Hey Junior Savers and Teen Banking Club members!

Investing might be a word you are familiar with already (maybe from reading one of our club newsletters?), and it is one you will hear a lot as you learn more about money and finances. But it’s complicated, and it might be hard to understand what it is and how it works.

It’s definitely not for kids or teenagers, right? Wrong.

Anyone can invest — with the help of an adult. You don’t need hundreds and thousands of dollars to start, and the earlier you begin, the better. But before we get into how to invest, let’s break down what it is.

What is investing?

Financial investing is putting your money towards something that will hopefully grow and increase in value over time. All financial investments come with risk, or the chance that their value could go down instead of up. People that invest money are called investors.

Did you know there are other kinds of investing you do every day? You invest time and effort practicing chords or memorizing musical symbols when you’re learning to play an instrument. When you study math or writing in school, you invest your time and ability in learning about those subjects.

Those investments can increase your ability to play an instrument or understand math over time. The goal of financial investing is to do the same thing for your money.

How does investing money work?

Investors buy or lend money to get what are called financial assets. Financial assets are bought, sold, and traded on a market, which can make them more or less valuable over time. Here are some of the most popular financial assets for investors because of their potential to grow in value:

• Stocks: These are small parts of a publicly-traded company, called shares, that investors can buy. A stock's value can rise or fall over a period of time depending on many different factors.
• Bonds: Groups such as companies, governments, or municipalities sell bonds to investors as a way to borrow money. These groups pay investors interest on the bond over a period of time.

Both of these investments can be bought online or through financial professionals called brokers. There is a stock market and a bond market where they are exchanged by investors from all over the world.

Other ways to invest

Your Junior Savers account¹ pays you interest (and Treat Dollars) for investing — putting and keeping — your money in it. Junior Savers accounts require no minimum deposit to open or daily balance minimums until the account holder turns 22, when a $5 monthly fee will be charged if the daily balance goes below $200. A deposit in your savings account is a savings investment, so not one that will grow like a stock or bond, but it’s a great start because you earn interest on every dollar.

Did you know that collectors save their baseball, basketball, or football cards, and comic books, to sell in the future as an investment? This is because these items can become more valuable over time if they are popular and kept in good shape.

Investing can be risky

We mentioned risk earlier, but it’s important to remember that investments do not always lead to growth, and can lead to a financial loss. Talk to your grown-up or a banker about investing before making any decisions, especially if it’s your first time. 

But even with the risk, investing gives investors the best chance to make their money grow in value over time. And remember, the earlier you start, the more time your investment has to grow.

Interested in joining the Junior Savers or Teen Banking Club? Bring your grown-up to the nearest branch, or find information on the clubs and sign up for our newsletter here.

1. Junior Savers Account. At account opening, child(ren) must be accompanied by a parent or guardian and present a valid social security number(s). Transaction limitations will apply. Fees may reduce earnings. A listing of WTFC locations can be found here: www.wintrust.com/locations.