The Start-Early Race

What your kid learns

• Early money grows longer

  Money saved at 14 has about 50 years to grow by age 65. Money saved at 40 has about 25. More years means more compounding.

• The pretend race

  Saver A puts in $1,000 a year from 14 to 23, then stops. Saver B puts in $1,000 a year from 24 to 64. At a pretend 7%, they finish nearly tied.

• The rate changes the result

  At a pretend 5%, Saver B wins. With slower growth, time can’t make up as much. So it’s not only time. The amount you save matters, too.

• Start small, never too late

  Small amounts started early add up. Saving more later helps, too. It’s never too late to start, and grown-up lessons cover catching up.

The story: Jade vs Alex: the long race

Jade and Alex race as pretend savers. Jade saves early for 10 years. Alex saves later for 41. They finish nearly tied.

1. Helper: A pretend race. Jade and Alex each save $1,000 a year, at a pretend steady 7%.
2. Jade: I start at 14 and stop at 23. Ten years, then I let it grow.
3. Alex: I start at 24 and keep going to 64. That’s 41 years of saving!
4. Helper: Jade put in $10,000. Alex put in $41,000. Who’s ahead at 65?
5. Alex: Me, obviously. I put in four times as much.
6. Helper: They finish nearly tied, with Jade a little ahead. Jade’s early money had more years to grow.
7. Jade: But at a pretend 5%, Alex wins. The rate changes the result.
8. Helper: Time helps. Saving more helps. Both matter. And it’s never too late to start.

The game: The start-early race

Two pretend savers add the same amount each month from different ages. Pretend steady rate. Real investments go up and down, and can lose money.

Games use pretend money and work with taps or a keyboard. Nothing is timed.

New words

time horizon

how long until you need the money

contribution

money you put in

growth

money your money earns over time

Questions at the end

• In the pretend race at 7%, who finishes ahead?
• In the same race at a pretend 5%, who wins?
• Why does the rate change who wins?
• What is a time horizon?
• Saver A put in $10,000 but ended with far more. Where did most of it come from?

Remember this

Start small, start now.

Talk about it

What could a small amount saved each week turn into after a long time?

Try it at home: What $5 a week becomes

1. Play the start-early race again with $20 a month. That’s about $5 a week.
2. Find what $5 a week becomes in 10, 20 and 40 years.
3. Circle the year when growth passes what you put in.

Use the start-early race in this lesson with $20 a month, about $5 a week.

School standards

• Grades 6–8
• National Standards for Personal Financial Education: Investing
• Common Core Math 8.F.A.3