How To Invest For Teenagers

Summary

This video offers investing advice for teenagers, framed through a humorous and relatable lens. It emphasizes the importance of personal development, starting early with financial habits, and building credit. Key points include investing in self-education, understanding compound interest, and the benefits of Roth IRAs. The video uses video game metaphors to make the advice engaging, encouraging viewers to level up their financial skills. The host also shares personal anecdotes and recommends books and practical steps for managing money and building wealth over time.

Takeaways

• 💇‍♂️ Get a haircut - a humorous but practical piece of advice.
• 💡 Invest in personal development rather than risking small amounts of money in the stock market.
• 📚 Start reading important financial books early on to build financial literacy.
• 💼 Get a job early to understand the value of money and develop work skills.
• 🧩 Explore various activities and hobbies to discover your passion.
• 🏦 Open a bank account with a high interest rate once you turn 18.
• 💳 Get a credit card to build your credit history responsibly.
• 🏠 Open a retirement account (traditional or Roth IRA) as soon as possible.
• 📈 Start investing in stocks early, preferably within a retirement account.
• 📝 Develop good financial habits like tracking expenses, maintaining a healthy lifestyle, and being frugal.

Q & A

What is the first piece of advice given in the video?

The first piece of advice given is to get a haircut.

Who is the target audience for the investing advice in the video?

The target audience includes teenagers, parents looking for advice for their kids, and possibly those who have stumbled upon the video late at night.

What generational conflict is mentioned in the video?

The video mentions Zoomers (Generation Z) destroying Millennials on TikTok and how Millennials are often criticized by Boomers for being entitled.

Why does the speaker compare life to a video game?

The speaker compares life to a video game to illustrate that while we cannot choose our characters or stats, we can control our actions, explore, and improve our skills to make the game (life) easier and more enjoyable.

What is the recommended first step for investing for teenagers?

The recommended first step is to invest in personal character development and boosting one’s own stats instead of risking money in the stock market.

Why does the speaker emphasize reading, and which books are recommended?

The speaker emphasizes reading as a way to gain knowledge and better manage money. The recommended books are 'The Simple Path to Wealth' by J.L. Collins, 'I Will Teach You to Be Rich' by Ramit Sethi, and 'Harry Potter and the Goblet of Fire' for enjoyment. For advanced readers, 'The Intelligent Investor' by Benjamin Graham is suggested.

What is the significance of getting a job at level 15 according to the speaker?

Getting a job at level 15 is important because it teaches the value of money, helps one understand the effort required to earn it, and encourages financial independence.

Why is it important to open a bank account and get a credit card at level 18?

Opening a bank account with a high-interest rate helps in saving money effectively, and getting a credit card helps build a credit history, which is crucial for future financial activities such as getting loans at good interest rates.

What are the benefits of starting a retirement account early?

Starting a retirement account early, like a traditional or Roth IRA, allows money to grow tax-free or tax-deferred, leveraging compound interest to accumulate a significant amount of money by retirement age.

What is the speaker's advice on building good financial habits?

The speaker advises tracking expenses, taking care of one's health, being frugal, and living below one’s means. These habits help in managing money better and avoiding unnecessary expenses.

Outlines

00:00

💇‍♂️ Get a Haircut and Start Investing

The video begins with a humorous and outdated meme, advising viewers to get a haircut. It acknowledges the audience might be Gen Z, parents, or late-night internet surfers. The creator discusses generational differences, specifically how millennials face economic challenges and mockery from Zoomers. The video aims to provide investment advice for teenagers, emphasizing that learning these tips early in life can lead to greater financial success.

05:01

📚 Invest in Yourself First

Andre introduces the concept of life as a video game where you can control your character and level up by acquiring skills and knowledge. He advises against investing small amounts in the stock market due to the high risk and low returns. Instead, he suggests investing in personal development and education, such as watching tutorials and learning from experienced individuals like teachers and parents. The emphasis is on the importance of self-improvement during teenage years.

10:03

💼 Discover Your Passion and Gain Work Experience

Andre recounts his experience of getting a job at 15 and realizing the value of money. He encourages teens to explore various interests and side quests to discover their passions and talents. By investing in their skills and trying new activities, they can set themselves up for future success. Andre highlights the importance of finding a skill that society values, as it can lead to better financial outcomes.

15:04

💳 Essential Financial Steps at 18

Upon turning 18, Andre advises teens to take crucial financial steps such as opening a high-interest savings account and getting a credit card to build a credit history. He explains the importance of a good credit score and provides tips on managing credit responsibly. Andre also stresses the importance of starting a retirement account, like a Roth IRA, early to take advantage of compound interest, illustrating the significant difference in retirement savings when starting at 18 versus later in life.

