How To Invest In Stocks If You Are Under 18

If you are under 18 you’ve probably realized that you can’t open up a brokerage account on your own to start investing in stocks but you want to invest in stocks you understand the power of investing in the power of the stock market how do you do it well I have found two ways I’m going to go over both of them the first one i think is probably more what you’re looking for and what I think is probably going to be best for you but I’ll talk about them both and these are both legal ways that you can start investing in the stock market and start getting your money to start working for you so without any further ado let’s get to it and let’s start talking about how you as someone who is under 18 years old can start investing in stocks. If you are under 18 years old is by opening up a custodial brokerage account now custodial is very important here but this allows you to have a brokerage account that you can invest in stocks so let’s talk about it this is very very important so a custodial brokerage account is a type of brokerage account that you open with a custodian and custodian in financial terms is someone who is of legal age almost always this is going to be usually a parent however it can be really be anyone close to you it’s usually a relative that is obviously older than 18 years old and they open up that account with you however even though they opened up with you the assets are yours.

They just have to be there with different decision makings and different things like that then that’s part of the custodial side of it so once you have your custodial brokerage account then you really can do what you would want to do with a normal brokerage account you can go and buy that stock so you can go and put money in maybe you wanted to invest in apple or amazon or anything else that you wanted to do you now can with a custodial brokerage account and when you set up this account usually you will set up a time of maturity so this is usually between the ages of 18 and 25 years and it can also change from state to state brokerage to brokerage it may change 18 is a pretty common one that once you turn 18 the account becomes yours and you no longer have the custodian there they’re just with you until you have the maturity date that you guys choose and the account becomes yours and there are tons of different places that you can open up your own custodial account i personally use td ameritrade that is the brokerage that i use Charles Schwab also has a very common one and just look at what works best for you having a custodial brokerage account is such an important topic i actually made an entire other video on custodial brokerage accounts i talk about popular ones that are out there what you need to know about them.

Just so you can get a better idea because i think this is something that every teenager should know and be aware of because this is how you guys can start investing in the stock market the second way that you can start investing in the stock market and because this one i didn’t think was quite what you were looking for but it is a way to be invested in stocks so i did want to mention that and that is a custodial ire so we have that word custodial again which means you are opening up this account with a custodian and ire stands for individual retirement account so this is a retirement account that you will be opening and it is with a custodian so this is going to be either a traditional ire or a Roth ire usually with younger people i like to recommend a Roth ire and usually that’s probably what’s going to be best for you meaning you’re going to put after tax dollars in right now and then once you become of age and are retired then you’re able to take that money out tax-free which is great because you’re probably in a higher tax bracket than you are right now being under 18 years old but you’re gonna wanna do a little more research into what’s best for you so this is a retirement account so you obviously can’t take the money out without uh being or some form of punishment i think for Roth ire uh there are fees around what is it about a 10 penalty.

So something about that so it is a retirement account you wouldn’t want to put all your money in there because you want to probably take some out later and there’s different things like self-directed iris that allow you to invest in real estate and different things like that so the reason that it’s on here for the stock market is because when you open up an ire and suppose you have something like a Roth ire you then have control of what you want your Roth ire to be invested in so then you can go and invest in stocks and different things like that with your ire so it’s also not mutually exclusive you don’t have to do either an ire or a custodial brokerage account you can do both and the reason i kicked it off with that custodial brokerage account is because i think that’s what you’re looking for and you know i obviously don’t know you but i don’t know your situation but i do think that is best for you and i do think you could start that of course look at your own financial situation you can even let me know in the comments below if you have any questions at all i understand that you know when you get started in the stock market things can seem a little bit overwhelming and things like that so i really admire that you’re here and i look forward to talking to you in the comments below but those are the two ways that i see so the custodial brokerage account and also the custodial ire and a lot of younger people really really want to get invested in stocks and i see people doing things that kind of scare me a little bit that aren’t that don’t seem too legal you know going through you know if you try to have your parents do it or something you may run into tax issues and different things like that because they’ll have to pay income tax if they take the money out or anything like that

It’s just you don’t want to open up a brokerage account you have to prove that you’re over 18 so don’t try to do anything there these are the both legal ways that you can start investing in stocks so i am very focused and very passionate about teenage personal finances i have ever since i was a teenager so i really want to help you in any way that i can so let me know if you have any comments or questions down below i’m going to be going through there i’m going to be talking to you guys and just kudos to you for being here watching this video and really starting your journey with investing it says a lot about how you are and you’re going to be successful with the kind of power of compound interest so thank you for starting your journey well done i have tons of more videos about teenage personal finance and different things like that that i think you would really enjoy and i would love it if you would just check those out so if you found this video helpful i would love if you would get a like feel free to share it with anyone that you think it may help out i know there’s lots of people under 18 years old that are trying to get invested but not to share where to go so it would be very nice of you if you would share this video with them and if you want more videos like this and you want to see more of me talking about teenage personal finances stock market for teenagers.

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