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For this project, I would like to work on developing a framework for ensuring investment education in teens. I opted for this idea as I have always felt that there was no guidance provided on the process of investing, which is one of the most lucrative fields if a person starts early.

Learning the trade at an early stage can teach individuals valuable skills of wealth management and financial independence. Moreover, there’s constant innovation in fintech which makes it even more important to have a channel for educating younger individuals on different means of investing.

I hope to utilize the technology tenet and create a framework for an online platform where individuals can learn the terminology and the process of investing.

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Salman Khan is an educator and the founder of Khan Academy, which is a free online education platform and an organization with which he has produced over 6,500 video lessons teaching a wide spectrum of academic subjects.

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Salman Khan was working as a hedge fund analyst when he started using online tools to tutor his cousins in math. Nine years later, his nonprofit organization, Khan Academy, draws on the same approach to offer more than 5,000 free, web-based video lessons to millions of students across the globe, disrupting not only schools but also the education industry built around them.

What are the key concepts students should understand in order to be successful in today's workplace?

The one meta-level thing is to take agency over your own learning. In the traditional academic model, you're passive. You sit in a chair, and the teacher tries to project knowledge at you; some of it sticks, some of it doesn't. That's not an effective way to learn. Worse, it creates a mind-set of "you need to teach me," so when you're on your own, you think, "I can't learn." Anyone in any industry will tell you there's new stuff to learn every week these days. So you have to say, "What information and people do I have at my disposal? What questions do I need to ask? How do I gauge whether I've really understood it?" Khan Academy is designed to give students that agency. If you want to get more tangible, I would say learn how to program a computer, more about the law, and definitely statistics.

In your book, you talk about curiosity being stamped out of kids. How do you bring it back?

Curiosity is a hard thing to squash, but the traditional model of education manages pretty well: Listen to lectures, take notes, feed back what you learned, and then forget it all. You're not allowed to go beyond the curriculum. Khan Academy is all about giving more breathing room. You want to go deep? Go deep. I had this to some degree at the public school I went to in Louisiana, where there were gifted programs. Every day, starting in second grade, they took me out of class for an hour, and I would go to another room, with a mixed age group. The first time I went, I thought it was the biggest racket. I walked up to Miss Rouselle's desk, and she asked, "What do you like to do?" I was like, I'm seven years old-shouldn't you be telling me what to do? But I said, "I like to draw. I like puzzles." She said, "OK, have you used oil paints? Have you done Mind Benders?" Soon I looked forward to that hour more than I did to spending the night at my friend's house. And I learned more that applies to what I do today than in the five other hours of the day combined.

That's what we need to create space for. Historically, it was hard to do in a scalable way. How do you personalize education for 30 kids without breaking the bank? But technology can deliver information at a student's pace, give practice problems and feedback, and arm teachers with data, so that when students go into a classroom, it's much more like what I experienced in that gifted program.

How much of what you've learned about effective education applies to the business world?

The idea that you do K-12, four years of college, maybe some grad school, and then stop learning is a myth. The book applies to lifelong learning: Go at your own pace, master content before moving on, and do it without disrupting your current work and productivity. A lot of corporations, when they do training, mimic the classroom. They create corporate universities; people have to take time off and listen to lectures. But the information and credentials you get coming out of those classes aren't as useful as other things. At Khan Academy, when we hire, it's nice if you have a high GPA and an academically rigorous major. But what we really care about is what you've made. For engineers, show us software you've designed. We also want evidence of how you work with other people, the leadership you exhibit, and what your peers think of you.

Your findings on the limits of human concentration seem relevant too.

We think that because this generation has Facebook, Twitter, and mobile phones, they don't have attention spans. But it's clear from the studies that we never really had the attention spans the classroom-based lecture model expects of students. Especially with dense subject matter, humans can pay attention for 10 to 15 minutes before they zone out. You zone back in for eight or nine minutes, then you zone out again. The zoning in gets shorter; the zoning out gets longer. By the end of the hour you might have picked up 30% of the material-or you might be lost altogether. That has consequences in a work setting, too. If people are meeting, they don't need a lecture; if you don't need them to interact, information should just be in a video or a memo. At Khan Academy, one side effect of that approach is we've created a library of videos that provide background on our thinking, so that we can tell a new employee, "Go watch." We make videos for our board, too, so that everyone can see that historical narrative; then the board meetings are mainly interactive Q&A.

Should every company use videos instead of memos?

There's something you get only from a human voice-little intuitions or parentheticals that people express verbally but for some reason not in a white paper or a memo. It's incredibly valuable.

You've been called the world's teacher. How much of that came to you intuitively, and how much did you learn along the way?

If you're being talked down to in a classroom, or if a lecture is over your head, you feel belittled. As my wife will tell you, I'm hypersensitive to that. When someone uses an even slightly exasperated tone, my reaction is, "Hey, don't talk to me that way!" So when I give a talk, 10% or 15% of my brain is thinking, "Sal, are you sounding arrogant? Are you talking down to people, or above them?"

