How To Start Investing As A Teenager (2026)
Saving money on start investing teenager does not have to be complicated. We rounded up the essentials so you can spend less and skip the guesswork.
Key Takeaways
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- Table of Contents Toggle At a GlanceWhat Happens To Every Dollar You Invest TodayThe Power of Compound ReturnsThe Investing Laws Teenagers N...
Table of Contents
ToggleAt a Glance
- If you’re under 18, you’ll need your parent’s help getting started investing. If you’re over 18, you can open an investment account on your own (we cover both below).
- As a teenager, you have the ability to leverage a massive advantage called compound returns. If you understand and utilize this concept now, you can become quite rich over your lifetime.
- Numerous teenagers mistake investing as a way to get rich quick. But good investing is more about earning decent returns over a very long period of time. That’s when the magic of compounding really kicks in.
My grandpa helped me get started investing at the age of 19, and as you’ll see in this article, I’m incredibly grateful for everything he taught me.
Not only did his help influence my decision to become a CERTIFIED FINANCIAL PLANNER™, but it’s also been extremely rewarding from a financial standpoint.
In this guide to investing as a teenager, I’ll share some of my grandpa’s most powerful lessons. Plus, I’ll give you straightforward instructions so you can begin investing the right way, with the right mindset.
First and foremost, understand one key rule: it’s never too early to start investing.
In fact, starting early gives you a huge advantage. It even makes becoming a multimillionaire over the course of your life a realistic and achievable goal.
Note for parents: While this post is aimed at teens, you’ll find tips and resources throughout to help guide your child’s investing journey. If you’re looking for platforms that combine spending, saving, and investing for younger users, be sure to check out our best banking and investing apps for kids and teens guide.
What Happens To Every Dollar You Invest Today
Say you invest $500 every year from the ages of 16 through 19 , a total of $2,000 over the course of four years.
And let’s say that you’re able to earn a 7% return on your investment, which is the average annual return produced by the stock market. So, it’s available for anyone to invest.
Here’s what that $2,000 investment would be when you’re older:
Your AgeValue65$49,88970$69,97175$98,13880$137,644Not too bad, right?
Let’s have a little more fun.
Say you’re able to earn a bit more money in your 20s, and that from the age of 20 to 29, you’re able to invest $2,000 each year for ten years, a total of $20,000.
Combined with the $500 per year you invested from the ages of 16 through 19, here’s what your investment would grow to at that same 7% annual rate of return.
Your AgeValue65$365,56570$512,72475$719,12280$1,008,606Alright, so you’re a millionaire. Although it’s going to take a while.
Now, let’s have a lot of fun. Say that from the ages of 30 through 65, you’re able to save $5,000 per year.
Combined with your earlier investments, here’s how much money you’ll have:
Your AgeValue65$1,105,13270$1,550,00575$2,173,96280$3,049,095As I hope you’re beginning to see, this is where the so-called magic of compound returns really begins to kick in. Setting aside just a small amount of money year in and year out can add up to millions of dollars over your lifetime.
Even if you just save a little, like $100 a month, consistently over your lifetime, you can become a millionaire. And if you are able to save more once your income grows in your 20s and 30s, becoming a multimillionaire is completely realistic. The big advantage is that you are starting so young, so it does not take nearly as much as you might think.
Starting earlier makes a big difference. This chart shows how investing $100 a month at age 18 versus age 30 leads to dramatically different outcomes over time.The Power of Compound Returns
You’ve probably heard the name Warren Buffett. If not, he’s widely regarded as one of the greatest investors in history.
He’s also one of the richest people in the world today. And he’s also 95 years old in 2025 (remember that last fact).
What factor is most responsible for Warren Buffett’s success?
Well, he’s picked good investments for sure.
Over time, he’s earned around 20% per year on his investments. In our example above, we earned just 7% per year.
Ideas worth knowing: The average annual return for the S&P 500 index, which measures the stock performance of the top 500 companies in the United States, is about 10%. In the example above, I used 7% because of what’s known as inflation. Inflation occurs because prices tend to rise over time, so a dollar today is more valuable than it will be 50 years from now. Another way to look at this is by thinking about “purchasing power,” or how much “stuff” $1 can purchase at any given time. The average inflation rate is about 3% per year.
What has made Warren Buffett one of the richest people on the planet is this: time.
Buffett made his first investment at the age of 10. That gave him, as of 2025, 85 years for his investments to grow through the power of compound returns.
What would Buffett’s net worth be today without this early head start?
As this 2020 article explains (his net worth today is now estimated at over $150 billion).
By the time he was 30, he had a net worth of $1 million, or $9.3 million adjusted for inflation.
But what if he was a more normal person, spending his teens and 20s exploring the world and finding his passion , and, by age 30, his net worth was, say, $25,000?
And let’s say he still went on to earn the extraordinary annual investment returns he’s been able to generate , 22% annually , but quit investing and retired at 60 to play golf and spend time with his grandchildren?
What would a rough estimate of his net worth be today?
Not $81 billion.
$11.9 million (99.9% less than his actual net worth).
Buffett didn’t build his fortune by chasing the highest returns. He built it by starting early and staying invested for decades. This infographic shows how even extraordinary investing skill produces very different results depending on when you begin and why time is the biggest advantage young investors have.Before you check out, double-check start investing teenager against current offers and any coupons you can stack. Small habits like this add up to real savings over a year. Originally published at thewaystowealth.com.
R.J. Weiss
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