There are few better gifts you can give to your kids, or other children you care about, than an introduction to investing. Most of us get our wake-up calls about the importance and value of investing much later than we wish we had -- let's not let that happen to the next generation.

After all, young people have the most to gain from investing -- because they have so much time for their money to grow.

A young man is holding a piggy bank in one hand and cash in the other and smiling.

Image source: Getty Images.

The case for starting to invest while young

Yes, you can amass a lot of money over just 20 years or so -- but you will probably have to sock away hefty sums each year. In contrast, someone who is just 15 has a full 50 years until age 65, and money can grow very powerfully over such a long period. Indeed, those who start young and stick with it can probably achieve early retirements.

Check out how much a single investment of just $1,000 can grow to, at an average annual rate of 8%:

Over this period...

$1,000 will grow to:

5 years

$1,469

10 years

$2,159

15 years

$3,172

20 years

$4,661

25 years

$6,848

30 years

$10,063

35 years

$14,785

40 years

$21,724

45 years

$31,920

50 years

$46,902

55 years

$68,914

60 years

$101,257

Source: Calculations by author.

Of course, $1,000 might be a stretch when you're just 15, but most of us can increase our annual investments each year or so, as we (ideally) see our incomes increase over time. Check out how larger sums can grow:

Growing at 8% for

$1,000 invested annually

$3,000 invested annually

$5,000 invested annually

5 years

$6,336

$19,008

$31,680

10 years

$15,645

$46,936

$78,227

15 years

$29,324

$87,973

$146,621

20 years

$49,423

$148,269

$247,115

25 years

$78,954

$236,863

$394,772

30 years

$122,346

$367,038

$611,729

35 years

$186,102

$558,306

$930,511

40 years

$279,781

$839,343

$1.4 million

45 years

$417,426

$1.3 million

$2.1 million

50 years

$619,672

$1.9 million

$3.1 million

Source: Calculations by author.

Getting kids interested

One of the best ways to get kids interested in investing in stocks is to show them how wealthy they can become through it. Show them the tables above, for example. Much of it may be hard to process -- even we adults can have trouble wrapping our heads around huge numbers -- but explain that those big sums can mean that they will be able to do most things they'd like to do later in life -- like taking flying lessons, traveling around the world, buying every book or piece of music they'd like, buying any clothes they'd like, buying nice cars, having a nice home, and so on.

Here are some other ways to get your kids investing:

  • Discuss financial matters frequently in your home. Let your kids hear you talking about how much things cost, and how you're doing working toward your own financial goals. Discuss your investments that have gone well and poorly. Discuss mistakes you've made and what you've learned. Discuss companies in the news that interest them.
  • Set up a mock portfolio. Give them, say, $100,000 in imaginary money and have them pretend to buy some shares of stock in companies that interest them. Set up the portfolios online, so they can check in every day and see the progress. Discuss why various holdings have risen or fallen.
  • Set up an actual investment account for them at a good brokerage. There are "custodial" accounts that can be opened with and for kids, and kids with earned income can even have Roth IRA accounts.
  • Once kids have real or imaginary investments in a portfolio of their own, follow those companies like sports teams: Keep up with their developments together and root for their success.

What to invest in

So what should your kids actually invest in? Well, a simple low-fee, broad-market index fund, such as one that tracks the S&P 500, is a fine option for kids and adults alike. But it can make good sense to start out with some stocks in individual companies, as that can be far more interesting for young people to follow and keep track of -- and it can build a stronger interest in investing.

Focus on companies they're familiar with and really like -- as they will be more inclined to keep up with those. You can come up with companies that they know and admire by thinking about their habits: What do they eat or drink a lot of? What restaurants do they like? What stores do they frequent at the mall? What are their favorite brands? What products do they use every day? What are their hobbies?

Here are some of the many companies you and your kids might consider:

Food and drinks

  • McDonald's
  • Chipotle
  • Yum! Brands
  • PepsiCo
  • Coca-Cola

Sports and fitness

  • Nike
  • UnderArmour
  • Lululemon

Games and entertainment

  • Microsoft
  • Activision Blizzard
  • Electronic Arts
  • Walt Disney
  • Netflix

Interests and pastimes

  • Apple
  • Home Depot
  • Tesla
  • Snap
  • Facebook
  • Amazon.com
  • Spotify Technology
  • Target
  • Walmart

Once your young ones have started investing, encourage them to keep learning about money, businesses, and investing. They might enjoy articles at Fool.com, and there are many good books on money and investing, as well.