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How to Invest if Your Under 18

We always say "investing is for everyone" here at The Bull Pen, and we believe that is true. However legally..... well.... not so much. See in the United States you must be 18 years or older to buy and sell securities, but the good news is, today we're going to show you how to invest even if you're a minor!

Before reading this article, you may want to check out our article titled "The Best Brokerages of 2022" to give you some background on the logistics behind online brokerages.

We broke this article up into 2 sections; one section is for minors, and one section is for Mom, Dad, Legal Guardians, or soon-to-be parents.

If you're a minor, start here!

There are a few key steps before you can start investing:

  1. Talk about it with your parents- If you're a minor, you legally need your parents to help you begin. Plus, it's always a good idea to ask someone you trust before trying to make financial decisions on your own. If you need help convincing them, send them this article!

  2. Pick your brokerage- This is the website you're going to use to start investing. There are tons of free, online, trustworthy brokerages to choose from, so do some research to see which one best fits you

  3. Create an account- A Custodial account is the type of account we think works most broadly. This account puts all of the assets (stocks and cash) in your name but uses your guardian to legally control those assets until you turn 18, then the assets become 100% yours. However, there are a few different types of accounts to choose from, so see which one fits you!

  4. Research, Research, Research- Now it's just about researching what stocks to invest in, luckily you're in the right place! When your money is in your brokerage account, make sure you do due diligence on a stock as much as possible before buying it. Some brokerages like E*Trade have great research tools built into the website for free if you have an account with them. Read all of our other articles too; the more you know, the better.

If you're not a minor, start here!

Hey, we get it, allowing youth to start investing before they are 18 is a scary thing. but historically speaking, the earlier you start investing, the more potential growth you can get exposure to.

This is a chart visualizing the different curves of investing early Vs. late (CouponFollow)

Why invest early?

The scenario pictured above is just an illustration; however, the figures used are historically accurate. A 7% a year gain in the stock market is an accurate representation of the gains someone could expect over a 30-50 year period. As you can see, in this example, the 10 extra years account for a $178,000 difference in the results, totaling a $17,800 difference per year.

These figures may vary throughout decades of market movement but at a 7% estimated yearly average return, starting just a year or two before turning 18, could put 10's of thousands of dollars of value onto the net worth of an individual throughout their investing career. This could give some financial wiggle room if they choose to, say, buy a house, take on an entrepreneurial challenge, or buy a new car.

This is an infographic depicting the biggest online brokers (

How to do it

First, we recommend you check out our "Best Brokerages of 2022 article mentioned previously. After that, decide what brokerage and account type fits you and the minor's goals. Do you want an account for their retirement, something they can practice investing with, a guaranteed interest type of account? All things to think about. The biggest benefit of a custodial type account is that the non-minor cannot legally take any of the money the minor put into the account, which gives them control when they are 18 and prevents parental or guardian theft from minors.

Research with them! Help find stocks to invest in together, this eliminates any arguments about the process because the minor gets a say in where their money goes, yet you have the ultimate authority for their safety. At the Bull Pen, we usually choose stocks in a custodial account vs bonds or retirement accounts at that age.

Remember to always do research before making any financial decisions. At The Bull Pen, we are here to educate our readers and give them as much information as possible. Don't let us persuade you to make any decisions without first doing independent research.

How'd we do?

-We hope this article has helped. If it did... Let us know! We are always looking for feedback and are happy to connect with readers whether it's by email or by comments on the article. Thanks for reading, and as always, let the bulls run! 🐃🐃

DOW Jones= 31,029.31 NASDAQ= 11,177.89 S&P 500= 3,818.83

What are index prices when you are reading this article?

Published on 6/29/22. Read important disclosures listed in header. This is not financial advice, simply education. Do not take this article as personalized financial advice, we do not know any given individuals personal situation and do not intend to be the deciding factor in any financial decisions.


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