Investing for Teens 2023

Teenagers investing.

Investing for teens helps them build wealth and secure their financial future in 2023. While this is mostly reserved for adults but teens can benefit greatly from starting their investing journey early. 

In this comprehensive guide, we will explore the world of investing for teens, providing valuable insights and practical tips to help them navigate this exciting financial territory. 

So, let’s get started: 

Why is it Important to Start Investing Early? 

It is important to understand why it is beneficial for teenagers to start investing at an early age. Here are some solid reasons why early investing for teens in 2023 is really important:

When you invest early, you have more time to grow. As your investments generate returns, those returns can also generate returns which leads to wealth over the years. 

Investing early is a great way for teens to learn about finance. It teaches valuable lessons in financial literacy, risk management and decision-making. 

Investing early helps teens achieve their long-term financial goals. It is important to focus on long-term goals. 

It allows teens to own businesses or assets which gives them a sense of control over their financial future. So, it creates a sense of responsibility and ownership. 

Investing early in assets beats inflation and helps grow your wealth as inflation is getting out of hands. 

How to Start Investing as a Teenager? 

Educate yourself about investing. Before starting investing, it is important to understand the basics of investing. Learn about different asset classes like stocks, bonds and real estate. 

Set your financial goals. Having clear goals will help you make informed investment decisions. 

Open a custodial account. As a minor, you cannot open a brokerage account but you can open a custodial account with the help of a parent or guardian. It is an investment account in your name but managed by an adult until you turn 18. 

Choose investment and start small. Starting with a small amount and deciding what you want to invest in is really important. Choose investments that are less risky. 

Consider a strategy called dollar cost averaging. Instead of investing all of your money in one lump sum, invest a fixed amount at regular intervals such as on a monthly basis. This method acts as a protective shield against market volatility. 

Investing is a long-term game. Don’t expect to get rich overnight. Hold your investments with patience and let them grow over time. 

Keep yourself updated. Staying updated about financial news and the performance of your investments is really important. Having knowledge of market trends and economic indicators helps you a lot. 

Get guidance if you are unsure. Don’t hesitate to take guidance from a financial advisor or trusted adult. They can provide information which can help you in decision making. 

Save and invest regularly. Make it a habit to save and invest a portion of your earnings. Consistency is the secret behind building wealth over time. 

Remember that investing has risks and there is no guarantee of returns. 

Be careful, do proper research and consider professional advice if needed. As you get experience and knowledge with the passage of time, you can then adjust accordingly. 

What can a Teenager Invest in? 

Here are some investment options and strategies that are suitable for teenagers: 

1. Savings Account 

A savings account is a safe place to start. It gives an opportunity to learn about earning interest on your money. 

To maximize your savings, look for high-yield savings accounts that offer more interest rates than traditional savings accounts. That way, your money can grow more efficiently over time and you will gain valuable knowledge about saving and investing. 

2. Stock 

Teens can invest in stocks or exchange-traded funds (ETFs). Many platforms now offer small shares, allowing you to invest with as little as $1 in stocks which are overvalued. Invest in companies or industries that you are interested in or have knowledge about.  

3. Mutual Funds 

These are financial instruments that pool money from multiple investors to purchase a diversified combination of stocks, bonds or other financial assets. Skilled fund managers oversee and manage these pooled investments. 

4. Robo-advisors 

Robo-advisors are computerized investment platforms that design and monitor a variety of investment portfolios based on your risk preferences and financial objectives. They are user-friendly and can be beneficial for those new to investing. 

 5. Cryptocurrencies 

A lot of teenagers are interested in Cryptocurrencies and have a little bit of knowledge. Some of the most popular ones are Bitcoin, Ethereum etc. Cryptocurrencies are highly risky and can be highly stressful. So, its important to do your research before investing in cryptocurrencies. 

6. Bonds 

This is not a common choice for teenagers but bonds can be a safe and predictable way to grow your money. Bonds work like loans you make to governments or companies. In return, they pay you interest over a fixed time frame which is less volatile. It might be better for those who prefer more stable and less risky investing but it might not offer the same high returns as stocks. 

7. Peer-to-Peer Lending 

Peer-to-peer lending is an online method where you as an investor lend money to individuals or small businesses through a platform. In return, you receive interest payments from the investment. Also, be aware that there is some risk in it too as borrowers sometimes don’t repay their loans. So, it is important to do research on platforms and borrowers before investing. 

8. Education Accounts 

If you have earned income such as from a part-time job, you should explore options like a Roth IRA or a custodial brokerage account. A Roth IRA is a retirement account that allows your investments to grow tax-free and you can withdraw your contributions but not the earnings at any time without penalty. A custodial brokerage account is managed by a parent or guardian until you turn 18. Both options provide a long-term approach to investing.  