Also, I've always been interested in really understanding things. When you have a strong foundation, everything falls into place a lot easier later on. I don't say, "Memorize this formula." I say, "This is how my brain thinks about it." I try to make my thought process very transparent; if I'm doing calculus or quantitative finance, I'm not afraid to remind myself of some basic arithmetic.

Your first trial-and-error attempts to teach your cousins remind me of the iterative "lean start-up" model.

You have to do some planning, but you get real information only when you put something out there, observe people using it, get data, and quickly iterate to throw something else out. One thing in my mind is to not lose that.

Now that you have more people, and solid funding, why have you stuck with the same model-your voice against a simple digital blackboard?

When I started making videos, in 2006, I did 10 or 20 as a proof of concept, and, with my MBA hat on, I thought, "I'll get a bunch of other people to make content, because that's the only way to address all the topics I want to." But it was hard to find people to participate, and I realized I could scale up on my own far more than I had assumed. Within two or three months I had done 80 or 90 algebra videos. Then I moved on to geometry and calculus and physics. But I'm clearly not going to be able to cover everything, and people might appreciate a different style. We have a few other folks already doing art history, medicine, and project-based learning videos, and we've hired a team to build the tools and platform to allow more people to create content. You're going to see content in many languages. You're going to see us going much deeper into interactive experiences.

When your lessons are criticized, how do you respond?

You have to figure out what is meaningful and constructive and what isn't. When someone sends us an e-mail or writes a blog post about something they think is incorrect or unhelpful, and they're right, we annotate or redo the video. That's one of the values of this form over a traditional textbook, where you get little or no feedback. When we put content out, 10,000 people look at it within a week. It's a very fast editorial cycle. We don't have to wait until the next textbook. We can fix it overnight.

Khan Academy is clearly disrupting education. Will you kill off some established players?

Whether or not Khan Academy exists, the world in which a business model is based on charging people for access to information-and not even new information, but 300-year-old science or math-is going away. I think publishers recognize that and see that there are opportunities for them. They already have huge distribution and traction in schools globally. If they turned those schools into registered internet users and customized material for them, the market would value that. It's not 100% clear how to monetize it, especially since we're out here saying that access to learning is a human right. But the writing's on the wall.

At the same time, there are start-ups trying to imitate your model on a for-profit basis.

The more dollars thrown at the problem, the better. If a for-profit player gives away part of an education in order to attract customers, that's a win for everyone.

Why did you set Khan Academy up as a nonprofit?

In the for-profit realm, a home run is to scale big, get 100 million users, and go public or get acquired. That would have been good for me individually and for our investors. But it felt a little wrong, because I wanted our content to be accessible to all people, for a long time into the future. Beyond your generation, do you have confidence that a for-profit will stay true to its mission? The institutions that have had global reach over multiple generations have been not-for-profits. That's a home run in that sector. And maybe Khan Academy can be one of those. In terms of its advantages, we get goodwill. There are 51 people in the organization, plus thousands of volunteers, and we're attracting some of the best in Silicon Valley: McKinsey folks, people from Google and Facebook, one of the leading quant fund guys, the world's top Java script programmer. These incredible people come for the mission, not even realizing that we actually pay pretty well. So we're getting a caliber I don't think anyone else can.

What kind of boss are you?

It's an exciting and hard challenge: How do you have a flat and nimble structure? How can you be approachable but also have authority? How do you make sure people's voices are heard while correcting something you feel is going in the wrong direction? Every manager has to plot his own trajectory and be as open to feedback as possible.

Eventually you're going to run into another classic management problem: You're the face of the organization. Can the Academy exist without you?

Two years ago that would have been impossible. Even now a lot of the press narrative is about me tutoring my cousins and making videos. But that's starting to change, because people see our interactive platform, which was clearly worked on by people other than me. As we bring other content creators on board, my hope is that I can continue to be a valuable evangelist for what we're doing. But if, God forbid, I get hit by a bus, Khan Academy should survive. We have a deep bench. I'm the least impressive person in the organization.

A lot of us dream of leaving our jobs to do something good for the world. How did you decide to take the plunge?

I really enjoyed my hedge fund job; it was far more thought provoking and intellectual than people might assume. But I also found a lot of satisfaction working with my cousins, writing the software, and making the videos. So in the back of my mind, I thought I would become a portfolio manager, have my own fund, and maybe 15 or 20 years in the future, on my own terms, fund a school. As anyone in investments will tell you, you have bad days, and you think maybe you should do your hobby full-time. But then you remember you don't own a house, you have a baby on the way, and you haven't paid off your or your wife's student loans, so you stop dreaming. I'd been part of the dot-com bubble, and I found it so exhausting emotionally that I told myself entrepreneurship was not for me. So when I started Khan Academy, I said, "This is a hobby. This is a passion. This is fun." And I protected it that way as it developed. I thank my old boss, because he thought it was valuable for us to have our own lives, and that created a space for Khan Academy to blossom. When I took the plunge, it was significantly de-risked. By 2009, 100,000 people were using the videos, we'd been on CNN and in USA Today, and I was starting to talk to philanthropists. So I sat down with my wife and said, "Let's give it a year. If I can't get it off the ground, I can go back to my old job." Nine months in, things started to happen.

