Ryan had a race this past weekend just east of Los Angeles.   It was a 7-hour drive and the perfect opportunity for me to use my passenger time to review The Young Investor, Projects and Activities for Making Your Money Grow by Katherine R. Bateman.

I was interested in reading the book because I am a big believer in exposing kids to ways to make their money grow.  Early elementary kids should open a savings account at a bank or, my personal preference, a credit union, and be introduced to the concept of interest/dividends.  And in the upper elementary years, kids should become familiar with CDs, bonds, mutual funds, and the stock market.

But these topics aren’t always easy for kids (or adults!) to understand, so any investing book written for kids needs to be done in a way that, one, is interesting to kids, and two, makes sense.  Bateman does a beautiful job of recognizing the importance of this and uses analogies to make these concepts more attainable.  For example, in describing how economist’s measure our country’s economic health, she compares the economy’s checkup to getting an annual checkup at the doctor’s office…both have specific lists they follow to help determine overall health.

Bateman writes the book directly to the tween/teen.  It’s much more fun to read if you feel the author is addressing you, and I can see the appeal for this age group.  Each chapter ends with an update on Billy Ray, a real life example of earning and investing money beginning at age 6.  If Billy Ray can do it, then I can, too!

Investing begins with understanding of the power of compound interest.  I learned a long time ago that kids as young as 10 or 11 “get” compound interest if it’s shown to them in a concrete, visual way.  And once they get it, they want in.  This is where the book comes in.  In clear, easy-to-understand words, Bateman takes the reader through the history of money, different ways to invest, the stock market, and how all of this relates to the economy.

When my boys began investing around age 11, I had them read The Motley Fool’s Investment Guide for Teens. Chapter by chapter, we discussed the information.  I wanted them to understand that anyone who is going to invest needs to be aware of what they are doing.  And that means reading.

I would use The Young Investor in the same way.  The tween/teen reads a chapter and then discusses what they learned with the parent.  It’s also a good way for parents who are not very familiar with investing themselves to learn.  There’s nothing wrong with learning right along side your child.

The book is filled with a lot of activities that kids can use as a hands-on way to solidify the concepts.  Many of the activities also serve to direct kids to take specific action.  Reading this kind of book for the first time can be overwhelming.  So if we can show kids exactly what to do with the information, there’s a better chance that they’ll actually do it.  And that’s the whole point.

The book covers a lot of information.  As such, it serves as a great resource.  I plan on adding The Young Investor to my resource table during my financial literacy classes and recommending it to parents who are interested in teaching their kids how to make their money grow.