You don’t need a finance degree or a ton of cash to get started – just a little knowledge and a willingness to learn.
Investing means putting your money into something, like stocks, bonds, or real estate, with the hope that it will grow over time. Unlike saving, which keeps your money safe and slowly growing (if you have it in an interest-bearing account), investing helps your money work for you, with the possibility of faster and bigger growth (though that is never guaranteed).
Before we get started, we must make the disclaimer: We are not offering financial or investment advice, and results are never guaranteed. Seek out a trusted investment advisor to discuss your own individual investment plans.
Time is your biggest advantage. Thanks to compound interest, even small investments can grow significantly over time. For example, investing $100 a month starting at age 18 could grow to over $200,000 by retirement, just from consistent contributions and market growth.
Time plus consistency is a reliable strategy for investing. Even small amounts invested regularly, as little as $20 each month, can build a strong portfolio over several years.
Staring young also helps you build habits and master methods that lead to long-term financial freedom. Young investors have time to make mistakes and learn from them. If the market dips, you have decades to recover and adjust your strategy.
Stock: A share in a company. When you buy stock, you own a piece of that business.
Bond: A loan you give to a company or government. They pay you back with interest.
Mutual Fund: A collection of stocks and/or bonds managed by professionals.
Diversify: Spreading your money across different types of investments to reduce risk.
Public Stock: Shares of a company that are traded on public stock exchanges like the New York Stock Exchange (NYSE) or NASDAQ. These stocks are available for anyone to buy or sell, and the companies are required to disclose financial information regularly.
Private Stock: Shares in companies that are not listed on public exchanges. These are usually held by founders, employees, or private investors. Buying private stock often requires special agreements and qualifications.
ETF (Exchange-Traded Fund): Similar to mutual funds but traded like stocks.
Portfolio: The collection of all the investments you own.
Risk: The chance your investment could lose value. Higher risk can mean higher reward, but also potentially bigger losses.
Fiat Currency: Government-issued money like the U.S. dollar, not backed by a physical commodity.
Self-Custodial Wallet: A crypto wallet where you control your own private keys and assets, without relying on a third party.
Learn First: Use reliable resources like online tutorials or investment advisors. Be extremely careful to choose trustworthy sources with a strong reputation. There are plenty of scammers out there who want to swindle you! Ask your parents or another money-wise adult if they have a financial advisor they recommend.
Open a Brokerage Account: Many platforms let you start with small amounts.
Start Small: You can invest with as little as $5. You may wish to consider ETFs or fractional shares to diversify.
Think Long-Term: Don’t panic over short-term ups and downs. Investing is a marathon, not a sprint.
Trying to Get Rich Quick: Investing isn’t gambling. Avoid hype-driven stocks or any investment promising overnight success.
Ignoring Fees: Some platforms charge high fees that eat into your returns. Always check for hidden costs.
Putting All Your Money in One Place: Diversify your investments to reduce risk. Don’t bet everything on one stock or asset.
Following the Crowd: Just because everyone’s buying something doesn’t mean it’s a good investment. Do your own research.
Not Having a Plan: Set goals and understand your risk tolerance. Investing without a strategy can lead to emotional decisions.
Neglecting Emergency Savings: Before investing, make sure you have a safety net, like a few months of expenses saved in a safe bank account.
Forgetting Taxes: Investment gains can be taxed. Learn about capital gains and how they affect your returns.
Avoid scams. If it sounds too good to be true, it probably is.
Use a self-custodial wallet if you invest in crypto. This means you control your own keys and assets, not a third party. (Old Glory Bank will have options to consider soon – stay tuned for details!)
Diversify. Don't put all your money into one stock or asset. Consider different types of investments, including stocks, bonds, mutual funds, real estate, and crypto. You’re less likely to lose everything if one type of investment drops.