From one teen to another: Why you should start
Writing by Max Chwatko
Photography by Avery Gameiro
Whether you’re taking on your first job this summer, you’ve worked before, or you just want to use up all that birthday money, there are options. Sure, you could spend it all on new sneakers or concert tickets. But if you’re looking for a smarter move, you could save it in a teen-friendly bank account, or you could invest. With just a few extra dollars and a teen or custodial brokerage account, you can start buying fractional shares, set up automatic deposits, and let your money work for you over the long haul—turning simple savings into real wealth building.
If investing seems like an intimidating world—one reserved for Wall Street professionals, financial gurus and those with years of experience—I promise you, it’s not that scary. Speaking as a fellow teen, investing is far more approachable than it seems.
I began investing around nine months ago, when my grandparents and mom helped me open an account for my birthday. Since then, despite the market’s ups and downs, I’ve grown my account by 45 percent—even earning returns of 150 percent and 140 percent on two of the stocks I picked. Along the way, I’ve gained a deeper understanding of the market than I ever imagined, and I’m still learning every day. With the right knowledge and tools, you can start building wealth and securing your financial future. All it takes is your phone or laptop and a bit of expert advice.
The case for investing now
While saving money in a traditional bank account is a great start, investing offers an opportunity to grow wealth over time. “When I talk to people before they start investing with me—and it could be young teens or adults—not everyone is familiar with investing,” says Judi McAnaw, a financial advisor at Edward Jones in Armonk. “Before you even think about what you want to invest in, you need to think about what your goals are.”
If you’re wondering, “Why invest now?” The answer lies in the power of compounding. Even small contributions made early can grow significantly over time. In other words, the longer money is invested, the more time it has to multiply.
Jennifer Drapala, a business teacher at John Jay High School and advisor to the school’s business clubs, believes financial literacy is important, even as a teen. “This is such an important topic for teenagers, but you don’t see it in a lot of schools,” she notes. “Finance—even just the basics—before everybody goes off to college is critical.” Investing early, even with small amounts, will allow you to build confidence and experience managing your money.
The first steps
Before diving into the stock market, it’s crucial to do two things. First, setting clear goals is essential. Whether you’re saving for college, a first car or long-term wealth, knowing the purpose of investing will help you shape your decisions.
Second, you should explore different types of investment accounts. If you’re under 18, a custodial account—with a parent or guardian’s help—can be an excellent place to start. These accounts allow you to buy stocks as well as exchange-traded funds (ETFs) and mutual funds.
“A lot of people think you need thousands of dollars to start investing, but that’s not true,” says McAnaw. “With fractional shares, you can invest in major companies with just a few dollars. The key is consistency.”
If you’re scared you might lose your hard-earned money, another way to test the waters is through investment simulations. “A lot of our students start by using paper trading accounts,” Drapala explains. “These allow them to practice without any real risk. It builds confidence before they start using real money.” If that seems like a safer route for you, many brokerage platforms (like Charles Schwab, Webull, TradingView, etc.) offer virtual accounts where users can make trades without financial consequences.
Avoiding common pitfalls
Investing comes with risks, and one of the biggest mistakes new investors make is trying to time the market. But it’s risky to “chase” performance. “Jumping into a stock because it’s doing well at the moment shouldn’t be the only or biggest factor when making your decision,” McAnaw cautions. “The best investors take a long-term approach and don’t let short-term market swings dictate their decisions.”
A key concept worth grasping is something called unrealized losses. A stock’s value fluctuates daily, but a loss is only realized when the investor sells at a lower price than they bought in. “If you’re investing for the long term, temporary drops don’t necessarily mean you’re losing money,” McAnaw explains. “It’s only a loss if you sell. Holding steady and riding out the volatility is often the best approach.”
Diversification is another essential principle. “You don’t want to put all your eggs in one basket,” Drapala notes. “Investing across different industries and asset types can help reduce risk.” The five percent rule is a guideline many financial experts recommend; it means no single stock should make up more than five percent of an investor’s portfolio.
Building long-term wealth
Art of teen.
If you want to grow your money, consistency is key. And one of the most effective ways to do this is with a strategy known as dollar-cost averaging, which means investing a fixed amount of money at regular intervals, regardless of market conditions. For example, instead of spending $50 a month on expensive coffees, turn that money into an investment opportunity. “It’s an attractive way to start the habit of regular investing and reduce emotional decision-making,” McAnaw explains. “This approach helps smooth out the impact of market fluctuations. You buy more shares when prices are low and fewer when they’re high, which can help reduce overall risk.”
