Top 5 Ways for Teens to Invest Their Money

As you begin to make money as a teen, you will hopefully start to save some. As you begin to save some money, then you'll hopefully start to look into the possibility of investing your money in hopes to make a larger return. Let me start off by saying that investments can be very risky. Even the mo
st seasoned wall-street investors can lose millions of dollars at the drop of the hat, which is why it is so important you only invest with funds you can afford to lose and to make sure that you are a smart investor. The number #1 piece of advice that almost all financial services tell you is to make sure that you pay off your debt, such as student loans, before you begin investing. Sure, it may sound cool to have the possibility to turn your $5,000 into $7,000 after a year, but that initial $5,000 can also turn into $0. Then you will be stuck with $0 as well as debt that will continue to grow due to interest. Now that you have that in mind, here are some great ways that you can begin to invest, granted you have all of your debt paid off, with a small amount of money while being a teen, college student, or young adult.

1.) Make a Fantasy Account
The best way to learn about the world of investing is to make a fantasy account. Imagine having $100,000 and allocate that money to various investments. Track your progress over the course of a year and along the way you are sure to learn about the world of business or finance. A great way to do this is to perform this with a couple of close friends or your parents. That way you will have someone to talk about these investments with and learn from. Also, many brokerage accounts offer services where you can trade pretend money for free, which will help you gain knowledge on various investments and what not to do when it comes time to investing real money.

2.) Put Your Money Into a Savings Account
Probably the best advice I can give you when looking to invest your money as a teen is to put it into a savings account. When investing with small amounts of money the potential returns are very small. For example, say you invest $1,000 into a particular company. Don't expect at the end of that year to have doubled your money and have $2,000. A 100% return on a given year is incredibly rare and only happens to the luckiest of investors. A great strategy to have is to take the money that you are planning on investing with, putting it into a savings account for a year, and then making a fantasy investing account so you can learn which investments work and don't work. At the end of that year, you will have more money to invest with and a better understanding of potential investments.

3.) Invest in the Stock Market
Investing in the stock market can be fairly risky, however with the right plan you can minimize your potential loses. It is important to use a fantasy account first so that you understand the ups and downs of the market before you put any real money at risk. It is nearly impossible to predict the direction of a stock and many people invest in a company solely based on speculation of how they will perform in the future. In order to open your own brokerage account you need to be 18 years old, however with your parents permission, they can open up a custodial account for you if you aren't yet of age. When investing, keep in mind that you should be investing for long-term gain. Over long periods of time, returns in the stock market have averaged about 10% per year. Some great low-no minimum brokerage accounts that you can check out are Etrade, TD Ameritrade and Trade Monster.

4.) Invest in a Website
With $1,000 you can build a pretty amazing website with a lot of great content on it. You can pay others to design your website, perform SEO for it, write articles for it, get a custom logo and many others all with virtually no work on your end. Fact of the matter is that the only money I put into this website is for the URL and hosting which is only about $10/year and I make easily $1,000 a year with it. With a $1,000 you could build a website on a niche that you are knowledgable on and possibly make some huge returns. Or you could buy 40-50 micro niche sites and make a profit $10-$20 a month on EACH one. I have been investing for roughly 5 years now, in both the stock market and with mutual funds, and I have found that internet marketing blows them all out of the water. It is a lot less risky and a lot easier to predict how much money you expect to make in a given month.

5.) Invest in a Mutual Fund
Investing in individual stocks can be risky because you can lose a ton of money if the company you are investing with comes out with a bad earnings report, or worse, goes bankrupt. Mutual funds are  investment pools run by individuals. Even if you only have a couple thousand dollars to invest, a mutual funds spreads your money out over several different stocks representing different companies. Check out Yahoo Finance or Morningstar to research various mutual funds that you can invest in. Some high earning mutual funds can make you upwards of a 20% return each year.

For some great sites that offer some more free advice on investing for teens check out the list below. Make sure you are smart when you start investing and don't rush into it. When I was 18 I invested $1,000 I had made waiting tables into a tech company without doing any research. The company tanked and I eventually lost $500. So be smart and let me know if you have any questions below!

• The Mint: Investing Tips for Teens
• Investment Education for Teens
• Teens and Stock Trading

10 Ways to Save Money as a College Student

As a college student myself, I know how difficult it can be to make it through the year with little to no money in your bank account. My freshman year I don’t think that there was a time when I had more than $50 in my account for the entire year. Regardless of what my situation was, it’s a common trend that all college students will experience at one time or another: not having enough money. Here are 10 money saving tips for college students as well as teenagers to make your funds stretch further than you ever thought they could:

1.)  Rent or Buy Used Textbooks

I still do not understand why some people purchase new textbooks every semester. My first semester of college I bought all new textbooks and spent $580. Ever since then I have been renting and buying used and have not spent over $150 a semester. Ebay, Chegg and Amazon are great for saving your money.

2.)  Drink Water

Don’t waste your money on juices and energy drinks. Water is free and a whole lot healthier than those sugar infested beverages.

