4. November
Why Should Teenagers Start Investing?
By Andrej Hano, Birdwingo’s Co-founder
Teaching teens to invest is key to their financial future, as an early start equips them better for financial security. Here are reasons why teenagers should start investing.
1. Harnessing the Power of Compound Interest 📈
Albert Einstein reportedly called compound interest “the eighth wonder of the world.” The concept is simple: the earnings from an investment generate their own earnings over time. For teenagers, time is an invaluable ally. Starting to invest at a young age means they can invest smaller amounts of money and still amass significant wealth over time due to the magic of compounding. A few dollars invested today could grow to be much more by the time they reach adulthood.
2. Developing Financial Literacy Early 🧑🎓
Investing as a teenager can jumpstart financial education. Understanding the basics of the stock market, bonds, mutual funds, and other investment vehicles teaches practical math skills, economics, and the value of money. This knowledge pays dividends beyond any financial returns by fostering informed decision-making about personal finance, college loans, credit cards, and budgeting.
3. Building a Savings Discipline 💪🏼
By making investment a habit, teenagers can develop a disciplined approach to saving money. This discipline is crucial in a consumption-driven society. Instead of spending on ephemeral trends and products, they learn the importance of setting aside funds for long-term goals. This habit, once established, is likely to continue into adulthood, setting the stage for a more secure financial future.
4. Taking Advantage of Lower Financial Obligations 🎯
Most teenagers have fewer financial responsibilities than adults, such as mortgages, family expenses, or significant debts. This situation presents a unique opportunity to invest and take risks that could yield higher returns. Since their financial obligations are low, teenagers can allocate a portion of their money towards investments without the pressure that comes with higher stakes.
5. Learning from Mistakes 📉
Investing is not without its pitfalls, and losses can be part of the learning process. Teenagers have the advantage of time to recover from these setbacks. The lessons learned from early mistakes in investing are invaluable and often lead to more sophisticated strategies and better decision-making in the future.
6. Capitalizing on Technological Resources 🖥️
Today’s teenagers are digital natives, and they have at their fingertips a wealth of online tools, apps, and resources to help them learn about and manage investments. Technology has made it easier and more accessible than ever for them to research, track, and invest in stocks and other assets with minimal costs.
We have partnered with top-tier payment providers that charge us a fixed fee for their services. We offset that expense with the commissions per trade we receive from our users, ensuring we don’t have to impose any additional charges on you.
7. Preparing for Major Life Expenses 🏡
Whether it’s for higher education, buying a car, or eventually purchasing a home, teenagers will face significant expenses in the future. Investing can be a proactive way to prepare for these costs. With a long-term perspective, even small investments can grow and become a substantial fund when these big-ticket items become a reality.
8. Contributing to the Economy 🏦
Teenage investors are not just benefiting themselves; they’re also contributing to the economy. By investing in companies and startups, they’re providing capital that can be used for innovation, expansion, and job creation. This participation in the market economy fosters a sense of ownership and responsibility that can shape informed, engaged citizens.
Conclusion
Teenagers are at an ideal juncture to start investing, with time on their side and the flexibility to learn and take risks. By fostering financial literacy, savings discipline, and practical experience, they set the stage for a more secure financial life. As with any journey, the first step is often the hardest, but for teenagers looking toward their financial future, it’s a step that’s well worth taking.
📲 What is Birdwingo?
Birdwingo is a go-to investing app with more than 20k users where you can invest in stocks & ETFs like Apple, Tesla, S&P 500 ETF & more.
What do we offer?
- 11,000+ most popular stocks & ETFs
- lowest fees on the market
- personalised portfolios
- robo-advisory
- auto-invest
