Financial Planning

Investing and other real-life money lessons for teens

wealthgram
wealthgram
2 Min Read
Is investing gambling?—and other real-life money lessons for teens

Neither of them laughed when topic on investing came.

“Too soon?” I joked. “But I mean it. And I think we should discuss the difference. I would do this even if there were no such thing as sports betting.”

“Yeah, right,” Oliver mumbled.

Is investing like gambling?

“Oliver,” I said earnestly, “I’m not taking a cheap shot. Truly, some people think investing is gambling. It’s not at all, and it’s important to understand the difference.”

“Okay, fine,” he said curtly.

I carried on. “Sometimes, when we talk about investing, we talk about this thing called the risk return trade-off. It’s an investment principle that basically says, the more risk you take, the more potential return you could get. The return is the money you make, or rather the money you could make.”

“Like slot machines,” Oliver said. “If you play the penny slots, you don’t lose much money, but you’re not going to gain much money either. If you play the $5 slots, you could lose much more, but gain much more.”

I grimaced a bit at the gambling reference, given the circumstances, but he had a point. “That’s a great point. But again, I am careful not to compare gambling to investing.”

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