If you’re a teenager reading this, read all of this through we will talk about the best way to invest at 18. It will help you in the long run with the advice I will give you and the mistake that I have personally made in the last 7 years which could have easily been avoided with these simple steps. Personally, this mostly applies to people who are 16 to 18, if you’re under then keep reading and take notes.
Personally, I wish when I was 17 I saw this article and it could have saved me time and money. Trust me on this no matter what you do with your life or how much money you have right now, just read this article because eventually at some point in your life you have to.
Keep in mind they won’t be in any order but make sure when you turn 18 to have at least some if not all of them to be financial ahead and have the best way to invest at 8.
Open Credit card
My first advice as soon as you turn 18 go and get a credit card. Forget about the present and birthday cakes because that’s not gonna make you money, instead, you go and get a credit card and that’s your present to yourself.
If you’re over 18 then I highly recommend getting a credit card like right now. Here is one of my regrets as an 18-year-old since I never got a credit card as early as possible, the reason why I didn’t get a credit card is that I grew up with two parents who were in credit card debt. I personally remember that credit cards were pointless and they were evil and should always pay with a debit card or cash.
Here is why you should get a credit card one example is to invest in real estate. No bank will give you a loan or mortgage because you don’t have any credit history whatsoever. So if you’re trying to act cool about not having a credit card this is an awakening that you need a credit card and some credit cards are free to open.
Opening a credit card is about being irresponsible with money, it’s simply about playing the system to your benefit by showing lenders that you could pay your bills on time and in full and if you could do it successfully lenders will see that you could properly handle money because of that they are more likely to lend you money to go and invest.
debt’s simply about playing the system to your benefit by showing lenders that you could pay your bills on time and in full and if you could go and do that successfully then lenders will see that you could properly handle money and because of that they’re more likely to lend you money to then go and invest with and doing all of this, by the way, is very easy and if you’re just starting. Which is one of the best way to invest at 18 or more to open a credit card.
Highly recommend to check out the best credit cards in 2020 by nerdwallet
Open a Bank account
Secondly, if you don’t already have one and you’re over the age of 18 years old then open up your own bank account. I think it’s incredibly important that you have your own bank account under your name and no one has access too. The first step of being a financially responsible adult is to open a bank account that doesn’t have ridiculous fees like there shouldn’t be any minimum accounts fee.
Here are my suggestions on what bank account you can open right now and don’t have to pay any monthly fee or anything that you have to pay. The first one is Bank of America. If you’re under the age of 25 years old then everything you have with Bank of America is pretty much free.
There is no downside and may as well sign up an account if you’re under 25 years old and not a student as long as you keep 1,500 in your account they’re gonna waive all of the fees. Just remember no monthly maintenance fee and you will be just fine.
Roth IRA
As soon as you turn 18 sign up for a Roth IRA this is one of the most important things to do and here is why. A Roth IRA is a retirement account that lets you contribute, what is called post-tax money that just means you already paid your taxes on the money you contribute to that account and at the age of 59 and a half of the profits that you’ve already made within the Roth IRA is yours to keep tax-free.
Now, this account is really good to start as soon as you’re 18 for two possible reasons: first there is a chance that you’re not making lots of money right now and chances are because you’re not paying a lot in taxes.
Another main reason to open a Roth IRA is that right now you’re not losing a lot of money to taxes as you would later in life when you’re potentially in a higher tax bracket.
Having a Roth IRA is a power of compound interest. This is where your money makes you more money then makes you more money. Take for example a snowball rolling down a hill as it continues rolling it starts getting bigger and bigger that’s compound interest like let’s just take this example if you invest $5,000 at the age of 30 at an 8% return that means at the age of 60 that $5,000 will have turned into just over $50,000 but on the other hand if you started right now and open a Roth IRA at the age of 18 and invest $5,000 by the time your 60 that $5,000 will have turn into more than $120,600 that means just by investing your money a little bit earlier you will have more than doubled your profits by the age of 60.
I would personally recommend using Vanguard or Fidelity and it’s extremely easy to do it just takes 15 minutes of your time.
Consumer debt
This will apply to any age out there and that is staying away from debt and when I’m not referring to things like low-interest rate mortgage on the rental property or leveraging your money to make you even more money. I’m talking about like High-interest rate credit card debt, a high-interest rate personal loan, high interest like an auto loan, or other types that have no purpose to make you more money or make your life awful.
I personally believe for anything other than a business, real estate or investing you cannot afford to buy something outright then don’t buy it and don’t finance it so important to stay out of debt like this and get into the habit of never buying things you can’t afford outright.
Get a Job
If you’re a teenager watching this right now go and get a job, seriously get a job if there’s anything that sets you on a successful path. A job can help you do everything that an actual working adult does all long. You get to see how the business was run and get to see what the importance of customers really is.
When you get a job you will understand how to make money and save your own money and having that bit of experience was absolutely valuable. It really helps you shape your entire future and if you’re a teenager reading this right now go and get a job even if it’s just working for a couple of days, don’t worry the only thing that matters is the work experience that you get from doing it, it will be worth a thousand times more.
Live below your means
This will apply to anyone and that’s living below your means. Here is one of my biggest mistakes and I spent a lot more and I could have easily saved up. If you start making money please don’t spend too much. You first spend the most important things like rent and food and then spend a fraction on clothes or eating out.
Hope you enjoy reading this article about the best way to invest at 18. Be sure to at least do one of them. it can really save you time and money in the long run but be sure to check out more from linxtro where we put out articles about investment, make money online and much more check out our latest article about investing your 1000.
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