Investing for Kids (Ages 9–14): Stocks, Funds, Real Estate & Compound Growth

Investing can sound complicated, even for adults, but it doesn’t have to be. Kids are naturally curious, and a simple, early introduction can help build patience, financial goal-setting, and long-term thinking. Instead of chasing “get rich quick,” they learn the real path: slow, steady growth.

A powerful side benefit is confidence, in our bigger aspirations, this is the kind of confidence that helps tweens and teens resist the online pressure to “keep up.” When social feeds push trends and labels, a financial mindset can help shift the focus to progress over hype: funding needs first, saving toward goals, and taking pride in growing savings rather than the latest flex.

Teaching the Basics: What Is Investing?

Investing means using your money to buy something that might grow in value over time. That could be:

A share of a company (a stock): you own a tiny slice of a business and become a shareholder.
A fund that owns many investments (a mutual fund or ETF): you buy units of the fund and become a unitholder. One purchase gives you exposure to the basket of stocks and/or bonds the fund holds, which helps with diversification.
A bond: a loan to a company or government that pays interest in return for lending your money.
Real estate: owning property directly, or indirectly through a REIT (Real Estate Investment Trust): a company (traded like a stock) that owns or finances many properties (apartments, offices, warehouses). REITs collect rent (or interest) and pay dividends to their shareholders. You can also own REIT ETFs, where you buy units and become a unitholder in a fund that holds many REITs.
Fund-of-funds: a single fund that invests in other funds (for example, a mix of stock and bond ETFs). You buy units and become a unitholder of the fund-of-funds, which can make diversification simple in one step, though there can be layered fees (the fund’s fee plus the fees of the underlying funds).
We’ll save crypto and other advanced topics for a future lesson.

How You Earn Money from Investing

Price growth (capital gains): If what you own (your stock, unit or property) becomes more valuable and you sell it for more than you paid, you make a gain.
Dividends: Some stocks and REITs share part of their profits with investors as cash payments called "dividends" to shareholders.
Interest: Bonds pay "interest" for lending your money.
Fund distributions: Mutual funds/ETFs may pay out dividends or interest they’ve received from the investments they hold to the unitholders.
Reinvesting (DRIP): You can choose to reinvest your dividends/distributions to buy more shares or units automatically, which helps compound your growth over time.

Simple rule: More diversification + steady contributions + time = a better chance of growing your money, even though prices can go up and down in the short term.

Key Concepts

Risk: Prices of investments (stocks, Mutual Funds, ETFs, REITs and real estate) can rise or fall. Unlike saving, investing carries risk- but over long periods, diversified investing has historically rewarded patience.
Reward: Long-term growth can outpace regular saving.
Diversification: Don’t put all your eggs (dollars) in one basket and own a mix of different investments.
Compound Growth: Earnings that earn more earnings. Even a small amount saved regularly can multiply over years.
“Looking rich” vs “being rich.” Looking rich chases upgrades, labels, and short bursts of hype; being rich makes steady contributions, grows the balance, and lowers long-term stress. Build the confidence, training yourself to scroll past the “keep up” posts and stay with your plan, because your future self matters more than today’s flex.

Getting Started

Start simple and hands-on:

Build a watchlist (now).
Pick 2-3 companies and 2-3 funds together. Write today’s share price or unit price, then check in weekly or monthly (depending on their interest) and talk about what changed and why (news? earnings? the overall market moves?)
Encourage kids to “invest” in brands they know, like Apple, Disney, Hasbro (or Mattel), and watch how the value changes over time. Note: this is not a recommendation on any brand or security, just a fun way to connect what kids know about the company to its stock.
Add diversification early.
Include at least one broad ETF so kids see how a single unit gives a unitholder exposure to many companies at once. Many families learn diversification by looking at broad ETFs or mutual funds as examples of how one unit can hold many companies.
Real investing.
Pretend portfolios help kids learn without real risk. Move from watching to owning (when ready). If a family chooses to move from watching to owning, they often learn about custodial/in-trust accounts or youth accounts with a parent/guardian.
- Custodial Accounts (e.g., in Canada, an “in-trust” account) where a parent or guardian manages investments on the child’s behalf until they’re older.
- Youth investment accounts or RESP-linked options, depending on the child’s goals (education, long-term growth, etc.)
Set the habit.
Start small and contribute regularly. Some families practice with small, regular contributions to understand habits and compounding (amounts vary by family). Discuss how dividend/distribution reinvestment works in general (DRIPs), including pros/cons. We did not go into where fees or taxes may apply, but this is important to discuss and review when actually investing. Note: Fees, account minimums, and taxes vary by provider and jurisdiction. Review these with a qualified professional before using real accounts.

Reminder: Always research any ‘finfluencer’ or author recommendations, resources and apps carefully, and seek professional advice. Every family’s needs are different, and Financial Kid Academy does not endorse specific banks, products, bank accounts, investment accounts, investments, apps, or specific investment strategies.

Takeaway

Investing isn’t about luck, it’s about learning. With practice, patience, and curiosity, kids can build habits that last long after their first “pretend” portfolio turns into the real thing.

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Every family’s financial situation is unique, and we encourage readers to conduct independent research and choose what best fits their own needs.