So how you start investing at age teenager and even younger. Well in this video I’m going to give you guys 3 ways to invest in the stock market as a minor.

1. Custodial Account
– Basically, an account managed and maintained by your parents
– And once you turn 18-21, depending on your state
– The account will revert to your name.

What if my parent Steals my money:
– Well once money has been contributed, the manager usually the parent is not allowed to take it out
– Unless it’s for your benefits, and they have to prove it
– For example school clothes, braces and so on.

Why not just have my parents open a RobinHood, M1 finance or acorns app account:
– Because legally that account will be theirs
– And in the long term you never what’s going to happen
– So you want to be legally protected.

Here are the Best Once:
– Acorns just release a way for parent invest into a custodial account
– Fidelity: 0 fees, minimums and 0 on trades
– Charles Schwab: almost the same as fidelity since they are direct competitors

Tip: don’t use the money you make to buy a new iPhone or the ps5 or ps6 comes out in 10 years, just save up for those liabilities. ( things that don’t make you money are liabilities)

2. Custodial Traditional IRAs and Roth IRAS
– The only requirement is that you earn income as a teenager so you can get a job
– Some parents go as far as hiring kids into their own companies and paying them 12k a year to avoid taxes
– However most you watching this video will be better off just getting a job.

Now what I would do is:
– I would split my investing money 50-50 or maybe 80-20
– Half for investing normally and the other have for investing in your retirement
– The reason this is important is that your money gets to grow tax-free

Tip: the earlier you set up a system, the more money you will have. For example, if you earn $1000 a month as a teenager, you can easily keep 200 for yourself and invest the rest. Over time, that 800 bucks will add up to be a lot of money.

Options: fidelity and Charles Schwab

3. 529 College Savings plan accounts
– Now this is just for education
– But if you can get your parents to open this account for you
– It’ll save you a ton of money on student loans for sure

Here is how it works
– Your money will grow tax-free
– And when you use it for educational purposes the gains will also be federally tax-free also
– So it means if the math is done correctly you get to graduate with 0 student loan debt

Tip: remember this is an investment account, not savings, so there is a risk to market fluctuations.

Ps: they do have limits account to your state might range from 200k to 520k for example in New York.

Pss: if the person does not go to college it’s still getting a penalty, if they get a full scholarship, then the penalty is waived.

Options: fidelity and Charles Schwab

4. Things I want to address:

– Dollar-cost average: how often to invest?

– Free gift tax: up to 15k per year single or $30k per year married and btw Anyone can transfer for money to your account: grandparents, uncles, friends, and more.

– This might affect your financial aid, so keep that in mind also: 20% of the assets will be considered in a normal brokerage account. But only 5.64% for a 529 account

– Now here is the math 8% return in the s&p 500: from
13 to 18: 38k
13 to 45: 869k
13 to 65: 4.35M

https://www.fidelity.com/open-account/custodial-account
https://www.schwab.com/custodial-account

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*Some of the links and other products that appear on this video are from companies in which Tommy Bryson will earn an affiliate commission or referral bonus. Tommy Bryson is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. I’m an Accountant but I’m not your Accountant, always review information with your Accountant/CPA and your Financial Advisor.

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