As a high school student, you may be looking for ways to invest the money you’ve earned from part-time jobs or other sources. Investing can seem intimidating, especially if you have limited funds and are just starting out. However, there are many options available that can help you grow your money and build wealth for the future. Here are the top 5 ways for a high school student to invest their money:
High-yield savings accounts: High-yield savings accounts offer a safe and easy way for high school students to invest their money. These accounts typically offer higher interest rates than traditional savings accounts, so students can earn more on their money while it sits in the bank. The amount of return that a high school student can expect to gain from a high-yield savings account will depend on the interest rate offered by the bank and the amount of money invested. As a general rule, the more money invested and the higher the interest rate, the more return a student can expect to earn.
Mutual funds: Mutual funds allow investors to pool their money together and invest in a diversified portfolio of stocks, bonds and other securities. This can be a good option for high school students with a limited amount of money to invest, as it allows them to diversify their investments without buying individual stocks. The return that a high school student can expect to earn from a mutual fund will depend on the performance of the underlying securities in the fund. Some mutual funds may provide a steady stream of income in the form of dividends, while others may focus on capital appreciation.
ETFs: Exchange-traded funds (ETFs) are similar to mutual funds but are traded on stock exchanges like individual stocks. This means that they can be bought and sold throughout the day, making them a convenient option for high school students who want to access their money quickly. The return that a high school student can expect to earn from an ETF will depend on the performance of the underlying securities in the fund. Some ETFs may provide a steady income in the form of dividends, while others may focus on capital appreciation.
Robo-advisors: Robo-advisors are online investment platforms that use algorithms to create and manage investment portfolios. They can be a good option for high school students who want professional investment management without the high fees charged by traditional financial advisors. The return that a high school student can expect to earn from a Robo-advisor will depend on the performance of the underlying securities in the portfolio. Some Robo-advisors offer portfolios focused on providing a steady income stream, while others may focus on capital appreciation. Many Robo-advisors are 18+ but with the help of parents you can invest within a custodial account.
CD ladder: A CD ladder is a strategy that involves investing money in CDs (Certificates of Deposit) with different maturity dates. This allows investors to take advantage of higher CD rates while still having access to their cash at regular intervals. CD ladders can be a good option for high school students who want to earn a higher return on their money but still need to be able to access it occasionally. The return that a high school student can expect to gain from a CD ladder will depend on the interest rates offered by the bank and the length of the CD terms.
