Many adults today don't invest because they were never taught about it when they were younger. Now, investing seems so complex, which puts a lot of people off. I believe that teaching kids about investing, and emphasising that it doesn't have to be complicated, will give them a significant advantage in life.
Remember, for your kids to grow up financially healthy and wealthy, they need to be following the 3 Rules of Wealth! (the second being, invest what you save).
I hope you'll read the story below to your kids and help them start their investing journey. After the story, I've included a link with tips on how you can begin investing for your kids.
The River Race Story
Lazy Larry and Crafty Cassie were feeling restless as they wandered through the forest near their village, when they came across a river.
“Hey, let’s have a boat race!” Cassie suggested. “We’ll build our own boats and race downstream through the forest!”
Larry yawned. “I don’t know, Cassie... I’ve never built a boat before. You’ll probably win.”
Cassie smirked. “Come on, it’ll be fun! Besides, I’m getting bored.”
Reluctantly, Larry agreed. “Alright, but I’m just going to keep it simple. I don’t have the energy for anything fancy.”
Larry built a basic raft with some driftwood and pushed it into the water. It was far from perfect, wobbling when he paddled, so he decided to do the least amount of work possible: he lay back on the raft and let the river’s gentle current carry him along.
Meanwhile, Crafty Cassie was hard at work. She found sturdy wood and crafted a sleek canoe, complete with a shiny paddle. Watching Larry float off lazily, Cassie rolled her eyes. “This race is mine for the taking,” she said to herself confidently.
Once her impressive canoe was in the water, Cassie started paddling furiously, quickly closing the gap between her and Larry. But just as she rounded a bend in the river, she spotted a small stream that cut through the forest—a shortcut! Cassie remembered that the stream rejoined the river much further down. "This’ll help me win for sure," she thought, and with a burst of effort, she paddled hard against the current toward the stream.
However, as soon as she reached the stream, things went wrong. The tide was low, and the water barely covered the rocks. She couldn’t paddle through it. "Great," she muttered. She had three choices: wait for the tide to rise (who knew how long that would take), go back to the river (which would waste a lot of time), or carry her boat through the stream herself.
Grumbling, Cassie chose the third option and hoisted her canoe out of the water, trudging through the rocky streambed. As she struggled, she noticed many abandoned boats, signs of others who had tried the same shortcut and failed. “Not so clever after all, huh?” she muttered under her breath, sweating and exhausted.
Meanwhile, Larry continued to drift lazily downstream, his simple raft bobbing along. He didn't even notice when he passed the point where Cassie's shortcut was supposed to meet the river.
After what felt like hours, Cassie finally saw the river ahead. Panting and exhausted, she threw her canoe back in and paddled furiously toward the finish line. As she arrived, expecting to see Larry far behind, she was shocked to find him already sitting under a tree, relaxing with a smile.
“What?! How did you beat me?” she exclaimed, utterly baffled.
Larry stretched and shrugged. “I didn’t do much, really. I just let the river carry me. I figured the current would get me there eventually.”
Cassie was stunned. “But I worked so hard, I even tried to take a shortcut!”
“Well,” Larry replied, “I guess sometimes keeping things simple is the best strategy.”
The End
Check Out Our Book: If your kids enjoyed this story, then they'll love the stories in my book, Grandpa's Fortune Fables. Available on Amazon.
Inspired By A Real-World Investing Story
This story was inspired by a reportedly true study conducted by a bank.
The bank researched which of its clients had achieved the highest returns over a 20-year period. What they discovered was that it wasn’t those with complex strategies that followed the latest trends and news. Instead, the top performers were those who had either forgotten they had an account (or misplaced their password) or who had passed away.
Essentially, it was those who didn’t take any action and just let their investments follow the markets who came out on top—just like Larry followed the river and won the race!
Financial Education Program for Schools: If you are teacher, or working as part of a school, and feel that a financial education program that helps students manage their money before they become adults (including how to invest), then please check out our Financial Education Program here
Money Lessons From The Story
There are several really important money lessons / Investing Tips in this story. If you help your kids to invest and follow these tips, they will do better than 90% of adults who invest today!
3 Investing Tips For Kids
1. Start Early: Larry’s simple strategy was to start his journey without overthinking, and he won in the end. Just like in investing, the key is getting started. There's rarely a perfect time to begin investing, and time in the market is more important than trying to time the market. I encourage you to help your kids to start investing early.
2. Simple Beats Complex: Cassie’s downfall was trying to be too clever with shortcuts. Similarly, a simple investing strategy—like investing broadly across the stock market—often performs better in the long run than constantly trying to predict which stocks will rise or fall. The more complex the strategy, the more likely it is to underperform over the long term, like carrying a canoe through a dry streambed.
3. Patience Pays Off: When investing, there will be times when 'bad news' is everywhere, and everyone appears to be making changes to protect their investments. The key is to ignore all of this and just ride it out. The stock market has crashed hundreds of times but has always recovered over time. This is why patience is so important when it comes to investing.
"The stock market is a device for transferring money from the impatient to the patient."
I appreciate that these tips appear to be taking the fun out of investing but trust me, in years to come when you have a stress-free and growing investment portfolio, your kids won't care that it's boring!
Start Investing For Your Kids Now: Here is a guide to helping you start investing for your kids (education only): 10-Year Investment Plan For Kids
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Will
P.S., for more money and investing tips for your kids, grab a copy of Grandpa's Fortune Fables. Available on Amazon.
