Invest As a Teenager
Share on facebook
Share on twitter
Share on linkedin

How Old Do You Have to Be to Start Investing? Here’s When to Begin

What is the best age to start investing?

One of the most common questions we get from younger people (and parents alike) is this: how old do you have to be to start investing? And along with that, when is the best time to start? Today, we’re going to answer these questions for you and hopefully give you a better idea of why it’s best to start early. 

Overall, there is no specific age for when to start investing – that’s up to you, but what you’ll really want to make sure is that you’re ready. This means being informed enough on how stocks and investments work. If you know your stuff and have the means to make good investment decisions, there’s no bad time to jump into the game.

Most people wait until their 30s to start investing, so if we’re giving honest advice, you should start earlier than that if you can. Beginning your investment journey in your 20s could mean the difference between thousands of dollars made in the long run. And we’re not kidding! 

Since investing is an art that can provide compound interest, the earlier you start the better. With this general rule in mind, read on to find out some great tips for investing at an early age.

A beginner’s guide to asset classes

So, what is an asset class? This is one of the fundamental investment topics you should definitely know before starting your journey. 

Join Our Small Business Community

Get the latest news, resources and tips to help you and your small business succeed.

Basically, an asset class is a group of investments that are similar in nature. There is some debate among experts about how assets should be grouped, but there are at least a few that are pretty clear-cut. Let’s go over a few.

The first is cash and equivalents. You can invest in treasury bills and savings deposits, for example, which will accrue interest over time. These are very safe investments as there is little fluctuation, so in general, you won’t see super high returns on them. High risk, high reward rings true here.

When you get into investing with asset classes such as stocks/shares, real estate, bonds, and the like, the risk will start to go up. Again – the higher the risk you take on, the higher the reward can be, but before you take the plunge you’ll need to know everything you can about the investment. This means what are the projected returns, what could go wrong, and what to do if things do start to go south.

Choose the asset class that falls most in line with the time you have to research, the capital you’re starting with, and the amount of risk you’re comfortable taking on.

How to double your money by investing

One of the first things people will wonder when looking into investments is how long it could take to double their money. It sounds attractive, yes, but doubling your money could take a long or short time, depending on your investment style and prowess.

If you invest a certain amount, there is actually a lucky Rule of 72 investors use to predict how long it will take to double that amount. For example – if your investment has a return rate of 1%, it will take 72 years to double your investment. Luckily, this is rarely the case if you invest in the right stuff.

The Rule of 72 shows how much shorter the timespan is for doubling your money if the rate of return goes higher. For example, if the rate of return goes up to 3% (still low), that 72 years gets divided by 3. With just a 2% increase in RoR, that’s 48 years off the time to double. Once you start getting into the 10% per year return range, it’ll only take about 7.2 years to double your entire investment. 

Of course, having a good amount of initial capital can help you start living off these returns. That’s why it’s so important to keep investing each month or each year. The more money you have in the investment, the more money you’ll see returned.

Is life easier without kids? 

For the people on the fence about having kids, we get it – kids are expensive, and if you are looking to build up a solid nest egg, it can seem like a good choice not to have kids. After all, if you want to have more capital to grow your money, it would make sense. 

While the costs of raising kids can run high, the decision is entirely up to you. If your goal is to make as much money as possible, it could be the right decision to hold off. After all, if you don’t have kids and invest the money you’d be spending on them into the market, you could end up with thousands in returns off that money in 30 years instead.

The general expectation of our society has been that you grow up, get married, and have kids. But, the birth rates are decreasing as the generations go on, and you shouldn’t feel pressure to have children if you know it doesn’t align with your personal goals. 

You should definitely ask yourself the right questions about what you want in life, but ultimately, the decision is yours. Generational wealth isn’t the only goal of making tons of money. Philanthropy and giving back to the community can be a great way to make sure your legacy continues.

What are the best techniques for investing in stocks?

Serious life questions aside, the last thing we have for you today is a couple of tips for investing. What are the best techniques for investing intelligently? Well, there are many factors that go into making a solid investment. If you can master even a few of these investment strategies, you’re already well on your way to becoming a pro.

The first tip we can give is to look for stocks that are underperforming but have a good chance of bouncing back. In short, you want to buy low, sell high (of course!). This isn’t to say look for the worst stocks – we mean in a bearish market, do your research. Look for companies that are planning fruitful mergers, or are coming out with a revolutionary new product in the coming months. 

It can be risky, but the best technique is to find the stocks that look promising in the future, not necessarily ones that are trading at much higher prices than they’re worth.

The next tip is to reinvest your profits. As we said, the more money you have in the market, the returns you’ll make are exponential – if you make good investments! The trick is really to not invest more than you’re willing to lose. So, if you’ve already made returns on another stock, that’s money you wouldn’t have had otherwise. With the returns, it could be smart to diversify your risk load.

Overall, don’t be afraid to experiment a bit with smaller amounts of money. That way, you can find your personal investing style and use it for future endeavors.

Best of luck out there!


Join Our Small Business Community

Get the latest news, resources and tips to help you and your small business succeed.