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Investing for teens
You can start investing when you're a teen, but you'll likely need your parents to open an account.
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How old do you need to be to invest?
You generally need to be at least the age of majority in your province or territory (either 18 or 19 years old) to open an investing account, but that doesn’t mean you can’t get started when you’re younger. There are many ways to invest, each of which comes with varying degrees of risk:
|Investment method||Minimum age to invest||How it works||Risk level||Can parents open an account for children who are below the age of majority?|
|Open a savings account||Age of majority (18 or 19 depending on where you live)||Low||Yes. Parents can open a youth account or trust for their children, or they can open a joint account with their children.|
|Buy a GIC (Guaranteed Investment Certificate)||Age of majority (18 or 19 depending on where you live)||Low||Yes. GICs can be held in a variety of accounts that parents can open for (or with) their children including RRSPs, RESPs and savings accounts.|
|Contribute to an RRSP (Registered Retirement Savings Plan)||Age of majority (18 or 19 depending on where you live)||Low||Yes. parents can open RRSPs for their children. Or, children can open RRSPs for themselves with their parents’ consent.|
|Open an auto-managed investment account with a robo-advisor||Age of majority (18 or 19 depending on where you live)||Moderate. Depends on your risk tolerance.||Yes. Robo-advising platforms typically let clients hold investments in a number of different accounts that parents can open for (or with) their children including RRSPs, RESPs and non-registered investment/savings accounts.|
|Buy stocks through a broker or online trading platform||Age of majority (18 or 19 depending on where you live)||High. Stock values can fluctuate and are sometimes unpredictable. There is little or no buffer against the temptation to make risky or speculative trades.||Yes. Clients can hold investments in a number of different accounts that parents can open for (or with) their children including RRSPs, RESPs and non-registered investment/savings accounts.|
Is there any way to invest without a parent?
No – most savings and investment accounts open to teenagers require parental consent before an account can be opened. Such accounts act as a legal agreement between the account holder and the bank or institution that issues it. If you’re younger than the age of majority for your province or territory, you can’t legally enter into this agreement without your parent or guardian’s consent.
Ways to invest as a teenager
There are 2 ways you can begin investing as a teenager:
1. Get your parents to open an RRSP, RESP or savings account for you
Most financial institutions — including banks, stock brokerages and online trading platforms — allow clients to hold investments in certain types of accounts. So, one way to start investing is to get your parents to open one such account. You’ll likely need your parents to approve of, or buy, the investments you intend to hold in the account.
Parents can open RRSPs, RESPs (Registered Education Savings Plans) or youth savings accounts for their children. They can also open joint savings accounts with their children. Additionally, minors can open RRSPs for themselves with parental consent.
The types of investments you can hold in these accounts include GICs, mutual funds, stocks, bonds and interest-earning deposits. One great way to grow your money is to set up an automatics savings program that automatically withdraws from your everyday banking account on a regular basis (say, when you get paid) and deposits funds in an investment account.
2. Get your parents to buy stocks or ETFs on your behalf
You can get indirect access to the stock market if your parents are willing to buy stocks or exchange traded funds (ETFs) for you through a stock brokerage or online trading platform. They can use their own brokerage account if they already have one. If not, do some research and find a platform that interests you. If both you and your parents lack trading experience, limit your research to beginner-friendly platforms, like Wealthsimple, Justwealth or CI Direct Investing.
Do your homework and find out the minimum amount required to open an account as well as the types of stocks and stock exchanges the platform supports. Doing so can provide both you and your parents with an opportunity to learn more about the stock market and investing in general.
Compare stock trading platforms
If you plan to open an investment account with your parents or if your parent/guardian is opening a new brokerage account to let you start investing, you’ll want to compare your options to find the best fit. Look for an affordable fee structure, access to major stock exchanges and flexibility options for trading and withdrawing your funds.
Risks of investing
Before you start exploring any platform or account options, familiarize yourself with some of the biggest risks associated with making your own investments:
- Losses. Investments — especially stock market investments — are inherently risky. If the company you invest in does well, so will your portfolio. But if that company underperforms or goes out of business, you may lose some, or all of your money.
- Complex. There’s no way around it: the world of investments is complicated. And if you don’t understand what you’re investing in, you risk funneling funds into an asset or company that wastes your time and money.
- Volatility. Even with a solid understanding of the market under your belt, things can go wrong. And that’s because the stock market can rise and fall drastically with little warning.
- Fees. While commission fees are less common than they once were, account fees are common and you may still face commissions on certain types of securities.
Other ways to learn about the market
There are plenty of ways to learn more about investing. With more knowledge, the better equipped you are to make smart investments and minimize potential losses. Any of the following resources are a solid place to start:
- Stock trading books. There are helpful books on investing that can start building your knowledge, including How to Make Money in Stocks by William J. O’Neil and Market Wizards by Jack D. Schwager.
- Stock trading channels. If reading isn’t your thing, try YouTube. Content creators upload video tutorials covering investment basics.
- Stock trading games. Stock market games help you hone your trading instincts with simulated markets and trading goals. Popular games include Wall Street Survivor, HowTheMarketWorks and the Young Money Stock Market Game.
- Demo account (also called paper trading). Test-driving your investing skills with a demo account (also called paper trading) is arguably the closest you can get to real trading without risking a penny. This type of account lets you play with virtual money on a hypothetical market that mirrors live market pricing. Many online brokers give clients access to demo environments including Friedberg Direct, Forex.com and Questrade.
The world of investments is exciting — but it isn’t without its risks. Ultimately, the best investment strategy depends on your goals. No matter what type of investing you’d like to try, you’ll likely need your parents to begin investing if you’re under 18 years old. Check out our guide on how to start investing in the stock market to learn more.
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