How to Teach Kids to Think Like Investors, Not Consumers
Every day, kids are surrounded by advertisements telling them to spend money on toys, clothes, video games, and fast food. But what if we flipped the script and taught them how to make money work for them instead?
✅ Investors grow their money. 📈
✅ Consumers spend money without getting it back. 💸
✅ Teaching kids to invest early builds lifelong wealth. 💰
✅ The earlier they start, the richer they’ll become. 🚀
In this guide, we’ll explore how to shift kids’ mindset from spending to investing and set them up for a lifetime of financial success!
Step 1: Explain the Difference Between Investors and Consumers
1. What is a Consumer?
A consumer is someone who spends money on things that lose value and never make them money.
📍 Example:
Buying a $100 pair of sneakers → Wears out, never makes money.
Spending $20 on fast food → Gone forever after eating.
💡 Lesson for Kids:
"Consumers trade money for things that don’t make them richer."
2. What is an Investor?
An investor is someone who uses money to buy things that grow in value and make more money over time.
📍 Example:
Buying $100 of Nike stock → If the stock grows, it could be worth $500 in 10 years!
Investing $20 in a lemonade stand → Turns into $50 profit after selling drinks!
💡 Lesson for Kids:
"Investors use money to make more money!"
Step 2: Show Kids How to Be Owners, Not Just Buyers
1. Own a Company Instead of Just Buying From It
Instead of spending money on things that lose value, teach kids how to own part of the companies they love!
✅ Do they love Disney movies? → Buy Disney stock (DIS) instead of just movie tickets.
✅ Do they wear Nike shoes? → Buy Nike stock (NKE) instead of only sneakers.
✅ Do they play on Apple devices? → Buy Apple stock (AAPL) instead of only iPhones.
📍 Example Activity:
Make a list of your child’s favorite brands and look up their stock prices together.
💡 Lesson for Kids:
"If you love a company, you can own part of it and grow your money!"
2. The $100 Consumer vs. Investor Challenge
Give kids two choices:
🔸 Spend $100 on toys, clothes, or video games (decreases in value).
🔹 Invest $100 in stocks or a small business (grows in value).
📍 Example:
A $100 toy becomes worthless over time.
A $100 investment in McDonald's stock in 2010 is now worth over $500!
💡 Lesson for Kids:
"Spending makes you poorer, investing makes you richer!"
Step 3: Teach Kids How to Spot Smart Investments
1. Look for Investments That Grow Over Time
A smart investment is something that increases in value over months and years.
📍 Example:
Buying a rare collectible toy that gains value over time is investing.
Buying trendy clothes that go out of style is consuming.
💡 Lesson for Kids:
"Always ask: Will this make me money later?"
2. Learn the Power of Passive Income
Passive income means making money without working—like earning rent from a house or dividends from stocks.
✅ Stocks pay dividends (free money for owning them).
✅ Rental properties pay rent (money every month).
✅ Online businesses or books make money while you sleep!
📍 Example Activity:
Teach kids about dividends—invest in a stock that pays them every month.
💡 Lesson for Kids:
"Investors make money even when they’re not working!"
Step 4: Fun Activities to Build an Investor Mindset
🎲 Game 1: The Investor vs. Consumer Challenge
Give kids pretend money ($500).
Let them "spend" half on toys and "invest" half in pretend stocks.
Track who makes more money after one month.
💡 Lesson for Kids:
"Investors always end up with more money than consumers!"
📈 Game 2: The Business Builder Challenge
Have kids create a mini business (lemonade stand, handmade crafts).
Help them track costs, profits, and reinvestment.
Compare business profits to toy spending.
💡 Lesson for Kids:
"Building a business is better than spending all your money!"
🏡 Game 3: The Investment Field Trip
Visit a real estate property and explain how landlords make money from rent.
Visit a bank or investment firm to learn about stocks.
💡 Lesson for Kids:
"Investments come in different forms—stocks, real estate, and businesses!"
Step 5: Help Kids Start Investing for Real
✅ 1. Open a Custodial Investment Account
Kids can start investing through a custodial account managed by parents.
🔹 Best Brokers for Kids:
Fidelity Youth Account
Charles Schwab Custodial Account
Stockpile (Buy Fractional Shares for Beginners)
📍 Example Activity:
Let kids help pick their first stock and track it every month!
💡 Lesson for Kids:
"This is your first step toward financial freedom!"
✅ 2. Invest in Stocks Instead of Spending on Toys
Encourage kids to save up for stocks instead of just spending on “wants.”
📍 Example:
Instead of buying a $50 video game, buy $50 worth of Microsoft stock.
Instead of spending $100 on shoes, buy $100 of Nike stock.
💡 Lesson for Kids:
"Buying stocks means making money from the companies you love!"
Conclusion: Help Your Kids Build an Investor Mindset Today!
By shifting their thinking from consuming to investing, kids will:
✅ Learn how to grow money instead of spending it.
✅ Develop smart financial habits early.
✅ Build long-term wealth and financial security.
✅ Make money work for them instead of working for money.
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