📈 Building Good Financial Habits

Andre discusses the importance of tracking expenses, maintaining good health, and being frugal. He advises teens to track every dollar earned and spent, using apps like Mint or Personal Capital to develop the habit. He emphasizes the importance of physical health to avoid high healthcare costs in the future. Additionally, Andre explains the value of frugality and delaying gratification for long-term financial success. He also suggests setting up a custodial account with the help of parents to start investing early.

📊 Join the Investing Community

In the final part, Andre invites viewers to join his Discord community to discuss investing and other topics. He provides links for signing up to investment platforms like Weeble and Robinhood, offering free stocks as incentives. He encourages teens to follow him on Instagram and promises to answer questions in the comments. Andre congratulates young viewers for taking the initiative to watch the video and encourages them to enjoy life while making smart financial decisions.

Keywords

💡Gen Z

Gen Z refers to the generation of people born roughly between the mid-1990s and the early 2010s. In the video, the speaker addresses Gen Z individuals as the primary audience for investing advice, highlighting their potential to start building wealth early in life.

💡Millennials

Millennials are people born between 1981 and 1996. The speaker discusses the challenges faced by Millennials, such as economic hardships and job prospects, and contrasts them with the younger Gen Z, illustrating generational differences and financial attitudes.

💡Investing

Investing refers to the act of allocating money or resources into assets with the expectation of generating income or profit. The video provides advice on how teenagers can start investing early, emphasizing the importance of investing in personal development and the stock market.

💡Compound Interest

Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, interest on interest. The speaker highlights the power of compound interest in growing wealth over time, especially when starting investments at a young age.

💡Credit Score

A credit score is a numerical expression based on a level analysis of a person's credit files, representing the creditworthiness of an individual. The video explains the importance of building a good credit score early by using credit cards responsibly and paying bills on time.

💡Roth IRA

A Roth IRA is a type of individual retirement account where contributions are made with after-tax dollars, and qualified withdrawals are tax-free. The speaker advises young viewers to open a Roth IRA to take advantage of tax benefits and compound growth over time.

💡Frugality

Frugality is the quality of being economical with money or resources. The video encourages viewers to adopt frugal habits, live below their means, and avoid unnecessary expenses to build wealth and financial stability.

💡Side Quests

Side quests refer to additional activities or tasks that can be undertaken outside the main storyline, often used in video game terminology. The speaker uses this metaphor to encourage teenagers to explore various hobbies and interests to discover their passions and potential career paths.

💡Character Development

Character development involves investing in oneself to improve skills, knowledge, and personal attributes. The video emphasizes the importance of personal development, suggesting that teenagers use their money and time to enhance their abilities and boost their future earning potential.

💡Retirement Account

A retirement account is a financial account specifically designed to save and invest for retirement. The speaker stresses the significance of starting a retirement account early, such as a Roth IRA or traditional IRA, to benefit from tax advantages and long-term growth.

Highlights

Outdated meme humor and first piece of advice is to get a haircut.

The video is aimed at teenagers looking for investing advice or their parents.

Gen Z and Millennials comparison, highlighting the economic challenges faced by Millennials.

Introduction to the importance of investing early in life.

Life is compared to a video game where one should explore and level up.

Advice to invest in personal development rather than risky investments.

Recommendation to read 'The Simple Path to Wealth' by J.L. Collins and other books for financial literacy.

Importance of getting a job at a young age to understand the value of money.

Encouragement to explore various activities and discover one's passion during teenage years.

Significance of getting a bank account and credit card at age 18.

Explanation of credit scores and the importance of maintaining a good credit history.

Emphasis on opening a retirement account, like a Roth IRA, to take advantage of compound interest.

Suggestions for building good financial habits such as tracking expenses and being frugal.

Mention of setting up custodial accounts with the help of parents for early investment.

Encouragement to join a community for financial discussions and to use available resources for free stocks.

