How To Earn Money As a Teen (This Article Won't Make You a Sigma-Billionaire, By the Way)

Before I start, I would like to share my own story on how I first got into investment. When I was 15, I tried to make a better use out of social media, so I started digging into some topics I wanted to learn about. Honestly, I was really influenced by all the “sigma” and “discipline” talk, but there was something in that little world that genuinely intrigued me: how to be financially free. I began reading some books my father had lent me, like Rich Dad, Poor Dad (a book I recommend reading if you are a rookie on the subject) to familiarize myself with it. The most memorable part was the definition of financial freedom. It says: “Imagine you quit your job now. How much time will you last until you need to return?” (1)

Most people would say a month, a year, or even a week. This is a concept most teenagers have a distorted vision of, and that's a problem; you can't rely financially on your job. Just picture this: one of the highest pensions paid in Europe is €1500 in Italy(2). And that´s not the worst. In order to get paid 100% of your regulatory basis (the money you get paid based on the number of years you have worked), you need to work for 37 years of your life. Ask yourself if €1500 a month allows you to live the life you want, or if it's worth spending half of your life in an office. 

We, the youth, need to learn about the importance of financial education. Knowing what to do with our money is a key concept to achieve our goals, and if I have to say it, I will; in this world, you need money to live. Money does not give you happiness, but perhaps it’s the way to it.

Making money has to be one of the most exciting things you could do- not because you might be doing something you like (as you can also cover a necessity society has, yet not enjoy it), but because you want it to make it sustainable and better over time. The very positive side is that the opportunities you have in life, in such a globalized world, are infinite.

The way you want to earn money depends on you: whether you are a more active, impulsive person, or a calmer, meticulous and cautious one means a lot. In that way, you can decide if the approach you want to earn more money over time requires a more passive or active commitment.

Active

By definition, this means that you want to be implicated actively in the money-making process. Usually the benefits of these are plenty: you get to make more decisions regarding your money or get to learn more about a specific subject. Nowadays, there is a wide branch of opportunities for you to explore, though you might be limited by your age.

Developing your own business idea might be a bit risky, but that doesn't mean you can´t get started. Join a young entrepreneur club- there are plenty out there. Some are organized by big firms, and others, by non-profit organizations. You can try The Young Entrepreneurs Club, hosted by the EU (Linked at the bottom of the article)(3). Although, you can also look up some videos on any social media platform, or read any book about properly-established firms, like Elon Musk´s biography.

Another interesting way of starting to earn money as a teenager is involving yourself in investing. This is a way to start growing sustainable wealth for yourself, which will allow you to grow a passive income source. This means that once you start, you begin making very small profits that will eventually expand into  a much larger thing. You can earn money through the stock market in two ways: actively or passively. If your investment strategy follows an active attitude, then it usually means that you want to find the best moment to buy and sell: this is called trading. Personally, I don´t like trading. Why? Because it is like gambling. And, believe me, going “all for red” isn't funny when your money is involved. But, if you want to learn, there are plenty of books out there about the topic, however you can also invest your money by yourself, instead of leaving the task to someone else. That is also active investing.

The last way to earn money is the old fashioned way: go get a job. You can do something you don't like, yet it´s basic, like cleaning your neighbors’ garden. Or, rather, choose a talent or passion you have, and monetize it. Do you like teaching? Go give private lessons to someone. Do you like photography? Take pictures of things and sell them, or post them in a blog. Find something you like or want, and monetize it. You can do it, just take the risk.

Passive

Growing income while you having to do nothing sounds cool, right? Well, what is cooler is that it’s possible, and never before has it been so easy. When I told you about investing in the stock market, there was something really cool I didn't tell you: some companies pay dividends to those who own stocks, which means that for every stock you have, you get paid a certain amount of money.

The thing is that the amount is usually so small that you are going to have to keep those stocks for several years if you want to get your money back.  But imagine that instead of having just one stock, you have a thousand. And instead of getting paid $0.20, you get paid $200 a year without having to do anything. Keeping your stock in order to earn dividends in the long term is called long-term investing. When you do this, you are able to cover the expenses of the things you like with your dividends. That newly released video game you were waiting for? The dividends got you covered. That concert from your favorite singer? No worries, dividends are there for you.

An even more passive approach is investing through hedge funds(4). The process is simple: the owner of the hedge funds gets leverage from various investors interested in the fund. Then, he/she proceeds to invest that money, trying to optimize yield. After, he splits the benefits and pays the investors. There are a lot of types. some have a wide branch of companies, others specialize in specific sectors, and some invest in indexes. Indexes reflect the totality of a country’s stock market behavior.

As you have seen, there are plenty of ways to earn money as a teenager. You can choose the one you like the most. Although what is more important than finding your type of investing, is knowing yourself, because you can't follow a method you don't enjoy. Enjoy the process, mate, because it's beautiful.

Works Cited

(1)Pensions in Europe: Which Countries Are Best and Worst for Retirement? | Euronews, www.euronews.com/business/2024/05/31/pensions-in-europe-which-countries-are-best-and-worst-for-retirement Accessed 06 Oct. 2024.

(2) Kiyosaki, Robert. “Rich Dad Poor Dad: The #1 Best-Selling Personal Finance Book Ever.” Rich Dad | Financial Education & Coaching for Everyone, 10 Dec. 2014, www.richdad.com/ Accessed 06 Oct. 2024.

(3) “Youth Entrepreneurship Club.” Youth Entrepreneurs Club, e-learning.youtheclub.eu/ Accessed 06 Oct. 2024.

(4) Team, The Investopedia. “Hedge Fund: Definition, Examples, Types, and Strategies.” Investopedia, www.investopedia.com/terms/h/hedgefund.asp Accessed 06 Oct. 2024.

Editor: Sienna Pearce-McLean