5 powerful benefits of starting investing at a young age

Think investing is only for adults in suits? Think again. Investing as a kid or teen is a great way to learn about the stock market and how small amounts of money can grow over time, helping you achieve goals sooner.

The more you learn about the benefits of investing at a young age, the better it sounds. Here are five benefits you can take to the bank — or your Greenlight app.

1. Compound growth can help your money earn more over time

Investing at a young age is like planting apple seeds. Each of those seeds grows up into a tree, which eventually makes more apples. Those apples fall, and the seeds get buried in the dirt. Those seeds grow into new trees, which make even more apples.

Think of every dollar you invest as an apple seed. When you buy stock in a company, and the company does well, your investment grows. Maybe you started with $1 and got to $2. Now, you're earning money on $2, which means you make more every time the stock increases in value. That's called compound growth. You can also see that kind of growth in your savings account, thanks to compound interest. 

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But wait, can kids invest in stocks? Yes, but an adult has to be involved. Greenlight's easy-to-use investing app lets kids invest through an adult-owned account, with a parent approving each trade. When you start investing at a young age, your money has more time to grow. Even a small amount can grow steadily over the years if you keep it invested. It's a case of "slow and steady wins the race" — starting early matters more than starting with a lot.

2. More time in the market means less pressure and risk

People invest to grow their money, but that doesn't always happen. Stocks can lose value if the company doesn't do well, which means there's always the risk of loss.

That's why investors have to be strategic. You know stock market values go up and down — sometimes by a lot, sometimes a little. Stock investing is great for kids because it gives them time to ride out those ups and downs.

It also gives you more investment options. A 30-year-old who wants to be a millionaire by 35 might take a risk on a stock that could go up or down dramatically, hoping for a quick win. But they might end up with a big loss. Kids don't have to rush things because there's time to ride out market volatility — the natural ups and downs of stocks. You can also lower your risk by choosing investments that tend to be more stable.

One option that beginners often like is index funds, which are like a multipack of stocks from big companies. They're affordable and generally less risky than investing in a single company, but your share can still grow over time.

3. Investing early helps kids build strong money habits

Investing for kids teaches consistency and discipline with money. You make the smart choice to invest what you might spend otherwise, and you (hopefully) see it grow over time.

Having more money in your investment account means more growth potential. Kids and teens can take advantage by investing a certain dollar amount or percentage every time they get an allowance, chore money, or pay from a part-time or summer job. Say you get $50 from your grandparents for your birthday. You might decide to spend $20, put $20 toward your future-car fund, and invest the other $10.

The Greenlight app is a great way to teach kids strong money management skills. Kids can either spend money they earned from chores, save for a new goal, or choose to invest in stocks of their choice. 

4. Young investors learn goal-setting and patience early

When you invest as a teenager or even a pre-teen, you learn the tangible benefits of looking at things long-term. The key is to remember why you're investing and how you want to use the money.

Maybe you want to buy a car when you go to college, or you dream of owning a home before you're 30. You can track your investments' growth over time and watch yourself get closer to your goal.

Seeing progress helps you stay focused on your goals. It can be tempting to spend $5 on a sweet treat or energy drink instead of investing, but a glance at your portfolio shows you what can happen if you're patient. 

5. Early investing builds confidence with kid-friendly tools

Investing is like learning to drive: The earlier you get comfortable with it, the less intimidating it tends to be when you're older. 

Gen Z is already finding this out. A quarter of adult Gen Z'ers, ages 18 to 25, started investing before their 18th birthday. Now, more than half of them have active investment strategies.

And, no, you don't have to be rich. You can buy lower-cost shares or part of a share of stock, which investing pros call a fractional share. You're buying a fraction, and you get returns accordingly. If you buy a 33% share and the stock goes up $1, your share goes up $0.33.

Greenlight makes it easy and safe for kids and teens to practice investing. You choose a stock and how much you want to invest from your Greenlight account. All you need is your parents' approval, and you're good to go. You can even talk about your trades and learn about investing together. It's a great way to bond and develop money skills as a family, while you work toward your goals.

Want to raise savvy investors?

With Greenlight, kids can learn to invest with parental approval on every trade. Build their financial confidence early.

Ready to get started? Learn more about how Greenlight's investing app helps kids and teens learn smart trading. 

© 2025 Greenlight Investment Advisors, LLC, an SEC Registered Investment Advisor provides investment advisory services to its clients. Investing involves risk and may include the loss of principal. Investments are not FDIC-insured, are not a deposit, and may lose value.