Is investing gambling?—and other real-life money lessons for teens

Oliver, who learned to ask for what he needs

Back to Oliver. I asked Oliver if there was anything else he wanted to ask about finances.

He looked at his dad. Then to me.

“Is crypto a good investment?”

“That’s a doozy of a question,” I said, smiling.

John cleared his throat. “I suspect this is directed at me because, well, I don’t know if Oliver told you, but I have a sum of money put aside that I invest on his behalf. He gets to make the choices in a stock simulator account, and then I trade them in real time so that he gets to learn about investing, dividends, capital gains, et cetera.”

“And cryptocurrency,” I added with a grin.

John’s eyes shot to Oliver and then back to me. “Yes. I also bought some cryptocurrency, and that didn’t pan out as well as we’d hoped.”

“As well as you’d hoped,” Oliver corrected.

“Son, you were there and just as curious. I only traded that with your permission. I—”

“Dad, it’s fine. I’m just razzing you.” Oliver grinned.

John did not look like he appreciated the razzing. He adjusted himself in his seat, his face a little flushed.

“Oliver,” I said, “do you actually want to know my opinions about crypto, or are you just putting your dad on the spot?”

Oliver put a hand on his heart and feigned shock. “I’m offended by that, Shannon. Of course I want to know if my future is blown because of a bad cryptocurrency purchase.”

“That’s enough,” John said in a warning tone.

“I agree,” I said.

Oliver held up his hands, like a peace offering. As if to say, “Okay, okay, I’ll stop.”

“John, can I ask,” I started, “how much of the $5,000 you invest on Oliver’s behalf was in the cryptocurrency?”

“We bought $500 near the end of 2021.” He looked at me. Waiting for my reaction.

What makes an investment “good” or “safe”?

“A lot of people bought crypto for the first time in 2021,” I said.

“Some people have made lots of money, some people have lost lots of money.”

“Yeah, well, we lost,” Oliver said.

“What’s it worth now?” I asked.

“About $350,” John said.

“So, not a good investment,” Oliver chimed in.

“Hold on,” I said.

“Isn’t that, like, a 30% loss, though?” Oliver asked, annoyed.

“It is, but it’s also only been a year. It’s not really a good idea to judge if something is a”—I made air quotes with my hands—“‘good investment’ or a ‘bad investment’ after such a short time. I’d say the same thing if you purchased a blue-chip dividend stock that went down.”

“Aren’t blue-chip stocks safe?” Oliver asked.

I sat back and eyed him for a moment. “What does ‘safe’ mean for you here?”

His eyes sort of widened. “Uh.” He shrugged. “Like, not going to go down?”

I shook my head. “As soon as your money leaves high-interest savings accounts or Guaranteed Investment Certificates, it can go down. All investments have some type of volatility. If you want something that never goes down, you have to stick to things like high-interest savings accounts and GICs.”

“But those have no opportunity for growth,” John added. “They just keep pace with inflation. The entire point of investing is to grow your money more than inflation.”

Oliver looked to me to confirm or deny this tidbit from his dad. I nodded. “Absolutely. And with that potential growth comes risk. Risk with investing doesn’t mean risk like—oh, I don’t know—perhaps the risk of gambling.”

Neither of them laughed.

“Too soon?” I joked. “But I mean it. And I think we should discuss the difference. I would do this even if there were no such thing as sports betting.”

“Yeah, right,” Oliver mumbled.

Is investing like gambling?

“Oliver,” I said earnestly, “I’m not taking a cheap shot. Truly, some people think investing is gambling. It’s not at all, and it’s important to understand the difference.”

“Okay, fine,” he said curtly.

I carried on. “Sometimes, when we talk about investing, we talk about this thing called the risk return trade-off. It’s an investment principle that basically says, the more risk you take, the more potential return you could get. The return is the money you make, or rather the money you could make.”

“Like slot machines,” Oliver said. “If you play the penny slots, you don’t lose much money, but you’re not going to gain much money either. If you play the $5 slots, you could lose much more, but gain much more.”

I grimaced a bit at the gambling reference, given the circumstances, but he had a point. “That’s a great point. But again, I am careful not to compare gambling to investing.”

