How to Start Investing as a Teenager

If you're a teenager thinking about investing, here's the truth: you have an advantage no adult can buy back — time. A small amount invested at 15 or 16 has decades longer to grow than the same amount invested at 30. Starting now, even tiny, beats starting big later. So let's get you started.

Can a teenager actually invest?

Yes — you just can't do it entirely on your own until you're a legal adult (18 in most states). Until then, you invest through a custodial account: it's opened with a parent, who manages it until you reach the age of majority — but the account is in your name, and the money is yours. (More on the age rules: at what age you can open a brokerage account.)

Your two main accounts

• A custodial brokerage account (UTMA). The flexible, do-anything option — no job required. You can invest birthday money, allowance, anything. See how a UTMA works.
• A custodial Roth IRA. If you have earned income — from a job or your own business — this account is unusually powerful: your money grows tax-free, and qualified withdrawals in retirement are tax-free too. A teen who earns and invests here has a head start most adults never get.

How to actually start (it's five steps)

1. Talk to a parent. You need them to open the custodial account with you — so this is a team move.
2. Pick the account. A UTMA for flexibility, or a custodial Roth IRA if you have earned income (grab that tax-free growth).
3. Open it. It takes about 15 minutes online at a major brokerage.
4. Keep it simple. Don't try to pick the next hot stock. Buy a broad index fund or ETF that owns a little of everything — it's how most smart investors, of any age, actually do it.
5. Add a little, and leave it alone. The magic isn't picking winners; it's time. Let compounding do the work.

This explains how to get started, not what to buy — MemoryBank is an education and display tool, not a broker or a financial advisor.

The move that supercharges it: earn, then invest

The teens who pull ahead don't just invest money they're given — they invest money they make. Earning gives you fuel for the Roth and turns a hobby into wealth. Need income ideas? See how to make money as a teen. And for proof it works, meet Zane, who built a lawn-care business and invests hundreds a month.

To compare the accounts a teen can use, see the best investing apps for teens.

Frequently asked questions

Can a teenager invest in stocks?

Yes — through a custodial account opened with a parent, because you must be a legal adult (usually 18) to open a brokerage account entirely on your own. The custodial account is in the teen's name and the money is theirs; the parent just manages it until the age of majority.

How do I start investing as a teenager?

Five steps: talk to a parent, pick an account (a custodial brokerage/UTMA for flexibility, or a custodial Roth IRA if you have earned income), open it online in about 15 minutes, buy a broad index fund or ETF rather than trying to pick winners, and add a little regularly while leaving it to grow.

What should a teenager invest in?

For most teens, a broad, low-cost index fund or ETF that owns a little of the whole market is the simplest and smartest choice — it's diversified and doesn't require picking individual stocks. The goal at your age isn't to be clever; it's to start early and let time compound.

How much money do I need to start investing as a teen?

Not much. Many brokerages have no minimum and offer fractional shares, so you can start with just a few dollars. Because you have decades for it to grow, even small amounts invested now matter more than large amounts invested later.

Should a teenager open a Roth IRA?

If you have earned income from a job or your own business, a custodial Roth IRA is worth understanding — the money grows tax-free, qualified withdrawals in retirement are tax-free too, and the long time horizon does most of the work. No earned income yet? A custodial brokerage account works in the meantime.

What to do this week

1. Show this to a parent — opening the account is a two-person job, and they'll be glad you asked.
2. Decide the account: UTMA if you're investing money you have, a custodial Roth if you're earning.
3. Open it, buy one simple index fund, and set up even a tiny recurring contribution.
4. Connect it in MemoryBank so you can watch it grow — that's what keeps you going.