What Teens Need To Know About Investing
As a teen, investments and returns may not be the first thing on your mind. However, you will reach a point when you start earning your own money.
Your first few salaries area great incentive to learn more about investing. While investing is not easy, everyone can get the hang of it with a little research.
Additionally, investing can teach teens a lot of money lessons that they’ll find useful as they become older.
Here are some ways in which teens can invest their money:
Stocks And Index Funds:
A stock is a share that entitles you to ownership of a public corporation. Companies that trade their shares to the general public include Facebook, Uber, and more.
While you need to be above 18 to invest in stocks, you can also set up a joint or custodial account with your parents or guardian.
Buying a stock when it’s low and selling when high is the rule of the game. This strategy focuses on growth to allow you to gain profits.
You can also accumulate money with dividends. This is when companies pay a percentage of their profits out to their investors, according to the number of shares purchased.
It is crucial to understand different industries and research market trends before investing. Past records can help you predict how a market is likely to do in the future.
Starting a retirement account as early as your teens can help you in many ways. For one, it will grow over time, allowing you to live comfortably once you stop working.
A Roth IRA is a type of retirement account that is taxed once and remains tax-free in the future.
A 401k is another type set up by an employee’s workplace to allow them to move money from their paychecks to the retirement account.
It is taxed only when you take money out of the account. Your employer will match the money you put into the account, increasing your wealth.
While investing in real estate is not for the faint of heart, it is highly lucrative. You can make money by renting out a property or buying a property that appreciates over time.
Discuss this option with your parents and learn the process by working beside them.
For more investment options for teens, get in touch with the experts at Orion Metal Exchange.