Transcripts

wipe wipe it worked

it's a totally outdated meme by now and

it does not make any sense but the first

piece of advice is

get a haircut and if you clicked on this

video looking for investing advice for

teenagers

you're probably gen z or maybe you're

just the parent who's looking for advice

for their kids or maybe

you've stumbled on the dark corners of

the interwebs at 3am

but whichever one it is you've come to

the right place and speaking of all the

different types of generations

i just read somewhere that zoomers are

destroying millennials on tick tock

and that just isn't fair cause

millennials inherited the worst economy

known to man

we have the lowest job prospects the

least amount of money out of all the

generations

boomers think that we're entitled and

now zoomers are beating up on us

i can't start this video on adulting

until i've had my morning coffee and you

smash the like button because you owe it

to me

don't be such a hufflepuff i cannot do

this video with a straight face

this is ridiculous being a millennial is

the thing i hate and love about myself

the most

and this wasn't even bought for this

video i literally had this in my kitchen

pantry

this is embarrassing everyone knows that

us millennials were a mistake so leave

britney alone

put jokes aside let's talk about the

best investing advice for teenagers

and this really applies to everybody the

earlier on in life you hear this the

better off you'll be

i just wish this was stuff that i heard

it when i was in my teens

because i would have ended up with a lot

more money than playing cards in my bank

account but lucky me

i watch the secret

and the power of the secret compels me

to make money out of all these playing

cards

clearly real bills because uh money's

stiff like that

let's begin

[Music]

hi my name is andre and i like to think

of life kind of like a video game

except we don't get to pick the

characters that we play as or the stats

because those get assigned to us at

random but just like life you get to

control your character

and as long as you explore the entire

map and you collect all the items and

all the special pokeman like this

happy birthday pikachu which i'm really

proud of owning and as long as you grind

and level up then the game will get a

lot easier but i want you to remember

that if it ever gets frustrating or

tough

you don't just quit playing the game you

continue practicing as long as you

remember

that there is a ton of rng involved in

this game of life

you cannot influence much because the

rng preferably favors those who are born

into

elite guilds with lots of coin so the

best thing that you can do is continue

unlocking those special abilities

special skills collecting all the items

leveling up and that's when this game

will get a lot more fun so kind of think

of this video as

your video guide walkthrough tutorial so

starting with the first teen level

level 13 you might be wondering andre

i've got like 100 coins to invest

where do i put them and the answer is

wherever it's going to promise to give

you the greatest amount of returns

and if you're thinking of taking this

money and putting it in something like

the stock market

then please understand this super simple

fact whether you have a hundred dollars

or a

thousand dollars right now the best

amount of money that you can make from

this

is a couple hundred extra dollars in

just a few months but at worst

you can lose your entire principal

investment and that's not worth the risk

so instead take this money and put it

into your own character development

of boosting your stats but if you don't

have the money to do it then understand

that life

takes a different kind of currency as

well and that is visa

i'm kidding it's not a plug for visa

it's actually time

you can invest either your money or your

time but this level is very easy and

you're literally doing it right now so

watch as many tutorials as possible and

pay a special close attention

to people who look like they beat the

game a couple times that includes your

teachers

your parents and your grandparents who

literally played that game on hard mode

this is the age to learn and listen now

in level 14

i strongly suggest that you start

reading now when i was younger

i hated reading i don't know about you

but i just could not stand when people

suggested or recommended or told me what

i had to read

that's why i started with picture books

like this one

because i wasn't very bright i'm still

not but i'm moving on from picture books

it's progress

but the first book you have to read is

the simple path to wealth by j.l

collins it's going to change the way you

look at money and life

please read that book the second book is

i will teach you to be rich

by ramen setti ignore the clickbait

title of the book it's actually a really

good book

and the third book is harry potter and

the goblet of fire but that's the

millennial of me and that's actually a

really good book it's my favorite if you

want to go advanced or hard mode

then please read the intelligent

investor by benjamin graham

to give you a lot of advanced tips and

tricks about investing your money in the

stock market

when you're ready but you're not there

yet now levels 15 and 17 are some of my

favorites

and that's because we start to evolve so

don't mind the fact

that you'll be seeing some physical

changes that's pretty normal in

preparation for level 18

but in level 15 the first thing you want

to try to do

is get yourself a job i got my first job

at level 15

and it taught me the fact that i could

make money but also the value of that

money true story when i was in high

school i was flipping through this

magazine and i saw this

mercedes slk for sixty thousand dollars

and i thought

wow that's cheaper than i thought and as

soon as i got my job

i unlocked the reality skill tree and i

realized that working part-time for nine

dollars an hour i would never be able to

afford a car like that and from that

moment on

i never asked my parents for a single

thing again because i realized

the time and the value that it would

take to earn each and every single

dollar

also between levels 14 and 17 go on as

many side quests as you can

try everything except for the things you

know you shouldn't but try youtube

try tik tok try cooking try tennis magic

card issue photoshop photography this

journey will allow you to discover your

master skill or otherwise more cheesily

known as

your passion now most people will miss

this side quest

but if you can find that skill you will

set yourself up for the rest of your

life

it's almost like a cheat code i was

fortunate enough to find my special

ability at level 12.

