Growing Money: A Complete Investing Guide for Kids

During my family’s Christmas celebration, I learned a little more about my oldest nephews. I don’t see them often, so it’s hard to know what interests them. This year, I learned that six-year-old Alex likes art. You can bet I’ll be encouraging this productive hobby — the only other two things I know he likes are dinosaurs and video games. I was also pleased to learn that his older brother, Michael, likes money.

“I have $86 saved,” Michael told me. “It’s for my trip to Florida.” The two boys were taking a trip over Christmas break to visit their grandmother.

“That’s great,” I said.

“And grandma is going to give us each $100 to spend at Disney World,” Michael added, “but I might save some of it.”

Michael turns nine tomorrow. To encourage smart money behavior, I sent him a book for his birthday. While compiling my guide to personal finance books as gifts, I was intrigued by Growing Money: A Complete Investing Guide for Kids. This book by Gail Karlitz received rave reviews. Kris and I both read it recently, and we think it’s perfect for Michael.

The first thing the book covers is inflation. Many adult books never mention the subject, so it’s refreshing to see a book aimed at grade-schoolers put it front-and-center. “In 1960,” Karlitz writes, “a kid with a quarter cold buy a pizza and a slice of pizza for 15¢ and a soda for 10¢. Today, you’d probably need at least $2 to buy the same meal!” (Or $4 if you live in my neighborhood.)

Growing Money has good chapters on banks and bonds, but most of the book is devoted to the stock market. Karlitz has written a brilliant chapter on how stocks work, using a hypothetical pizza parlor as an example. By keeping the scope small and understandable, she’s better able to convey concepts like equity, dividends, and IPOs. (She doesn’t always use those terms, however.)

The book also contains chapters on the history of the stock market, how investors make money, and how to buy and sell stocks.

The final chapter introduces the “Growing Money investment game”. Using $10,000 of imaginary money, participants buy and sell investments following the rules of real-life investing. The goal is to see how much money each person has at the end of six months. Yes, this is just like any other stock market portfolio game, but it’s aimed at kids. I think it’s an excellent way to introduce children to the stock market. When my Michael finishes the book, I think I’ll challenge him to a duel!

Growing Money offers a solid introduction to saving and investing, but it does have some weak spots. Only one page out of 120 is devoted to mutual funds. Because the book is aimed at children, taxes are barely considered. Still, its strengths outweigh its weaknesses.

Though this book is designed for children, I think most adults could profit from reading it, too. Actually, it’s a great book for parents to read with their kids. Growing Money provides clear, concise explanations of important financial concepts. It’s the sort of book to buy for your nephew, but read yourself before you pass it on.

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There are 11 comments to "Growing Money: A Complete Investing Guide for Kids".

  1. Pippin says 22 January 2008 at 05:34

    Sounds great, but could I just ask, is this a general ‘how money & investment works’ book, or does it get into US/North American centric? (an important issue to consider for basic readers)

    And can anyone recommend a virtual share trading game? MoneyObserver (here in the UK) used to have an annual competition, but it seems to have stopped now.

  2. ThomB says 22 January 2008 at 05:38

    I got this from the library. It is really good. My big problem is getting my kids interested in saving and investing. They have a good amount saved, but they don’t seem to think about how they could grow it. They are 15 and 11 years old.

    Any suggestions for how to engage them?

  3. Ron@TheWisdomJournal says 22 January 2008 at 06:23

    Sounds like a very interesting book. I have a three kids ages 14, 13, & 8. This might be something good for them to read.

    Have you tried Investopedia?

  4. Eric Nagel says 22 January 2008 at 06:57

    As a Cub Scout leader, one of the electives this year is about money, spending and saving. I’ll be sure to do this with my kids. I wish I learned these lessons as a child.

    ING has Planet Orange which may help teach kids about money, too.


  5. Betsy Teutsch says 22 January 2008 at 07:46

    One of these year everyone will be raving about your financial ed comic book, JD!!

    This subject is dear to my heart. there are two things I hammered into my children.
    One was consciousness raising about advertising hype and marketing to children. We subscribed to Zillions, a consumer reports magazine for kids (now online perhaps?) and they thought all the insider info was hilarious, like how cereal photos on cereal boxes feature white glue, not real milk, which is why the cereal never looks soggy.
    The second point I often made was that just because peers spent a lot of money on stuff didn’t mean they had a lot of money – their families might not have many resources at all. Case in point – i once dropped my daughter off a the best-dressed fifth grader in her school’s house – the one who shopped for hours every weekend, never wore the same thing twice – and it was quite a modest house. This was just a family into shopping, not particularly wealthy. I still remember how shocked my daughter was, since our house was way bigger [not that it matters, but we do have a much nicer house]and I was very restrictive in how much time we even went to malls, let alone bought stuff in them. So she learned that there isn’t necessarily a correlation to how people spend and what’s in their bank account. Now my daughter is a complete cheapskate about clothes. brag brag!!! And believe it or not, my son is a financial educator.
    I have a children’s financial education label at MoneyChangesThings, you’re all invited.

  6. HollyP says 22 January 2008 at 08:05

    I’d love to know how your sibling got your nephew to think about actually saving. Despite repeated efforts to get them to save, my kids want to spend every cent as soon as it hits their palms.

  7. Alya says 22 January 2008 at 14:27

    Nice tip to teach children to start young….thank you!

  8. Troy says 23 January 2008 at 07:24

    Holly, to answer your question about saving… I tell my kids that each December I will match 100% of what they have saved and not touched for the previous year. They get $20/month, are required (our rules) to save at least 20% of it, but can save as much as they like. My wife and I match their YTD savings (not cumulative, but what their new savings this year) 100% each December when we get our bonuses… they LOVE that, and it’s a great incentive for them to save. They also understand that whatever they save is to STAY in savings or be moved to other investments… once they put it in the savings pot, it stays there. The siblings see how much each other’s “net worth” has grown to, and given that they all receive the same “income”, but have very different “net worths”, the power of saving early and holding it is peer-driven.

  9. Colin Joss says 23 January 2008 at 19:26

    I don’t think it will wrong by simply giving the book to my children. Usually kids listen and follow example, so we’d better read it and start exposing to our children through life examples.

    Colin Joss
    East Lothian, Haddington
    United Kingdom

  10. Colin Joss says 25 January 2008 at 18:36


    I see that most potencial issue of teaching kids about saving and investing, is to get them real hands-on experience.

    I tried to teach frugal life and saving habit to my kids, but if their established grand parents (my father & mother, of course) who happens to live nearby give them just about anything they want and they don’t want, then teaching them to feel your need and get satisfied with enough will be rather difficult.

  11. Colin Joss says 27 January 2008 at 21:34


    My daughter still thinks ATM is magic money machines.. and I’m having difficulties telling her that it is not.

    Please do tell me when you solve this.

    Colin Joss
    East Lothian, Haddington
    United Kingdom

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