How can parents teach kids about investing?
Parents can teach kids about investing by using a familiar business, such as a Singapore bank, as a real-life learning project. Owning or tracking 100 shares can help children understand ownership, dividends, share price movements, business performance, risk, and long-term compounding.
The June holidays are often filled with playdates, travel, and the occasional battle over screen time.
But they can also be a good time to teach children one of the most useful life skills they may not learn deeply in school: how money works.
That does not mean starting with a textbook, worksheet, or complicated investing lesson.
It can begin with one familiar business.
For many Singapore families, a local bank is a useful place to start. Banks such as DBS Group Holdings Limited (SGX: D05), Oversea-Chinese Banking Corporation Limited (SGX: O39), and United Overseas Bank Ltd (SGX: U11) are familiar names. Children may have seen their parents use a banking app, withdraw money from an ATM, scan a PayNow QR code, or tap a card at the supermarket.
That familiarity matters.
A child may not fully understand artificial intelligence, semiconductors, or real estate investment trusts. But most children can understand that people put money in banks, borrow money from banks, and use banks to pay for things.
From there, the lesson can grow.
The goal is not to turn children into stock pickers. It is not to encourage them to check share prices every day. And it certainly does not mean parents need to rush out and buy shares during the school holidays.
Instead, the idea is simpler: use one real business as a learning project to teach children about saving, ownership, dividends, patience, and risk.
You do not need 100 shares to start
The phrase “100 shares” can be useful because it makes the maths easier.
If a company pays a dividend of S$0.10 per share, 100 shares would receive S$10. If it pays S$0.50 per share, 100 shares would receive S$50.
That is simple enough for a child to understand.
But 100 shares is not the rule.
With DBS, for example, 100 shares can cost more than S$6,000 before fees. That may be too much for many families, especially if the main purpose is education rather than building a large position.
That is perfectly fine.
The learning does not have to begin with a big investment. In fact, it does not even have to begin with real money.
Parents can start by choosing one bank stock and tracking it on paper with their child. They can record the share price once a month, look out for dividend announcements, and discuss how the business is doing.
For some families, the project may eventually involve buying a small number of shares as a long-term learning exercise. For others, a mock portfolio may be enough.
What matters is that the amount, if any, is appropriate for the family’s financial situation. A learning project should not create financial pressure.
The point is not the size of the investment.
The point is to make money visible.
A share is ownership
The first lesson children can learn is simple but powerful: buying a share means owning a small part of a business.
Many people grow up thinking about shares only as prices that move up and down on a screen. But a better way to explain it to a child is this:
“When we buy shares in a bank, we are not buying a number on a screen. We are buying a tiny piece of the business.”
That tiny piece may be small, but the idea behind it is big.
It introduces children to the concept of ownership.
If the bank serves customers well, manages risk carefully, earns profits, and grows over time, shareholders may benefit. If the bank makes poor decisions or the economy weakens, shareholders may also feel the impact.
This helps children understand that investing is not a game of guessing prices.
It is about understanding businesses.
Dividends make investing feel real
For adults, dividends are often discussed in terms of yield, payout ratios, and passive income.
For children, the explanation can be much simpler.
A dividend is a way for a company to share some of its profits with shareholders.
That one sentence can lead to useful questions.
Did the bank make money? Why is it paying a dividend? Can the dividend go up or down? Should we spend the dividend or reinvest it?
This is where the learning becomes powerful.
A small dividend may not look exciting at first. But it can teach children a habit that many adults only appreciate much later: money can earn money.
If the dividend is spent, the lesson is about cash flow. If it is saved, the lesson is about delayed gratification. If it is reinvested, the lesson is about compounding.
Share prices move, but the business matters more
Of course, share prices do not move in a straight line.
If a child tracks a bank stock over a few months, they may see the price rise one week and fall the next. That can feel confusing.
Why would the price fall if the bank is still making money? Why would it rise even when the news sounds uncertain?
This is where parents can introduce the difference between price and business value.
Share prices can move because of interest rates, economic worries, investor expectations, market sentiment, or short-term news.
But long-term investors should ask better questions.
Is the bank still profitable? Is it managing loans carefully? Is it paying sustainable dividends? Does it have enough capital to handle difficult periods?
These questions are more useful than simply asking whether the share price went up today.
The goal is to teach them to observe how a business performs over time.
Risk is part of the lesson too
A bank stock may be familiar, but it is not risk-free.
Banks can be affected by bad loans, weaker economic growth, falling interest margins, regulatory changes, and financial market stress. Dividends are also not guaranteed. They depend on the company’s profits, capital position, and management decisions.
This is why the project should not be presented as “buy a bank stock and watch your money grow”.
A better lesson is this: “Investing always involves risk. That is why we learn before we buy, and why we do not put all our money into one company.”
That helps children understand that investing is not gambling, magic, or a guaranteed path to riches.
It is a long-term process of understanding businesses, managing risk, and making thoughtful decisions.
How parents can turn this into a simple project
Parents do not need to make this complicated.
Choose one bank stock with your child. It could be DBS, OCBC, or UOB.
Then, once a month, sit down together and ask five questions:
- What is the share price today?
- Did the bank announce any results or dividends?
- Did the bank make a profit?
- What is one thing we learnt about the business?
- Would we still be happy to own this business for many years?
The answers do not need to be long.
For younger children, the project can be visual. They can draw the bank, record the dividend received, or colour in a simple chart.
For older children, parents can introduce slightly deeper ideas such as revenue, profit, dividends, and risk.
The point is not to turn the school holidays into an accounting class but to help children connect money with real-life decisions.
Get Smart: The real lesson
The best outcome is not that your child becomes excited about DBS, OCBC, or UOB.
The best outcome is that your child learns how to think about money.
They learn that money can be saved, spent, invested, and grown. They learn that businesses earn profits by serving customers. They learn that shareholders are owners. They learn that dividends come from real companies, not from thin air.
A bank stock learning project will not make a child rich overnight.
But it may help them build something more valuable: a strong foundation for how money works.
And that lesson can last far longer than the June holidays.
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Disclosure: Joanna Sng owns shares of DBS, OCBC and UOB.
