7/10/24
Starting Your Investment Journey: A Guide for High Schoolers and Young Adults
Author: Abhilash Kalyan
Editor(s): David Sun
Investment is a powerful tool to build wealth. The earlier the start, the more you can make in the long run, proving a huge advantage over those who start later. Here’s how you can get started.
Educate yourself!
Before starting to invest, you need to learn the basics. Thousands of free and paid courses exist online and in your local library. Online courses and financial new websites can help you gain valuable insights. The book "A Random Walk Down Wall Street" by Burton G Malkiel is a good choice to get started.
Set your goals!
What do you want to do with your investments? Do you want to save for college, a car, a kid or your own future? Knowing what you want to do can greatly influence your decisions and strategy.
Save early!
The first step in investing is saving. Open a savings account and set aside a portion of your income. It adds up quickly, and compound interest will be on your side, turning hundreds into more hundreds, and potentially thousands and beyond.
Explore your options!
There are many ways you can invest, such as:
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Stocks: Buying shares of a company can be profitable if you make the right decisions. Apps like Acorns make it easy for young investors to start with relatively low buy-ins.
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Bonds: Bonds, loans to a government or corporation that pay interest over time are generally safer than stocks, with less payouts.
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Mutual Funds: These funds pool money from many investors to buy a diverse collection of stocks and bonds. It’s a great low-risk way to get returns.
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Roth IRA: Contributions are made with after-tax dollars. This is a tax-free account to save for retirement, which is great for young adults
Use Technology to Your Advantage!
There are numerous apps and websites that are meant specifically for young investors for low or no fees at all, such as Stash and Acorns.
Start Small, Be Consistent!
You don’t need a lot of money to start investing. Even small amounts can grow into respectable amounts when invested regularly into the right accounts. Set up automatic transfers to your investment account(s) and let them grow worry-free.
Learn to Assess the Risks!
Investing always involves you taking some sort of risk with your money. Diversify your investments and remember: NEVER spend money you can’t afford to lose. Understanding the risks can involved can make you a better investor.
Accept Help When You Need It!
Don’t hesitate to ask for help from family, friends, financial advisors or even qualified people online. It’s always good to gain different perspectives to help you make more informed divisions.
Conclusion
Starting to invest early allows high schoolers and young adults to use compound interest to their favor and lead a worry-free adult life in regards to investing. With proper guidance, anyone can be a successful investor in the future.