Generating Income

When thinking about saving up money as a teen, the first thing I think of is how to generate an income to invest, save, and spend. Here are some of the easiest ways to get started with generating an income!

1. Getting a job

Getting a job sure seems like a daunting commitment that takes a lot of time and energy, but it is viable for some people. Depending on the location, teens will be working for different wages. For example, California requires employers to pay a minimum wage of 10 dollars per hour to minor-age workers. Many jobs, however, are not available for minors because they are too hazardous. Another choice would just be taking less formal jobs, such as getting paid to mow a lawn or wash a car. These jobs don’t have to be a consistent commitment, so are very flexible. Overall, if the circumstances are right, getting a job could be a very consistent way of earning money as a teenager.

2. Index Funds

Index funds are a great way to invest in the stock market because they provide a wide range of diversification, which also means there is significantly lower risk. This makes index funds one of the most consistent ways to profit on the stock market, and the great part is that you can just buy it and forget about it. Personally I highly recommend this option.

3. Individual Stocks

Buying individual stocks can yield larger rewards compared to investing in index funds, but the risk is much higher, which means beginners are especially at risk of losing money. It is fun to play around with stocks though, and you could make serious money doing it.

4. High Interest Saving Accounts

While standard savings accounts only have an average interest rate of 0.06%, high interest savings accounts, mostly provided by online banks such as Ally Bank and Ponce Bank, have interest rates as high as 0.50%. The downside to these high yield accounts is that the interest rates vary from what is advertised quite frequently, although it will still be way higher than standard savings accounts.

5. Explore Your Interests!

The best way to get motivated to make money is to do something that you enjoy. If you can start some type of business from a hobby or interest, even if it isn’t that successful or doesn't make much money, it would be a valuable experience for the future. It’ll get you into the mindset of entrepreneurship and really test your skills. The important part is to try!

These are just a few of the ways in which you can make money as a teen without getting a job or spending too much time on trying to make a profit. I hope that you can apply these simple ways of generating income to your own life and save up money for your future!