How To Invest Under 18: Investing As A Teenager

Investing as a teenager gives you valuable investing experience for later in life. However, figuring out how to start investing as a minor can be difficult. You will need an adult you trust to help you set up and manage accounts.

Before you consider signing up for one of the best free stock apps on the market and funding your account, you’ll need to know one important rule about investing in the stock market by yourself: you have to be an adult, or at least 18 years old.

How Old Do You Have to Be to Invest in Stocks?

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. 

What is a Custodial Account & How Does One Work?

The best investments for a teenager will include a combination of stocks, mutual funds, and exchange-traded funds (ETFs). Stocks are often considered the most exciting type of investment vehicle, but also the riskiest.

How to Invest Under 18: Investing as a Teenager

Before purchasing stocks, make sure to thoroughly research any you are considering. Some people choose to take investment classes first.

→ Consider Paper Trading Apps

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.

→ Invest in Individual Stocks

You will also want to consider investing in mutual funds. Mutual funds combine investors’ money to purchase several types of investments, such as stocks, bonds, real estate, and more.

→ Invest in Mutual Funds

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