3.)  Use Campus Transportation

I cannot tell you how many times I have gotten parking tickets on campus because I was too lazy to walk or take the bus to class.

4.)  Don’t Buy Your Music

Free services like Soundcloud, Spotify and Pandora are available so why would you waste $1.29 for a single song with ITunes?

5.)  Ditch The Cable

I had no idea how expensive cable was until I got it for myself. For the cheapest plan on Comcast, it cost me $40 a month, $40 that I really didn’t have to spend. You can watch TV online and play DVDs through your laptop for free.

6.)  Pay Bills Before They Are Due

There are too many times where I simply forgot to pay my rent and was forced to pay a late fee for my stupidity. Just plan to pay your rent and bills at least a week early, every month.

7.)  Skip The Alcohol

Alcohol is expensive, plain and simple. Especially when you’ve had a few drinks and are at a bar with a few friends, you’ll probably end up finding yourself buying drinks for them out of the niceness (drunkenness) of your heart. The solution? Go to the bar without your credit card or just have a couple drinks and vouch not to spend anything else. Or, just don’t drink!

8.)  Avoid Take-Out

Getting take-out is expensive and you will most likely spend at least $10 each and every time. Why not go to the campus cafeteria? Or go shopping and buy your food in bulk so you can save money?

9.)  Skip Expensive Spring Break Trips

So many of my friends have always gone on extravagant spring break trips. While I’m sure they are a ton of fun, they cost a lot of money and you end up forgetting more than you remember.

10.) Avoid Spending Money On the Weekends

This may be the best step you can take to save yourself a lot of money. Whenever I find myself with an overdrawn bank account, it’s usually on a Sunday or Monday after the weekend. Almost all of my purchases are made on the weekends on food, movie tickets, etc. Rather than partaking in costly endeavors you could read a book, play a sport or go for a walk (all free alternatives).

There you have it. Here are some great ways to safe money as a college student that teenagers can use as well. Have any other effective methods to save money? Comment them below and lets have a discussion. Thanks for reading!

Money Management For Teens To Become a Millionaire

As a teenager or young adult it is very tempting to spend your money on new gadgets as soon as you get your hands on some cash. While this can be exciting, how often have you bought something, like a new video game, and then regretted spending your money on that item. While saving your money may not be as exciting as its alternative, it is important to do. Saving and managing your money will create a financial cushion for yourself, when you begin to have more responsibilities, like paying bills as you get older and enter the “real world.” I hope that by reading this post you will increase your financial awareness and learn the importance and benefits of money management as a teenager. 

How to Begin to Save Money

When you begin to save your money you may not know how much to save each month or how to go about beginning the process. Here are a few tips that you can use to get you started.

Set Goals- Say you get a weekly allowance of $20 from your parents, which adds up to about $80 a month. Set a goal for yourself to save $30 of that $80 which will add up to $360 a year.

Talk With Your Parents: I know that when I was younger my parents were excited when I told them that I wanted to begin saving the money that I got for birthdays, holidays and odd jobs around the house. They set up a system where they would “match” every dollar I saved, as long as I didn’t take that money out of my account for personal use. Maybe you can bring this idea up to your parents and see what they think about it.

Have a Plan­-Saving before you spend may be the most important step to this process. As you get older many adults save a certain percentage of their income for retirement funds and other things. You too could save a percentage of money that you get each month and then spend the rest of your income on whatever you choose.

What to do With Your Saved Money

Once you have begun to save your money you will now need to find a place to keep your saved money. The first step that you should take is to open up a bank account for yourself. Opening a bank account serves many benefits, including: safety, easy access and more ways to save. You are protected from robbery that may occur if your cash is stored in your favorite hiding spot, the opportunity to access your account via debit cards/checks/online, and finally an opportunity to earn interest on your account. So what is a savings account and how do I go about getting one?

Saving Accounts

When you’re younger chances are that you most likely have zero expenses. Your parents probably pay for your essential goods like food, clothes and housing. This can make it seem like there is no reason to save your money and you will probably want to spend it as soon as you get it. However, once you get to college you will learn the importance of saving your money when you will have to pay for rent, schooling, food, bills, clothes and all other non-essential items. This adds up quickly and having a good savings account can help you decrease the inevitable college debt that you will most likely incur.

The amazing thing with savings accounts is that you can see your money significantly grow even with a small account. You will earn interest payments on your account on a regular basis and these payments will allow your account to grow without you touching it. For example, say you initially deposit $50 into an account and $50 every month for 5 years. The $3000 that you deposited (5 years*12 months/year*$50), with a 6.5% interest rate compounded annually, will turn into $3,585.31, a gain of $585! Now imagine that you continue to deposit $50 every month for another 5 years. The $6000 that you have put into the account has now turned into $8,428.98, a gain of almost $2500 that you would not have had had you not put it into a savings account. Scale up that $50 monthly deposit into your account and you will see yourself with incredible gains of tens and hundreds of thousands of dollars.

A great list of the best savings accounts of 2014 has been put together over at The Simple Dollar.With parental supervision, you should start researching some accounts and possibly open one up for yourself.

