Investing for Kids: How to Save, Invest, and Grow Money

Should I pay off debt or start investing?

Pay off high-interest debt (credit cards above 7%) first. For low-interest debt (mortgage, student loans under 5%), you can invest simultaneously since market returns historically exceed these rates.

How do I start investing with no experience?

Start with a diversified index fund through a brokerage account or Roth IRA. Invest consistently regardless of market conditions (dollar-cost averaging). As you learn, diversify further.

How do I start investing in index funds?

Open a brokerage account (Fidelity, Schwab, or Vanguard are all excellent), deposit money, and buy a total market index fund (VTI, FXAIX, or SWTSX). That's it — you now own a slice of 3,000+ companies. Set up automatic monthly investments to dollar-cost average. A target-date fund is even simpler — it automatically adjusts your stock/bond mix as you age.

Why should I start investing early?

Starting early maximizes the power of compound interest — your earnings generate their own earnings over time. A 25-year-old who invests $5,000/year for 10 years and stops will have more at age 65 than a 35-year-old who invests $5,000/year for 30 years. Time in the market is the most powerful variable available to young investors, and it cannot be bought back later.