Money. Something every teen desires, whether it is for new clothes, going out, beauty products, or even saving for a car or college savings, but the money has to come from somewhere. So for this second article of our series, Absolute Cash will teach you how to start building wealth. And the best way to do so is through investments. There are two types of investments: growth investment and buy-and-hold investing. Growth investments are a stock buying strategy.
With a growth investment, you invest in high-growth stocks. You need to research new or small businesses whose revenue growth projections are higher than those of their industry or the market. Then, you will buy stock in these companies, which can result in substantial returns. However, there is also the risk involved if the company fails. Based on our research, some growth stocks to consider investing in are Meta Platforms (META), MercadoLibre (MELI), and Block (SQ).
Buy-and-hold investing is holding an investment indefinitely regardless of fluctuations in the market, which prevents selling at the wrong time. Billionaires such as Warren Buffet use this method when investing in stocks. This method of investing also has tax advantages because the investor can defer capital gains taxes on long-term investments. An example of this type of investment is the purchase of Tesla stock. If someone were to buy 100 shares of Tesla stock in 2016, that would be $1500. However, if that same person held on to it to this date, that stock would be worth $18,000, which is over 1000% return. Some of the best long-term options to consider investing in are Apple (AAPL), Broadcom Inc. (AVGO), and Elevance Health (ELV).
An alternative way to make money with low risk is through your bank. CDs and certificates of deposit allow you to earn interest from your savings. The only catch is that the money has to be in the CD for a certain period, with acceptance of no withdrawals or deposits. Capital One has an exemplary interest rate of around 5%. In addition, a mutual fund pools money from many investors to create a well-diversified portfolio. An ETF, a pooled investment, allows investors to add many securities to their portfolio through a single investment.
Building up a fortune from the start might seem complicated, but Absolute Cash is here to help. Keep a lookout on VOF for more articles to come, and for more information on financial literacy, subscribe to our YouTube channel (@absolute_cash). In addition, be sure to follow our Instagram handle (@absolutecash.pmfl) for more news on seminars, webinars, and a game in the making!