Why Invest as a Teen?
Part of the Investing Series
I bet you've heard at least a couple reasons why investing is so great. It's "a passive source of income", or "free money", or "how the rich stay rich". It may be all of those things, but the truth is more complicated.
Investing is a very broad term. In its simplest sense, it is the act of putting time or resources into something with the expectation of making a return. When you study for a test, you are investing your time for a good grade. When you sleep, you are investing in better health. When you spend time or money, you expect that investment to ultimately provide you with more benefit than those resources could otherwise.
So when you studied for that test, you gave up time with the expectation of receiving a good grade in a class. That good grade was worth more to you than the time spent studying for it. In the same way, investing with money means giving up some of your wealth in the short-term, with the expectation of a net return in the long-term. So really, everyone should be investing!
Through investing, you can increase the value of your money over time, beating inflation and allowing you to save for important things. Examples include retirement funds, saving for a house, a car; really anything you can think of, investing can help you get it! For most people, investing is a very long-term action. Over the short term, it's hard to make money without high risk, while over the long term, you can make
Investing is a very broad term. In its simplest sense, it is the act of putting time or resources into something with the expectation of making a return. When you study for a test, you are investing your time for a good grade. When you sleep, you are investing in better health. When you spend time or money, you expect that investment to ultimately provide you with more benefit than those resources could otherwise.
Investing means giving up resources with the expectation that you will eventually gain more than you gave up.
So when you studied for that test, you gave up time with the expectation of receiving a good grade in a class. That good grade was worth more to you than the time spent studying for it. In the same way, investing with money means giving up some of your wealth in the short-term, with the expectation of a net return in the long-term. So really, everyone should be investing!
Investing generates wealth from existing wealth.
The younger you are, the earlier your money starts making more money. As that wealth compounds, you are making more money per percent your investment increases in value. So, the earlier you start investing, the longer your investment compounds, and the more money you make.
That's why its so important to invest as a teenager. When you start early, you are that much closer to financial independence.
Through investing, you can increase the value of your money over time, beating inflation and allowing you to save for important things. Examples include retirement funds, saving for a house, a car; really anything you can think of, investing can help you get it! For most people, investing is a very long-term action. Over the short term, it's hard to make money without high risk, while over the long term, you can make