Investing Apps for Teenagers 

Here are some best investing apps for teens in 2023:

1. Fidelity Youth Account 

This app allows teenagers to set up their own personal brokerage account which allows them to engage in stocks, ETFs and mutual funds. There are no account fees, no minimum balance and no trading commissions. 

To Open a Fidelity Youth Account, it is essential for a parent or guardian to have a Fidelity account. A parent or guardian will need to provide their teen’s social security number and date of birth as part of the registration process. Once the account is opened, the teenager can download the Fidelity Youth app and start using their account. 

Teenagers can: 

  • Deposit and withdraw money. 
  • Buy and sell stocks, ETFs, and mutual funds. 
  • Use their debit card for purchases and ATM withdrawals. 
  • Track their spending and investment performance. 
  • Learn about investing through educational articles and videos. 

It is really a good option for teenagers who want to learn about investing and start building their wealth. 

2. Greenlight Max 

  • Charges: Greenlight Max charges $7 per month. 
  • Options: Greenlight Max offers small shares of stocks and ETFs. 
  • Parental Controls: Parents can approve trades and set limits on money kids can invest. 
  • Learning Resources: Greenlight Max provides a variety of educational resources. 

Greenlight Max is an investment account for teenagers with parental controls. It is part of the Greenlight financial literacy app which provides debit cards and bank accounts to youth. 

Teenagers can invest in fractional shares of stocks and ETFs. Parents have the control to set spending limits on their teen’s debit card and track their spending. 

So, if you are a teenager who wants to learn about money and investing, this is a good choice. It is also good for parents who want to give their teens some financial freedom and responsibility, keeping track of what they’re doing with it. 

3. Acorns Early 

  • Charges: Acorns Early charges $3 per month. 
  • Options: It invests in a diversified portfolio of stocks and ETFs. 
  • Parental Controls: Parents or guardians have full control over their child’s Acorns Early account. 
  • Learning Resources: Acorns Early provides a variety of educational resources. 

Acorns Early is a custodial investment account for teenagers. It’s part of the Acorns investment app which also offers investment accounts for adults. 

Acorns Early allows parents or guardians to save a little money for their child. It works by taking extra money from what you spend with your linked debit or credit cards and using it to buy different investments for your child such as stocks and ETFs. If you prefer, you can also decide to make regular deposits into your child’s Acorns Early account. 

It is also a good option for parents or guardians who want to teach their children about investing. 

4. Stockpile

  • Charges: Stockpile charges a $9.95 fee for custodial accounts, annually. 
  • Options: Stockpile offers small shares of stocks, ETFs and cryptocurrencies. 
  • Parental Controls: Parents have full control over accounts. 
  • Learning Resources: Stockpile offers different educational resources to help teens learn about investing. 

Stockpile is an investment app that is perfect for families. It allows teens and parents to invest as a team. You can buy small stocks, ETFs and even cryptocurrencies for as little as $1. So, it is easy for everyone to start investing together. 

Stockpile provides a variety of learning materials to help teenagers understand investing. They have articles, videos and fun games that make learning about investing fun and easy. 

Parents can create a custodial account for their teenage children at Stockpile. This means that the parents can manage and monitor the account and investments of the teenager until he turns 18. 

Stockpile is a solid choice for teenagers looking to understand the basics of investing and start growing their finances. Also, it is perfect for parents who want to empower their teens with financial independence and accountability. 

5. Stash 

  • Stash Growth: This plan is for $3 per month. It offers access to all of Stash’s investment products and educational resources. 
  • Stash+: This plan is for $9 per month. It offers everything in the Stash Growth plan, premium advice and children’s investment accounts. 
  • Options: Stash offers small shares of stocks, ETFs and cryptocurrencies. 
  • Parental Controls: Stash+ users can create investment accounts for their kids. 

Stash is an investment app that makes investing easy and budget-friendly for everyone. It provides different investment options such as stocks, ETFs and cryptocurrencies. It offers educational content to help beginners get to grips with the world of investing. 

Stash is a good option for new investors who want to start investing with small amounts. It is also a good option for investors who want to learn more about investing. 

Investing for Teens 2023: Conclusion

Finally, “Investing for Teens 2023” opens the door to an incredible educational experience. Apps like Stockpile, Stash and Acorns Early have made it more accessible and affordable than ever before. 

These platforms offer a wealth of educational resources, small investment options and parental controls by providing the tools teenagers need to start building their financial future. 

By going through this guide “Investing for Teens 2023”, you can take the first step during in your teens and build a foundation for financial success.

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