It is honestly never too early to start thinking about investing. A lot of schools and parents miss the mark when they discuss their children’s future with them. College and a well-paying job in a sound career are often discussed, but not the potential to earn wealth early on. As soon as someone is making their own money at a job, they can begin putting a portion aside to be invested once they are of legal age. People under the age of 18 can have a parent or guardian open a custodial account with them so that they can begin investing very early on.
What to Know About Investing
When it comes to investing, it is important to realize there are a few truths.
- Sometimes there are bad investments
- Investing comes with risk
- Investments can generate gain
- Dividends on stocks are taxable
- Interest earned from stocks is taxable
Those new to investing may want to seek the help and guidance of a trained investor. These individuals will take the money you give them and invest it in stocks that match what your goal is. This means you will typically have one or two meetings before the investment is made. One meeting will go over how much you plan on investing and what your goals with investing are. The follow-up meeting may simply be done over the phone or video conference to discuss where your investor plans on investing your money.
You will receive summary reports and links so that you can follow the progress of the investments. The investor earns a living by keeping a percentage of the earnings off of your investment.
You will also want to seek out the help of a financial advisor if you are new to investing and do not have anyone within your family or friends to go over the basics with you. Depending upon the earnings your investments make and if you will be cashing them out, you may have taxes to pay. You will want to know the dividend yield on your investments when you are investing in certain stocks. This will tell you how much money you may make off of each share of investment.
Why Should You Be Investing Early?
It is smart to invest as early in life as possible. You obviously may not have a lot of money while you are working part-time in high school or college. You may also find yourself always tight on money while working and paying off student loans in your early 20s. This is the time to at least put a little money aside each week to invest. Give up those pricey coffees weekly and you could find yourself saving over $100 a month and that could be put right into an investment.
If you are not comfortable with investing through a skilled investor, you can look at easy online investment options as well as penny shares and start-ups. This is a great opportunity to invest a little and possibly gain more.
If you turn a decent profit, you can then trust that profit with a professional to turn that into more potentially. While it may seem difficult to invest this early in life, it is actually the time to take the risk. Later in life when you have a mortgage, a family, and responsibilities, you may find it just as difficult to invest.
The added bonus of investing young is the fact that you will learn the market sooner in life. You will feel more comfortable with larger investments later in life because you have been investing for so long. By the time you are in your 30s, you will have learned quite a bit and established business relationships with your advisors and accountants so that you know how to properly be in the market.
This is a great way to set up for retirement very early on in life. Some people are so well versed in investments that they are able to use those earnings in their retirement and not have to solely rely on pensions and savings.
Investing truly can be for anyone. It just takes a little bit of money and the willingness to understand that with it comes either loss or gain. With investments, even a loss is an educational experience to set you up for future gains.