Learn how to invest if you are under 18
Is it possible to invest if you are under 18? Find out everything about it!
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Investing if you are under 18 is possible. In fact, there are several advantages to investing early. After all, the sooner you start, the better.
And if you want to know more about this process, you're in the right place!
We will explain everything about the subject and show you how you can invest if you are under 18 years old.
What are the advantages of investing if you are under 18?
Time is a great ally for those who start investing when they are young, as compound interest takes time.
With this in mind, we will present the main advantages of starting to invest early. Take a look:
Start learning about the world of investments
There are several types of financial applications that allow a person to make a profit on their capital.
For example, when you start studying investments, you will discover that there are fixed income, variable income and investment fund applications.
Additionally, you will learn the importance of having a emergency reserve for times of financial unforeseen circumstances.
Therefore, the sooner you enter this market, the greater the chances of you making good decisions.
Less sacrifices
As you learn more about financial education and investing, you will realize that focusing on the long term is essential.
The strength of “interest on interest” favors the return on money that remains invested for a longer period of time.
In other words, by starting early in the world of investments, you will be able to see your capital returning greater returns, which will grow year after year.
Starting to invest early is a way to ensure that your goals are achieved more smoothly.
Reinforces the importance of financial education
Financial education is much more than just saving.
It consists of good practices and objectives that bring quality of life both in the present and in the future.
This way, you learn to handle money better.
Obviously, cutting unnecessary expenses and making investments is important. However, financial education goes far beyond that.
Financial education involves several factors, such as questions about the best way to use your money.
When a person begins to study about investments, they begin to understand the importance of managing capital and begin to look for ways to make this amount grow over time.
Have a more comfortable life in the future
People of any age can start investing – it’s never too late to do so.
However, those who start this journey earlier end up finding more opportunities to obtain good income and thus have more peace of mind in the future.
This is because, from now on, it will be possible to build up capital that can be used to make some dreams come true in the future, such as buying a car or even for your retirement.
What are the rules for investing if you are under 18?
Parents or an adult responsible for a minor can open an account with a stockbroker in the name of the child or adolescent.
To open an account with the broker you will need:
• Minor's identification document
• Identification document of the legal guardian
• Proof of residence in the name of the parents or minor
• Registration form signed by the father and mother. Only one signature will be accepted if the father or mother is deceased or the parents are separated.
The child's legal guardian will also be responsible for his/her account, making investments and decisions until he/she reaches the age of majority.
What are the best investments for your child's future?
Before you open an account for your child with the brokerage firm, contact the company and ask any questions you may have about rules, conditions, etc.
This way, you avoid problems with opening and managing the account.
The main objective should be to teach about financial education. This will make it easier to have a broad view of the investment market and learn how to manage your personal budget.
With that in mind, we will present some recommended products for little ones:
Treasury Direct
Tesouro Direto is one of the most recommended investment options for beginners and minors.
The Federal Government trades public debt securities through Tesouro Direto. This means that when you invest in this product, you are, in fact, lending your money to the government.
In return, you will be paid an interest rate.
There are three types of government bonds for sale at Tesouro Direto: fixed-rate, post-fixed and hybrid.
One of the main advantages of Tesouro Direto is that with just over R$ 30, you can start investing.
Furthermore, Tesouro Direto is considered one of the safest investments in the country, which is 100% guaranteed by National Treasury.
CDB
CDB is the acronym for Bank Deposit Certificate.
This investment works very similarly to Tesouro Direto. The difference is that here, you are lending your money to a private institution.
The CDB is a safe investment, as it is guaranteed by the Credit Guarantee Fund (FGC), which is accessible and practical.
Therefore, it is a great option for those who are starting to invest and do not have much experience.
Private pension plans
There is no minimum age to have a private pension plan.
There are two ways to include a minor in a private pension plan.
The first is including the child's name as the parents' beneficiaries, while the parents are listed as the holders.
The second is by placing the minor himself as the holder of the pension plan.
There are several advantages to taking out a private pension plan, such as:
• Professional management
• Absence of minimum age
• Focus on the long term
• Financial control
• Flexibility in contributions
• Ease of hiring
Conclusion
Now you know that it is possible to invest if you are under 18 years old.
The sooner you start, the better, as compound interest gains a lot of strength over time.
