Investing as a teenager provides you with a significant financial advantage as you get older. Not only do you have more time for funds to accumulate, but you can benefit from compound interest and youth tax breaks.
How Old Do You Have to Be to Invest in Stocks?
Minors can’t invest in the stock market by themselves, teenagers under 18 included in that group. They need to open a custodial account.
A custodial account acts as a type of financial account an adult maintains for another person, often a minor. The two basic types of custodial accounts are the Uniform Transfer to Minors Act (UTMA) accounts and Uniform Gifts to Minors Act (UGMA) accounts.
Choosing to invest in dividend-yielding stocks as a teenager can become very lucrative long-term. Dividends represent payments made by companies representing a percentage of their profits given back to investors.