Investing is all the rage, especially following the historic leaps in the stock market following the 2020 market crash. With the major indices scoring record highs practically every week, it’s no wonder that people are interested in investing at ever-younger ages. But before you start, there’s one really, really important question you need to answer. How old do you have to be to invest in stocks?
Before we answer that question, let’s take a look at some interesting investment trends by age and gender.
According to Wealthsimple, just 26% of women between 22 and 38 invest in the stock market outside their retirement accounts. But for millennial men, that number nearly doubles to 43%!
That said, a full 63% of millennial women report investing as early as their 20s, including retirement accounts. And Morninstar data shows women invest for retirement a year earlier, starting around age 26 to men’s 27.
But on the whole, women are less likely than men to invest at all – despite living an average of three years longer. After the 2020 market crash, around 34% of women hadn’t started investing at all compared to 24% of men. And of those surveyed, just over 20% of women had been investing between 1-5 years compared to almost 25% of men, with half as many women as men investing between 11 and 15 years.
The reasons for these discrepancies vary.
According to FINRA, just one-third of women feel comfortable investing compared to half of all men. But a FinanceBuzz survey suggests that the most common reason to not invest across genders comes down to a lack of funds, followed by a lack of information.
And all this despite the fact that women generate better returns – 1 to 2.5% more – than their male counterparts.
Now that we’ve taken a look at the gender and age differences in investing, we can address our pivotal question.
So, exactly how old do you have to be to invest in stocks?
Technically, the answer is 18, or the age at which a person can legally enter into a binding contract. But the limit for when you can open a brokerage account – which is required to start investing in stocks – is set by the state.
In the majority of states, the investing age is set at 18 years old. But if you live in Alabama, Delaware, or Nebraska, you have to wait until you’re 19 to invest.
And residents of Utah, Tennessee, Ohio, Nevada, and Arkansas may have to wait just as long to start investing in stocks. In these states, the minimum age is set at 18 or when you graduate high school – whichever comes later.
And for those who call Mississippi home, you’ll have to wait until you’re a ripe, old 21 years of age.
On the other hand, if you have kids, you can open an investment account at any age! These custodial accounts, as they’re known, will be funded in your name until your kids are 18 to 21 (depending on the age of majority in your state).
Opening a custodial account gives parents a way to teach their children the merits of investing under a watchful eye. To start, you’ll need your names, Social Security numbers, and dates of birth. You may also have to supply employment information – and of course, you’ll need to link a funding account.
Once the account is open and well-stocked, you can guide your children into investments such as stocks, mutual funds, and ETFs. And when you feel they’re ready to give their input, you can loop them into the decision-making process, too.
Because the lowest investing age in any state is 18 years of age, investing apps can’t set a minimum age below that point. As such, to invest in stocks with Robinhood, Sofi, Betterment, or any other app or brokerage out there, you need to be at least 18 years of age.
You might be wondering at this point: how old do you have to be to invest in stocks with Q.ai?
The answer, unfortunately, is still 18 years old.
But if you meet that threshold and feel prepared to take charge of your financial future – with the power of AI backing your investments, no less – come join us today!
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