Financial Investment Tips for Teenagers

In today’s world, there are so many temptations to part teenagers from their money, it is small wonder that many teenagers simply do not want to think about financial investment. The consumer market has long since realized that teenagers have money from part time jobs or generous allowances from their parents and has in place various ways of extracting this income.

The typical teenager of today would feel naked without a cell phone. Clothes have to be designer label. Food has to be eaten out at fast food restaurants. Entertainment has be provided by expensive tickets to concerts. Leisure time is spent playing expensive electronic games. There are so many areas in which to spend money that “saving” is a dirty word.

There is a word that most teenagers might have heard but pay no attention to in their lives. That word is “sacrifice.” Before teenagers can even think about financial investment they have to accumulate savings and that means sacrifice. How many teenagers would limit their use of a cell phone to the bare minimum? How many teenagers would dress in cheap clothing, eat food prepared at home, watch a concert on DVD and use leisure time going for walks in the park? The majority of teenagers would be horrified at such a radical change to their lives. That is why the majority of today’s teenagers will never be rich. They simply don’t understand or more likely simply refuse to sacrifice their wasteful ways. Big business wants teenagers to spend and constantly provides new and exciting ways to dupe teenagers.

There must be some teenagers astute enough to realize that wealth creation involves a lot of hard work, planning and sacrifice. To save ten thousand dollars must seem like an impossible dream. The temptations listed in previous paragraphs would see that the majority of teenagers would be hard pressed to save even a thousand dollars. Yet by a lot of hard work, budget planning and sacrifice it should be possible to accumulate ten thousand dollars. Many millionaires will tell you that their hardest work was saving the first ten thousand dollars.

So what do you do with ten thousand dollars? Given that it will take you some considerable time to accumulate ten thousand dollars use that time to learn all you can about investment. A fool and his money are soon parted should be etched on your mind. There are many and varied investment schemes which may appear attractive on the surface but ultimately fail. Take your time to learn all you can about any investment before you part with a cent.

The share market is on area where there is money to be made. It is also an area when money can be lost. It is said that shares take the steps to rise and take the elevators to fall. Join an investment club. That is an excellent way to learn your skills. If you don’t want to bother personally with the share market look at investment trusts where the trust employs a manager. This is where your ten thousand dollars would be needed as minimum investment, but you must do your homework and be wise in selecting the investment trust.

You could of course invest the money in a secure bank deposit. There is minimal risk of loss; however, the return on your investment will also be minimal.  A bank deposit has the advantage of being readily available and would go a long way towards a deposit on a a house. Regular savings also demonstrate your ability to make repayments should you proceed with a house purchase.

Smart teenagers know that other teenagers who move out of home have to pay for their independence. If you have parents that allow you to stay at home then reward them by doing things around the house. Cook tea, wash the car or mow the lawn could be your way of showing appreciation.  When you have accumulated your ten thousand dollars look at buying a house, but rent it out. Use equity in the house to purchase another rental and build up a portfolio of rental houses. Again, the key to success is knowing everything there is to know about investment. Poor decisions caused by lack of knowledge can be disastrous.

For the adventurous teenager, there is the prospect of forming a partnership and either starting up a business or buying into an existing business. This decision to proceed involves an incredible amount of hard work both in running and planning the business. Many business fail simply because the hard work was not done thoroughly. Perhaps this area would be best left alone by teenagers.

When everything is considered, there are numerous areas for financial investment for teenagers. The teenagers should be aware of the many pitfalls that come with investment. Investment involves risk. Ask teenagers if they would accept risk, hard work, budgeting and sacrifice as opposed to living for today and you would find not many who could accumulate ten thousand dollars without succumbing to temptation to spend. 

Most of the wealth of any country is in the hands of a minority who own big businesses determined to extract every cent they can from teenagers. It’s time teenagers woke up and devised ways of extracting every cent they can from big business. It would be their investment in their future.