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How I Told a 17 Year Old to Invest His Money (reader question) - YouTube
Channel: Wealth Hacker - Jeff Rose
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do you remember what you were doing a 17
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years old I can tell you I don't
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remember even if I did remember I
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probably wouldn't share with you because
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it would be pretty embarrassing but no
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seriously I know the one thing that I
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was not doing at 17 years old was
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thinking about investing so any time
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that I have a 17 year old or any
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teenager that is either read my blog or
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watch me on youtube that has contacted
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me or messaged me and asks me how do I
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get started investing like that blows my
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mind like I love it I love the fact that
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teenagers are ready to get started
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investing before they are legally adults
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and are coming to me to ask me how to do
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it
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now I had a recent seventeen-year-old
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that want to start investing that
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contacted me and I want to share with
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you what I shared with him on giving him
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some actual steps and strategies that he
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can get started invested today so we're
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not share with him well we're gonna find
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out right now
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[Music]
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I mean it seriously crazy when I think
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about a 17 year old a 16 year old I had
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a 12 year old comment the other day that
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wants to get started investing it blows
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me away because that wasn't even in my
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vocabulary in my teenager in my teenage
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years I mean wasn't really my vocabulary
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into almost my mid-20s
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now loved it was my upbringing you know
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I didn't have any any family members
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that really talk to me about investing I
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didn't really have any interest in
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investing I'm a struggle with math when
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I was in high school so to invest to
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make money to make return of my return
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on investment I mean none of that
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interested to me at all like I'd even
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know what a stock was probably until I
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was in college so the fact that I have
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these teenagers contacting me that want
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to get started investing now I'm a I
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love it I love it because I love it
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which I want to talk about more in an
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upcoming video but the reality is this
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if you start investing in your teenage
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years so the 17 year old which I'm going
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to share with you what I share with him
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so he's gonna get started investing and
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maybe it's going to be stocks maybe it's
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going to be mutual funds maybe it's
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going to be something else chances are
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whatever he had invest into he may or
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may not make any money right
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chances are could probably lose money
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and that's okay because he doesn't have
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a lot of money it started with so he
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might not make a huge return or he might
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take a little bit of loss on his initial
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investment but what he's going to get
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out of this is so much more experience
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than anybody that is watching youtube
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videos that's reading blogs then that's
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reading books you know that's doing all
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the research before they actually make
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their first investment because you
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learned so much and actually doing
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instead of reading about how to do it
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I mean you can do analysis all day long
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you can do research all day long but
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until you actually go out and do it
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you're not gonna learn anything I mean
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you learn so much more by taking action
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so anytime I see these teenagers that
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want to get started investing that want
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to invest into something I love it
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because they're gonna be so far ahead of
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the curve because they're going to go
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through all those initial struggles that
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most people do when the other older they
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have a little bit more more money to
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invest because they haven't gone through
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any of the the lowering process and some
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of the pain points that come along with
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investing because usually what happens
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is that when somebody invest for the
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first time and they lose some money they
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get scared they get scared they don't
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understand or losing money so I end up
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cashing it out and leaving it the bank
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or they don't invest it and that's just
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opportunity lost because they didn't
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leave that money there or they didn't
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have the time or didn't really have the
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fortitude to know like okay that
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investment didn't work but let me go to
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plan B or let me evaluate another option
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or other options are out there so if
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you're getting all of this out of the
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way when you're a teenager my goodness I
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mean you it's just amazing and what ends
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up happening is you have so many
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strategic what I call strategic
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byproducts of taking that initiative
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taking that initial investment and
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taking action on it that by the time
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this person is in their 20s I mean
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they're going to be so diverse they're
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gonna be so much more experienced and
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understand the investment game and who
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knows what other opportunities it has
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led them to because they've taken action
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so that's why I just loved it so let me
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go ahead and dive into what the reader
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with a 17 year old asked me like what
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his question was then also share the
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specific answer that I gave him so let's
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take a look at what that question
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right alright so let's dive into this
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what was the question that this
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seventeen-year-old asked me so here's
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the question hi I'm a 17 year old who is
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looking to invest a small amount of
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money around $3,000 but I would like to
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diversify so I won't lose it all
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some long-term low-risk as well as some
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higher risk short term any suggestions
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all what good short-term investments I
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could do also I'm hoping to invest
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enough for a safe cushion so I can start
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my own business and focus on that
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without a side job so as you can see
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we've got a lot going on with this
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question we've got short term goals we
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got long term goals we want to start a
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business now keep in mind we only have
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$3,000 yes I'm I'm amazed and excited
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that a 17 year old has the discipline to
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save that amount of money but the
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reality is like when we start trying to
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diversify and split all this up it
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doesn't leave us a lot left over to do a
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lot of things with it so we really have
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to be very specific with what our
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ultimate goal is so is the goal of short
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term gains is the goal long term gains
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or is it to start this side business now
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the other thing I want to address is
