How to Start Investing Young
Starting to invest as a minor will carry different rules than someone who doesn’t start investing until later in life. Therefore, it’s important to understand how minors can legally invest and what qualifies as the best investments for teens.
How to Start Investing as a Teenager
If you are a minor, you can start investing, but it needs to be done with a custodial account. These are financial accounts an adult maintains for a child or another person under the age of majority.
What Should a Teenager Invest Money In?
Indexes tend to fluctuate less than individual stocks and they don’t require active management on your part. These act as long-term investments, which work well for younger investors.
What Should I Invest $1,000 In?
If you’re an older teenager aged 18 or 19, it’s possible you already have some debt and you may have little to no savings. If you have a large balance on a high-interest credit card, pay that off before investing your money.
How Can I Invest at 14?
At age 14, your savings goals are likely different than older teens. You may be saving up for a car (which isn’t the best investment if you can avoid it), college or a trade school, or even be thinking ahead to your future home and retirement. At this age, it’s best to consider a combination of short-term and long-term investments.
Best Investment Plan: Start a Roth IRA
Roth IRAs are usually the better to start with because you pay taxes on contributed money right away when your income is lower. With a traditional IRA, you pay when you withdraw money.
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