Save and Invest Like an 11 Year Old

Save and Invest Like a Kid
Financial literacy has always been a key problem to many. And unless our education system starts to finally integrate financial awareness for the real world, this will always be a dilemma to many people, including those with diplomas. So I gladly took the challenge upon myself!

My goal? Teach 3 kids how money can work for them.  

If I can teach 11 year olds the concept and difference between saving and investing, then the more it can be taught in school, right? You wouldn't believe it, but they have far more capacity to learn than most of my friends who work in the corporate world.


Because they know little about how to work for money, where most employees are extremely good at. Besides, being young gives them the time to prepare for a brighter life, they say.
Or so they thought.

Of course, you know by now how we, as children, grew up being groomed to be corporate slaves: to study hard and find a good, high-paying job until we trap ourselves in what they call as “rat race”. It is a vicious cycle popular to working people: get paid, pay bills, get loans and the cycle goes on... taking no time to think of another way out. Just like a mouse that keeps running on a wheel without really going anywhere.
I planned to teach them by making them realize things on their own. And what's the best thing to do that? Let them experience first-hand how it's like to save, invest or just be skeptic about every opportunity. These kids were actually my two nephews and niece, all aged 11. And how do I want them to absorb the lessons? I used numbers, which I agree to be one of the most effective tool to present something. Numbers don't lie after all.
Lucky me, we have a softdrinks delivery business. Hence, I had an actual example to work with. Our monthly ROI (Return on Investment) for our business ranges between 8%-20% per month, depending on sales. After some comical speech and demonstrations (I had to buy them ice cream each so they'd listen), I offered the plan. For now, let's call them “Saver”, “Investor” and “Skeptic”. 

I told them that they should invest their money on our business so their money would grow, and the dividends will be paid out every January of the following year. I told them they have 3 options: One, place their money on a savings account. Two, invest in our business or three, keep the money on a piggy bank.

Deposit money in the bank

It was the 26th of December, by the way. Of course you know how rich kids were during this exact day of the year!
I also told them the risks associated with investing and saving. “Keeping your money,” I said, would probably be the safest, “unless your sisters or brothers learned where you keep them.”. “Putting your money on the bank is almost risk-free too, since I'll be placing them on a well-known commercial bank”.

Invest in business
Finally, I told them that investing in our business has the highest risk, although it will give them the highest potential to earn. The risk, I told them, would be that the monthly income is not guaranteed, for there may be months where sales were low. “Low sales mean low profit. Low profit means low dividends” I explained. “Or worse, there could be a month when the operating expenses are higher than the profit, which will give us zero profit!”

Save money in piggy bank

They asked their questions one by one, and this is where I got the idea on what to call each:
     Investor: “Where can I earn more?”

     Saver: “Will you open in Xian Lim's bank?”

     Skeptic: “What if the business closed?”

The Decision
After some serious debate, the deals were finalized. “Saver” decided to hand over the entire aguinaldo worth 1,000 pesos (I told you they're rich!) and advised me to put them all in the bank. “Investor” gave 1,000 pesos and told me to invest it on our business. Finally, “Skeptic” decided to just keep 1,000 pesos in the piggy bank. Lastly, I told them that they should religiously add 100 pesos every month on their savings. End of discussion. All three went back to playing with smiles on their face.
After a year, I showed them how their savings and investments did (we first opened the piggy bank of “Skeptic”). Using Excel, I showed them the numbers. I told them to stare closely on my laptop screen (so they can't see me prepare my phone's camera). And below were the exact expressions each of them had:
Can you guess who's “Investor”, “Saver” and “Skeptic” based on their expressions?

reactions when investing

Below is the answer:

Kids save and invest
Note: The interest rate used for the bank is 0.75% per year. Tax deductions were not included on the computation so actual values do not necessarily reflect on the table above.

Jorie (right) never had a chance to grow her money. Jaycee (middle) grew his money thinly, thanks to the very low interest rates offered by banks. Finally, Carl (left) grew his money exponentially month after month, because he consistently saved and invested each month while his earlier shares were already earning interests. This is called compounding interest, which Albert Einstein's claimed to be the most powerful force in the universe! Meaning, the interests earned by Carl's money is added to the capital which again earns interest!
Carl was happy and more inspired than ever. I gave him the dividends of his shares as promised, yet he still had his shares. Jaycee, on the other hand, was disappointed. He had high hopes that the bank would give him higher returns. “That's what they say on TV!” he said.
Jorie was neither happy nor sad, until I told her something about inflation.
     Me: “Remember how much your favorite Almond Chocolate costs last year?”
     Jorie: “Yes, 100 pesos each!”
     Me: “How many can you buy in 1,000?”
     Jorie: “10!”
     Me: “Correct. But that was last year!”
     Jorie: “Why?!”
     Me: “Because it costs 112 each now. So your 1,000 can only afford around 9 pieces.  
             Your money is still 1,000. But its value can only buy something worth 900 pesos.”

Final Thoughts
It may have taken me a year for them to realize what I wanted them to learn, but it was worth the wait. What's one year compared to the rest of the years ahead of them? They have just been taught something they would never learn in school.
So, will you be a saver, an investor or remain skeptic?

The choice is always yours.

Did this story made sense to you? Receive cool updates like this when you subscribe to PisoandBeyond!


  1. investing would probably be d best option IF u know d business is really PROFITABLE and has GOOD reputation

  2. Nice article Mr. Jeffrey Kiyosaki! hehe #ProudBusinessPartnerHere

  3. AnonymousJune 12, 2017

    Where did you invest carl's money?

    1. I invested his money on our family business.

  4. Presumptuousness is a standout amongst the most pervasive passionate inclinations. Nearly everybody, regardless of whether an instructor, a butcher, a repairman, a specialist or a shared store chief, supposes he or she can beat the market by picking a couple of incredible stocks.

  5. The most vital question to consider before making any invest is, "What Is My Investment Goal?"


Join the Discussion!

Contact Form


Email *

Message *