Tips for Teaching Your Teen To Make Smart Investments

Children learn how to navigate the world by doing as their parents do. As they grow up, this is especially crucial so that adolescents can venture forth into the real world and achieve success. Arguably one of the most important things for high school students to learn is how to be responsible with their finances and invest wisely. If you’re looking to instill the right habits and knowledge in your child, here are a few tips for teaching your teen to make smart investments.

Make sure they know the importance of investing in education.


When you talk about investments, your high school senior may only be thinking about things like ETFs and stocks. However, one of the most critical investments they will be making in their senior year is the investment in their education. Those who choose to pursue higher education may expect higher salaries and a better quality of life. If they’ve done especially well in high school and maintained a high GPA while engaging in plenty of extracurriculars to become a well-rounded college student, they can likely get a degree from their pick of local or nationwide colleges.

Of course, some seniors may feel like college is not achievable given the high cost. However, many may be able to qualify for financial aid, taking out student loans that they can repay once they land their dream job. To reduce the amount they have to take out, they can also find ample scholarships for high school students and grants that they won’t have to pay back at all. No matter what field of study they’re interested in, scholarships are a great way to put money toward a college degree, with many scholarship opportunities offering $1,000 or more should they qualify. Whether it’s through FAFSA or scholarship funds, college can be a wise investment for many.

Teach them the value of due diligence when investigating different investment opportunities.

There are some investments out there that seem great regardless of how you get started. Take, for example, real estate. In real estate, you can make a wide variety of investments to grow your wealth. Two such opportunities you may come across are REIT vs real estate syndications. On one hand, a REIT allows you to invest your money into one fund that invests across multiple asset classes. On the other hand, you have a real estate syndication, which allows you to invest in a property and receive regular payments for your investment. Teaching your teen how to take the time to consider and weigh the pros and cons of multiple types of investments allows them to invest their money wisely when they do find the right fit for their needs.

Give them a lesson on FOMO and how it can cost them money.


In today’s world, there’s no shortage of new and exciting investments that could pose a major risk to one’s wealth. Take, for example, Bitcoin. While Bitcoin has soared over the past few years, it’s still a volatile asset that could crash at any moment. Success stories do abound, but so do stories of those who invested their money and saw a major crash that forced them to sell their life savings for a major loss to get that money back. Your teen needs to learn to critically assess investments, avoid things that are selling simply because they’re popular but have no real value or application, and build a portfolio of reliable investments. When they rely solely on FOMO to choose investments, it’s a gamble as to whether or not the outcome will be favorable.

Investing can be hard, even for adults. Improve your teen’s financial journey by using some of the tips listed in the guide above!