Posted by roberdam 10/30/2025
However, I think that's the easier part of being an investor. The more complicated part is risk management. With a savings account, there is basically zero risk. But that's not how you invest these days.
It's not zero risk:
- Your currency may collapse, see Germany 1930s, Argentina, Zimbabwe, Venezula, etc.
- Only a certain figure is protected in savings, though governments will act aggressively to protect that (see 2008 + the Icelandic/UK/Dutch palava)
A agree, that the currency is not a 100% safe investment. Inflation especially makes it bad for long-term savings. Indeed, money in any savings account is insured only up to a certain amount. However, that's not something you can explain to kids with a "virtual account." I suppose the idea that Daddy's bank will go bankrupt is probably not an ideal way to teach kids financial literacy.
Or even worse, in the tradition of these unclickable javascript buttons of the late 1990's, just detect when the finger is approaching the "withdraw" button and have the asset crash right before they can click!
I used to know an adult who only cared about that number going up, despite making more than a comfortable amount of money. Live with parents, save on rent/mortgage, number goes up faster. Buy cheapest food, take leftovers from work-catered lunches, number goes up faster. Scam your way into being hired for a position you are severely underqualified for, get terminated after three months, keep the salary and sign-on bonus, number goes up. Invest pretty much everything (because there are almost no expenses), compound interest.
And to be fair, investing does not apply to most people either.
Why doesn't investing apply to most people?
Most people are living paycheck to paycheck.
I knew I wanted to save a lot for my future and retirement since I was in high school. I didn’t gain any reasonable ability to do so until much later.
A much better life skill in my opinion would be to teach about budgeting, how to cook economical meals, how to avoid debt traps and lifestyle inflation.
How about offering a range of rates with volatility increasing as rate increases. Then they can think about the benefit of guaranteed return vs the benefit of long-term growth, or a combination of both.
Another add to the feature request list :)
However if they see their pension balance fall in a big correction, they can panic and move to less volatile investments, thus reducing their long term gains.
You can theorize all you want but the best way to learn to cope with this is for it to happen to you so it would be great to include it in the simulation!
That is wildly misleading. Investing is super important, but it shouldn't be described in this fairy-tale way. Young people might be misled into trusting investment advisors/counselors/brokers, whose real goal is to enrich themselves at your expense. In fact, there are adults who haven't yet learned this.
An article about investing that doesn't mention the WSJ dartboard contest isn't worth reading -- essentially, over 14 years, random stock picks produced returns equal to those of stockbrokers, before the stockbroker's fees and other costs were subtracted.
An investment counselor's primary goal is to make you think you need his services. His secondary goes is to keep you from performing your own research to discover that is false.
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I have set up a similar Google sheet for my 12 yo, which is shared with him on view-only mode. He loves the idea that he's earning $$ every day out of his savings. He's on fire to grow his investment to the point that he earns $5 every day, "while sleeping". He's currently making ~$2/day.