Say it like this

For the child

Say you have ten seeds and you are hungry.

You could eat all ten. That is ten seeds of dinner, tonight, and then they are gone.

Or you could eat five and plant five. Tonight you get a smaller dinner. But if the plants grow, in a few months you might have a hundred seeds. Maybe more.

That is investing. Giving up something now so you might get more later.

Now the honest part, because it matters. The plants might not grow. It might not rain. A bird might get there first. Investing is not a trick for getting more, it is a trade: a smaller sure thing now for a bigger maybe later. Anybody who promises you the maybe is a sure thing is not telling you the truth.

For the grown-up

What is actually going on underneath

Two things are being taught at once here, and the second one is the important one.

The first is deferred consumption, which children already understand from saving and which the seeds make concrete. The second is risk, and it is the reason this explanation is worth giving early rather than later.

Most people meet investing for the first time inside a sales pitch, where the risk is a line of small text at the bottom. A child who learns the concept with the risk built into the definition has a defense that nothing in the sales version can dislodge. That is the actual point of covering this at five instead of twenty-five.

Also worth noticing that this explanation needs money, value and saving already in place. It is a fourth-rung idea. Given on its own it turns into a rule about being patient, which is not what investing is.

Do something with it

Five seeds or ten dinners

A drawing activity about choosing between something now and more of it later, including the version where the plants do not grow.

Open the activity

Ask afterward

Four questions that usually go somewhere

What would you plant, and what would you eat tonight?
What could go wrong after you plant the seeds?
Is saving the same as investing? What is different?
If somebody promised the plants would definitely grow, should you believe them?

Words in this one

If they ask what a word means

Invest Using something valuable now, hoping it becomes more valuable later. It might not. Save Keeping something now instead of using it, so you still have it later. Value How much something is worth to you. It can be different for two people looking at the same thing. Risk The chance that the thing you hoped for does not happen. Money A way to trade what you have for what you want, without having to find one person who has both. Profit What is left over after you pay for everything it took to make the thing.

If they want more

The books

When an idea turns out to be worth forty pages instead of two, it becomes a book, and the books live next door at DigitalCrayonBooks.com. Here is how the two sites divide the work.