How to invest $1,000 as a teenager?

Teens have time on their side and don't have to be too aggressive. Just $1,000 invested in the S&P 500 by an 18-year-old would be worth over $88,000 by the time that person turns 65, assuming the index's historical average 10% rate of return. Teens also have plenty of time to make mistakes and learn from them, so they should not be afraid to take some risks or invest in what interests them. Just be willing to learn from your mistakes as you go!

When can a teenager start investing?

You usually have to be at least 18 to invest in stocks, although there are ways to get started even younger. An adult can open a custodial account on behalf of a child that will legally transfer to the child once they turn 18. Consult your broker for more details.

What can a minor invest in?

A minor can invest in the entire market, as well as in crypto and other asset classes, through a custodial account. It is rare to find a brokerage that will allow a minor to invest without an adult opening an account on their behalf.

How to Start Investing as a Teenager

A step-by-step investing guide for teens and their parents.

By Lou Whiteman – Updated Sep 3, 2025 at 4:16 PM EST | Fact-checked by Parker Hicks

Key Points

Teens can benefit from compounding interest over a longer period, enhancing wealth by retirement.
Parents can help teens start investing by guiding them and opening custodial accounts if they are under 18.
Investment knowledge and identity help teens manage risks and pursue suitable strategies.

Time gives teenagers a massive advantage over those starting their investment journey later in life. Albert Einstein is reputed to have described compound interest as "the eighth wonder of the world. He who understands it earns it … he who doesn't … pays it."

Compounding is a powerful force because of its impact over time. The longer you allow an investment to compound, the more valuable it becomes. With that being said, let's dive into why investing for teens may be a great way to build wealth early.

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An infographic listing five steps to help teenagers get started with investing. — Image source: The Motley Fool.

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Teens can let the wonders of compounding interest work to their advantage for a longer period, which can make them wealthier by the time they reach retirement. This guide will help teens and their parents (you must be 18 to open a brokerage account in most states) get on the right path to building wealth through investing.

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Compound Interest

Compound interest is what you get when you reinvest your earnings, which then also earn interest.

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3. Discover the right investments for you

If you do get bitten by the investing bug, start learning how to research stocks. Then, pick a few you like that align with your interests (investing and otherwise) and start digging into the company. Learn how it makes money, how much it can grow, and where it might expand in the future.

Familiarize yourself with its financial statements to see if it has the flexibility to survive the inevitable economic downturns. Go through this process for companies you like and whittle them down to a list of those you want to own. There are also ways to trade with fake money, such as Webull (BULL -0.92%), to test your strategies and get familiar with trading.

4. Open and fund your brokerage account

Once you're ready to start investing, it's time to open and fund a brokerage account. Anyone at least 18 years old can open an online brokerage account. People who are younger will need a parent's assistance.

Parents can either open a brokerage account on their teen's behalf or set up a custodial account. The process is relatively simple and usually takes less than 15 minutes. If you have earned income, a Roth IRA for kids can be a great way to start investing.

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5. Make your first investment

Once the funds clear in your brokerage account, it's time to make your first stock purchase. Decide which of the stocks on your list you want to buy and set up the order. We recommend using a market order to make the purchase.

When you're ready, submit the order during market hours. Before you know it, you'll be the proud owner of a small piece of what you believe is a great company or, if you choose to go the passive route, a basket of great companies.

Now, repeat the process and build out a diversified portfolio. Continue adding money to your brokerage account and buying more shares of the companies or index funds you want to own to take even greater advantage of compound interest over time.

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Investing for teens FAQ

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About the Author

Lou Whiteman is a contributing Motley Fool stock analyst covering aerospace, defense, transport, manufacturing, specialty finance, and bank stocks. Previously, Lou was a financial analyst and senior writer for TheStreet, a venture capital specialist for The Deal LLC, and a high school personal finance teacher. He holds a bachelor’s degree in communications from Loyola University Maryland and completed a fellowship at the ABA Stonier Graduate School of Banking.

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Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.