Q. When is the best time to start investing?

I’m currently in high school and learning about personal finance. I plan on getting a part-time job soon to save up money for future investments. I want to start investing; should I make the decision of when to start based on my age, my knowledge of investing, or a combination of both?


A.  Congratulations for already thinking about your future at such an early age!  Following through on your plans will set you up for a great financial future.

Fortunately, it doesn’t require earning an MBA to start investing!  Too often we over complicate the process or worry that some better option exists.  Fear and greed are powerful emotions are best left out of the investing process.

Since you’re new to investing, I’d recommend focusing on building a diversified, low-cost mutual fund (or ETF) portfolio.  Picking stocks is incredibly difficult to do consistently.  Index funds outperform the vast majority of professional, active managers.  Any hope that you or I could do better is probably unrealistic.

Instead of having a complicated investment strategy, follow a few simple investing fundamentals like:

  1. Get yourself ready to invest by first building an emergency fund.
  2. Stay tax efficient.  Since you’ll be working, invest using a Roth IRA.
  3. Understand your personal risk tolerance.  Your age will allow you to take a lot of risk.  But don’t take more than you can handle in a down market!
  4. Keep costs low.  The lower the fees, the more of your portfolio you get to keep, especially over the many decades you’ll be investing.
  5. Re-balance periodically.  Once a year is fine.
  6. Stay the course!  Don’t bail out of the market when prices drop!

History shows us that regular investments, diversified across the equity markets and re-balanced periodically outperform other more “professional” investing strategies.

Get started as soon as you get your first paycheck!  And good luck!


John is a CPA and personal finance coach.  Email your questions to john@60minutefinance.com.

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If you need confidential financial coaching for your particular situation, please contact John for a no-cost, no-obligation discussion of your needs.

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