Investing for Teens (How to Easily Invest in Stocks as a Teenager) (2024)

Investing may seem like such a confusing thing to understand, but no more! Here is how to start investing for teens!

These tips will give you the knowledge to start investing in a matter of minutes.

By the way! You don’t have to be a teenager to read this. This advice is also extremely useful to college students in their 20s. Anyone can learn something new from this!

What is the Stock Market?

Stock Market (real definition): “A stock market, equity market, or share market is the aggregation of buyers and sellers of stocks, which represent ownership claims on businesses”

Here’s the definition for the people (like me) who can’t even comprehend what they just read:

The stock market is a place where companies can receive more money from someone like you, and in return, they will let you own a piece of their company.

Sounds pretty cool right?! You get to be an owner of multiple companies without even running anything!

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But Why Should I Invest as a Teen?

Well, when you become an owner/shareholder of a company, a couple of things will happen to your money:

  1. If the value of the company goes up, so does your money (and vice versa)
  2. You can receive compensation for investing in certain companies (dividends)

Dividends: A small payment given to its owners (that’s you!) every once in a while just for being an investor in their company

Here are a few more great reasons to start investing for teens:
  • The stock market has increased 8-10% every year on average
  • You will build up your wealth for retirement (boring I know, but very important)
  • You can support companies you already love and use
  • You’ll be financially ahead of all your friends
  • Compound Interest

Compound Interest: Interest that multiplies by itself when you invest

Example of Compound Interest: Let’s assume you make a 10% profit every year starting with $1,000. So after 1 year, you will now have $1100:

[(10% of 1000 = 100) (100 + 1000 = 1100)]

Here’s where compound interest comes into play: After 2 years, you will now be making 10% profit on $1100 instead of $1000. So now you will have $1,210!

This multiplication allows your investments to grow exponentially instead of linearly as they age.

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What If I Don’t Have Enough Money to Invest?

Nonsense! You can start investing with as little as $5!So, instead of buying one more cup of coffee every week, turn that coffee money into your future wealth.

What Happens When I Invest?

1. Your money will be sent through an online platform of your choice (I will give you recommendations below)

2. That money will then be available to buy shares of companies

Share: A share is just a price tag of each companies stock. For Example: Amazon is currently worth $1,903.00 for 1 share.

If you think you can’t afford that, don’t worry. Certain apps and investing platforms allow you to buy a small fraction of the share.

3. You can choose to invest in companies of your choice with the money you have available

4. Or even better, you can invest in Exchange Traded Funds

Exchange Traded Funds (ETFs): A mix of a bunch of large companies that have more consistent and positive growth

5. You hold your money in the investments and watch them grow (Don’t touch them)

Investing in a large mix of companies can help beginners feel more comfortable about putting their money into the stock market because it is slightly less risky than buying individual stocks

It’s so important to grasp the concept of investing and you should always try to keep learning more and more about it, especially if you have investments.

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Okay, I’m Convinced. When Should I Start Investing?

Now! If you don’t believe me, here’s a chart of what would happen if you invested earlier than later:

Investing for Teens (How to Easily Invest in Stocks as a Teenager) (1)

As you can see, Ben only invested for 8 years starting at age 19 while Arthur invested for 39 years starting at age 27.

Arthur missed out on $756,830!!!

Yes, the average return every year in this chart is 12%, which is slightly higher than average, but you get the point. You can miss out on so much potential profit.

Please, be like Ben.

How to Start Investing for Teens Under 18 Years Old

If you’re not under 18 or a parent of a minor, you can skip this section.

If you’re a minor (under 18 years old), you have to open up a Custodial Account.

Custodial Account: An investment account opened up by a parent/guardian where a minor can invest in stocks while the account is responsibly managed by an adult.

I know, it sucks that you can’t do it by yourself as a teen, but it’s not the end of the world. In fact, it’s just the beginning and starting young will only make you more money in the future.

Parents Reading This!!Don’t miss out on the opportunity to start investing for teens to help them learn more about finance and put their money to good use. Help them… CONVINCE them, to open up a custodial account under your name!

Here’s A Link to the Best Custodial Accounts You Can Open

Do some proper research to make sure you know how much it costs to trade, if there are any minimums to start, or if it’s the right fit for your purpose.

How to Start Investing for Teens Over 18 Years Old

Being an adult has a lot of advantages when it comes to investing. One being that you can do it all by yourself!

There are plenty of apps out there that allow you trade stocks. These are a few of my favorites:

1) Acorns

Acorns is what I use for most of my investments. These are a few benefits of investing with Acorns:

  • You can invest with as little as $5
  • It is completely free for students and only $1/month if not
  • It rounds up and invests your spare change for you. Ex: You buy a $4.50 coffee. Acorns rounds that to $5.00 and invests the left over $.50 cents
  • You can choose how aggressive you want your portfolio
  • Acorns does all the investing work for you while you watch the money grow

If you’d like, you can use this link to sign up for acorns and get a free $5 investment that you can withdraw at anytime! I will receive $5 as well if you use my link at no additional cost to you.

2) Robinhood

Robinhood is great investment app for investing in individual stocks that you’re passionate about. Here are a few benefits to using Robinhood:

  • Free stock trading with no hidden fees of any kind
  • You can invest in individual stocks and cryptocurrency
  • Daily news on the app of companies and how they’re doing
  • You can now invest in fractional shares
  • No minimum to get started

You can use this link to sign up for Robinhood and receive 1 free stock valued up to $100.

3) Fidelity

Fidelity is a very large company that now has no trade fees and includes lots of informative company insights. Here are a few benefits to using Fidelity:

  • $0 commission trades
  • No minimum to start investing
  • Easy and useful tools for learning
  • Real branches to go to for consultation and assistance

You can learn more about them here.