You're backed by the likes of Bill Gates and Carlos Slim. What have you learned from them?

All of them, even though they sit on top of empires, go deep and try to understand things themselves. They're very hands-on. And they're incredibly curious. The first time I met Carlos Slim, we sat on a beach for four hours and talked about what civilizations existed during previous interglacial periods. These people are big thinkers. Seeing that has given me the confidence to let my epic juices flow, so to speak-to indulge my science fiction, delusional dreams. You have to, for some of your stuff to become a reality.

Your wife is a doctor, and you have two young children. How do you balance work and family?

I set hard lines. Weekends are for my family. I do not touch the computer unless it is an absolute emergency. When I come back on Monday, I'm refreshed and productive. The same goes for evenings. I've been up on stage at speaking events and said, "I have to go give my kids a bath now," and everyone is shocked. But if I can't have dinner with my kids, give them a bath, and read them a book before bed, something is wrong in my life.

A version of this article appeared in the January-February 2014 issue of Harvard Business Review.

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Life's Work: An Interview with Salman Khan

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Photography: Jonathan Sprague Salman Khan was working as a hedge fund analyst when he started using online tools to tutor his cousins in math. Nine years later, his nonprofit organization, Khan Academy, draws on the same approach to offer more than 5,000 free, web-based video lessons to millions of students across the globe, disrupting not [...]

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The Modern Guide to Stock Market Investing for Teens

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The Modern Guide to Stock Market Investing for Teens

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The best feature of this book is that it’s written by a teenager, Alan John, for other teenagers to realize the importance of investing from an early age. The book covers topics on investing in the stock market and defines simple strategies for starting a portfolio of stocks along with valuable lessons on handling personal finances and investment knowledge for retirement plans. Having read this book, I found the content helpful towards building a solid foundation in investment. The biggest advantage is that it’s relatable for young audiences who are more receptive to information coming from one of their peers.

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the modern guide to stock market investing for teens: how to ensure a life of financial freedom through the power of investing.

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young adult nonfiction/business & economics

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teens; stock market for teens; stocks for teens; teen entrepreneurship; teen money; money teens

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young adult nonfiction/business & economics

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The Modern Guide to Stock Market Investing for Teens: How to Ensure a Life of Financial Freedom Through the Power of Investing.

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The Modern Guide to Stock Market Investing for Teens: How to Ensure a Life of Financial Freedom Through the Power of Investing. [John, Alan] on Amazon.com. *FREE* shipping on qualifying offers. The Modern Guide to Stock Market Investing for Teens: How to Ensure a Life of Financial Freedom Through the Power of Investing.

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Thinking, Fast and Slow by Daniel Kahneman.

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Thinking, Fast and Slow by Daniel Kahneman.

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Thinking, Fast and Slow is a great read for understanding the psychology behind how leading investors select stocks that are likely to outperform others. The book includes terrific insights on making smart, informed investment decisions. It was a terrific read and provided interesting perspectives of psychology and investment. I’d like to include similar content focusing on the different approaches in making choices, either following logic or intuition, and the resulting impact of such decisions on future finance and wealth.

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Putting our best book forward

Each Great on Kindle book offers a great reading experience, at a better value than print to keep your wallet happy.

Explore your book, then jump right back to where you left off with Page Flip.

View high quality images that let you zoom in to take a closer look.

Enjoy features only possible in digital - start reading right away, carry your library with you, adjust the font, create shareable notes and highlights, and more.

Discover additional details about the events, people, and places in your book, with Wikipedia integration.

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business & economics / decision-making & problem solving

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business & economics/decision making & problem solving

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psychology / cognitive psychology & cognition

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cognitive bias; prospect theory; heuristics; decision making; decision making skills; decision making process; brain science; behavioral economics; nobel prize winners; cognitive psychology; behavioral finance; social cognition; cognitive skills; neuroscience; social neuroscience; cognitive neuroscience; stock picking; confidence; new york times best selling books; new york times bestseller books; nonfiction books; xmas gifts for men; christmas stocking stuffer ideas; hanukkah gifts; reasoning; intuition; sociology; popular science

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decision making; emotional intelligence; critical thinking; cognitive psychology; social cognition; intuition; reasoning; thought process; logical thinking; emotional thinking; thoughts; sociology; popular science

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business & economics / decision-making & problem solving

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business & economics/decision making & problem solving

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psychology / cognitive psychology & cognition

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Thinking, Fast and Slow - Kindle edition by Kahneman, Daniel. Download it once and read it on your Kindle device, PC, phones or tablets. Use features like bookmarks, note taking and highlighting while reading Thinking, Fast and Slow.

