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Funds for Teenagers

As a general rule, growth funds are best for teenagers. They’re riskier than most of the others, but they have the potential to make you more money. An aggressive growth fund could yield 30 to 40% in one year—or lose that much or more. There are plenty of less radical mutual funds that still tend to do much better than your bank account.

Unless you need every dime of your money to spend for college next year, you can probably afford to take moderate risks with your money. No one wants to lose money, but as long as you don’t take stupid risks, you probably won’t lose more money than you can replace quickly with a part-time job. Invest no more than half of your savings in a solid mutual fund. If the fund is risky (potential for big losses), don’t put in more than a fourth of your savings. Continue Reading »

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So far I’ve talked about using savings accounts and CDs to save up stacks of cash. There are lots of other investments out there— stocks, bonds, precious metals, commodities, and many more. Most of these kinds of investments don’t really work for teenagers because they require large amounts of money to get started.

There’s one nonbank investment that works just fine for teenagers—mutual funds. They don’t require lots of money to get started, and they can make your savings grow faster than a bank account. Here’s how they work.

Let’s say you have $500 to invest in something. You could buy 100 shares of a stock trading at $5 per share, but that’s putting all your eggs in one basket. If the stock does poorly, you’ll lose some or all of your investment. Not a good idea. Continue Reading »

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I don’t know your financial situation or what you dream of doing in your future. But if you’re like most teenagers, you have a specific high-dollar dream in your immediate future, whether it’s a car, a college education, or even a three-month overseas mission trip after you graduate from high school. Whatever your next big financial goal, this four-step strategy can help you reach it.

1. GO FOR GROWTH

Your number one investment goal is to make your money grow. Right now you have few expenses compared to your income. But soon you’ll be paying for cars, education, furniture, entertainment, clothes, food, housing, medical expenses, and a thousand other things that someday will obliterate your paycheck. Make the right investments now, and your money will grow substantially until you really need it. Continue Reading »

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