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When it comes to investing teenagers have more time and more risk-taking ability due to their age. And also the nature of growth you want with your investment is always better for teenagers as they can invest early in their life. In order to do that I’m going to share a couple of steps as investment ideas for teenagers which is going to ensure that if teenagers follow these steps then they can take to ensure that they get more outcomes. These are some amazing ideas for investing especially if you’re a teenager.
Investment Ideas for Teenagers 1: Savings Account
As a teenager, you do not have many expenses which are why you should keep one year of your expense in your savings account as liquid money. This not only enhances your security in case anything unexpected happens. This also ensures that you have saved one year of your expenses so that in case of a mishap you will not have to run around for money or arrange anything to go with the flow of your life. You can lead your life even if you lose your job for example for one year as you would have that ready with you.
Even if you have a savings account you should not put complete money in your savings account. You should keep 20% in your savings account of your one year expense and the rest 80% should go into a liquid mutual fund. The reason is liquid mutual funds are very easily redeemed and if you keep your money in your savings account you will not get much return because the returns in India are almost at 3%. Even SBI offers an interest rate of 2% on a savings account. However, if you store your money in your liquid mutual fund the investment return over a period of a long period of time could be more than a fixed deposit but much more than a savings account return.
Investment Ideas for Teenagers 2: Index Investment
If you do not know this already there are two indexes in India Sensex and nifty 50. When you invest your money in Sensex or Nifty 50 essentially you are investing your money in India’s future; in India’s economy. Therefore as long as your money gets invested in such indexes when India’s economy grows your money will also grow. And because you are a teenager you have that risk-taking capability that even if there are fluctuations in the market even if there are fluctuations in the Sensex or in Nifty 50 you will be secure from that perspective. Because being a teenager you will not have much responsibility towards your family or major expenses as much as adults.
Investment Ideas for Teenagers 3: Individual Stock Investment
This is known to everyone that the stock market is almost like gambling where you are investing. If you invest sensibly you will always get a return that is much better than any other mode of investing. Even if you do not understand much about stock markets only if you do index investments such as Sensex and Nifty 50 investment that will be enough. But eventually, I will suggest you go through the articles and understand the stock market more keep a tab on the news and then start investing in individual stocks which can give you more return than Sensex or nifty 50 could give you. But you need to start from somewhere. And keep in mind that any investment that you do should be long term.
Investment Ideas for Teenagers 4: NPS (National Pension Scheme)
National Pension Scheme is an investment avenue by the Government of India. Where you can invest your money and you can specify how much of your money will go into equity investments. How much of your money will go into debt investments etc. I suggest teenagers start even when they are 18 years old. As early you can start it will be better for you. If you start investing your money in a national pension scheme then your retirement days would be much better. Than the traditional ways of getting any amount every month.
While you are in your early twenties or even till you are thirty I suggest choosing to get 75% of your investment as equity and the rest 25% as an investment in your debt instruments within the National Pension Scheme itself. By the time you retire this amount will be a huge amount which you can take and use as you please. When you are older you will not have the luxury of doing this 75, 25 split as this is market-linked and you will have more responsibilities than what you had when you were a teenager.
you will also get tax benefits if you invest in NPS. Essentially you are getting two benefits if you are investing in NPS irrespective of what amount of investment you do. I would always suggest you invest any amount that you possibly can into NPS. Which will secure your retirement. Even if it is just 1000 a month, ensure to get started from there.
That said these are the instruments that I can think of as a teenager anyone could invest. And get the most of their money. And these are some excellent ideas of investment. If you do not agree then please let me know in the comments below. I would like to know what else would you suggest as a teenager to be doing for their investment. If you do agree then I suggest you start immediately. If you need any kind of help you can get in touch with me. And I’ll be happy to help you out.
I am a 30-year-old dude from a lower-middle-class family hailing from a small village Narasinghpur in Cuttack, Odisha, INDIA. I have a post-graduate degree in M.Tech from BITS Pilani. I started blogging back in June 2014. You can check out my journey and all that I have learnt all these years on my website.