The quick start guide to investing with your kids

Key takeaways:

• Greenlight’s new tools make investing less complicated and help families take it on together one step at a time — with as little as $1.

• Videos and easy-to-understand data visualizations turn stock market jargon into family talks that everyone can join, strengthening parent-child financial conversations.

• Learning how to invest isn’t just about dollars — it’s about helping kids build critical thinking skills, confidence, and lifelong money knowledge as they plan for bright futures.

Investing can feel overwhelming at any age. Confusing jargon and complex features on investing platforms are more intimidating than helpful. That’s why Greenlight is flipping the script to make investing approachable and educational with simple tools, AI-powered insights, and a focus on learning.

Now, investing can be a family activity, where parents and kids ask questions and learn together. Our mission is to help young people gain confidence and build independence with investing, and also understand why they’re investing.

"The latest version of Greenlight Invest combines everything I’ve learned over the last 40 years from books and articles to timeless insights from iconic investors like Warren Buffett and Peter Lynch, whose shared knowledge has had a lasting impact on me," says CEO and Co-Founder of Greenlight, Tim Sheehan. "We built Greenlight Invest because we want to help everyone learn to become an excellent investor."

How to get started investing with your kids 

1. Explore the market 

Greenlight helps you search and research investments. Start by browsing the invest dashboard, where you’ll find 4,000+ stocks, which are shares of a single company, and exchange-traded funds (ETFs), which are a collection of many different investments and traded just like stocks on the stock exchange. ETFs are a popular way to invest because they spread out the risk by including multiple companies or assets, which is built-in diversification.

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To make investing relatable, start with brands your family knows and loves, like Disney or Netflix. Simply use the in-app search to find specific companies or funds. Last year, Greenlight families invested big in emerging tech, AI, and crypto, through bitcoin ETFs. The tech company Nvidia (NVDA) became the #1 traded stock with $4.9 million invested, nearly 6 times more than the previous year.

2. Scroll simplified stock analysis 

Learn all about a company in an easily digestible way so you can make an informed decision if you think the company will do well in the future and if it’s trading at a fair price. Understand how they make money, how much they’re making, and their risk level with simple explanations and AI-driven insights. 

• Share price — The current cost of one share of stock. With Greenlight, families can buy fractional shares for as little as $1.

• Fair price estimate — An informed and reasonable estimation of a “fair price” to pay for a share of a company’s stock. The analysis is done by Morningstar.

• Morningstar rating — Compares a stock’s current price to its fair value. The more the stock is trading below its estimated value, the higher its star rating — up to 5 stars.

• 1-year change — The percentage the price increased (or decreased) in the last 12 months. It would be the investment’s return if it had been bought one year ago and sold now.

• Risk level — Every stock or ETF has a risk level from conservative (low risk) to aggressive (high risk). With higher risk, there’s a greater chance you could lose money — but there’s also a greater chance you could earn a higher return.

• Growth and profitability — How much money a company makes (revenue) and how much it keeps as profit (net profit) or how much it loses (net loss). 

• Financial metrics — How much a company earns, how investors value it, and how big it is in the market.

  1. EPS — Shows how much money a company makes for each share of stock. A higher EPS is more profitable.

  2. P/E ratio — Compares a company’s stock price to its EPS. It shows how much investors are willing to pay for each dollar the company earns. A higher P/E shows that investors expect higher growth from earnings in the future and are willing to pay a higher price.

  3. Market cap — The total value of all a company’s shares. It’s the price tag for the whole company!

• Performance — How the stocks’ price has changed over time at various intervals from 1 day to 5 years. It’s also compared to the S&P 500, which is a stock market index that can help investors evaluate performance by comparing returns. The S&P 500 index is made up of the 500 largest U.S. companies.

• Competitors — How closely other major companies compete. The closer a logo is to the center, the more directly it rivals the company. Tap to learn more about them and how they compare.

• Bulls and Bears — Two different viewpoints about the stock. One from analysts who are optimistic about it (bulls) and one from those who are pessimistic (bears); similar to how a bull market happens when stock prices are rising and a bear market happens when stock prices are falling. 