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Investopedia is one of the best sources of financial and investment-related information. The platform hosts extensive articles on investing and one of the best features (and most used one) is the dictionary to explain concepts along with applied examples. I would like to use a similar structure in my project and include basics along with practical examples which can provide a better understanding of the concepts.

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Investing in stocks is a way to make your money grow over time. By regularly putting money aside to invest, you can see its value multiply over the long term. That's why it's important to begin as soon as you have the money to do so-the longer your time horizon, the better. This article takes you through how much you need, what stocks to choose, and the other basics of investing in stocks you need to get started, all in 10 steps. Whether you have thousands set aside or can invest a more modest $25 a week, you have enough to begin.

Step 1: Set Clear Investment Goals

Begin by reflecting on what you want to achieve financially. You might have short-term goals like saving for a home or a vacation or have long-term objectives like securing a comfortable retirement or funding a child's education. Your objectives will depend on your life stage and ambitions. Younger investors tend to focus more on growth and long-term wealth accumulation, while those closer to retirement typically prefer income generation and capital preservation.

The more precise you can be about your goals, the easier it will be to sort out the best means to get you there. Here are some tips:

Be precise about your objectives: Instead of general goals like "save for retirement" or "I don't want to have to worry about money one day," set specific objectives like "accumulate $500,000 in my retirement fund by age 60."

Set your investment horizon: Determine how long you have to achieve each goal you set. You will have longer and shorter timelines for different purposes. In general, the longer you can give yourself, the less risk you'll need to take on, and the more viable your objectives will be.

Evaluate your finances: Be realistic about how much you can allocate toward your investment goals. This includes looking at your savings, regular income, and any other financial resources you can put to work as you begin. We'll come back to this.

Rank your goals: Most of us have several goals at once, like saving a down payment for a house, paying for a wedding next year, or preparing for retirement. Prioritize these and balance them according to their importance and urgency.

Review and adapt to changes in your life: The phrase financial planning is best taken as a verb, not a noun since goals aren't set in stone, and planning your finances is an ongoing project. You might fall in love or out of it, have many children or none of them, or realize your life's work is best done in a different place in the country. Life changes, and so will your financial objectives. Regularly review and adjust your goals accordingly.

The first step in any venture is the biggest, but it's also when you set your aspirations and imagine yourself in a future that your investments in stocks, a touch of luck, and a prudent investment strategy you'll begin to learn here make possible.

Step 2: Determine How Much You Can Afford To Invest

Determining how much you can afford to put in stocks involves carefully and honestly assessing your financial situation. Don't worry if your funds are less than you would wish. Just like you shouldn't berate yourself for not being ready for a race on your first day of training, so too, you're just at the beginning of your investment journey. This is a marathon, not a sprint and you've got a long way to go. Here are some tips for giving yourself an honest appraisal of how much you can use:

1. Look at your sources of income: Start with your income. In particular, you'll want to see if your employer offers ways for you to invest while gaining tax benefits or with matching funds that will amplify your own contributions.

2. Have an emergency fund: You should have a solid financial foundation before investing, though solid does not mean perfect. Settle on how much you need for emergencies, typically covering major expenses (a few months of mortgage or rental payments, plus your other bills).

3. Snuff out any high-interest debts: Financial advisors also generally suggest making sure you've paid down your debts, especially credit cards and anything else with high interest rates. Any returns you expect from trading stocks are unlikely to make back the cost of the high interest rates accruing each month on your credit card statements. If you still owe on your student loans, look at how much interest you pay. Balance that against the returns you expect by investing in stocks, and choose whether it's better to pay your loans down or invest.

4. Set a budget: Based on your financial assessment thus far, decide how much money you can comfortably put into stocks. This shouldn't dip into any funds you need for expenses now or down the road. Your budget should determine if you are starting with a large lump sum or investing smaller amounts at set times each month or year.

Investing in stocks carries risk, and it's important to only invest money you can afford to lose. Never put yourself in a financially vulnerable position for the sake of investing. This is what separates investing from some of the worst forms of gambling.

Step 3: Appraise Your Tolerance for Risk

Understanding your risk tolerance is a cornerstone of investing. Gauge your level of comfort with the inherent uncertainties of the stock market. Your risk tolerance will differ depending on your life stage, financial goals, and your financial cushion for potential losses.

Determining your risk tolerance is crucial for crafting an investment strategy that matches your financial goals while keeping your peace of mind. It helps you decide which stocks are suitable for your portfolio and what to do when the market goes up or down. Don't be goaded into being more adventurous than you need to be, or more cautious than called for. Do you prefer stability, or are you willing to accept higher risks and price swings if that means there's the potential for more returns? This self-assessment is key to setting a foundation for your investment journey.