“Gambling is irresponsible,” John piped in. “Investing is smart.”

“Investing can also be irresponsible,” I said, and John flinched.

“When not done correctly or for the right reasons. Think about people who jumped on the bandwagon with those meme stocks and lost thousands.” I turned to Oliver. “Even though the stocks themselves are not risky, jumping on a bandwagon based on a stock meme could be very similar to gambling.”

“Well, of course,” John said. “If you’re talking about throwing your money at something trendy, yes.”

“Plenty of people thought—and still think—crypto is trendy.”

How much risk should you take with your investments?

He was getting huffy. “I don’t think that a $500 purchase of crypto is the same as throwing your life savings at a meme stock.”

“It’s not. It’s not the same at all. And that’s the exact difference. There are always going to be investment opportunities that are new or alternative investments, or maybe a stock that could be extremely volatile, which may give it an opportunity for big growth. A long shot. Just because something is volatile, or risky, doesn’t mean that it’s bad or irresponsible. An investment becomes irresponsible for two reasons.”

I counted them off on my fingers. “First, when someone invests money they’ll need within the next one to two years.”

I waited for them to nod along.

“And second, when they invest in something that is potentially extremely volatile with an amount of money that they can’t actually afford to lose.”

“Like life savings on a stock tip type thing,” Oliver said.

“Exactly,” I said. “For you, putting $500 into crypto to see what happens and taking a long shot is not irresponsible because it’s a small portion of what you have. You don’t need the money in the next one to two years, so you have a long time horizon. Plus, it’s an amount of money that, even if it went to zero, you’d all still be financially okay.”

“But if we YOLO’d the full $5,000, that would be irresponsible,” Oliver said.

“Yes.” Noticing John looking confused, I added, “By YOLO, I know you mean if you put your entire savings into a single high-risk investment.”

“People do that, you know.” Oliver said it almost like a challenge.

I think he was testing to see if I knew about these types of online investing threads on social media. “They post their trades online. They trade, like, thousands and try to double it.”

I said nothing.

He shrugged. “Sometimes it works,” he said in a tone that was far too nonchalant for me.

“And many times, it doesn’t.” I leaned in and was very serious.

“Oliver, this is not a safe or smart way to grow your money. Anybody’s money,” I added in a warning tone. “YOLOing with your money is almost like gambling.”

“Buy high, sell low,” he said with a giggle.

“That’s where it leaves a lot of people,” I said solemnly.

John chimed in. “What are you two talking about?”

Should you follow investment advice from social media?

I looked to John. “Online investing threads on social media that glorify massive losses and taking huge risks. We all know that the point of investing is to buy low and sell high. There’s a thread online that makes a joke about the massive losses people end up with because many people buy when a stock is high, or it’s a risky long-shot, and they end up losing everything.”

Oliver was quiet, but he had a smile. I was not impressed.

“It’s not funny,” I said to him, so seriously that he stopped smiling. “I’ve seen this ruin people’s lives and marriages. Someone losing their life savings isn’t funny.”

“No, I know that,” Oliver said defensively. “But, like, they made the trade.” He held his hands up, as if to say, “It’s their fault.”

“Why would anyone do that?” John asked. “Throw money away like that?”

“I can only speak to what I’ve seen. Most times, it comes from a desperate place. People feel like no matter how hard they work, they will never be able to get ahead, so they feel they have to take these massive risks with their money to ‘get lucky.’”

“That’s quite upsetting,” John said.

“It is,” I agreed. “It’s one thing to take some of the money that you can afford to lose, that could go to zero, and take a flyer. It’s quite another to publicly post your entire life savings going into one single stock on the off chance you get lucky. That’s why investing like that is akin to gambling. It can start a loss cycle where you bet bigger and bigger, trying to cover the last loss.”

“I didn’t think about it like that,” Oliver mumbled sheepishly. “It just seemed funny online.”

I let the silence sit for a moment. Awkward silence can be very effective.

Don’t YOLO with your money

Oliver spoke first. “So, what you’re saying is, my dad and I should combine our money and invest everything tomorrow into one longshot penny stock, yeah?”

We all laughed and the tension was broken. “Very funny,” I said.

