Fundamentals like saving, spending, credit, debit and debt, should be taught early and often, so kids understand money as a concept before getting into the specifics of investing.AI SOMEYA/iStockPhoto / Getty Images
Young Canadians are increasingly interested in investing – even more so than previous generations.
A 2024 survey by Toronto-Dominion Bank found that 68 per cent of Gen Z – those aged between 13 and 28 – are investing consistently on a yearly basis, the highest percentage across any age demographic. Other surveys suggest that Canadians are getting curious about investing even in the teen years: A 2023 survey from Royal Bank of Canada and Leger found that 63 per cent of Canadians 13 to 17 planned to invest.
In Canada, people can’t open a tax-free savings account until the age of 18. Similarly, Canadians must be the age of majority in their province (so 18 or 19) before they can open a brokerage account to invest.
Even though a minor can’t open their own investment account to buy stocks, bonds, mutual funds or exchange-traded funds, a parent or guardian can open an informal trust (ITF) account for the minor and manage it on their behalf. That’s what Maya Corbic, CPA and author of From Piggy Banks to Stocks: The Ultimate Guide for a Young Investor, did for her kids. “I wanted them to think of investing as something normal that we just do, like brushing our teeth twice a day,” she said.
Creating a diversified portfolio is oft-cited investment advice, but it can be a difficult concept for children to grasp. Instead, Ms. Corbic purchased fractional shares of stocks for companies her kids were familiar with, such as Disney, Netflix, Roblox and Nike, for about $30.
If Disney came up in the news, Ms. Corbic would talk with her kids about how it might affect their investments, on a car ride to soccer or at the dinner table. “It’s like, ‘Oh, you lost a little bit of money.’ But the point was the lesson,” she said.
Investing and seeing money grow is exciting. But experts say new investors should have a solid understanding of fundamental financial skills before diving in – especially if they’re hearing about investing from online financial influencers, or “finfluencers.”
Robin Taub is a chartered professional accountant (CPA) and author of The Wisest Investment, which gives parents practical advice on how and when to introduce money concepts to kids. She says age-appropriate learning is important. For example, kids might learn about saving money earned from a lemonade stand, while preteens can learn about buying property and collecting rent by playing Monopoly. Teens can then try out simulation investment accounts. “They can experiment by buying stocks or building a portfolio without real money, and see what happens over a period of time.”
Junior Achievement Canada, a non-profit youth organization, allows students from Grade 8 to 12 to do just that with its six-week Investment Strategies Program. After the program wraps, students can participate in a six-week competition to manage a $100,000 virtual portfolio, risk free. The online stock market simulation is linked to live data from the Toronto Stock Exchange, NASDAQ and the New York Stock Exchange.
“They can really put their investment strategies to the test,” said Jennifer James, vice-president of programs and charter services at JA. Nearly 30,000 students participate in this competition annually with uptake steadily growing. “We’re seeing students become more curious about opportunities on the stock market. We do definitely hear students say, ‘I want to learn about this, because when I’m 18, I’m going to be ready to invest.’”
There are also many online resources to learn about investing on your own. The Canadian Foundation for Economic Education’s Money and Youth website provides resources for those interested in financial literacy, including a module on investing and saving, while Fidelity Canada’s Money Gain series has videos on the nuts and bolts of investing for young people, including concepts such as the difference between saving and investing and more complicated ideas such as how fluctuating foreign exchange rates can affect returns.
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Online tools are key for digital natives. “Young people are so incredibly smart and resourceful, but they want materials and resources that meet them where they’re at,” said Emily Naddaf, director of Wealthsimple Foundation, a registered charity focused on financial literacy for youth 14 to 24, founded by its namesake fintech.
In addition to workshops, seminars and online materials, the foundation recently launched an online quiz that helps young people discover their investing personality type or risk level.
“The younger you understand what your risk tolerance is, the better your investing strategy becomes, because you will never invest in a way that makes you uncomfortable,” said Li Zhang, financial literacy leader at Chartered Professional Accountants of Canada.
Of course, conversations about investing should begin well before a child’s 18th birthday. “Start as young as possible,” Ms. Zhang said. She is already teaching her four-year-old about money. On vacation, her daughter will receive $20 cash to spend without any restrictions. “She’ll understand the transactions, that sense of loss and the role money plays in her life,” she said.
Fundamentals, including saving, spending, credit, debit and debt, should be taught early and often, so kids understand money as a concept before getting into the specifics of investing. Investing at 18 has advantages – the earlier money is invested, the longer the time horizon and the more compound interest in the long run. “She’ll probably have to save much less in her lifetime compared to someone who started in their mid 20s, early 30s or early 40s,” Ms. Zhang said.