Stocks can be organized by the risk they involve. For instance, large-capitalization (large-cap) stocks are generally more stable since they are well-established, major companies well-known in the market. Small-cap stocks usually offer more growth potential but come with increased risk. Similarly, growth stocks are sought for rapid gains, with higher risks, while value stocks focus on long-term, steady growth, usually with lower risks.

Step 4: Determine Your Investing Style

Everyone has a different relationship with money. We've seen how this affects your risk tolerance. But investors also have investing styles that best suits them. Some prefer an active role, meticulously pouring over the last cell on the spreadsheets for their portfolios, while others opt for a hands-off, set-it-and-forget-it approach, trusting their investments will grow over time if they just leave them alone. Some just might not have the time to be active traders following the ticker crawls and latest reports on investing platforms. It's important to recognize that your style might evolve, but you'll need to start somewhere, even if your choice isn't set in stone.

Here are general directions for understanding your investing style:

DYI investing: If you have a good grasp of how stocks work and are confident to head out with minimal guidance into the market, managing your stock trades is one option. You can set up an account with well-known and trusted online brokers to access a wide range of investment options, including stocks, bonds, exchange-traded funds (ETFs), index funds, and mutual funds. This approach gives you full control over your investments, even if certain choices might be stock funds and the like managed by professionals with a fiduciary responsibility to look after your funds.

Working with a financial advisor or broker: For those who prefer the more personal approach and want more, an experienced broker or financial advisor can be invaluable. They offer advice tailored to your life experiences and goals, help you decide among the more promising stock choices for you, monitor your portfolio, and collaborate with you when adjustments need to be made.

Step 5. Choose an Investment Account

You've figured out your goals, the risk you can tolerate, and how active an investor you want to be. Now it's time to choose the type of account you'll be investing through. Each has its own set of features, benefits, and drawbacks.

Here are the most common:

Retirement accounts

Your employee retirement plan: If your employer offers a retirement plan, this is a convenient way to invest in stocks, including potentially those of the company itself. The plans are known by the sections where they're described in the U.S. tax code. The most popular are 401(k)'s (tax-deferred, private employer-sponsored retirement savings), but you could also have a 403(b) (used mostly by nonprofit organizations, public schools, and some churches), a 457 (mostly for state and local public employees), or a similar plan. You contribute to your account automatically each pay period, and many employers offer matching contributions, boosting your investment. Your contributions are tax-deductible, and the account balance grows tax-deferred.

Individual retirement account (IRA): You can start investing in stocks by opening an IRA in addition to your workplace retirement plan (if you have one). IRAs provide some tax benefits, and you can choose between a traditional IRA (tax-deductible contributions) or a Roth IRA (tax-free withdrawals in retirement).

Taxable brokerage accounts

If you prefer more flexibility or have maxed out your IRA contributions, a regular taxable brokerage account gives you access to various investment options, including individual stocks, stock mutual funds, ETFs, and stock options. While they don't have the tax advantages of retirement accounts, they are more flexible and don't have contribution limits. You can also pick different taxable brokerage accounts as you seek a match for your investment style.

Individual brokerage accounts: These are standard accounts opened by one person. The account holder has full control over the investments and is solely responsible for any tax implications. The most basic type is a cash account, through which you buy securities using only the money available in your account. You can also have a margin account at a brokerage for more experienced investors who borrow money from the brokerage against their account's value to buy additional stock.

Joint brokerage accounts: These are shared by two or more individuals, typically spouses or partners, and can be cash or margin accounts. These accounts can be structured as joint tenants with rights of survivorship: if someone on the account dies, ownership passes to the survivor(s).

Managed accounts:These are professionally managed, and a portfolio manager makes the decisions on your behalf, personalized to your needs, goals, and investment style.

Accounts for specialized goals

There might be tax advantages to using different kinds of accounts if you're investing in stocks for specific goals, e.g., for your own or your child's education or health expenses. If so, it's to your advantage to consider these alternatives, which have special tax incentives:

Dividend reinvestment plan accounts: Some brokers offer accounts that automatically take your stock dividends and use them to purchase new shares, usually without charging commissions for the additional shares.

Education Savings Accounts: These offer tax advantages when the funds are used for qualified educational expenses.

Health savings account: Contributions are tax-deductible, and withdrawals for qualified medical expenses are tax-free.

Trust and custody accounts: A trustee manages trust accounts for the benefit of a third party according to the terms of a trust agreement. In the case of custody accounts, minors can own stocks and other assets, but a custodian manages the account until the minor is an adult.

