When you get your first job in life it is tempting to take that first paycheck and learn something you’ve always wanted, yes, a fancy dinner. I’m happy, and I’m not saying you shouldn’t be rewarded yourself. In fact, I’ll tell you what. Go ahead and take that first paycheck you earn and go crazy with it. But shoes, you’ve been eyeing get that later iPhone models. Go for it, and 2 days later when you realize you don’t have enough left over to eat at Taco Bell come back and watch the rest of this blog because this is where you learn how teens like you should use their money to best prepare for the future.
Investing for teenagers.
If you haven’t watched part one yet, so do that first and then come back here. No worries, I’ll wait. It’s done great, because well, I talked about having the right mindset for investing in that blog. In this one, we’re going to give you 6 specific actions to secure your ability to invest for the future. Here’s the thing you can’t invest money if you don’t have any to start with right, so the first step is to get a job and not just any job, but I want you to get a second job boards specifically I want you to build a side hustle as a teen holding a full time job is pretty rare I mean you have school friends and family obligations.
most jobs take place while you’re taking classes that is why on top of that part-time job you have at the mall making hot dogs on a stick I want you to start up an online side hustle not sure how well you can check out this video where I talk about some great side hustles you can do but here’s a quick list of a few options off the top of my head start a blog create user generated content for social media on Fiverr review products you light on you too for tech top start affiliate marketing learn a sellable skill like web or graphic design of self loathing from goodwill cari or Poshmark.
Start making money online
There are literally dozens and dozens of ways you can start making money online right now and really this is only partially about making money it is also about the experience of building your own online business and mastering a craft well you failed maybe probably really isn’t a problem it is about how you dust yourself off and get back up to pivot and adjust your approach side hustles are amazing at helping you build skills overcome challenges learn how to manage a business and also build that extra stream of income the second action is to open a bank account if you’ve already done this then great but if you are over 18, and you don’t have your own bank account yet.
go open one now you can find online banks like allay bank where they don’t have any fees or minimum balances if you want a brick and mortar banks that work still most banks have no fee starter accounts for students under 25 shop around and find the best deal. Credit unions are also amazing institutions. What they lack in flashy marketing and brand recognition, they make up for in service is amazing loan rates and low fees. If you want to start investing, you need a bank account, so take that hard-earned side hustle money and put it in the bank for now. But we’ll talk more about that in a moment. The third action is going to seem strange and counterintuitive as a budding investor. But there with me what I want you to do is get a credit card.
Credit score is the biggest way to leverage
I know you probably assume that credit cards are often either too tempting to use or not for people who want to save money to invest but that is just the top level of credit card use. Yes, you need to use it responsibly but the true value of a credit card isn’t the spending power it is and how it helps you develop credit. Your credit score is the biggest way to leverage other people’s money for your future investments. You might not want to buy a car or invest in real estate right now but if you start building up your credit rating to date you’ll be prepared when the time comes. Of course, if you don’t have credit, how can you get a card?
Well, if you can’t take it back on your parents’ card then I recommend getting a secured card through your bank a secured card is just standard credit card what meant mobile is to T. mobile you put your money on the card first and then you can use the card against your balance why do this instead of using a standard debit card because after a few months or a year of responsible use of the secured card most banks will allow you to upgrade to a standard credit card account I actually did this back when I was trying to build my credit and within a year I went from having a $200 secured credit card to qualifying for $2000 unsecured visa card and my credit only went up from there.
Open an investment account
The fourth action is to open an investment account through an online brokerage. Finally, we’re actually going to start investing your money and I know that the idea of opening a brokerage account might seem intimidating, but it really isn’t much different than opening up that bank account from step 2. In fact, I have a whole video where I talk about the best places to open up for retirement or investing accounts. The link is in the description below. The idea here isn’t to throw all of your money into Apple stock. I recommend buying small quantities of a broad based index fund or ETF. These funds allow you to purchase hundreds or thousands of well performing companies all at once, and yes, I have a whole blog where I explain those to link down below.
This is really about getting in the habit of regularly putting your money towards your investments even $10 from every paycheck is a good place to start as I have its builds. so will your investments’ consistency is the key the fast action start a retirement account specifically a Roth IRA .what is a Roth IRA you can think of this as a way to safeguard your savings against future taxes a lot of times for their time in accounts you have to be a big chunk of money to the IRS when you withdraw it at retirement.
But not so with the Roth IRA again just like your investment account this isn’t about dumping a truckload of cash in this account all at once put away a few dollars from each paycheck more if you can, but the focus should be on building up the habit before you know it you’ll be growing some serious well for the future.
Difference between various retirement accounts
And yes, I have a blog where I talk about the difference between various retirement accounts. Did you have to ask that link is also in the description? The sixth and final action is going to sound funny. I want you to go have fun with your money. I know your head is probably spinning now. but hear me out. Everyone advises you to save money and young age. They want you to practice a lifestyle of abstinence from spending and buy everything at a discount. Ensured that is generally good advice if you’re a teenage robot, but here’s the thing: life is about balance.
Spending your youth for the sake of a few dollars isn’t a very enjoyable way to live. You want to go to the movies sure once in a while it isn’t going to hurt. You need to replace your broken cell phone, go ahead and upgrade to the latest iPhone. The issue is only when you spend excessively, far outside of your means. It is once again about building good habits by things you enjoy but that still allows you to invest for the future don’t go beyond your means because dat and excessive consumer spending can really derail your life in the future you probably won’t regret having spent $20 an overpriced popcorn at the movies.
Spending quality time
but you will regret not spending quality time with the people you care about make those great memories but do it with balance after all what good is investing for the future in the future your building is one of regret and disappointment being young enjoy life but also plan and prepare for your future you can have both in fact you can actually retire in just 10 years can you imagine going to your 10 or 15 year high school reunion and when people ask what you do for a living you could say I’m retired well in this video I show you exactly how you can make that happen so check that out, and I’ll see you there.