Introduction to Stocks vs Bonds for Kids and Teens
This video provides a stocks vs bonds comparison in a simple, concise way for kids and beginners. It could be used by kids & teens to learn about the differences and similarities between stocks and bonds, or used as a money & personal finance resource by parents and teachers as part of a Financial Literacy course or K-12 curriculum.
Suitable for students from grade levels:
- Kindergarten
- Elementary School
- Middle School
- High School
The topics covered are:
- Differences between stocks and bonds
- How do you make money from stocks and bonds
- Stocks vs bonds – differences in investing in each
- What happens when a company goes bankrupt
Infographic: Click Here to Download
What is the difference between a stock and a bond?
Well, if you own the stock, then you own part of the company. But if you own a bond, you make a loan.
But how do I make money from stocks and bonds?
With stocks, you get a share in the profit of the company through dividends. And you also get a share in the growth of the company through an increase in the price of the stock.
And with bonds, you get interest on the money that you lend, and you get the principal amount back at the end of the term.
But how is stock investing different from bond Investing?
Well, with a stock you own part of the company. So get a say in some of the things that the company does through voting.
You also take up risk – if the company does well, you can earn from the increase in the stock price and dividends. But if the company does not do that well, then you do not make any money.
But with a bond, you make a loan to the company, so you have very little risk. That way, you earn irrespective of whether the company does well or not.
But what happens if a company does really, really, really badly?
What if a company goes bankrupt?
Well, if a company were to go bankrupt, than the stockholders or people who own the stocks, would lose all of the money that they invested because stock price would crash.
But bondholders would be paid using the money that was obtained from the sale of the assets, like land and factories.
Thank you very much for telling me what the difference between a stock and a bond is, Wall Street Willy.
You’re welcome, Sooper Cooper. Remember, finance is your friend!
Download Transcript: Ideal for Use by Teachers in their Lesson Plan to Teach Kids & Teens
Podcast: Stocks vs Bonds
Fun, informative and concise episodes by a 10-year old, breaking down complex financial concepts in a way that kids and beginners can understand. Episodes cover personal finance topics like saving, investing, banking, credit cards, insurance, real estate, mortgage, retirement planning, 401k, stocks, bonds, income tax, and more, and are in the form of a conversation between a cowboy (a finance novice) and his friend, a stock broker. Making finance your friend, only at Easy Peasy Finance.
A little bit about me: I have been fascinated with the world of personal finance since I was 6! I love to read personal finance books, and keep myself updated on the latest by reading various personal finance magazines. My friends often ask me questions about finance because they find it complex and intimidating. That’s what inspired me to start my YouTube channel called Easy Peasy Finance when I was 8, and this podcast 2 years later.
A thorough comparison of stocks vs bonds: What is the difference between a stock and a bond, how making money from stocks and bonds is different, how is stock investing different from bond Investing, what happens if a company does really badly and goes bankrupt, and more.
Show notes and transcript at: https://easypeasyfinance.com/comparison-stocks-vs-bonds/
