Teen Millionaires? The Risks and Rewards of Young Investors

However, some have ventured into the darker side of investing, engaging in pump-and-dump scams and price manipulation.

While teens frequently make headlines for their financial activities, we’ve decided to take a closer look at what makes this group stand out. In this article, we’ll discuss what teens invest in and how, highlight some successful young investors, and examine the risks of investing at a young age.

Young people invest more than ever and get into investing earlier. 

A study by the World Economic Forum found that Generation Z (born between 1997 and 2012) views retail investing as a key way to grow their wealth. Their active participation is driven by new, diverse financial products, technological innovations, accessible trading platforms, and easy access to financial information.

Another survey, by Charles Schwab, revealed that on average Gen Z starts to invest at 19 years old. For comparison, baby boomers (born between 1946 and 1964) started at an average age of 35.There’s also a shift in what the younger generation prefers to invest in. While older generations favor stocks and traditional assets, Generation Z leans toward alternatives. The most popular investments for Gen Z and millennials (born between 1981 and 1996) include:

• real estate (31%)
• crypto/digital assets (28%)
• private equity ​​(26%)
• personal brand or company (24%)
• direct investment into companies (22%)
• companies focused on the positive impact (21%) 

Overall, the most common strategies among investors are buy and hold along with growth investing, which is investing in sectors that have the potential to grow. 

Although teenagers younger than 18 years old can’t open brokerage accounts or register on crypto exchanges directly, they can open accounts in the name of trusted adults like parents or guardians. 

Young investors have proved that they can be successful and compete with more experienced traders in making profits. As digital natives, they adopted crypto early, which plays a large part in their success stories. Below, we’ll mention some cases when teenagers’ investment decisions paid off.  

Altoukhi learned about investing from his father, a stock investor.

A Forbes article featuring Altoukhi notes that he discovered Bitcoin and the crypto industry in 2016. In 2017, when Bitcoin reached a new all-time high of over $19,000, Youssof became interested in altcoins and their potential to solve issues like scalability, speed, and transaction costs. 

Along with his altcoin investments, he bought ASIC miners to participate in crypto mining. By late 2020 and into 2021, his investments paid off, yielding substantial profits. While he didn’t disclose the exact amount, he revealed in a 2022 interview with LADbible Stories that it exceeded $1M.

Altoukhi has a keen interest in entrepreneurship, too.  

At just 7 years old, he received a 3D printer as a gift and started printing and selling items like phone cases, even creating a website for online sales.

In 2021, he founded Y Coin (YCO), a cryptocurrency with a democratic governance mechanism. However, based on social media and analytics sites, YCO is no longer active, as its X page has not posted updates since 2022.

As of 2024, Altoukhi continues to be active on X, where he shares updates on crypto. In one of his posts, he mentions that he is now focused on building crypto utilities.

It all started when he received a gift of around $1,000 from his grandmother, according to a CNBC article. The teenager made a deal with his parents: if he became a millionaire by 18, he wouldn’t have to go to high school.

Finman mentioned that he didn’t like high school and recalled a teacher telling him that if he dropped out, he’d never amount to anything more than working at McDonald’s.

Despite the teacher's prediction, Finman’s teenage dream of leaving school and following his own path became a reality. His Bitcoin investment at $12 per coin earned him his first million by 2013, growing 10X.

The investor then sold his Bitcoins to found an educational company called Botangle, which he later sold for 300 Bitcoins.

In 2024, Erik Finman continues to invest in tech startups and support crypto.

In an interview with Business Insider, the teenager admitted that he was initially skeptical about crypto. However, a $10 gain made within hours of trade sparked his curiosity and excitement.

Encouraged by this early success, Zillan invested his entire life savings, earned from teaching tennis lessons and receiving gifts, into crypto. The total investment amounted to $12,000, which for him meant risking everything.

Within the first few months, his investment brought substantial gains, prompting Zillan to dive deeper into the industry by engaging in conversations with other investors and crypto founders.

By the age of 18, Zillan had made over $1 million in crypto.

The crypto investor is known in the community as “The Wolf of Crypto Street” after using the phrase in an Instagram caption in 2018.