Another valuable strategy is focusing on quality investments. Blue-chip stocks—companies with strong financials and consistent performance—tend to be more stable over time. “Look for companies with a strong track record, including businesses with good leadership and sustainable advantages,” McAnaw adds.
And finally, consider dividend-paying stocks. Dividends are small cash payments companies make—usually every three months—to share their profits with the shareholders. You can treat them as spending money (which might mean paying taxes) or set up a DRIP (Dividend Reinvestment Plan), which automatically uses those payments to buy more shares—no extra effort, no penalties and it supercharges your growth over time. Depending on the stocks you choose, these stocks can serve as a steady income stream for those times when school is your priority.
Manage your emotions and stay the course
One of the hardest aspects of investing, even for seasoned professionals, is managing emotions. Watching stock prices drop can be nerve-wracking, but emotional reactions often lead to poor decisions. “It’s important to remember that the stock market goes through cycles,” Drapala says. “Panicking and selling at the wrong time is one of the biggest mistakes new investors make.”
Patience and discipline are crucial. While social media and financial news may hype up certain stocks or trends, successful investing is about long-term growth rather than quick wins. “It’s not about getting rich overnight,” McAnaw emphasizes. “It’s about making smart, consistent decisions over time.”
Take your first step toward financial independence
Now that you know the basics, it’s time to make that paycheck (whether it’s your first or one of many) really work for you. Starting now will help you develop good money habits and allow you to take advantage of time in the market. “The sooner you start, the better positioned you’ll be later in life,” McAnaw says.
And know that whether you choose to begin with simulated trading, fractional shares or custodial accounts, the key is to start small and stay consistent. But if you’re unsure or still have questions, seek advice from trusted experts and educational resources. “Investing isn’t just about making money,” Drapala says. “It’s about understanding how money works and taking control of your financial future.”
As for me, investing isn’t just about making money either—it’s about the sense of empowerment it brings. Growing up, it always felt like adults were just inherently better at everything. But seeing my portfolio outperform major index funds and teaching myself things that once seemed out of reach has made me genuinely proud of how far I’ve come. It’s taught me discipline and patience as well as how to analyze companies and industries like a real investor. I’ve spent nights studying earnings reports, tracking trends and refining my strategies—not because I had to, but because I wanted to understand how the market works. Being a teen investor does require research, but it’s incredibly rewarding. It’s giving me a head start, not just financially, but in life. I know that every dollar I invest now is a building block for the future I’m creating—and that’s a powerful feeling.
How $300 Could Grow Over Ten Years
Investing doesn’t have to be complicated or intimidating—it’s simply a way to grow and protect your wealth over time. By learning the basics now, you can set yourself up for a more secure financial future. We wanted to give you an example of what that could look like, but since we can’t predict the future, we went back in time. Here’s what it would look like if you purchased $300 of blue-chip stocks in 2015 and did nothing with them over the next 10 years.
*Note: Because companies sometimes split their shares (which means the number of shares you own increases while the share price is adjusted downward proportionally), historical prices are “split‑adjusted” so you can compare them consistently. Amazon, for example, completed a 20-for-1 split in 2022. That means its historical price, when adjusted, is about 1/20th of what it used to be.
Apple Inc. (AAPL):
(*split‑adjusted) Price per share: $31.71,
$100 Investment: 100 ÷ 31.71 ≈ 3.15 shares
Price per share: $198.15.
3.15 shares × $198.15 ≈ $625
Approx.
Total Earned:
$625
Microsoft Corporation (MSFT):
Price per share: $41.76
$100 Investment: 100 ÷ 41.76 ≈ 2.39 shares
Price per share: $388.45.
2.39 shares × $388.45 ≈ $930
Approx.
Total Earned:
$930
Amazon.com Inc. (AMZN):
(*split‑adjusted) Price per share: $15
$100 Investment: 100 ÷ 15 ≈ 6.67 shares
Price per share: $184.87.
6.67 shares × $184.87 ≈ $1,233
Approx.
Total Earned:
$1,233
Key Takeaways
Starting small can grow big:
Even a modest investment of $100 per stock can grow impressively over time if you select companies with strong, long-term performance.
The power of compounding & splits:
Stock splits (like Amazon’s 20-for-1) adjust the number of shares you own without changing the total value at the time of the split. Over time, however, the share price can still increase dramatically, multiplying your initial investment.
Diversification matters:
While in this example, each stock grew (Apple by about 6.25×, Microsoft by about 9.3×, and Amazon by about 12.3×), putting your money into different high-quality companies spreads the risk and can boost overall returns.
This article was published in the May/June 2025 edition of Connect to Northern Westchester.
Max Chwatko
