Most investment brokers and financial experts will tell you that you should start investing your money as soon as possible. That said, it’s not necessarily a great idea for teens still in high school to start too early. Investment is a serious responsibility that requires a lot of careful planning, management, and patience.
If guided by a responsible guardian or parent who genuinely wishes to help you learn how to invest wisely and safely, getting started as a high school student might not be a bad idea. Done correctly, making some savvy early investments could help you and your parents pay for college. You could even try saving for a future home, or otherwise prepare you for the complexities of life post-education.
All that said, though, there are a few rules you should follow to make this a safe and practical reality.
Don’t Invest Alone
You’re a teenager. You will need permission from a parent or guardian to file any investment paperwork or even to open a bank account in your own name. The reason for this isn’t because everyone assumes you’re irresponsible and unable to manage a basic checking account. Rather, these rules are in place to help protect you and your family from scammers.
Keep in mind, scammers are everywhere. They are extremely good at what they do, and most would have zero problems taking money from a kid. You really need to understand that this isn’t a territory that you should try to navigate alone.
If you decide you want to look into investing, you should start by sitting down with your parents to get permission. You should decide on a safe level of investment, and develop a smart plan for your future portfolio.
Start Small
Once you and your parents decide on an investment plan, the next step is to start investing. Remember, though: you’re a beginner. You don’t have the skills of a professional yet, so there’s a good chance you could lose money on early investments. That’s why it’s a good idea to keep your initial investments low.
This isn’t a bad rule even once you’ve graduated beyond the stage of parental guidance and decide to continue investing throughout your college years. Keep your bottom line tight and invest in lighter increments. Every little bit can help…but overleveraging yourself could literally ruin your finances for years to come.
Invest Responsibly
As adults, your parents probably have a better understanding of how financial gains and losses work. Even so, you should do your own homework on the topic (LOTS of homework, this is a complex subject) and research the most stable investment opportunities over a given timeframe.
Also, beware of meme investments and “get rich quick” schemes… they are almost ALWAYS scams. If anything sounds too good to be true, it probably is.
For example, let’s imagine that a friend of yours has just become interested in the cryptocurrency market. He tells you about two or three people he saw on TikTok or YouTube bragging about the coins they invested in that made them rich. He says he plans to invest in the same plan and thinks you should jump on board. What do you do?
Nod and smile, but follow the plan you worked out with your parents. That’s the best course of action.
Don’t Fall For the Hype
While it is true that there are people out there who have had crazy success in markets like cryptocurrencies and NFTs, you should be aware that the market is incredibly volatile. Far more people have lost money in this space, sometimes millions of dollars.
I’m telling you right now, your odds of getting rich in the cryptomarket fall somewhere between “slim” and “nil.” In fact, you’re much more likely to lose money than gain it.
There are a lot of finance influencers out there who claim to share the secret to make lots of money quick. Think about it, though: if you actually had a genius money-making scheme that made you millions… would you share that information all over the internet?
Those influencers make money by selling the idea of making money. Otherwise, they’d just spend more time making more money by following their own advice. This distinction is critical; don’t get suckered by appearances.
Be Okay With “Slow & Steady”
The most important thing to note when considering investments is that true growth is SLOW. Very, very few people ever get rich quick, especially through investments and stocks.
Invest carefully. Research absolutely everything and aim for slow, stable growth over long periods of time. Finally, remember to never throw all of your eggs into one basket. Diversifying is, and always will be, the key to successful investment.