How To Invest Money At A Young Age

Here are some easy to follow tips for how to invest money at a young age. Investing at a young age is one of the best things that any person can do, as well as one of the best things that a person can do for the youngster in his or her life. The value of any investment is generally a result of the amount of time that an investment has to grow and those investing at a young age can expect a large return on many types of investments. Also, a young investor will learn vital personal finance skills by starting at a young age that will be of a great benefit throughout his or her life.

  1. Start Now. One of the greatest failures of many investors is simply not getting started. The sooner the investment is started the longer it will have to grow. There are scores of possible investments for youngsters, but a simple index mutual fund is easy to start and is a great place for a long term investment.
  2. Invest on a Regular Schedule. If an investor has a large lump sum to start investing with at a young age, that is great. But if not, investing small amounts on a regular schedule will help to teach the skills needed to be responsible with money. Many mutual funds will allow new investors to start with a small initial investment as long as regular contributions are made.
  3. Track the Investments. Keeping an eye on the ups and downs of the value of the investment will help teach a young investor many lessons. The young investor will be given the chance to learn about the fluctuations of the market and the importance of patience. Those investing at a young age will also learn of the importance of finances and the responsibility that comes with it.
  4. Watch the Money Grow. The best part of investing at a young age is watching the investment grow. Being able to see how an investment or many small investments grow over time should be a valuable lesson that can be used throughout life. Tracking the growth of the money on an easy to see wall chart can be a lot of fun for the young investor.

Resource:

http://www.sec.gov/investor/students/tips.htm

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