3. Understand exchange-traded funds (ETFs)

For Greenlight families, the #1 investment overall remains the Vanguard S&P 500 ETF (VOO) with $6 million invested in 2024. Greenlight kids and teens love to research and learn about new investments, and they also know the importance of a diversified portfolio. Here’s what you’ll see in the app about ETFs.

• Share price — The current cost of one share.

• Different holdings — The number of investments in the ETF.

• Expense ratio — How much it costs to manage an investment fund like an ETF or mutual fund. It’s a small percentage that the fund takes each year to cover its operating expenses.

• 1-year change — The percentage the price increased (or decreased) in the last 12 months. It would be the investment’s return had it been purchased one year ago and sold now.

• Performance — How the ETF’s price has changed over time at various intervals from 1 day to 5 years. It’s also compared to the S&P 500, for ETFs that aren’t tracking that index.

• Risk level — Every stock or ETF has a risk level from conservative (low risk) to aggressive (high risk).

• Top companies — Overview of the companies inside the ETF and what percentage each company is within the ETF.

• Yearly gains and losses — How the ETF has performed each year over the past five years. It’s important to look at the bigger picture and understand how investments change over time, rather than focus on short-term ups and downs.

4. Analyze before you buy

Here’s where the magic happens with guided analysis! Just three questions can help you decide if the investment is right for you and your personal risk level, which Greenlight assesses when you set up your Invest profile. 

Simply tap “Help me decide” from any stock or ETF page to bring all the key details together and help you answer the following questions for stocks:

• Do you think they are a leading company in a thriving industry?

• Do you think they will keep growing and making money?

• Do you think this stock is worth buying right now?

And these for ETFs:

• Do you think this ETF contains companies and industries that you believe in?

• Do you think this ETF will perform well in the future?

• Do you think this ETF is worth buying right now?

Greenlight’s tools encourage critical thinking and informed decision-making. With GL Assist, you’ll get Q&A prompts and can also ask additional questions to decide with confidence, not guesswork. Watch it in action in a video walk-through. Ta-da, you’re ready to trade!

5. Request and approve trades

Once a decision has been made, kids and teens can propose a trade, like buying $15 of Netflix. Parents receive a notification to review and approve or decline with a tap in just seconds. It’s a hands-on learning loop where kids and teens learn to invest and grow portfolios with their parents’ oversight. 

The benefits of long-term investing

Investing is a way to grow wealth and earn income for the long term. Historically, investing in the stock market has made money over time. One benchmark for the stock market, the S&P 500 (read more below!), averages yearly returns of about 10%, and as investments grow, you can earn returns on returns — the power of compounding.  

So far, Greenlight families have invested more than $100 million! Investing can help kids achieve their financial goals, whether it’s saving for college, a car, or future entrepreneurial ventures. 9 out of 10 kids and teens who’ve played Greenlight Level Up® think people should start investing for the long-term before they turn 20. They’ve already learned what a big difference saving and investing now can make in the future, and your family can, too. Even small amounts add up over time!

Greenlight Invest FAQs

How old do kids need to be to invest through Greenlight?

→ There is no minimum age for kids to use the Invest feature on Greenlight, because the kids’ investing portfolios are brokerage accounts in the Primary Accountholder’s name, and all trade requests are submitted to the broker-dealer by the Primary. 

Do I need to be an investing expert to use this?

→ Not at all. Greenlight’s tools make investing accessible for beginners and seasoned parents alike.

Is there a minimum investment amount?

→ Start with as little as $1 by purchasing fractional shares

Is there a fee to invest on Greenlight?

→ There is no cost for stock market trades. Greenlight only charges one monthly fee (plus applicable taxes) per plan, which includes all features for your chosen plan. At this time, Investing for Kids is available on Greenlight Max, Greenlight Infinity, and Greenlight Family Shield.

What are the risks of investing?

→ Investing involves risk, and losses are a normal part of the ups and downs in the world of investing. Greenlight can help you assess your personal risk level, which is how much risk you are comfortable with.

What if my child wants to buy something risky?

→ That’s where you come in! You approve or decline trades, and GL Assist helps explain the risks and opportunities

Can we invest automatically?

→ Yes! Set up recurring investments to build a regular habit.

It’s never too early — or too late — to start your family’s investing journey. Sign up or upgrade today. Explore the invest dashboard, spark money conversations, and help your family have their ‘aha!’ investing moment — together.