Investing For Teens
Whether you are a teenager in need of extra change for some airpods, or an adult looking for an extra source of income to pay off your student loans, trading and investing in the stock market is an enriching and beneficial path to consider. If you are responsible and have a willingness to learn, trading and investing is fun and has great potential returns. What’s the secret? Start as early as possible. And, it isn’t too hard to get started: you need a computer, a brain, and a touch of luck.
Trading is the quick, hands on, and yet risky way to make money in the stock market. The thrill of seeing that candlestick chart pile up dollar by dollar, your profits highlighted in an exquisite green? This is what you expect. But in reality, trading is a strenuous and unpredictable Investment strategy. If you are curious enough to learn and try, put aside time to learn first before actually putting some money in. I occasionally swing trade and do longer term investments, and I do have my glorious days, greatly outweighed by the red days, truthfully.
Rather than day trading, swing trading is purchasing a share of a company and holding that share overnight or beyond that, meaning you don’t sell your share in the same day. Why do I like it most? It fits a busy schedule. In school, we can’t pay attention to our trading screens the whole time, which is required in professional day trading. We can, however, take it slow and let time do its thing. Live trading is what 90% of people end up failing to do and is not generally made for younger people to fool around with. It sure is fun, but be prepared to fail because this is more than risky, it is RISKY. If you want something a little more comfortable, just minus the quick returns, pay attention to what’s right below.
TL’s renowned Econ Teacher, Mrs. Coyne, personally recommends another strategy for investing your hard earned money. I asked her if she would even recommend trading live in the stock market and you probably guessed it. Mrs. Coyne said, “Students should passively trade. They should start a Roth IRA and put their money in an index fund like one from Vanguard or Fidelity. They should put $200.00 (or more) in the fund every month and not take it out until they retire.”
A Roth IRA is a tax deductible retirement plan where you can start at any age with your parents (or by yourself when you are 18), and take in benefits at retirement. This is a safe and rather less risky way to invest, but a strong downside is needing to wait till your retirement. You will continuously contribute a sum of money annually until you reach that time. If you happen to ride off into the sunset before you can receive your benefits, your next of kin can also take the benefits you’ve worked so hard to invest. Using a Roth IRA calculator should give you a good perspective on how good retirement will look for you, especially if you start right now.
I know talking about money isn’t fun all the time. It’s only fun if it’s in your hands. Percentages. Math. Equations. Graphs. It’s a lot to take in when at our age, school and fun is generally our only focus. Problem is, there is going to be a time when you have to care about these things and what everyone tells you is that they wish they had known these things earlier. The examples above are just a needle in a haystack because there are so many other ways to invest your money. I hope you can put these ideas into consideration so you can be prepared to be successful for the future!