Teenage investing can seem dangerous, but it doesn't have to be. Here are 4 misconceptions about investing early.
- You're too young to invest
Traditionally, investing is viewed as an activity for adults and Wall Street traders. However, with new technology and demand, investing at all ages is becoming increasingly common. Apps like Bumper create safe environments for teenagers to learn about the stock market at an early age. Investing now can be a great opportunity for teens to develop healthy financial habits, money management skills, long-term wealth.
- You don't have enough money
Many people believe that you need thousands of dollars before you can invest. However, with the advent of fractional shares, today's investors need as little as $1 to begin investing. With $5, you can own Apple, Microsoft, Tesla, Snapchat, and Chipotle. Whether you earned some money from a part-time job or a holiday gift, you can now put it to work in the stock market.
- Investing is too risky
Investing carries risk. However, by learning how to invest responsibly, teenagers can avoid unnecessary risk. For example, although 80% of day traders lose money, NerdWallet found that long-term investors have a 95% chance of tripling their initial investment over 40 years. Thus, by focusing on long-term investing, you can reduce much of the risk associated with the stock market. Bumper has built-in safety guardrails and limitations for reducing unnecessary risk. We don't give access to options or margin trading,
- You don't know enough about the stock market
The best way to learn something is by doing it. While there are plenty of purely educational resources available, nothing will compare to the value of real experience. Each investment will teach you something new and you will quickly gain a better understand of the stock market and financial world. Embrace your inexperience and start now.