You want to begin investing as a teenager. Great. We’re here to walk you through the process of getting started step-by-step.
First, in order to begin investing, you’ll need to open an account designed for investing. Just like you might have a savings account or a checking account at a bank, there are also “investing accounts.” Although there are multiple kinds of investing accounts, the most basic one is called a “brokerage account.”
Unfortunately, in order to open a brokerage account, you need to be a legal adult. In most U.S. states, you are a legal adult when you turn 18. In order to comply with this regulation, Bumper has you invite an adult sponsor to your account. We recommend you invite a parent or guardian that you trust. Your sponsor will open the actual brokerage account.
Second, you need to transfer money into this account. On Bumper, your sponsor can transfer money from a bank account into the investing account. However, just because you have money in the account does not mean that you are investing. As of now, your money is simply sitting in the investing account as cash. You haven’t invested that money yet.
Third, you can finally make your first investment. On Bumper, you can invest in over 2,000 companies and ETFs. We'll discuss ETFs later. In order to make your first investment, navigate to the page of a company you want to invest in. Press “Buy” and enter the dollar amount you want to invest. This can be as little as just $1. You have now exchanged money for partial ownership of that company.
Fourth, talk to your sponsor about your trade. Because you aren’t 18, your adult sponsor must approve or deny your trade. However, they do have the option of auto-approving any trade you make.
You can reverse this process and exchange your partial ownership for cash by selling your stock.
You can begin investing by creating your teen Bumper account here.
Disclosure: This article is solely for informational purposes only. Bumper does not recommend any specific investments or investment strategies. Investments in securities involve the risk of losses and past performance does not guarantee future results. Before investing you should carefully consider your investment objectives, time horizon, and overall risk tolerance as well as the information stated in the product offering prospectuses.
All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification does not assure a profit, or protect against loss. There is always the potential of losing money when you invest in securities, or other financial products. Investors should consider their investment objectives and risks carefully before investing.
Disclosure: Alpaca does not make recommendations with regard to fractional share trading, whether to use fractional shares at all, or whether to invest in any specific security. A security's eligibility on the list of fractional shares available for trading is not an endorsement of any of the securities, nor is it intended to convey that such stocks have low risk. Fractional share transactions are executed either on principal or riskless principal basis, and can only be bought or sold with market orders during market orders.