How to Invest As a Teenager: Opening Your Account
Written by Arjun Shekdar
If you’re a teenager living in the 2020s, creating profits and making money, whether it’s for the future or in the moment, is undeniably a common topic roaming around in your head. Many students assume they’re making all the money possible through allowances, jobs, or even birthday money. However, that couldn’t be further from the truth, and if you want to rapidly increase the digits under your name, a custodial investing account is the way to go.
What is a custodial account, and how do I open one?
That’s probably a question you’re asking yourself, and believe it or not, the process of opening and managing a minor’s investing account isn’t as complicated as you think. A custodial account is managed by a trusted adult (custodian), allowing a minor to hold stocks, cash, and bonds. The custodian manages all decisions and moves made on the account until the minor reaches majority age (18-25). In order to open an account itself, there’s three main steps:
Fill out the minor’s name, date of birth, and Social Security Number (SSN)
Fill out name, address, contact information, and SSN of the custodian
In order to fund the account, add the bank account’s information
Why should I open an account at such a young age?
The simple, teenage response to this question would be “to feel pride in knowing you bought what you wanted with your hard-earned money,” which may be the answer, but I’m going to take a different approach. While the morale boost is undeniably incredible, making simple money by yourself helps you set your future. You understand the basics of handling personal finances with the counseling of a trusted adult, meaning when you become an adult, minding your money simplifies significantly.
As a fellow teenager, my biggest aspiration for life is to manage my money properly, and to live in the comfort my parents provided me, as well as the stability I hope to supply myself with. When I asked my parents one thing they wished they knew about money at my age, they replied “Knowing how to make money, and how to be smart with it.”
Whether you’re saving up for your friend group’s summer vacation after graduation, the newest iPhone, or a new pair of shoes, a custodial account will not only help you afford it, but it’ll fund different, better things, and open up doors you didn’t even know were in your room.
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