Investing

While investing your money may be a little bit risky, it is an awesome way to increase your financial awareness and possibly set yourself up for stability down the road. Investments do however pose more risk than savings accounts, as there is a possibility that you can lose your money. The three most common types of investments include stocks, bonds and mutual funds.

Stocks- Stocks are when your have partial ownership in a publicly traded company. If the company is doing well, you will have an opportunity to sell your “shares” of stock for more than you paid for them. However, if a company performs poorly you will lose money as you may end up selling your shares for less than what you paid for them. Investing in stocks is fun to do as you can see your investments increase when companies come out with new products or ideas.

Bonds- Bonds represent a promise from a company or organization for a payment of a specific interest rate for the money you leave with them for a specified period of time. Bonds are much more safe than stocks, but you will not have the opportunity to make as much money.

Mutual Funds-Mutual funds are professionally managed collections of money from different investors. Each mutual fund invests a variety of ways including in stocks or bonds. So you are essentially giving your money to these money managers who run these funds in the hopes that they will increase your capital for you.

Penny stocks also offer a way to make yourself a lot of money, however proceed with caution and only use funds that you can afford to lose. Check out my post Turn $500 into $5000 with penny stocks to learn more on the topic.

For more detailed information on the potential risks and returns on investing I suggest you check out a “ Beginners Guide to Investing” at the SEC: www.sec.gov/investor/pubs/begininvest.htm

Be Smart

All in all it is important to be smart when you are saving your money or investing it. Money management as a teen or college student is a great skill to have and if you can start saving at a young age you will be miles ahead of someone who begins saving at a older age. If you successfully save and invest your money chances are that you will become a millionaire at some point! Thanks for reading and I hope you have a great day!

Turn $500 into $5000 With Penny Stocks

UPDATE JULY 2015
"It has come to my attention that Turn $500 into $5000 With Penny Stocks is the most popular post on this website, Teens With Money. While I did at one time turn $500 into $5000 on a single penny stock nearly 5 years ago, it was incredibly lucky and I don't recommend gambling your money like I did. The stock (KEYP) was a scam and has since dropped to $0.03 from its 2011 high of $4.83. I was very lucky as I took my profits and wasn't too greedy. $500 is not enough for an initial investment, and most investment experts would recommend a minimum of $2000 to begin investing in todays highly volatile markets. However with that all said, I still stand by the second part of this article as it contains some great information for teens looking to make money in the stock market. Good luck, be smart and thanks for reading!"- John Cookster

Original article:
Have you grown sick of your job while working so much for so little money? Believe me, the last thing I would want to do right now is to have a 9-5 job, busting my behind to make minimum wage. Granted, any money is better than no money, but I'm not looking to make any money...I'm looking to make a lot of money.

I know that kinda sounds like I'm an arrogant person, but hey call me what you want. I know how to make a lot of money online and I'm only a teenager. Recently, I turned 18 and got involved in penny stocks (aka stocks under $1.00) and eventually larger stocks through a friend. He told me about a sub penny stock with a new CEO that had completely changed the direction of the company. The sky was the limit and their stock price was about to sky rocket. I trusted my friend, opened a brokerage account and bought $500 worth of shares in this company.

Fast forward 1 week. I had just bought myself $1000 worth of brand spankin' new clothes. The share price rose over 1000% and i had turned my initial small investment into a large sum of cash. I was ecstatic and couldn't believe that at my age, a mere freshmen in college, I had just made so much money in 1 week. Naturally, I did what any stupid teenager would do. Without doing any research I dropped $1000 into a another company. Within 2 days the share price had dropped 60% and I had lost $600. I had gone from being on top of the world to being scared to spend a dime in a matter of days.

Since that drastic turn around about 2 months ago I have made another $4500 in the stock market. I began reading up on chart trends, company statistics and industry news. All factors that affect the price of a share. I educated myself and although I have had some tough losses, I have overall made a large amount of money through stocks.

BUT BE CAREFUL. Stocks are extremely risky. Plain and simple. Especially penny stocks! If you aren't willing to take some risk then you probably won't make yourself any money. Don't be a stupid teenager. I know I was at first!

Penny stocks can make you filthy rich, but can also cause you to lose all of your money. Before you decide to invest in a penny stock realize that they are risky because of:

• Lack of available information about the stock
• Lack of minimum standards to cushion investors
• Lack of stock history due to a company's new start

A penny stock can jump 400% in one day and seem like the next Apple. However it can drop 100% just as fast. Just make you that if you do decide to play penny stocks that you are constantly watching the share price and doing your DD on the company. They are hard to play as adults, let alone as a teen. However, I feel that as long as you do your homework then you aren't taking a risk, you are just taking advantage of a great investment opportunity.

Before you decide to go blow all of your money on some company, I suggest that if you are legitimately interested in stocks then you talk to your parents. I'm sure that your dad can offer you some great advice and would point you in the right direction to start. If not, the internet is your friend. Endless amount of free information will get you off to a good start! Good luck everyone!