The Robot Competition: Compound Interest

Parents often tell kids, “Work hard and you’ll succeed.” And while hard work matters, there’s another secret to success that often makes the biggest difference: working smart.

This is just as true with money as it is with anything else. We can work hard to earn money… but we can also learn how to get money to work for us. That is the magic of compound interest.

Here’s a story you can read with your kids to help them understand.

Flash Finn and the Robot Competition

Flash Finn was fuming. Bright Bella might be chosen as the school’s poster student. Bella?! She wasn’t popular like him. She wasn’t flashy. She didn’t even wear shiny jackets like he did.

When the school announced a robot-building competition, Finn’s eyes lit up. This was it. Whoever built the most working robots in five days would win. “Finally,” thought Finn, “everyone will see I’m the real star!”

Day 1

Finn raced to his parents’ workshop and built like lightning. By bedtime, two shiny robots stood proudly beside him.

He peeked into Bella’s workshop. Closed books. Silent tools. Not a single robot in sight.

Finn grinned. “This is going to be easier than I thought.”

Scoreboard: Finn (2) – Bella (0)

Day 2

Finn built two more robots, bringing his total to four. He strolled past Bella’s place, whistling smugly.

Inside, he spotted… one lonely robot.

“One?! At this speed, she’ll be lucky to finish five!” He laughed all the way home.

Scoreboard: Finn (4) – Bella (1)

Day 3

Finn was becoming more efficient at building his robots. However, as he was confident he’d win, instead of building more robots, he started to program his robots to dance and even added some gold plating to make his robots stand out. He felt it was a great opportunity to live up to his name, ‘Flash Finn’.

Around lunchtime, he peeked through Bella’s window. She was tinkering slowly, carefully.

“Ha! She’s a snail!”

But that evening, when he checked again, Bella had two new robots.

“What?! How’d she manage that? She was working so slowly earlier!” Finn scratched his head.

Scoreboard: Finn (6) – Bella (3)

Day 4 – The Twist

Finn worked hard and built two even flashier robots. His total: Eight.

But across the street, Bella’s workshop buzzed with clanks and whirs. Finn crept closer and gasped. Seven robots.

“That’s more than double yesterday!” he whispered. “How… how has she sped up so much since yesterday?”

Then Bella’s door creaked open. Finn dove behind a tree. Bella stepped out, cheerful and rested, and met her friend on the street.

Her friend laughed. “Shouldn’t you be inside building robots instead of coming out with us?”

Bella smiled. “I need my rest… besides, the magic never stops.”

“Magic?” her friend asked. Bella just winked.

Finn’s eyes bulged. Magic?! That explains it!

Scoreboard: Finn (8) – Bella (7)

Day 5 – The Fake-Out

Panic set in. Finn woke at dawn and hammered, soldered, and wired as he tried to build as many as he could on the final day.

Earlier that night, he tiptoed past Bella’s house. Through the window, he saw her stretch and switch off the lights. “That’s it? She’s finished for the day? Ha! I’ve got her this time,” Finn whispered triumphantly.

Finn went back to his workshop to continue building. He worked until midnight and built a total of 5 new robots that day!

The Showcase

At the showcase, the judges counted the contestants' robots.

“One, two, three… thirteen! Incredible, Finn!”

Finn puffed up like a balloon. Until…

“Now Bella’s robots. One, two, three… fifteen!”

The crowd gasped and cheered.

The Reveal

Finn’s face turned red. “Impossible! She used magic! Or cheated! No way she built eight new robots in one day. I saw how slow she was!”

Bella chuckled. “It wasn’t magic, Finn. It was math.”

“Math?!” Finn blinked.

Bella explained, “On the first day, I didn’t have a clue about building robots, so I studied and read as many books as I could. My goal was to build a robot that could help build other robots. After two days, I had only built one robot, which I called Dylan. The next day, Dylan and I each built one more robot, so I had three robots - Dylan and the two new ones. The next day, the three robots and I built 4 more, making 7 in total. And today, my seven helpers and I built eight more, making fifteen.”

Her robots lined up proudly, chanting in their little voices:

“One, two, four, eight, fifteen!”

“If the competition lasted longer,” Bella added, “my robots would continue to build new robots and we’d soon have thirty-two, then sixty-four, then hundreds. That’s the power of compounding.”

Finn slumped. He had worked hard… but Bella had worked smart.

“Next time,” he muttered, “I’m building a robot that builds robots too!”

The end

Money Lesson: Compound Interest

This story shows kids the power of compounding in a way they can see and imagine. Finn worked hard, just like many of us do when we earn money. Bella worked smart by creating a system that multiplied her results while she rested.

That is exactly how compound interest works in terms of money. We can work hard for money, but if we save and invest wisely, our money starts working for us. It keeps growing while we sleep, just like Bella’s robots kept building.

Helping kids understand this lesson early gives them a powerful head start. The sooner they learn to let their money work for them, the bigger the long-term impact will be.

To help teach your kids understand how money can grow, using McDonalds and Lego, check out my popular blog: How to teach kids about the Stock Market

Whilst in the story, Bella was able to double her robots every day, when it comes to money, we have to be patient (the third rule of wealth). You want to help your kids invest, not look for quick wins by trading.

The Three Rules of Wealth (to share with your kids)

1. Save a little regularly – even small amounts add up over time.

2. Let your money grow – don’t spend it all, give it time to work for you.

3. Be patient – wealth takes time, but like Bella’s robots, it multiplies when you give it the chance.

To help your kids learn these rules in a fun way, check out my best-selling book (now in 5 languages), Grandpa’s Fortune Fables - available on Amazon.

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Will