How old do you have to be to buy stocks? How old do you have to be to invest? How old do you have to be to trade stocks? Do you have to be 18 to buy stocks? Do you have to be any certain age to buy stocks?

These are all very common and very wise questions. I bought my first stock at age 10. Warren Buffett bought his first stock at age 11. When you buy your first stock is largely up to you. Though the question of “How old do you have to be to buy stocks?” does come with a few restrictions…

If you’re reading this, you probably want to start investing at a young age. Congratulations! If you get started at a young age – and keep at it – you’ll become very, very wealthy. You don’t even have to be a great investor. Why? Because you have time and that means you’ll receive lots of compound interest. Over time, even just hundreds of dollars will turn into thousands. If you want to read more about compound interest, read this post about why I’ll be a millionaire while young just because I started investing early.

How Old Do You Have to Be to Buy Stocks?

Wondering how old you do you have to be to buy stocks is such a great question. I’m happy to say there’s no minimum age requirement for buying stocks. There’s no age maximum either. Just like using a savings account at a bank. Even a 5-year-old could technically begin trading stocks, I suppose. So if you’re able to read this article, you’re not too young to begin investing. You can buy stocks, trade stocks, invest in other investments such as mutual funds and exchange-traded funded, etc. regardless of age.

There is a myth in society that you must be a certain age to invest. But I’m here to squash it. I’ll show you the three ways you can begin investing while young.

If you have a parent or guardian, you’re pretty much set. Unless your parent or guardian doesn’t want you to invest. Then they can stop you. But honestly, what kind of parent would squash a child’s dream of investing? I can’t think of one. Since you do need permission from your parents to invest, make a convincing argument. Tell them you want to invest in your future. They will be proud. How old do you have to be to buy stocks? Any age – as long as you get consent.

Reasons to Invest while Young

I love talking about why the best time to earn money is while young. I won’t say everything in this article but I’ll hit some high points.

For starters, working hard while young gets you in the money mindset. You understand its value. Working makes you smarter. Working gives you a reason to wake up each morning. Working boosts your self-esteem. All this becomes what is referred to as your money mindset. When you get started working young, you have a positive money mindset. You know you can make money. Life will be good.

Another reason is because of compound interest. Again, I detail it in this post about how I’ll soon be a millionaire. Compound interest is a magic thing. The sooner you earn the money, the faster it can start working for you. Think of a dollar as an employee. That employee works hard for you by earning you interest. Then that interest earns you more interest. Pretty soon, $10 is now $11. Then it becomes $12 and that number keeps growing. It’s powerful stuff. The earlier you begin earning, saving and investing, the richer you can get. If you begin saving early enough, you can retire at 30 if you’d like! Then you can play video games all day and live off the interest! Seriously! However, that lifestyle would get old after awhile but still. My point is you can do whatever once you have a certain amount of money.

But let’s look at minimum age requirements for investing once again. If your parents don’t support you bettering yourself, here is how old you have to be to begin investing on your own (by state). It’s the age of majority:

How Old Do You Have to Be to Buy Stocks on Your Own?

Alabama 19
Alaska 18
Arizona 18
Arkansas 18 – or when you graduate high school, whichever is later
California 18
Colorado 18
Connecticut 18
Delaware 19
District of Columbia 18
Florida 18
Georgia 18
Hawaii 18
Idaho 18
Illinois 18
Indiana 18
Iowa 18
Kansas 18
Kentucky 18
Louisiana 18
Maine 18
Maryland 18
Massachusetts 18
Michigan 18
Minnesota 18
Missouri 18
Mississippi 21
Montana 18
Nebraska 19
New Hampshire 18
New Mexico 18
Nevada 18 – or when you graduate high school, whichever is later
New Jersy 18
New York 18
North Carolina 18
North Dakota 18
Ohio 18 – or graduation from high school, whichever comes first
Oklahoma 18
Oregon 18
Pennsylvania 18
Rhode Island 18
South Carolina 18
South Dakota 18
Tennessee 18 – or graduation from high school, whichever is later
Texas 18
Utah 18 – or graduation from high school, whichever comes first
Vermont 18
Virginia 18
Washington 18
West Virginia 18
Wisconsin 18 – or if you’re still in high school at 18, it’s age 19
Wyoming 18

How old do you have to be to buy stocks on your own depends.

There are several ways you can begin investing if your’e still considered a minor in your state. What I’m going to do is list out each method and explain how to get started. Some of this stuff may sound confusing. But investing at a young age is simple.