Step 6: Learn the Costs of Investing

Commissions and fees

Besides reputation and fit with your investment strategy and goals, broker fees are the most important consideration when you're choosing a brokerage firm, which comes in the next step. Let's prepare. Traditionally, brokerages have charged fees through trade commissions, account maintenance fees, and fees for additional services like research or financial advice. However, the landscape of brokerage fees has evolved significantly in recent years. Here's what you'll want to look for as you do your research:

Trading commissions: A broker might charge a commission every time you trade a stock, whether you buy or sell. Trading fees range from $2 per trade to $10. Some brokers charge no trade commissions at all, but they make up for it with other fees. Depending on how often you plan to trade, these fees can add up, affect your portfolio's return, and deplete the money you have available to invest.

Let's see this in action: Suppose you buy one share of stock in five companies with $1,000. Assuming a transaction fee of $10, you will incur $50 in trading costs which is equivalent to 5% of your $1,000. Should you sell these stocks, the round trip (buying and then selling) would cost you a total of $100, or 10% of your initial deposit amount of $1,000.

Maintenance fees: Some brokerages charge monthly or annual fees to keep your account active. These might be waived, though, if your account balance is above a certain threshold.

Service fees: You might pay additional fees if you haven't used your account in a while. Brokers also may charge for services like broker-assisted trades, access to their premium research, and trading on margin (by borrowing). Most of these fees and the services linked to them are optional.

Subscription-based models: As Generation Zers and Millennials take up a larger share of the investment space, financial advisors, planners, and brokers are taking on clients used to month-to-month or yearly fees for apps and app-based services. Instead of paying per transaction or for specific services, you pay a flat monthly or annual fee. Your subscription may include commission-free trades, access to research tools, and other premium support.

Some platforms offer tiered subscription levels, supplying more features or lower margin rates at higher subscription rates. As you would with Hulu or your favorite online magazine, you'll want to keep an eye on how much you're taking advantage of what you're paying for. If not, you might draw down to a lower tier or seek another broker altogether.

Account minimums

A major change in recent years has resulted from the immense competition among brokerages. Many online brokers have eliminated account minimums, making it easier for a wider range of investors to get started.

This means that if you have just a few dollars to invest, you can still open a brokerage account and begin trading stocks. While some brokerages still require you to deposit substantial amounts before you can become a client, this shift away from very low or no minimum requirements has made investing far more accessible to nontraditional investors and beginners. However, you'll want to assess any minimum a brokerage requires, which is still your money, with transaction fees and maintenance costs that may lead you to decide that keeping a minimum in your account is less costly in the long run.

Step 7: Pick Your Broker

Brokers are either full-service or discount.

Full-service brokers

These offer a full range of traditional brokerage services, including financial advice for college planning, retirement planning, estate planning, and for other life events. This customized advising justifies the higher fees that they typically charge, normally a percentage of the value of your transactions, a percentage of your assets under management, and sometimes, a yearly membership fee. Minimum account sizes can start at $25,000.

Discount brokers

These offer you tools to select your investments and place your orders. Some also offer a set-it-and-forget-it robo-advisory service. Most have educational materials on their sites and mobile apps. Some brokers have no (or very low) minimum deposit restrictions. However, they may have other requirements and fees. Be sure to check on both as you look for a brokerage that's best for your financial situation.

Below, we get you started by comparing the best online brokers:

We recommend the best products through an independent review process, and advertisers do not influence our picks. We may receive compensation if you visit partners we recommend. Read our advertiser disclosure for more info.

Robo-Advisors

For an automated solution, robo-advisors or automated investment platforms are cost-effective and pretty effortless when investing. If you select this option, you won't be alone in doing so. According to Charles Schwab, 58% of Americans say they will use some sort of robo-advisor by 2025.

An app or platform takes the information you provide about your financial goals, risk tolerance, income and savings, and so on, and its robo-advisor creates and helps manage your investment portfolio using its specialized algorithms. Aimed at retail investors, robo-advisors are low-cost, usually have little or no minimum balance requirements, and are programmed for strategies suited for new and intermediate investors. That said, they tend to offer fewer trading options and lack the personal approach to financial planning best suited for long-term investing.

If this interests you, we get you started below by comparing the best robo-advisors.

Step 8: How To Fund Your Stock Account

Now that you've chosen the type of account to open, you'll have to fund it. Here's what to do:

1. Choose a brokerage: First, select a brokerage firm, perhaps one of the major online firms, that aligns with your investment goals and preferences or is simply most convenient for you. Consider factors like fees, available investment options, and the platform's user-friendliness.

2. Pick your account type: Decide whether you're opening a cash account, which requires you to pay for investments in full, or a margin account, which allows for borrowing to purchase securities.

3. Open your account: Once you've chosen a brokerage and account type, you'll need to open your account. This involves providing your personal information: Social Security number, address, employment details, and the particulars of your financial situation. This shouldn't take you more than 15 minutes.

4. Link your bank accounts: The most common way to fund your stock account is by linking it to your bank account. This is usually done online through the brokerage's platform, where you'll enter your bank account number and routing number. Many brokerages allow you to link your account via small test transactions for verification.