and for the next 8-10 levels i tried to

put all of my experience points into

that one

and boost it to the max that allowed me

to travel the world

make friends with people i never thought

in a million years i ever would

which allowed me to find my career which

eventually allowed me to consult on now

you see me and work with harry potter

yeah i know harry potter's not now you

see me

but i got to work with daniel radcliffe

and as cool as those experiences were

unfortunately the world didn't place

such a high dollar value on all my

skills

so bonus points for you if you can

discover that special ability that

society places

a high value upon then you're gonna make

a lot more money than i

ever did so really think of levels 13

and 17

as levels to invest in yourself to boost

your own stats because that's where

you're gonna get

the greatest returns on your money bar

none now we've come to the most

important part of the game and that is

level 18. this is going to set you up

for the rest of the play style of the

entirety of your game

we need to collect a few key items here

so this is part of your main storyline

this is not a side quest so don't go

partying off the map and as soon as you

turn

level 18 the first thing you want to do

is get a bank account in your own name

look for something with a high interest

rate on your savings accounts

and this means that by parking your

money here your money is going to end up

making you more money allah compound

interest style which is what we want but

here are a few of my personal favorites

ally bank or cit bank now right now

they're both yielding around one percent

which

isn't very much but these rates

fluctuate up and down depending on the

economy

the market rate which is usually set by

the final boss

the federal reserve so right now

everything's about the same so don't

chase it too much because if you find

something that's maybe

point zero five percent more that's only

five dollars per year more

for every ten thousand dollars you have

invested the second item on this list is

something that you

absolutely need asap and something that

i didn't get until level 24 which is

kind of embarrassing to admit

and that is a credit card and for the

longest time i thought people with

credit cards were just irresponsible

with money because they bought things on

plastic

because they couldn't afford it and i

was so wrong because what credit scores

do is they allow

other people to see how responsible you

are with other people's money and if

you're good

they'll let you use their money at good

interest rates and if you think like me

well i don't want to borrow money if i

want to buy a car or a house i will save

for it but even

if you have all that money to just pay

it in cash you should really never do

that

for reasons that i will get to in

another video but as soon as you hit

level 18

trust me get yourself a credit card

because this side quest

takes years to fully finish in order to

build your credit history personally i

recommend going with something like a

secured credit card or this uh

discover it's secured it's kind of like

the gold standard if you don't have

history and it's pretty cool because it

gives you two percent cash back on

different categories

and one percent cash back on everything

else but pro tip

if you're a student in college instead

of getting that one get yourself

the cash back student edition of that

card

it's the same idea but it's going to

give you better perks and the idea of

this

is to get a high score of 750 or higher

and we could do all that within eight

months to one year if you can follow

these next few steps

number one make sure to always pay your

bills on time

and never carry a balance because if you

do you're going to pay more money in

interest alone than all the rewards that

you're going to get in return

if you could do all that then 35 of your

score will be accounted for just paying

on time but if you miss your payment for

whatever reason

immediately pick up the phone and call

the little number on the back of a

credit card

and ask them for forgiveness usually the

first missed payment

is going to be okay and it can be

forgiven as long as you call and ask and

number two is the utilization rate which

accounts for a huge thirty percent of

your score

now if you can keep your utilization

rate of thirty percent or lower

you'll do just great for you have a

thousand dollar monthly spending limit

spend no more than three hundred thirty

three dollars and thirty three cents but

if you wanna be ultra conservative and

do what i did and get there far

quicker then utilize no more than ten

percent or a hundred dollars or less in

this case

now you could literally just buy one

little tiny thing like a pack of gum

or just some gas and in that case your

utilization rate will be in the single

digits

and that will improve your score

dramatically and number three is your

length of history which accounts for

15 of your credit score which is why

it's so important to do this

as early as possible now for me this is

what drags my score down the most

and if i had started when i was 18 my

score would easily be over 800 by now

but pro tip cheat code if you can have

your parents co-sign on their credit

cards for you

then you will inherit their credit score

if they have an excellent score

i couldn't do this because my parents

didn't have a good score but your

mileage may vary

if you can do these three things you

will easily and quickly beat this side

quest

the third item on this list is something

you need to get asap as soon as you hit

level 18

it's probably the most important part of

this video and that is a retirement

account

it could be traditional or a roth ira

now think of these accounts like savings

accounts

except instead of putting your cash in

here what you're putting in here is

mostly stocks

and the reason you want to do this is

because it protects your money

from taxes in the case of a traditional

ira you pay no taxes today

but you will pay taxes later on the

money that it's grown into

in the case of a roth ira you pay taxes

