Why Every Teen Should Learn How to Pick Stocks

Most teens learn how to earn money through chores, part-time jobs, or allowances—but very few are taught how to make their money work for them.

That’s where investing in stocks comes in. Instead of just spending money, teens can learn how to grow wealth, build financial independence, and even retire early by making smart stock choices.

✅ Investing allows money to grow over time. 📈
✅ Picking stocks teaches critical thinking and decision-making. 💰
✅ The earlier teens start, the more wealth they can build. 🚀
✅ Learning to invest young can break generational financial struggles. 🔥

In this guide, we’ll explain why every teen should learn how to pick stocks, how to research companies, and simple steps to get started investing today!

Step 1: Why Stock Investing Is Important for Teens

1. The Earlier You Start, the Richer You Can Become

When it comes to investing, time is your best friend. The earlier teens start investing, the more money they can make through compound growth.

📍 Example:

• If a teen invests $100 per month from age 15 to age 65, with an average 10% return, they could have over $1.2 million!

• If they wait until age 30 to start, they would only have $300,000—that’s nearly a $900,000 difference!

💡 Lesson for Teens:

• "Starting young makes you a millionaire faster!"

2. Picking Stocks Builds Smart Financial Habits

When teens learn how to research and invest in companies, they develop:
✅ Critical thinking skills.
✅ The ability to analyze financial trends.
✅ A habit of saving and investing for the future.

📍 Example:

• A teen who learns to invest in Apple stock will also understand:
  🔹 How Apple makes money.
  🔹 Why new iPhone sales affect stock prices.
  🔹 How to research other tech companies for investment opportunities.

💡 Lesson for Teens:

• "Investing teaches you how businesses grow and how to make smart money moves!"

3. Investing in Stocks is Better Than Just Saving Money

Many teens save money in a bank account—but stocks grow much faster than savings accounts.

📍 Example:

• $1,000 in a bank (earning 0.5% interest) → Worth $1,050 in 10 years.

• $1,000 in an index fund (earning 10% per year) → Worth $2,593 in 10 years.

💡 Lesson for Teens:

• "Saving money is good, but investing makes it grow!"

Step 2: How to Pick the Right Stocks

1. Invest in Companies You Understand

The best stocks for teens are the ones they already know and love.

✅ Do you love Apple products? → Consider Apple stock (AAPL).
✅ Do you shop on Amazon? → Check out Amazon stock (AMZN).
✅ Are you a sneakerhead? → Nike (NKE) could be a great investment!

📍 Example Activity:

• Have teens list their favorite brands and research whether their stocks have grown over time.

💡 Lesson for Teens:

• "You can own part of the brands you love instead of just spending money on them!"

2. Research Before You Buy

Before investing in a stock, always check if it’s a strong company. Here are the 3 key things to look for:

📍 Example Activity:

• Have teens look up a stock on Yahoo Finance or Google Stocks and check:
  🔹 How much the company makes in revenue.
  🔹 If it has been profitable for many years.
  🔹 If its stock price has gone up over time.

💡 Lesson for Teens:

• "Always research before you invest—never buy stocks just because they’re popular!"

3. Avoid “Get Rich Quick” Stocks

Some teens may want to invest in hyped-up stocks, hoping to make fast money—but this is risky.

📍 Example:

• Many people bought GameStop stock in 2021 when it skyrocketed but lost money when it crashed.

• Instead, invest in strong, growing companies that will be successful long-term.

💡 Lesson for Teens:

• "Don’t chase trends—invest in companies with a strong future!"

Step 3: How to Start Investing as a Teen

1. Open a Custodial Investment Account

Since teens under 18 can’t open brokerage accounts alone, parents can open a custodial account to help them invest.

🔹 Best Brokers for Teens:

• Fidelity Youth Account – No fees, great for beginners.

• Charles Schwab Custodial Account – Parents manage investments until the teen turns 18.

• Stockpile – Allows teens to buy small pieces of stocks.

📍 Example Activity:

• Have teens pick their first stock and invest just $10 to start learning.

💡 Lesson for Teens:

• "You don’t need a lot of money to start investing!"

2. Start Small and Invest Regularly

The best way to build wealth is to invest small amounts consistently—this is called Dollar-Cost Averaging (DCA).

📍 Example:

• Investing $20 per month in an index fund can grow into thousands over time.

💡 Lesson for Teens:

• "Investing small amounts regularly builds big wealth!"

3. Think Long-Term, Not Short-Term

Many beginner investors want to make quick money, but the best investors hold stocks for years to grow their wealth.

📍 Example:

• If a teen invested $1,000 in Tesla in 2012, it would be worth over $200,000 today!

💡 Lesson for Teens:

• "The best investors don’t panic—they stay patient and let money grow!"

Conclusion: Start Teaching Teens How to Pick Stocks Today!

By learning how to pick smart stocks, teens will:
✅ Understand how companies grow and make money.
✅ Learn how to research and make smart investments.
✅ Build financial habits that will last a lifetime.
✅ Start creating wealth instead of just spending money.

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