5. Transfer or deposit your first funds: Once your bank account is linked, you can transfer funds to your brokerage account, typically through an electronic funds transfer, which can take a few days to process. Other options may include wire transfers for faster funding if you're raring to go, though these usually cost more. Some brokerages still accept physical checks. If you prefer this method, you can mail a check to the brokerage or bring it to a physical location.

6. Set up periodic transfers: If you plan to make stock buys a habit, consider setting up automatic transfers from your bank to your brokerage account.

7. Start investing: Once you've verified the funds are in your account (don't worry: the brokerage won't let you trade otherwise), it's time to start choosing among the stocks that best fit your investment goals.

If you plan to trade frequently, check out our list of brokers for cost-conscious traders.

Step 9: Pick Your Stocks

Choosing the right stocks can be daunting even for experienced investors. Beginners should look for stocks that have stability, a strong track record, and the potential for steady growth. Don't start out of the gate with a risky stock, thinking you'll hit it big right away. Investing for the long term is mostly slow and steady, not fast and rash. Here are some stocks that are solid bets to begin:

Blue chips: These are shares of large, well-established, and financially sound companies with a history of reliable performance. Examples include companies listed in the Dow Jones Industrial Average or the S&P 500. They are typically industry leaders and offer stability during market fluctuations.

Dividend stocks: Companies that regularly pay dividends can be a good choice for beginners. Dividends give you a regular income, which can be reinvested to buy even more stock. See How to Buy Dividend Stocks to get started.

Growth stocks: The greater the chances for outsized growth in a stock, the riskier investing in it will be. Beginners interested in growth stocks should look for industries with long-term potential, such as technology or healthcare.

Defensive stocks: These are in industries that tend to perform well even during economic downturns, such as utilities, healthcare, and consumer goods. They will give you a buffer against market volatility as you start.

ETFs: Traded like stocks, these track many indexes or sectors and are a low-cost way to gain exposure to a broad range of assets. You can trade shares in them throughout the day at market prices. These funds often track a specific market index, like the S&P 500, and offer instant diversification, reducing the risk associated with individual stocks. As you gain experience, you can look at funds for sectors that pique your interest, themes that meet your investment goals, or indexes that track environmental, social, and governance stocks to match your quest for returns with your values.

It's prudent to begin with a conservative approach, focusing on stocks or funds that offer stability and a good track record. This will give you confidence and returns to work with as you advance in your investing knowledge.

Step 10. Keep Learning About Investing In Stocks

Investing in stocks is an ongoing learning experience-even the most successful investors are learning new tips and strategies each passing day. As the stock market continually evolves, staying up to date and going back to Step 1 and reviewing your goals, available funds for trading, investment style, and so on, will be key. Here are some final tips for now:

1. Read widely and regularly: Consistently visit reputable financial news sites. Keep informed about the global economy, industry trends, and the companies you are invested in. Avoid sites and books promising easy returns or tricks, not tips, likely to redound to their benefit when you buy their courses or apps. Books on investment strategies, stock market fundamentals, and diversification techniques can be essential.

2. Use stock simulators: These platforms enable you to practice trading stocks risk-free using virtual money. They are excellent tools for applying investment theories and testing strategies without risk. Investopedia's simulator is entirely free to use.

3. Learn about diversification: Having taken your beginning steps here, you'll next want to spread your investments across diverse asset classes to reduce risk and improve the potential for returns. When you're ready, we'll help you learn how to diversify your portfolio beyond stocks.

Just as financial planning is a verb, learning about stock investing is continuous. The more informed you are, the better you'll be able to make wise investment decisions and adapt to market changes.

What Is the Difference Between a Full-Service and a Discount Broker?

Full-service brokers provide a broad array of financial services, including financial advice for retirement, healthcare, education, and more. They can also offer a host of investment products and educational resources. They have traditionally catered to high-net-worth individuals and usually require significant investments. Discount brokers have much lower thresholds for access, but tend to offer a more streamlined set of service, allow you to place individual trades, and offer educational tools.

What Are the Risks of Investing?

Investing is a commitment of resources now toward a future financial goal. There are many levels of risk, with certain asset classes and investment products inherently much riskier than others. It is always possible that the value of your investment will not increase over time. For this reason, a key consideration for investors is how to manage their risk to achieve their financial goals, whether short- or long-term.

How Do Commissions and Fees Work?

Most brokers charge customers a commission for every trade. Due to commission costs, investors generally find it prudent to limit the total number of trades they make to avoid spending extra money on fees. Certain other types of investments, such as exchange-traded funds, carry fees to cover fund management costs.

The Bottom Line

Beginners can start investing in stocks with a relatively small amount of money. You'll have to do your homework to determine your investment goals, risk tolerance, and the costs of investing in stocks and mutual funds. You'll also need to research brokers and their fees to find the one that best fits your investment style and goals. Once you do, you'll be well-positioned to take advantage of the potential stocks have to reward you financially in the coming years.

