How to Encourage Your Teens to Start Investing in the Stock Market | Motilal Oswal
How to Encourage Your Teens to Start Investing in the Stock Market | Motilal Oswal

How to Encourage Your Teens to Start Investing in the Stock Market

Can you imagine the amount of money you might have accumulated if you had begun to invest wisely in your teens? Although you cannot turn back the clock, you can promote investment in the mind of your teenager. Investment in the stock market is a good idea, and though it involves some calculated risks, you can still earn profits. Teenagers need to know how to invest in assets, and do it prudently so they can develop their net worth as they get older. Permitting teenagers to experiment with investments is a super way for them to learn how to invest. The best investment ideas for teenagers shouldn’t involve a great deal of risk, and here are some good ways to teach children to invest. 

1. Open a Savings Account 

A simple way to prompt child investment is to get your teen to get used to having their own savings account. Not only will this teach them to take financial responsibility, by using debit cards, cheques, etc, but they will need to manage their own balances in accounts. The  most basic way to teach teens how to start their financial path, several banks offer child accounts, having no opening fees and limited balance requirements. You can open a savings account at the same bank you use. Furthermore, you can open an online demat account along with a savings account, in case your teen decides to invest in securities. 

2. Investment in Index Funds

The typical nature of teens involves instant gratification, and investing may seem boring to teenagers. To ensure they remain interested, they need to have more control over  investment plans. Rather than be a young stock investor, investing in a single company’s stocks, index funds hold a host of benefits. By investing in the whole index (like the BSE or NSE index), your teen gets exposure to preferred companies, without being attached to a specific single one. 

3. Individual Stocks

In case the index fund investment notion doesn’t fly with an investor at a young age, you can always introduce teens to the idea of investing in companies they’re familiar with, owning a few shares. You will have to do significant research (or let your teen get cracking on it) beforehand. Investing in companies gives them better financial acumen in terms of the state of the economy at large. Also, when they know they hold a few shares of, let's say Google, they're likely to stay on top of their game by themselves. Nonetheless, you may find that your teen’s ‘favourite’ company’s stocks may be highly priced, but that said, encourage them to save up and try and meet that demand themselves. With a free demat account opened along with a savings account, it's easy for your teen to keep a track of investments online. 

Related Articles: How to Open a Demat Account Without a Broker | Factors to Keep in Mind While Opening a Demat account | Factors to Consider When Opening a Demat Account | 10 Points to Remember When Operating your Demat Account | Types Of Demat Account & Trading Account

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