How to Get Started with Investing

Why Start Investing as a Teen?

If you’re a teen, you’re in the perfect position to become a future millionaire. Why? Because time is your secret weapon. The earlier you start investing, the longer your money has to grow through the power of compound interest.

Imagine planting a tree. The sooner you plant it, the bigger it grows. Investing works the same way. Even a small amount invested now can turn into a large sum later. So instead of waiting until you're older, take charge now and build the habits that set you up for financial success.

What Does Investing Actually Mean?

Investing means putting your money into something with the goal of making more money over time. You could invest in things like:

• Stocks: Shares of ownership in a company
• Bonds: Loans to companies or governments that pay you interest
• Index Funds/ETFs: Bundles of stocks or bonds that make it easy to diversify
• Mutual Funds: Professionally managed collections of investments

Unlike saving (where your money just sits), investing gives your money the chance to grow faster—though it does come with some risk.

Step 1: Learn the Basics

Before you invest a single dollar, you need to understand how investing works. Don’t worry—you don’t need to be a financial wizard. Start with these basics:

• Compound Interest: This is where your money earns money, and then that money earns even more. Over time, it snowballs.
• Risk and Reward: Higher returns usually come with more risk. Learn to balance the two based on your comfort level.
• Diversification: Don’t put all your eggs in one basket. Spread out your investments to reduce risk.

Use teen-friendly websites, videos, or books (like Investing 101 for Teens and Young Adults) to build your knowledge.

Step 2: Open an Investment Account

To start investing, you’ll need a brokerage account. If you’re under 18, your parent or guardian will need to open a custodial account for you.

Some platforms designed for teens include:

• Fidelity Youth Account
• Greenlight + Invest
• Acorns Early

These let you start with as little as $5 or $10, and some offer automatic investing features. Once you’re 18, you can open your own account.

Step 3: Choose the Right Investments

Start simple. You don’t need to pick hot stocks or predict the next Apple. A great place to begin is with index funds or ETFs, which invest in many companies at once. They’re low-cost, diversified, and less risky than individual stocks.

For example, an S&P 500 index fund invests in the 500 biggest companies in the U.S. You get instant diversification in one move.

Some other beginner options include:

• Target-date retirement funds
• Robo-advisors that automate everything for you
• Dividend-paying stocks for steady income

Step 4: Start Small and Be Consistent

You don’t need hundreds of dollars. Even $10 a week adds up over time. What matters most is consistency. Make investing a regular habit—like brushing your teeth, but for your bank account.

If you get birthday money, a paycheck, or allowance, set aside a portion for investing. Use apps that automate this, so you barely notice the money is gone—but your future self will thank you.

Step 5: Track and Learn

Once you’re investing, don’t just forget about it. Check in monthly to see how your investments are doing. More importantly, track your own habits:

• Are you sticking to your investment plan?
• Are you letting your money grow or trying to time the market?

Also, keep learning. Follow credible finance blogs, books, or YouTube channels. Learning as you grow is the real win.

Common Mistakes to Avoid

Even smart teens can make money mistakes. Avoid these beginner traps:

• Chasing hype: Just because a stock is trending on TikTok doesn’t make it a good investment.
• Putting it all in one place: Spread your money across different assets.
• Panicking when the market dips: Markets go up and down. Stay calm and stick with your plan.
• Investing money you’ll need soon: Only invest money you won’t need for a few years.

Learning from others’ mistakes is cheaper than learning the hard way.

Know Your Goals and Risk Tolerance

What are you investing for?

• College?
• A car?
• Financial freedom?

Short-term goals require safer investments. Long-term goals can handle more risk.

Also, know how much risk you can handle emotionally. If the thought of losing money makes you panic, start more conservatively.

Final Thoughts: It’s Your Time to Start

Getting started with investing might seem intimidating, but it’s one of the most powerful tools you have to build wealth, independence, and confidence. You don’t have to be rich to invest—you just have to start.

Let your money work for you, even while you sleep or study. Make a plan, start small, and stay the course. Your future self will be glad you did.