up front

but no taxes later in life when you

withdraw those millions that you're

ready to retire on if you have no idea

which one you want to pick

you can actually have both a traditional

and a roth but remember you can only

contribute

six thousand dollars per year and you

can contribute it down the middle

however you want fifty fifty one year in

one

one year in the other doesn't really

matter now if you could do this early

look how much coin you can end up with

assuming a growth rate of eight percent

which is what you can expect from the

stock market

now assuming you started to max out your

roth ira account

at level 18 for three years only three

years until level 21 when you're fully

evolved into an adult you will have

ended up

with 781 thousand dollars which is an

insane amount of money

at retirement that's amazing if you had

done this at 31

then you would have ended up with 287

000 at age 67 which is almost two and a

half times less

all because you started just 13 years

later which isn't that much of a

difference

that's the power of time and compound

interest at work so pause this video if

you're 18 years or older and go and make

that account because you're literally

losing money right now

ready pause okay i know you didn't

actually pause this video but as soon as

you finish watching this video or as

soon as you turn 18

please go do that and let me know in the

comments below if you actually did and

the fourth item you need to collect

is to get yourself a stonk and

preferably put it in a retirement

account

it's going to be one of the most

complicated things you think you'll ever

do because there's thousands of

companies to select from and half a

dozen character play styles to choose

you can be a growth stock wizard a real

estate investment mage

or even a defensive dividend investor

and the list goes on and on

i actually made a video about that which

i will link in the description below the

video

it's super cool and you can select

exactly which character is best for you

and while you're level 18

one of the most important things that

you can do is get into the habit

of building good habits and the first of

these good habits is to track

your expenses i cannot emphasize this

enough

every single dollar that you make start

writing it down every single dollar that

you spend

write it down write it down on a piece

of paper just to get used to it manually

or you can immediately download an app

like mint or personal capital

those apps track everything you make and

everything you spend

and they get you into the habit of

tracking all of the progress because

nothing ruins progress than not knowing

where you've been because you have no

idea where you're going

this is just as true for building wealth

as it is for anything else

the second habit you should build for

yourself is to take care of your body

and your health

might seem obvious but as soon as you

level up in life you start to forget

about the skill tree more and more

and before you know it your abs melt

away slender physique

goes away and your metabolism just

vanishes and goes somewhere else in fact

if you compare what i look like today

versus my first few videos in 2019 it's

like watching someone's metabolism

get thick but if you don't train your

character regularly

healthcare costs will continue to expand

and before you know it

it's going to be your number one expense

in retirement and the third good habit

is to be frugal and live

well below your means and i don't mean

be cheap because

being cheap is just not wanting to spend

money for the sake of it and never

getting any enjoyment or value out of

life but being frugal

is to take that same dollar and stretch

it to the most of your ability

but don't fall into the trap of saying

life is short

live a little actually statistically

life is not short you're gonna live to

be a very old person someday

statistically speaking and if you can be

happy with less you'll succeed a lot

earlier

this is one of the most difficult skills

to build but if you can learn how to

delay your gratification

you are scientifically proven to end up

with more money i'm going to give you a

cheat code of my very own

it's a little privileged because not

everyone can use this but if you have

parents that you can convince to set you

up with a custodial account then you can

give them

your money that you earned from your job

and they will invest the money for you

and as soon as you turn 18

and you level up you will inherit that

account and you'll know exactly what to

do

because you watch this video and you

smash the like button the other cheat

code i will leave is a free link to my

discord channel where we talk about

investing and everything in between

it's an incredible community and i'll

give you three more free stocks

three more free cheat codes sign up to

weeble or get your parents to do it with

a custodial account

you get a free stock up to two hundred

fifty dollars and if you fund your

account one hundred dollars

you'll get another free stock that up to

fourteen hundred dollars and i will be

paid

but you don't have to use my links just

go get those free stocks and get your

third free stock from robinhood

simply for signing up love you all thank

you so much for watching this video you

can follow me on instagram

i post from time to time and i'll see

you back here on monday and friday

please use this video as a reference

guide come back to it anytime

let me know in the comments down below

if you have any questions i'll try my

best to get back to them

and i try to answer all the comments

that you guys leave thank you so much

for watching again and if you're 18

or younger then congratulations for even

watching this video and getting this far

you are much farther ahead than all of

your peers and all of your friends

it's unbelievable that you're here good

job go out there go level up

just make sure to enjoy all the levels

in between because life goes fast

[Music]

bye

[Music]

it'd be easier for me if i turn away to

flee

but there's something holding on

[Music]

today