What’s the Difference between Stocks and Bonds?

Stocks are ownership. When you own stock, you own part of a company. Bonds are “loanership”. You’re loaning money to a business or the government. In other words, a bond is debt.

So, when you buy a bond, you are lending money to a company. When you own a share of stock, you own a part of a company.

Let’s say you own a share of stock in a company that operates an amusement park. The company sells stock because they want to grow the company and they need to get capital, which is the money they can use to invest in growing the company. Now, if you own some of that stock, you own part of the company.

COACH'S BOOK RECOMMENDATIONS

Kids Ages 6 - 11

Money Savvy Pig

By Susan Beacham

This is a small plastic pig that resembles a traditional piggy bank with a twist -- instead of one slot, there are four marked "save," "spend," "donate" and "invest."

You can also purchase a workbook with the Money Savvy Pig that allows children to color the pages while they learn important concepts such as interest on savings, goal-setting, smart spending, long-term investing and entrepreneurship.

The Money Savvy Pig is the perfect introduction to personal finance.

The Kids Allowance Book

By Amy Nathan and Debbie Palen

This charming book tells children how to get an allowance and how to save and spend it wisely. The book includes responses of 166 kids to questions about the pros and cons of allowances.

*****************************************
Tweens and Teens
Personal Management

By Brent Neiser

Educators too often overlook personal finance basics when teaching life lessons to preteens and teens. As a result of the absence of financial education in our schools, young people with little or no income wind up in debt. Personal Management, is an antidote to this oversight.

This booklet has been used for many years to help Boy Scouts earn their "personal management" merit badge. However, you don't have to be a Boy Scout to benefit from the practical wisdom found here.

The booklet helps young people learn about saving, spending and investing as well as how to create a budget, use credit and track their spending.

Cash Cache

By Susan Beacham

This personal finance organizer is intended to help teens learn the basics of personal finance: saving, investing, credit cards, earning money, paying taxes, spending and donating. It also includes basic information on the stock market, setting goals, budgeting and bank accounts.

Teens can learn basic personal finance lingo by using the glossary of financial terms.

The Money Book for the Young, Fabulous & Broke

By Suze Orman

People in their 20s and 30s often have big expenses and enormous debt. As a result, they have little leftover for savings. Orman's book tailors advice to this generation's situation by focusing on credit cards, college loans, income and opportunities for saving.

Teens who recently graduated from college and read this book liked the tone and thought it made sense. They said they were particularly impressed with discussions about how easy it is to fall into debt and the dangers of owning too many credit cards.

Saving for Retirement Without Living Like a Pauper or Winning the Lottery

By Gail MarksJarvis

This book emphasizes the importance of starting to save early. Author MarksJarvis focuses on using retirement plans to defer taxes, collect employer contributions and accumulate greater levels of retirement wealth.

Other themes in this book include the importance of managing costs and the long-term benefits of asset allocation.

An award-winning writer, Gail MarksJarvis is a long-timer personal-finance columnist, currently writing for the Chicago Tribune.