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 companies. Learn how they make money, how much the companies can grow, and where they might expand in the future.
Familiarize yourself with each company's financial statements to see if they have 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 -0.14%), 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 can open an online brokerage account, but you must be at least 18 years old in most states. Younger people will need a parent's assistance to open a brokerage account.
Parents can either open a brokerage account for their teen or set up a custodial account. The process is relatively simple and usually takes less than 15 minutes. If a teen has earned income, a Roth IRA for kids can be a great way to start investing.
5. Make your first investment
Once the funds clear in your brokerage account, it's time to make your first stock purchase. Decide which 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.
