What are some ways for someone under the age of 18 to get their start at investing?
I am currently 17 and have always found the stock market to be incredibly interesting. I have not been able to find a way for someone like me to start investing so I was curious if it was even possible.
Answers ( 3 )
Congratulations to you for thinking about investing at such an early age! The easiest way for an American to invest before turning 18 is to set up a custodial account with a parent or guardian. Any major investment firm will have this option available. Presuming that you trust the adult, you give him or her the money, they deposit it into the account, and then you can control the transactions.
While I have your attention, though, I would encourage you to not think of investing as picking stocks and making millions on the next Google, Amazon, or Tesla. It doesn't really work that way -- if you are trying to pick a big mover like that, you're mostly just guessing and gambling. There's no way you can have information about these companies that major investors don't, and as a result, whatever information you do have is already cooked into the price of the shares. So rather than spend your time on chasing that, focus on improving your education and your skills in a way that allows you to make value in the world and get paid for it.
Then, you can become a serious investor. Whether you’re saving for retirement or seeking wealth through the magic of compound growth, the “secret” is really just a simple three-step plan:
1. Earn a decent living and live beneath your means
2. Invest that difference automatically, and increase the investment with each raise
3. Invest in a way that takes advantage of your tax situation and choose ultra-low-cost (0.20% per year or less), passively managed, widely diversified (across stocks and bonds and across domestic and international) index funds that are appropriately balanced for your age.
Index funds allow you to sock money away and let compounding growth do its thing, while you spend your time doing what you're good at (which hopefully creates value and improves the condition of the world for you, your family, and everyone else).
Hello Josh, first, i agree with everything that has already been suggested by one of our other Sage's. To that end though, here is a simple and safe way to get started while also determining exactly how much "cash" you can devote to an investment strategy.
Quite simply, everytime you purchase something or spend some funds..."try" and put aside an equal amount of money (say for two months) into a separate account (cookie jar, big wallet, hidey-hole, whatever, LOL). Again "try" to do this. If you can't put aside an "equal" amount, then try to set aside a SET percentage EVERY time you pay an expense. After say 2 months time this will have (hopefully) accomplished the following:
1 it will let you know how much "cash/income percentage" you can (eventually) devote to investing/saving
2 it will let you know if you are disciplined (or not) to continue any future investment strategy
3 you will build up a rainy day fund
4 you will learn if you are truly living within your means (or if not, where savings/cuts may be in order)
5 it will build up an INITIAL investment "cash/income pool" for when you are ready to execute some of the strategies suggested by the other knowledgeable Sage's.
good luck to you,
Jeff
You don't have to be a rocket scientist to start investing in stocks. In fact, by researching stocks and selecting which ones to invest in, you'll learn a lot about how the stock market works. Choose a company that you enjoy and — most importantly — trust. It's fun to be able to say you own part of a stock like McDonald's and The Walt Disney Co. But these have historically been steady earners, too.
Consider investing in a few of the stocks on the Dividend Aristocrat list. There are names you'll recognize, such as Coca-Cola and Target. These are companies that have proven histories of increased dividend payouts. That means, on top of the gains you'll get when you eventually sell the stock, you'll also receive cash distributions on a quarterly or annual basis. Check this link