How to invest as a teenager

Do you have any idea how to invest as a teenager? – I was once asked by Peter, my cousin via e-mail. That’s what he said: “I have some money set aside (over 1000 dollars) but I’m 15 years old so there aren’t many options for me … What can I invest in to multiply the money? Because now I keep my money at home and don’t even have a bank account. I have a small surplus of about 50 $ a week, so that’s the amount I can easily invest with no fear, however investing 1000 is a little scary, unless in sure source. I thought about the alternatives:
– Mobile commerce (minimum firmware repair, replacement of something) or selling them at e-bay
– Minimal computer repair
– Doing Web design
– Putting the money at bank deposit.
How to invest as a teenager? Do you have any ideas for me?”

Well, Peter, there’s no easy answer to your question. You can always try the options you mentioned. There are unlimited possibilities of how to invest as a teenager. First you need to promote your first business and then the customers will start flowing. The earlier you start building your company, the better. Then if you’ll start worry that you may have too many customers you’ll ask adult to take you under his wing. Someone who has own business and could manage your clients for a little share of your earnings.  If you do not try you will not even see if one’s worth to do things like that. Most young people get pocket money from their parents. But that’s not the only way to put money in your wallet – you can also earn some money by yourself. It’s really great to know that you have over 1000 dollars and you do not want to spend it. Instead you want to invest them to make you even more money.

teenageIt’s unusual for teenager to have such a large amount of money. Usually they start with much less amounts. Of course, it is also worth investing small amounts. One of the best ways to invest small amounts of money is to locate them in a fund or a company that offers a program of re-investment of dividends (called DRIP) and derive the direct purchase of shares. In this way, you can omit brokers and most importantly related transaction fees and account maintenance. Not all companies have the offer but might be interested in this topic since even 50 dollars investment becomes profitable. Especially if you plan to make frequent operations of purchase and sale.

How to invest as a teenager in stock market?

Of course you can open a brokerage account but on the other hand, if you are able to invest one thousand dollars a year the other option will be more appealing. Suppose you are planning to invest over the next 20 years (may seem distant), and each year you will put 1000 $. Assuming that your money will earn only 7% a year, then on payment day the amount will be about 2.5 times higher than money invested which is about 50000 dollars. If you persist for 30 years savings it will be more than three times higher than the invested sum – that is about 100,000! The longer you’ll be able to save the greater the payout will be. Remember to keep a low account maintenance fee or transaction that does not devour your income. Stick to the principle that all costs did not exceed 2 – 3 percent of your investing portfolio. That’s the risky option of how to invest as a teenager. So keep learning to minimise the investment risk.