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How Investing Makes You Money: A Simple Guide for Parents New to Investing

You Work Hard for Your Money.

It’s Time Your Money Started Working for You

You’ve made sacrifices for your family. You’ve cut back on subscriptions, skipped impulse buys, and maybe even picked up a side hustle. Now that you’ve carved out a little extra money each month—$25, $50, maybe more—you’re wondering: What do I do with it?

You’ve heard investing is important. But it can feel intimidating—like it’s only for rich people or financial experts.

Let us simplify it.

Investing is how your money makes more money—and it’s one of the smartest moves any parent can make.

This guide breaks down how investing works, why it matters, and how to get started even if you’re brand new.

Inflation Is Silently Stealing From Your Savings

If you’re leaving your savings in a regular bank account, you’re actually losing money every year. Why? Inflation.

Inflation is the rise in the cost of goods and services over time. Even if you don’t notice it daily, you feel it—grocery bills climbing, daycare rates increasing, clothing prices creeping up.

The average annual U.S. inflation rate hovers around 2%–3%, though it’s been higher in recent years (Bureau of Labor Statistics).

Meanwhile, most savings accounts pay less than 1% in interest (FDIC average rates).

This means the money sitting in your bank account is losing purchasing power every year. The only way to outpace inflation is by investing your money in assets that grow faster than prices rise.

How Investing Grows Your Money (Even While You Sleep)

Let’s talk about compound interest—a phrase that sounds complex but is incredibly simple and powerful.

Imagine planting a tree. You water it. It grows. Over time, it bears fruit. Then those fruits drop seeds—and suddenly you’ve got an orchard.

That’s what happens when your money earns returns, and then those returns start earning returns.

According to the U.S. Securities and Exchange Commission, this is what happens if you invest $200/month starting at age 30 with an average 8% return:

  • After 10 years: $36,589

  • After 20 years: $114,514

  • After 35 years: $349,100

It’s not magic. It’s compound growth.

Three Key Ways Investing Makes You Money

1. Capital Gains: When Your Investments Increase in Value

When you buy an asset (like a stock or ETF) and its value goes up, that’s a capital gain. For example, if you buy a share of an ETF for $100 and later sell it for $140, you’ve made a $40 profit.

The historical average return of the S&P 500 is about 10% annually, before inflation. That’s the power of long-term investing in diversified assets.

2. Dividends: When Companies Pay You to Invest

Some companies distribute part of their profits to investors in the form of dividends. If you invest in dividend-paying stocks or ETFs, you’ll receive regular payments—often quarterly.

Reinvesting those dividends (which you can automate) leads to even faster growth over time. According to The Motley Fool, reinvesting dividends has historically accounted for a significant portion of total returns in long-term investing.

3. Compound Interest: Growth on Top of Growth

This is where wealth-building truly accelerates.

You don’t just earn returns on your original investment—you earn returns on your returns. The earlier you start, the longer compound interest can work for you.

As Albert Einstein reportedly said, “Compound interest is the eighth wonder of the world. He who understands it, earns it… he who doesn’t, pays it.”

Why Investing Matters More When You’re a Parent

When you’re single, investing is about your personal goals—retirement, travel, maybe a home.

When you’re a parent, investing becomes a legacy strategy.

You’re investing for:

  • Retirement, so your kids don’t have to support you later.

  • College tuition, to help them graduate debt-free.

  • Emergency funds, because life happens.

  • Generational wealth, so your children can start adulthood on stronger financial ground.

Starting early and staying consistent could be the best gift you ever give your family.

But What If I Lose Money?

This is a common fear—and a valid one.

Yes, investing comes with risk. The market fluctuates. But historically, it always trends upward over time. According to Morningstar, the stock market has recovered from every downturn in history—and those who stay invested benefit the most.

The key isn’t timing the market. It’s time in the market.

I Don’t Have a Lot to Start With

You don’t need a lot.

Thanks to fractional investing and modern apps, you can get started with as little as $25/month.

The important thing is not the amount—it’s the consistency. Automate your investments, let them grow in the background, and increase your contributions as your income rises.

Mostt, for example, lets parents invest easily in diversified portfolios that align with long-term goals—no big lump sums required.

I Don’t Understand This Stuff

You’re not alone—and you don’t have to become a financial expert.

Start with these beginner-friendly options:

✅ ETFs (Exchange-Traded Funds)

These are like bundles of stocks. Instead of betting on one company, you own small pieces of hundreds.

  • Why they’re good: Low cost, broad diversification, easy to buy.

✅ Target-Date Funds

These automatically adjust your investments based on when you plan to use the money. Perfect for retirement.

  • Example: A “2055 Target Date Fund” is built for someone retiring around 2055.

✅ Robo-Advisors

These apps manage your portfolio using smart algorithms based on your risk tolerance and goals. Set it and forget it.

How to Start Investing: A Simple 5-Step Plan

1. Define Your Goal

What are you investing for?

  • Retirement?

  • Kids’ education?

  • Long-term wealth?

Knowing your destination helps you choose the right tools.

2. Open an Investment Account

This could be:

  • A Roth IRA for retirement (Learn more at IRS.gov)

  • A custodial account for your child

  • A brokerage account for general investing

Apps like Mostt make opening these accounts easy and fast.

3. Choose Your Investment

Start with:

  • A low-cost ETF like VTI or VOO

  • A target-date fund based on your retirement year

  • Or a pre-built portfolio from a trusted robo-advisor

4. Automate Contributions

Set up automatic transfers from your bank. Even $25/month adds up fast.

5. Stay Consistent

Ignore the noise. Don’t panic if the market dips. Stay focused on your long-term goals.

Final Thoughts: You’re the Hero. We’re Just the Guide.

At Mostt, we know parents already carry enough mental load. That’s why we built an investing platform that’s simple, supportive, and tailored for families.

You don’t need to be wealthy. You don’t need a financial degree.

You just need to start—and stay consistent.

Let your money grow while you focus on what matters most: your family.

💡 Start Small. Think Long-Term.

Invest with as little as $25/month at Mostt.co.