Money Advice From a Teen Who Opened a Retirement Account at 14 and Wrote a Book at 16

©Ella Gupta

Gen Z personal finance expert Ella Gupta started investing at 10, opened a retirement account at 14 and wrote her book, “Gen Z Money $ense: A Personal Finance and Investing Guide,” at 16. Now, Gupta is on a mission to educate other members of Gen Z about money and help them get on a smart financial path early on in life.

Read: A Look at Gen Z’s Financial Habits, From Spending to Saving and More
See: 5 Financial Steps Gen Z Should Be Taking Now

GOBankingRates chatted with the Greenlight ambassador to get her best money advice for other members of her generation, and she shared her best tips for investing for long-term success, finding reliable personal finance advice and avoiding common money missteps.

How can kids and teens invest for long-term success?

Kids and teens should begin investing early for long-term success. Consider investing in index funds. These may seem rather vanilla, but boring is often best when it comes to investing. Consider complementing low-cost index funds with fractional shares — fractions or pieces of whole stocks and funds. Fractional shares are a great way for teens to get their feet wet in the world of investing without a large sum of money. Greenlight’s investing platform allows kids and teens to invest as little as $1, so you can start small and build as your confidence grows without taking any huge risks.

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What are some good sources for investment advice? Can young investors trust the advice they see on TikTok?

TikTok is attractive to many young people because it conveys information in short, digestible sound bites and can make complicated topics seem less daunting. The problem is that it can be hard to identify misinformation and resist trendy stock tips. Many influencers don’t always give unbiased information that is in your best interest — be aware that they have their own interests. Young investors need to do their own due diligence. Research who you are getting your advice from and verify the information they give. Personal finance is personal. You need more than quick sound bites to make informed decisions.

With that said, you can find some trustworthy sources on social media. For example, Greenlight recently launched an educational video series created for teens, by teens called #NowYouKnow that covers personal finance basics on YouTube and TikTok. Personal finance books can also be a great resource. I recently published a book called “Gen Z Money $ense” that gives a comprehensive introduction to the world of personal finance and investing while presenting topics in a fun, accessible manner.

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In addition to investing, what other areas should Gen Z be taking into consideration for their financial planning?

It’s important to have a comprehensive picture of your finances. Young people should first create a budget to ensure they are living within their means and spending in alignment with their priorities. Budgeting will help you make informed financial decisions and minimize debt. After budgeting, saving is an important next step, which can serve as your foundation for investing.

What are some of the common money mistakes you see fellow Gen Z-ers making?

One of the most common money mistakes I see fellow Gen Z-ers making is misusing credit cards. Many young people overspend with their credit cards and rack up excessive debt, which puts them in a financially precarious position early on. They then end up paying significantly more for an item than it originally cost.

Another common mistake is thinking that you’re young and can delay saving and investing for retirement. Time has the greatest impact on your nest egg, and compound interest is a young investor’s best friend. Every dollar you invest today could turn into $2, then $3, then $4 and so on with discipline and patience.

More: 7 Moves Gen Z Should Be Making To Protect Themselves Financially

What’s the best financial advice you’ve ever received?

The best financial advice I’ve ever received was to open a Roth IRA when I got my first job at age 14. A Roth IRA is one of the few investments that lets your money grow over time tax-free. I highly recommend that young investors who earn income take advantage of it.

What’s the one money move every Gen Z-er should make right now?

Create systems for your finances. In doing so, you take emotions, impulses and thinking out of the equation. Automate contributions to your investments, which is a strategy known as dollar-cost averaging.

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Last updated: Sept. 13, 2021

About the Author

Gabrielle joined GOBankingRates in 2017 and brings with her a decade of experience in the journalism industry. Before joining the team, she was a staff writer-reporter for People Magazine and People.com. Her work has also appeared on E! Online, Us Weekly, Patch, Sweety High and Discover Los Angeles, and she has been featured on “Good Morning America” as a celebrity news expert. 

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