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What Do I Do When My Money Goes Down?

Don’t panic. The stock market has ALWAYS recovered from going down in the long term. Hold your investments. Don’t take them out. Dips in the market are usually followed by rising stocks.

Instead, continue to learn more about why the market goes up and down. Continue to invest consistently and eventually you will grow your wealth.

Hopefully this guide on investing for teens has helped you get started in the stock market. Don’t forget to come back to refresh your memory and receive some advice on investing!

If you have any comments or questions, leave them down below. Thanks for reading!

Investing for Teens (How to Easily Invest in Stocks as a Teenager) (2024)

FAQs

Is it legal for a 14 year old to invest in stocks? ›

If you are under 18, you cannot own stocks, mutual funds, and other financial assets outright. As a minor, you can make investments only under the supervision of your parent (or an adult) through a custodial account.

How much money should a 16 year old have? ›

How to Set an Allowance for Kids. A commonly used rule of thumb for paying an allowance is to pay children $1 to $2 per week for each year of their age. Following this rule, a 10-year-old would receive $10 to $20 per week, while a 16-year-old would get $16 to $32 per week.

How to invest in stocks for beginners? ›

A beginner's guide to investing in the stock market
  1. Decide your investment goals.
  2. Select your investment vehicle(s)
  3. Calculate how much money you want to invest.
  4. Measure your risk tolerance.
  5. Consider what kind of investor you want to be.
  6. Build your portfolio.
  7. Monitor and rebalance your portfolio over time.
Apr 24, 2024

Can you use Robinhood under 18? ›

To apply for a Robinhood account, you'll need to have a device that meets our Technology requirements, and meet all of the following individual requirements: Be 18 years or older. Have a valid Social Security Number (not a Taxpayer Identification Number)

Can I day trade at 14? ›

Teenagers younger than 18 cannot set up their own account to invest in the stock market, but they can get an adult to do it on their behalf.

How to invest as a high school student? ›

Although you will be unable to open a brokerage account on your own if you are under the age of majority, you can work with a parent, guardian, or trusted adult to open a custodial or joint account that will allow you to begin investing.

Is 10000 a lot of money? ›

For most, $10,000 is a lot of money. Typically, that amount of money doesn't just appear out of thin air without some financial strain. However, if you think about $10,000 as saving a little over $27 each day, it becomes much more realistic.

What is the 50 30 20 rule? ›

Those will become part of your budget. The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals.

How can I save 10000 in a year? ›

6 steps to save $10,000 in a year
  1. Evaluate income and expenses. To make room for saving, you'll need a meticulous budget that outlines all your sources of income and all your expenditures. ...
  2. Make an actionable savings plan. ...
  3. Cut unnecessary expenses. ...
  4. Increase your income. ...
  5. Avoid new debt. ...
  6. Invest wisely.
Apr 2, 2024

How to invest in Netflix? ›

How to buy Netflix stock
  1. Open a brokerage account.
  2. Add money to the account.
  3. Search for Netflix stock within your brokerage account's platform using the ticker "NFLX."
  4. Fill out the order, indicating whether you want to buy the stock in dollars or shares.
  5. Submit the order.
Mar 6, 2024

How to buy shares in Coca-Cola? ›

To buy shares of Coca-Cola, you must have a brokerage account. If you need to open one, these are some of the best-rated brokers and trading platforms. Here's a step-by-step guide to buying Coca-Cola stock using the five-star-rated platform Fidelity. Fidelity makes it easy to buy stocks.

Is $500 enough to start investing in stocks? ›

One of the biggest misconceptions about investing is that you need a ton of money. That's not true at all. You can start with a fraction of a share and add to it when you can. Even $500 is more than enough, and it can grow to thousands of dollars if you pick a good investment and give it time.

How to invest as a minor? ›

How can I invest if I'm under 18? The easiest way for a person under 18 to trade stocks is for an adult to open a custodial account with a brokerage on behalf of a child and then invest in stocks on the child's behalf, with the child directing the investments if they want.

What happens if I trade stocks under 18? ›

So you'll want to do your research alongside your teen, explaining that if they start investing before 18, they'll have to do it through an institution that offers custodial accounts. Once they're of age, they can decide whether to continue with the same brokerage service or open their own.

How to buy stocks for kids? ›

Because minors are not eligible to open their own brokerage accounts, parents and guardians can open and manage custodial accounts in a child's name. Teaching children about how to manage, save, invest, and spend money may help them to establish and enjoy a solid financial future.

Can a 14 year old invest in stocks in Canada? ›

The same age of majority rules apply for a brokerage account: A minor cannot open an account to buy stocks, bonds, mutual funds or exchange-traded funds (ETFs), unless a parent or grandparent opens an informal or formal trust account.

What is the youngest age for stocks? ›

What Is the Minimum Age to Invest? To recap: The minimum age to invest in stocks and other investments completely on your own is 18 years old. However, minors are allowed to make investment decisions within a joint brokerage account shared with an adult.

How to get money at 14? ›

Here are some common job opportunities for teens who want to make money:
  1. Babysitting. Minors can babysit other children, but some states have age restrictions. ...
  2. Car Care. ...
  3. Food Service. ...
  4. Internships. ...
  5. Lawn Care and Other Errands. ...
  6. Lifeguard. ...
  7. Retail. ...
  8. Selling Recycled/Upcycled Goods.
Nov 21, 2023

Can a 14 year old use Webull? ›

What requirements do I need to meet in order to open a brokerage account on Webull? Be 18 years or older.

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