Zillan has also provided crypto advisory services. Currently, he runs TZ Remodeling Design Company and EZ PR Firm.

Memecoins have become a major trend. Based on online jokes, viral news, and social media trends, they have attracted significant attention and are now a focus for young investors.

Platforms like Pump.fun, based on the Solana blockchain, and other memecoin launchpads simplify issuing and trading these assets. Over the past few years, memecoins have been one of the most profitable categories in crypto. Investor stories, including those of teens involved in memecoin trading, frequently make headlines.

In March 2024, a teenager with the username @slippage on X posted about $7 million in gains from memecoins.

At the end of November 2024, a high school student took social media by storm with his livestream. In it, a teenager with the username @Fi2hrx launched a memecoin called GenZ Quant (QUANT).

The crypto’s price quickly surged, with the market cap reaching $1 million. The streamer then decided to sell his 51 million tokens and ended the video with the words, “Thanks for the 20 bandos.” This caused the price to drop, while the teen made around $30,000, according to data from DEX Screener.

As the hype cooled down, QUANT’s market cap is now around $3 million—still higher than at the time of sale.

After QUANT, the teen made a comeback to create two other tokens: SORRY and LUCY. While a group of investors found the situation fun and engaging, he sold again and pocketed $13,000 from SORRY and $20,000 from LUCY.

As a whole, investment risks for young people are similar to those of adults. The difference is that teenagers often have less experience and fewer financial resources. They can be more vulnerable to impulsive decisions and targeted by misleading ads.

Research by Carnegie Mellon University states that teens aged 13 to 17 may be more vulnerable to risks due to their developing brains. This group tends to show higher risk-taking and sensation-seeking behavior.

Peer pressure or social media influence can also impact teens’ investment decisions, raising trust and interest in certain projects.

Given their age, teenagers risk losing their college savings and important funds for future goals. This was the case with a student from the UK who put their entire life savings into crypto and lost them in a scam.

According to the investor, two mistakes led to this: not taking profits from their growing portfolio and revealing their crypto wallet’s private key to scammers.

While the first mistake is arguable, as there’s no exact right time to take profits, the private key of a crypto wallet should always be stored securely and known only to the wallet owner.  

Starting early, teenagers have more time to learn, invest, trade, and make a profit for their future. Sometimes, quick gains are possible due to unexpected market movements, but generally, it takes time to study the possibilities, learn from mistakes, prepare for different scenarios, and earn interest.

Rarely do investors become millionaires in a day. Like in the stories of young people, we mentioned earlier in our article, you start small, study the market, and then move forward with your decisions.

One of the most difficult things is to focus on your investment progress, rather than comparing it with the successful image of other investors. The luxury lives of crypto bros or people getting millions in returns can be deceptive, making you feel like you’re missing out on your chances.

But when you catch yourself in a moment like this, focus on your resources, your strategy, and the risks you’re willing to take. Consider different assets for investment. This will help you diversify your portfolio and manage risks.

1. What Do Teenagers Invest In? 
   
   

Teenagers mostly prefer alternative investments, which differ from traditional bonds and stocks. According to a study by Bank of America Private Bank, some of the popular options for this group include real estate, crypto, and building a personal brand or company.

2. Who Are Some Successful Young Investors?
   
   

Some of the successful investors who made their first million as teenagers include Youssof Altoukhi, Erik Finman, and Eddy Zillan.

3. Does Age Matter in Investment Success? 
   
   

Partially, yes. Starting young allows investors to leverage compound growth, building wealth over time. Younger investors also have more time to recover from losses and can take calculated risks. However, success depends more on financial literacy, discipline, and strategy than age alone. Early education can significantly increase long-term outcomes.

4. Why Start Investing at an Early Age? 
   
   

There are several benefits beyond just having more time to grow a portfolio. These include developing financial discipline and learning important money management skills. Early investing also creates a strong foundation for achieving long-term financial goals, such as buying a home, funding education, or saving for retirement.

5. What Are Teenagers' Investment Risks?
   
   

Teenagers face risks like impulsive decisions and falling for market trends. Without experience or proper guidance, they may risk significant funds, including college savings. These risks highlight the importance of financial education and responsible investing to help teenagers make informed decisions and protect their financial future.