Because apps like Robinhood have become so popular, young adults and even adolescents are looking into how they can become financially independent through investing. Although it is more accessible than ever for a high school graduate to make money investing, it’s not something that anyone can do as long as they’re able to manage an account.
While it’s true that you can become a successful stock trader without going to college, you’ll still need money, education, and resources to begin your career. For starters, the legal age to open a brokerage account is 18. This means you can’t start trading on the stock market while you’re in high school, and teenagers can’t legally invest. You can, however, start learning now and begin building a savings account that you’ll use to put toward future ventures.
Can Teenagers Trade Penny Stocks?
Because they are so low cost, many teenagers wonder whether that means it is okay for them to trade. After all, they’re not gambling away much, so what do they really have to lose? While trading penny stocks may be popular, it’s still off-limits to the under-18 crowd. Don’t worry, though. You can still learn all about penny trading and get ready to make your first investment when you’re in the legal age.
Can You Trade on the Stock Market at 16?
Teenagers may be interested in the stock market, but they cannot invest on their own without consent from a parent or guardian. A joint or custodial account must be made to manage the investments made by any person under the age of 18. But this does open up opportunities for teenagers as young as 14 to start putting their own money out there and turning a profit. It can also be a fantastic way for parents to teach their children financial responsibility and possibly save money for their future.
"There's Always A Scope Of Improvement"
How Can You Start Investing as a Teenager?
Before you put any money forward, you need to learn about the stock market, how investing works, and develop basic money management skills. Do you know how to build and keep a budget, how to manage savings, and how interest works? You also need to know how to develop SMART goals. These are the cornerstone of good financial planning. SMART money goals are:
- Specific- They have a defined start, end, and objective.
- Measurable- You can track progress, determine losses and calculate profit.
- Attainable- You have the resources to achieve them.
- Relevant- They align with your abilities and long-term goals.
- Time-based- There is a realistic time frame to help you pace your actions and make accurate decisions.
Consider your current income. How much of it is divided into savings and investments? Do you calculate your own living expenses or rely on your parents to cover everything? It’s best to start building your own financial independence little by little. This will give you the foundation you need to begin investing when you’re older without losing too much to start. Teenagers also have the benefit of being able to learn as much as possible without any risk. Get a part-time job, start putting money into a savings account and generate interest with an APY or cash-back rewards. This will allow you to get used to spending and investing your money without putting your future at risk.
