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Investing foundations

Lesson 60 · Written for kid, teen, and little

Splitting Your Money Up

Choose how much of your money goes to stocks, bonds and cash.

The idea

Asset allocation just means how you split your money between different types of things, usually stocks, bonds and cash. Stocks are pieces of companies and their prices tend to move around a lot, bonds are loans that usually pay steady interest, and cash mostly sits still. Nobody knows which type will do best in any single year, so most investors choose a mix instead of putting everything in one place. Your mix usually depends on when you will need the money and how much bouncing around you are okay with. 🥧

A

Words to know

5

asset

Something you own that has value, like a stock, a bond, or cash.

asset allocation

How you split your money between stocks, bonds and cash. Something like 80% stocks and 20% bonds is an allocation.

stock

A tiny piece of a company that you can own. One share of Apple makes you one of its owners, just a very small one.

bond

A loan you make to a company or government that usually pays you interest. You are the lender instead of the owner.

cash

Money that sits ready to use and does not change much in value. $100 in a savings account is still about $100 next month.

Try it — no accountTrue or false

True or false? Swipe to say what you think.

Card 1 of 4

Asset allocation means picking the mix of stocks, bonds and cash you want.

Swipe the card — or tap.

In the full lesson

  1. 1True or false
  2. 2Put it in order
  3. 3Make the call

Vine has 107 lessons like this one, each written three ways so a 7-year-old and a 17-year-old both get a version that fits.

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