Features

NEW YORK — It should come as no surprise in this era of instant Internet millionaires that there are a lot of teen-age investors out there hoping to build a college fund, a retirement fund and then some. 

Jay Liebowitz, 18, is one of those Wall Street wizards. He got his start in the stock market at age 13 after he created and then sold a computer software program. 

His first investment was a loser, but it taught him valuable lessons: do enough research and understand the risk. 

Liebowitz now is sharing his wisdom with others. He has written “Wall Street Wizard: Sound Ideas From a Savvy Teen Investor” (Simon & Schuster, $16) and he distributes a free e-mail newsletter via his Web site, streetwhiz.com. 

“There’s not a lot of data, but I know there’s a huge number of people under 18 investing,” says Liebowitz. 

Once the piggy bank hits $500, it’s time to consider financial options other than the traditional savings bank, says Liebowitz, who is now a student at the Wharton School of Business at the University of Pennsylvania. If you have less than $500, the transaction fees are too expensive for the investment to be worthwhile, he explains. 

The money does not have to come from a mega-cyberspace deal. If a teenager socks away his allowance or paychecks from a part-time job, the balance builds up over time. 

A good initial investment is an index fund, advises Liebowitz. It’s the benchmark used by professional mutual fund managers. In teen-age terms, an index fund is the equivalent of the curve of an exam. (“It’s like investing in the smart kids you know are going to do well,” Liebowitz says.) 

An index fund doesn’t have the return potential of a high-flying individual stock, but it also doesn’t have a high level of risk, he says. 

“The goal of investing early isn’t to make a lot of money. But just putting it in the bank is teaching a bad habit,” Liebowitz explains in a recent telephone interview. 

Investing is also the best way to learn about business, he says. 

Liebowitz is on the career path toward big business. While he had visions at one time of becoming a surgeon – that was after his police officer-firefighter stage – he now plans to get a bachelor of science degree in economics. 

In his book, Liebowitz describes his excitement when he first visited “the street” – and how he could identify all the buildings and even all the stock ticker symbols. He also explains all things Wall Street in understandable terms, including explaining what “stock” really is and listing the pros and cons of investing in a market powerhouse like Cisco Systems. 

Teen-agers have some great opportunities to join the investment community, he says, especially with many colleges offering free Internet access, which means the students can use online brokers, who typically charge lower fees than traditional brokers. 

On the Net: http://www.streetwhiz.com/