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that every new investor every
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experienced investor we get really
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caught up in these short term gains but
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the reality is that let's just say that
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we take $1,000 of this 3000 and invest
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it and we put it in the stock market we
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put it into stocks we put into ETF
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mutual funds or whatever and let's say
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that it makes us 10% return in our first
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year okay so how much is that how much
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is that really how much can we quantify
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that so really if we invest $1,000 and
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we make 10% we've only made $100 for
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that entire year and when I share those
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type of returns because that reality is
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like that's what we're looking at we can
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make 10% in the market we can make 10%
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on any money
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any of us been like that's a solid
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return but here's the other the other
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side of that is that if you're trying to
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make 10% you also have you run the risk
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of also losing 10% or losing more so we
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get really caught up in trying to make
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these short-term gain
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but the reality is that if you have this
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unrealistic expectation of how much you
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think you're gonna make or how much you
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can make chances are you're not even on
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button on the same page on the same
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planet so you run the risk of putting
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your money into something that's too
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aggressive for money that you may need
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for an emergency or some other goal that
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you're trying to accomplish so for the
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seventeen-year-old I have to assume that
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he is making some sort of money I don't
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he's more lawns if he's babysitting if
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he's selling things I'll eliminate Stan
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I don't know if he has some sort of job
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where he has w2 income that I would
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highly suggest that he open a Roth IRA
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now he won't be able to do that on his
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own he'll have to have a parent do that
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for him but if he's close to 18 then he
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could do it himself once again though
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you have to have w2 income for portable
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income you can't have like a side job
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where you're getting paid in cash but
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man I would love to see a 17 year old a
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minor under the age of 18 opening a Roth
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IRA because now we've got tax free money
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building for retirement but also to for
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the short term the one thing I love
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about the Roth IRA is that you have
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access to the money that you put in so
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if he were to put in $1,000 or $2,000
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into that Roth he can always take that
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money out at any time it's just the
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interest and the earnings that he would
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have to leave in until retirement now if
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you don't know much about the Roth IRA
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if you want to learn more you can check
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out one of my other videos where I talk
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about how to become a Roth IRA
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millionaire where I talk about all the
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different in-house of that Roth IRA so
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besides the Roth IRA the other option
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that I really like and this was the
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final question that this
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seventeen-year-old asked is using some
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of this money to start a business of
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some kind down the road now to me that
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is where you're going to get the most
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bang for your buck because starting a
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business whether it be an online
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business whether it be Amazon FBA
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whether it's selling t-shirts on eBay or
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or Shopify it doesn't matter what this
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is right if there's any business that
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this 17 year old can start today my
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goodness you're going to get so much
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more than just putting your money in
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mutual funds putting your money at the
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bank doing more like the traditional
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investments like yes you're still going
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to learn a lot in
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that but man when you have to actually
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start a business you start learning
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about gross gross margins and gross
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profits and setting up an LLC and
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setting out different accounts and
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expenses whoo I just get all excited
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because you you're just gonna get so
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much more out of it and to me the long
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term if you can stick to it and you find
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something that you like even if it's not
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the first or second or third business
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idea that you start down that you start
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with even if it's not that you're gonna
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learn so much through that experience
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that this will get you the largest ROI
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return on your investment than any of
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the other things that I've discussed in
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this video or other videos so that's the
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idea that I'm most excited about for the
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17-year old if they're willing to do it
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now once again though this is there is
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the risk and anything right there's risk
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any investments I've talked about
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there's risk and doing it the safe way
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there's risk in starting a business you
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have to be willing to stomach some risk
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you have to be willing to recognize that
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every investment that you make you're
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not going to make money every single
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time there are going to be times that
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you lose money there be times that you
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break even there are gonna be times that
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you maybe make a little bit but through
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all that eventually if you stick to it
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and you just keep doing your market
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research you keep seeking mentorship you
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keep seeking other entrepreneurs
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business owners like-minded individuals
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you will find something that will yield
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you some nice profits if you're willing
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to invest and just just do it so out of
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all those that's the one that I'm most
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excited about for him for you for
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anybody that's watching this that is
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wanting to invest to get started in
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something start some sort of business
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obviously an online business or just
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little to no wealth no but there's
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little upfront cost starting online
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business and than a traditional business
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so that would be the avenue that I would
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encourage you to look at all right okay
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so that is my advice to the 17 year old
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16 year old 13 year old doesn't matter
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how old you are you can do any of these
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obviously gonna have some parents some
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guardians to help you out to try to open
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up some sort of guardianship account or
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a guardian Roth IRA
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our custodial Roth or whatever either
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way though you can do it don't let any
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of these be excuses prevent you from
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taking action ok I'm done I'm out this
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is Jeff rose reminding you that it's
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your money it's your life and only you
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can make it awesome just go out and get
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started let's do it
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peace
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[Music]
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