Fun cheerful school teenage girl drawing a chart with ascending line

Share This Post

Share on facebook
Share on linkedin
Share on twitter
Share on email

How Old Do You Have to Be to Invest in Stocks?

Table of Contents

Starting Investing When Young

It is the younger generations that have shown great interest and awareness of the advantages of starting to invest at an early age. Despite the fact that they are still in the student stage, young people have sought ways to be informed and updated on investment topics.

Using Technology to Invest

Thanks to technology, learning about specific topics is very easy since it is just a matter of clicking on a few buttons to access information and learn more about the topic you want. In the case of investment topics, there is a lot of information that people have access to.

When Should You Start Investing?

You are never too young or too old to learn. Acquiring financial literacy has no age restriction. So, you are at the right time to start learning all about investing now.

To start investing, you do need a minimum age. Most brokerage firms require you to be at least 18 years old to open your own brokerage account. This is because this is the age at which a person is considered an adult in many parts of the world. And it is the age where you can have legal responsibilities and have a brokerage account in your name.

What Does it Mean to Invest in the Stock Market?

Investing is defined as the act of committing time and money to a business, real estate, or any project to make a profit from it. Simply put, investing exposes your money for a certain period of time to generate future profits or returns. This means that every investment involves risk. However, investing your money wisely and using the right resources can help reduce these risks and maximize your opportunity for profit.

How Old Do You Have to Be to Invest in Stocks?

To start investing, you must have the ability to enter into a legal contract on your own. You need to be at least 18 years old, which is when a person is considered an adult.

This is a very general guideline, but in some other countries, the age of maturity changes, and they might ask for a higher age to be able to start investing. For example, in Mississippi, you must be 21 years old to invest in stocks.

Get Started Now, Open a Brokerage Account

If you meet the age requirement to start investing, here’s what you need to know.

The first step is to find a brokerage firm so you can open an account. A brokerage account is similar to a conventional bank account. The difference is that this account will be used to make all the transactions of buying and selling stocks, bonds, mutual funds, and exchange-traded funds on the stock exchange.

Unlike a bank account, you own the money, and with this account, you can fund and use the money to buy stocks. The brokerage firm you choose can act as an intermediary between you and the stocks you wish to purchase.

Opening a brokerage account is very simple and can be done from the comfort of your home in a very short time.

It is important that you do your research before opening a brokerage account to make a good decision. The choice between one or the other agency is dependent on the preferences of each person.

Consider the following points to choose your brokerage:

  • Educational tools and resources. As a beginner, you are probably looking for a brokerage that will give you access to information that will help you start investing in an intelligent and informed way. Almost all brokerages have educational tools and resources for beginners. Look for a brokerage so that you have enough educational resources to get you started in investing.
  • User interface. You must find a platform that is easy to use and runs smoothly. A platform with frequent bugs can bring you consequences and make you lose money and risk more than you should. To choose a good platform, be sure to read user reviews to find out how the platform works.
  • Charges. This is one of the most important points to consider when choosing a brokerage agency. All or most agencies charge a fee for offering their services. Research what other fees they include in their costs as they may charge a commission per transaction and include real-time data fees, option trading fees, or research. Make sure you agree with all the costs associated with having an investment account with one brokerage or another.
  • Minimum balance. Brokerage accounts are always required to maintain a minimum balance in the account. It is important to know this before opening your brokerage account to know if you will be able to meet the minimum balance requirement. This will help you avoid the unpleasant surprise of being fined for not meeting the balance requirement.
  • Customer Service. Since you will be holding the money you wish to invest in this account, you should make sure that the brokerage offers good customer service. The quality of the support and the attention given to the client is an important point. You can rest assured that in case of any doubt or inconvenience you may have, the agency will help you with kindness and efficiency.

I Am Not the Required Age, How Can I Start Investing?

human hand stacking coins over a black background with hexagonal golden shapes

If you are not 18 years old or the required age in your country to start investing, this does not impede getting started in the world of business and investments. There are many ways you can start investing in the stock market even if you are not old enough to open your own brokerage account. Here are a few options you can choose from to start investing.

Open a Custodial Account

To open a custodial account, a young person must have the help of your parents or legal guardian. Two laws allow parents to save and invest on behalf of their children. The Uniform Transfer to Minors Act (UTMA) and the Uniform Gift to Minors Act (UGMA).

Thanks to these laws, you can open a custodial account with the help of your parents and have the opportunity to save and invest in the stock market as you would with a traditional brokerage account. This type of account has no contribution limits or restrictions, and you can buy and sell stocks without any problem.

529 Savings Plan

Another option to invest without being 18 years old or the required legal age is to open a state-sponsored account called a 529 Savings Plan. To open this savings account, you also need the help of your parents or legal guardian.

Although your parent is the person who must open the savings account, you are the beneficiary of the account. As the beneficiary, you can use the funds in the account for your college expenses and expenses associated with your education.

As with a UTMA or UGMA account, the account holder can buy and sell shares in the stock market using that account. Just keep in mind that the options on this account are more limited than a standard brokerage account.

No Limit In Age For Investing

As you can see, no particular age is required to start investing in the stock market. If you are not yet old enough to start investing, don’t worry! This is the right time to learn and soak up everything you need to know to start investing or start stock trading, while also learning more about your investment objectives.

The best weapon for any activity is information and education. Although a standard brokerage account may have an age restriction, it doesn’t mean you have to wait until you reach the required age to start an investment account.

Passive Investments

Passive investment is the type of investment where the child’s parents buy shares on behalf of their children. These types of options make it even easier to make your way in the business world despite not being of legal age.

Minors can own shares, which can be bequeathed through a will or as a gift. However, to buy and sell shares is done through the Uniform Transfers Act or the Gifts to Minors Act.

Start Investing At A Young Age

In fact, experts say that starting at an early age to invest means you have much more time to grow financially. In addition, investing in the stock market is one of the best ways to accumulate wealth over the long term.

So, if you start investing or virtual trading at a young age, you’ll have plenty of time to hold on to your stocks, and when you’re an older adult, you’ll be able to enjoy the benefits of having decided to invest your money early. In the meantime, soak up as much investment advice and knowledge you can from a financial planner so you can eventually reach your investment objectives.

More To Explore