Why should I be saving and investing?
You may think that money is this thing to be spent on goods you love and your life. That is absolutely true but the fact also remains that there is a finite amount of money in the world. It’s important to start building your wealth for the future as soon as possible to give yourself an edge over others. Studies have found that “more financial education causes higher portfolio returns and improved financial and wealth outcomes over a period of 4 to 25 years”(Altmejd et al.). The study found that people with business degrees invested more on average and were able to accumulate more wealth in their future on average too. This phenomenon can be applied to all of you as well, if you start investing at a younger age and slowly grow it over time, through compounding interest as mentioned in the previous article, you can gain a financial advantage over others and be able to have a strong financial future.
How Can I invest as a high schooler? I barely have any money!
You can start investing with as little as 1 dollar. That’s the beauty of the stock market, if you have just 1 dollar you can get involved and start growing towards a strong financial future. Adding more money will help you scale your earnings but you can start with very little and starting low is an amazing way to gain knowledge for the future once you are investing large amount of money. Two places to start investing are Robinhood and Fidelity, I personally use fidelity and would recommend their youth account to start investing as soon as you can.
How Would I Even Know What to Invest In?
There are many ways to think of a good investment, the best one would be to look at their financials with a platform like Finviz or Yahoo Finance. Learning about what metrics are good and what to look for to see if a stock may be undervalued is essential to investing and something that you should be doing when looking for investments. Other incentives to pick stocks include a growing popularity that you can see within your community for the company that may foreshadow a strong future for the company and a strong competitive advantage for a stock meaning that they have a unique product that addresses a real need. Make sure to do your own research and to diversify is possible, buying multiple stocks that you trust with different backgrounds for each one. Being more diversified lowers risk while keeping profits more constant, allowing for returns that will continue to be strong now and the years to come. It’s important to change your investments based on changes in price or a new investment opportunity that fits your strategy so make sure to track everything and improve your future finances by being ready.
Don’t Just Invest- Keep Learning
Markets, Companies, and the investments in those companies are constantly changing. It is very important to monitor these changes and see whether the investment still fits what you want. At the same time, change your investments whenever you learn new things that change the way you look at investing. There may be a new strategy you like or something new you learn that could potentially earn more profit. It is important to constantly improve to the point that you are way ahead of the competition and able to be very successful in the future. The goal isn’t to constantly buy or sell, it’s to understand why you’re holding an investment and make sure that there’s good reason to.
You can start investing in your future right now, you have the resources now go out there and do it, good luck everyone!
Source: Altmejd, A., Jansson, T., & Karabulut, Y. (2024). Business Education and Portfolio Returns. IZA Discussion Paper, 16976.