How to Begin Investing While Young:

Invest within a Custodial Account (UTMA/UGMA)

Uniform Transfers to Minors Act (UTMA) or a Uniform Gifts to Minors Act (UGMA) accounts can be opened. These are investment accounts wherein you buy stocks or any type of investment. Which one you and your parent/guardian choose depends on your state. It’ll be one or the other. Any brokerage firm will help you decide which to open.

With these accounts, a parent/guardian gets assigned as the account owner, while you are the beneficial owner. Then, once you reach the age of majority, you automatically become the sole owner. You can then name your parent/guardian as a beneficiary if you wish. You don’t have to sell anything once you reach legal age. The transition is quite smooth.

I had one of these accounts not long ago. It was really convenient actually. It functioned just like the solo accounts I have now. Once I turned 19 (I live in Nebraska) I was informed that the account was now my own and I could name anyone as the beneficiary. Once you turn age of majority, you’ll never again need to wonder “How old do you have to be to buy stocks?” It’s a great feeling.

Invest within a Roth IRA

How old do you have to be to invest in a Roth IRA? You can start a Roth IRA at any age. This is definitely my favorite investment vehicle. That’s because you put money in that has already been taxed. Then it grows tax-free. Let’s say you put in $100. You’ve already paid taxes on that $100. Over time, it will grow to $1,000. Which would you rather pay taxes on? $100 or $1,000? For a young person, the answer is easy. Always pay taxes when you’re really young. You’re in a low tax bracket.

To convince your parent/guardian to open a Roth IRA on your behalf, there are many ways you can convince them. For starters, tell them that Roth IRA money can be used for educational expenses. It can essentially be a college fund. The money can also be used to buy your first home. You can even take out the principal when you would like. The only hangup is you must wait until you’re age 59.5 to pull out your investment income for non-educational/first home expenses. But that’s fine. Building wealth while young is about having patience.

Or – You Can Simply Wait to Invest in the Stock Market

The reason states have this age of majority rule is because officials believe people under the age make poor decisions. Law makers believe the age of majority is protecting you from making poor investment decisions. They feel that you shouldn’t invest on your own until you’ve matured. I get it. There is some truth to that. I’m a much better investor than I was when I was 10.

If you’re okay with waiting (or if your parent/guardian won’t give consent) it’s not the end of the world. The fact is, saving money is more important than investing. Think about it like this. Today, you can make $10. Mow lawns, resell stuff on Craigslist, do anything. So in one day, you earn $10. Pretty much the best case scenario when investing is that you’ll make 12% on your investments. If you were to invest that $10 at earn that fantastic 12% return, your money would then be worth $11.20. Yep – it would take one year to earn $1.20. So what should your focus be? $10 in one day or $1.20 cents in one year? That’s why earning money and saving money will always be more important than investing. It can be done much faster. How old do you have to be to invest in yourself and perhaps a small business? Absolutely any age.

What to Invest in as a Child…

Here’s a surprise. I actually don’t recommend trading stocks at a young age. That’s because trading stocks in general is a pretty bad idea. Let me ask you a question. Can you predict the future? No? Then why do you think you can predict the future of a company? So asking, “How old do you have to be to trade stocks?” isn’t a good question. Instead, focus on long-term investments.

Trading stocks can work for some people, just not enough that I would suggest you start out with this medium of investing.

How old do you have to be to buy stocks (or other investments besides stocks?)

Invest in either be mutual index funds or exchange-traded funds. These are pretty darn safe bets. If you invest in good, low-fee funds while young, you’ll do really well. These funds track the stock market. The S&P 500 has done nearly 12% since inception. 12% is far more that most stock traders ever make. Stick with the 12% number. Then focus your energy on earning more income. Because income beats investing ability all day long.

Pro Tips for Investing at an Early Age

Again, how old do you have to be to buy stocks, trade stocks, invest in general? You either need the consent of a guardian or be at the age of majority for your state. As I said earlier, I started investing when I was 10. I’m now 26. I’ve learned a few things. So here are my pro tips for young investors:

  • Be patient
  • Invest in index funds with low fees and no loads
  • Invest in a fund with a solid track record of performance (10+ years)
  • Go through a quality brokerage firm like Vanguard or Fidelity
  • Think long-term. When the market dips and you ‘lose’ $20,000 – who cares? It will recover.
  • Consider the money you invest to be untouchable for at least 5 years.
  • Work hard to make your taxes as low as possible. Hire an accountant if you’d like.
  • Don’t check account balances every day. Remember, you’re thinking long-term. You can ignore the day-to-day nonsense.
  • Enjoy the ride

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