parents are now more knowledgeable about investing.
• Most parents prepare their children’s future early because they only want the best for them as they grow older.
• There are child-friendly investments where you can help your children invest their money.
• As kids have a short attention span, investing must be fun and creative.
• Parents can teach their children about stocks and give them money or ask them to use their savings to invest in companies they are interested in.
• However, make sure that they are properly guided through their journey.
• Parents should be able to determine their financial plans for their children.
• They should also teach their children the importance of investing in the simplest way they can understand.
• Be an example and surround them with people who will encourage them to save and earn money wisely.
• Guide them until they can independently make financial decisions wisely.

Benefits of Investing

• Investments are proven to have higher returns than savings.
• It can help you attain financial stability and generate wealth that you can use over time.
• It will help you achieve not only your short-term but also your long-term financial goals.
• Investments help you make retirement plans.
• Some investments can help in saving taxes.
• Investments are essential contributions to the economy.
• Investments can serve as an additional income.

Investing Worksheets

This is a fantastic bundle that includes everything you need to know about Investing across 22 in-depth pages. These are ready-to-use worksheets that are perfect for teaching kids about Investing, which is about securing and growing wealth by allocating resources with the expectation of gaining profit or a positive return.

Complete List of Included Worksheets

Below is a list of all the worksheets included in this document.

• Investing Facts
• Look For It
• Check List
• Investing
• Savings or Investment?
• Qualities
• My Baskets
• Ten Million
• More Than An Investment
• Start Them Early
• Make It Known

Frequently Asked Questions

What are the main investment types?

Types of investment or asset classes are divided into six main groups. These are Shares, Growth Investments, Defensive Investments, Property, Fixed Interest, and Cash.

When should you start investing?

Time in the market is arguably more important than timing in the market. It’s better to invest regularly and keep your money in the market as long as possible, rather than waiting too long for an opportune moment.

Is it safe to invest?

Investing is wise because it’s a good way to grow your wealth and assets to match and exceed inflation. Investing can be risky, depending on the asset class or volatility of the market, which is why it’s important to research the correct investment product for the level of risk you’re comfortable with.

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Link will appear as - KidsKonnect, August 8, 2022