Options trading entails significant risk and is not appropriate for all investors. Certain complex options and strategies carry additional risk. Before trading options, please read the Characteristics and Risks of Standardized Options. Supporting documentation for any claims, if applicable, will be furnished upon request.

There is an Options Regulatory Fee that applies to both option buy and sell transactions. The fee is subject to change. See Fidelity.com/commissions for details.

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How to Invest in Stocks: A Beginner's Guide

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From how much you need to open an account to the investments to choose, this guide will get you started.

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Wall Street Survivor is a stock market simulator, which uses fake cash and real stock price tracking to teach players how to invest. Aside from the game, users can learn from a wide range of in-depth courses and starter guides on all things investing. I would like to include a portion in my project that uses gamification to make learning easy.

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Learn How to Invest in Stocks - Virtual Stock Market Game - Wall Street Survivor

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Play our free stock market and cryptocurrency game Make learning about investing easy, fun and rewarding. Use fake cash to invest in real companies, under real market conditions. In addition to providing the best stock market simulation, We also trade and review the best investment newsletters.

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All investing involves risk.

Brokerage services are offered through Robinhood Financial LLC, ("RHF") a registered broker dealer (member ) and clearing services through Robinhood Securities, LLC, ("RHS") a registered broker dealer (member ). Cryptocurrency services are offered through Robinhood Crypto, LLC ("RHC") (NMLS ID: 1702840). The Robinhood Money spending account is offered through Robinhood Money, LLC ("RHY") (NMLS ID: 1990968), a licensed money transmitter. The Robinhood Cash Card is a prepaid card issued by Sutton Bank, Member FDIC, pursuant to a license from Mastercard® International Incorporated. RHF, RHY, RHC and RHS are affiliated entities and wholly owned subsidiaries of Robinhood Markets, Inc. RHF, RHY, RHC and RHS are not banks. Securities products offered by RHF are not FDIC insured and involve risk, including possible loss of principal. Cryptocurrencies held in RHC accounts are not covered by FDIC or SIPC protections and are not regulated by FINRA. RHY products are not subject to SIPC coverage but funds held in the Robinhood Money spending account and Robinhood Cash Card account may be eligible for FDIC pass-through insurance (see the Robinhood Cash Card Agreement and the Robinhood Spending Account Agreement ).

Options trading entails significant risk and is not appropriate for all customers. Customers must read and understand the Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount.

Commission-free trading of stocks, ETFs and options refers to $0 commissions for Robinhood Financial self-directed individual cash or margin brokerage accounts that trade U.S. listed securities and certain OTC securities electronically. Keep in mind, other fees such as trading (non-commission) fees, Gold subscription fees, wire transfer fees, and paper statement fees may apply to your brokerage account. Please see Robinhood Financial's Fee Schedule to learn more.

Robinhood, 85 Willow Road, Menlo Park, CA 94025.

© 2023 Robinhood. All rights reserved.

All investing involves risk.

Brokerage services are offered through Robinhood Financial LLC, ("RHF") a registered broker dealer (member ) and clearing services through Robinhood Securities, LLC, ("RHS") a registered broker dealer (member ). Cryptocurrency services are offered through Robinhood Crypto, LLC ("RHC") (NMLS ID: 1702840). The Robinhood Money spending account is offered through Robinhood Money, LLC ("RHY") (NMLS ID: 1990968), a licensed money transmitter. The Robinhood Cash Card is a prepaid card issued by Sutton Bank, Member FDIC, pursuant to a license from Mastercard® International Incorporated. RHF, RHY, RHC and RHS are affiliated entities and wholly owned subsidiaries of Robinhood Markets, Inc. RHF, RHY, RHC and RHS are not banks. Securities products offered by RHF are not FDIC insured and involve risk, including possible loss of principal. Cryptocurrencies held in RHC accounts are not covered by FDIC or SIPC protections and are not regulated by FINRA. RHY products are not subject to SIPC coverage but funds held in the Robinhood Money spending account and Robinhood Cash Card account may be eligible for FDIC pass-through insurance (see the Robinhood Cash Card Agreement and the Robinhood Spending Account Agreement ).

Options trading entails significant risk and is not appropriate for all customers. Customers must read and understand the Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount.

Commission-free trading of stocks, ETFs and options refers to $0 commissions for Robinhood Financial self-directed individual cash or margin brokerage accounts that trade U.S. listed securities and certain OTC securities electronically. Keep in mind, other fees such as trading (non-commission) fees, Gold subscription fees, wire transfer fees, and paper statement fees may apply to your brokerage account. Please see Robinhood Financial's Fee Schedule to learn more.

Robinhood, 85 Willow Road, Menlo Park, CA 94025.

© 2023 Robinhood. All rights reserved.

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Commission-free Stock Trading & Investing App | Robinhood

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Robinhood has commission-free investing, and tools to help shape your financial future. Sign up and get your first stock free. Limitations and fees may apply.