We can all do better, if we start investing according to our age. Like teaching your kids about money though, it’s easier said than done.

1. Engaging Kids in Investing: Fun vs. Tax Efficiency

Let’s be honest: the easiest way to get kids excited about investing is to let them buy a slice of something they know—think Apple, Disney, or even a bit of Tesla. There’s nothing like the thrill of “owning” a piece of the brands they see every day. But here’s the rub: in New Zealand, the most engaging methods for teaching kids about investing—like buying individual shares—are usually the least tax-efficient for long-term wealth building.

The reason? Direct shareholdings are taxed at the resident withholding tax (RWT) rate, which can go as high as 39%. In contrast, investing through a PIE (Portfolio Investment Entity) structure, like a managed fund or KiwiSaver, caps the tax at 28%—and for kids, it can be as low as 10.5%. So, while buying shares in Tesla might spark the right discussions about how investors can share in success, it’s not the most efficient way to do it.

So: direct shares are great for engagement, but if you’re serious about compounding wealth for your kids, look at PIE funds or KiwiSaver accounts in their name. Yes, it’s less sexy, but you can always pivot the conversation from “owning Apple” to “owning a slice of the entire US market.”

2. Why Do Young People Invest Like Old Folks—and Vice Versa?

One of the most perverse trends I often see is young people investing conservatively (like paying down their mortgages aggressively), while older investors ramp up risk late in life, sometimes going all-in on speculative assets. This flies in the face of what we should do:

The younger you are, the more volatility (and potential return) you can stomach, because you have time to recover from downturns. The older you are, the more you should be protecting what you’ve built.

So why the disconnect? Partly, it’s human nature. Young people are often scarred by stories of loss or taught to fear volatility, while older investors, flush with confidence and sometimes time-rich in retirement, seek the thrill they missed in their youth. The solution isn’t to shame either group but to recognise that an investment strategy should evolve with life stages.

3. Core-Satellite Investing: Blending Diversification and Concentration

One of the best ways to balance the ‘boring’ elements of stacking wealth, and the engagement direct shares offer, is the ‘core-satellite approach’. This might not be for the kids, but it’s a way to balance the safety of diversification with the excitement (and potential payoff) of concentrated bets.

  • Core: This is your well-diversified, low-cost foundation—think index funds, KiwiSaver, or PIE funds. The rule of thumb? Try at least 80% of your investable wealth in the core.

  • Satellite: This is where you scratch the itch for excitement—individual shares, crypto, or thematic ETFs. Keep this to 0–20% of your portfolio, depending on your risk appetite and life stage. The satellite is your “play money,” but if it goes to zero, it shouldn’t blow up your retirement.

The beauty of this approach is that it gives you permission to have fun and learn, while keeping the bulk of your wealth compounding quietly in the background. And yes, as life changes—kids, mortgages, retirement—you can dial up or down the satellite allocation.

Final Thoughts

Teaching kids about investing isn’t just about picking the right fund or stock. It’s not about the tools, it’s about modeling good behavior, having open conversations about risk and reward, and letting them feel the weight of their own financial decisions. Sometimes, the best lessons are learned by doing (and occasionally failing), but a little structure and tax efficiency never hurt anyone.

As for the rest of us? Don’t be the 75-year-old aping into MicroStrategy or the 35-year-old determined to be mortgage-free before taking their next step. Match your investment strategy to your stage of life. If you’re not sure (and let’s be honest, there’s a lot of conflicting opinions, and no ‘right’ way to proceed), get a second opinion.

After all, the art of investing is balancing growth and protection, for both you and your kids.