“I know you’re joking,” John said to Oliver. “But I also need to know that you don’t think this ‘YOLOing the market’ is a good idea, right?”

“No,” Oliver said. “Unless it was an amount of money that could safely go to zero.”

I smiled. “Exactly. Money that you can afford to go to zero.”

“Who can afford play money these days?” John asked incredulously. “In this economy?”

“Not many people,” I said. “Which is why it’s scary when you see it.”

“So, do we just keep on investing the way we are?” John asked.

“I would start by looking at Oliver’s risk tolerance.” I turned to him.

“I’d say your tolerance is very high. You are not afraid of volatility in exchange for potential high returns.”

“That’s true,” Oliver agreed, proudly.

“Plus, your time horizon is long for this $5,000. You don’t plan to spend it or use it for five years or more, right? Even past 18 years old?”

“That’s right,” John said.

I looked at Oliver to confirm. “Yeah?”

He nodded.

“So, the fact that you’re invested in blue-chip stocks and well diversified with exchange-traded funds, I’d say it’s a well-balanced, low-fee, diversified portfolio that suits your time horizon and risk tolerance.” I was smiling.

“And that’s good,” Oliver said.

“That’s great,” I said.

“Good,” John said. I could tell he felt vindicated.

“And if I want to invest in something high risk when I turn 18,” Oliver said, “I can just invest with an amount of money I’m okay with totally losing.”

“Oliver, no,” John said. “That’s—”

I cut him off gently by raising my hand.

“It will be his money then, right?”

John nodded.

“So, Oliver, you can absolutely do that,” I said. “The key is not to ‘YOLO.’ Don’t throw in your life savings. Only play high risk with an amount that you can afford to fully lose.”

Is it ever OK to lose money in the markets?

“You think it’s okay for him to lose money?” John said, genuinely shocked.

I leaned forward. “John, I know it’s not conventional thinking, but I believe it can be a great way for people to truly learn their risk tolerance. It’s one thing to sit here and say, ‘I have a high risk tolerance. I can handle ups and downs.’ It’s entirely another thing to watch your money go down. It’s hard. With a little bit of safe experimentation, we scratch that itch on the rebellious side of us, or the overly optimistic side that hopes for a big break, and we can learn who we really are when it comes to investment losses.”

Oliver spoke up. “It’s a problem only if I start using money that I can’t afford to lose.”

“Exactly. Money for bills and spending money. Money for responsible short- and long-term savings. Those all come first. And if you actually have money left over after filling all those buckets, congrats! That’s no easy feat. Especially these days.”

They both nodded, and we didn’t say anything else. It felt like we had said it all.

John looked at the clock and stood up. “We’ve taken a lot of your time. Thank you so much for today.” We shook hands.

“It was lovely to meet you.”

“I’ll wait outside,” John said to Oliver, and he walked out the door.

I turned to Oliver and released a big sigh. “I can’t wait to see how you make your first million.”

“Well, it won’t be from YOLOing or sports betting,” he said with a smile.

“Good,” I said. “Do you feel good about everything? The allowance? The plan? All of it?”

He smiled and nodded. “The allowance will be a game changer.”

“I think so too.”

He got up and put his backpack on. “Thank you.”

“No, Oliver, thank you.”

“This would be an exciting chapter in your book,” he joked.

“Oh, Oliver, this is going to be the entire book!”

We laughed hard.

“You stay in touch, okay? Call me for some financial planning when you’re grown-up.”

“I will.”

I was going to miss him. I was worried about him. I knew, deep down, he was going to be okay. He might take some time to find his footing and do things his way, but he was smart and resourceful, and those aren’t just good money skills, they are good life skills. Besides, he was young and time was on his side. Like it is for you!

Excerpted from Making Bank: Money Skills for Real Life by Shannon Lee Simmons. (HarperCollins, 2025).

Simmons is a Certified Financial Planner and life coach, a Chartered Investment Manager, bestselling author and founder of the award-winning New School of Finance Inc. She is also the author of Worry-Free Money, Living Debt-Free and No-Regret Decisions. Read her My MoneySense profile: Shannon Lee Simmons defines “emotional return on investment” and her take on personal debt.