Investing is an important part of U.S. personal finance. Unfortunately, not everyone does it. But lack of citizenship is not a reason people don’t invest. Legal or illegal immigrants can invest in the stock market. You can invest without a Social Security Number.
We’ll explain why investing is so important, why you can invest with an ITIN, and how to do it.
Why investing is essential
Most people don’t earn salaries in the high six figures or inherit fabulous wealth from family or hit that big lotto jackpot! But that doesn’t mean that you can’t grow real wealth. The way to do that is through investing in the stock market. Let’s look at some examples:
If you bought $1,000 worth of Amazon stock 20 years ago, 2002, at the time of writing, that stock would currently be worth $193,872.83. You earned nearly $200,000 in passive income, money you didn’t have to use your time or effort to earn. The average annual rate of return was an astounding 30.10%!
If you bought $1,000 worth of Apple stock 30 years ago, 1992, at the time of writing, that stock would currently be worth $231,328.61. You earned nearly a quarter of a million dollars in passive income. The average annual rate of return was 27.05%!
You can see that long-term investing can build real wealth. This is the calculator we used to get the above numbers. It’s fun to put in different stocks and dates and see what the returns are if you’d like to try!
How to invest in stocks with an ITIN
You do not have to be an American citizen to buy stock in American companies. To buy stocks with an ITIN, you can open a brokerage account with a company like Fidelity, Vanguard, or Charles Schwab. These companies don’t require a Social Security number to create an account and buy stocks. You create an account, fund it with money from a checking or savings account, and you can start buying and selling stocks, usually within a business day or two.
Be sure to do your research before investing. And you don’t have to invest in individual stocks. You can invest in an ETF (exchange-traded fund) or mutual fund, which allows investors to invest in a “basket” of stocks that provides diversification and eliminates the need for researching individual stocks, which can be time-consuming and confusing for new investors.
Rather, you can choose your ETF based on things like your risk tolerance and time horizon. Generally, risk tolerance means how much of a split you want between stocks and bonds when investing. Stocks are riskier than bonds but typically have a higher return. Your time horizon is how long you plan to hold the investments.
Learn with Upwardli
Investing is just one of the many facets of American personal finance. There is a lot to learn, and Upwardli is here to help! We have created dozens of resources to help you learn the ins and outs of personal finance in the U.S., and we can help you build your credit history in your new home. Upwardli is here to help you with your financial journey!
Candice Elliott has been a freelance writer specializing in personal finance since 2013. She learned to manage her money the hard way after moving to New York City and living paycheck to paycheck for years. She wants to help others avoid the money mistakes she made while providing easy and actionable advice in an entertaining way. Candice believes that personal finance information should be inclusive of everyone because a solid financial base is the foundation for a successful life. Candice now lives in New Orleans where she admits she spends more than she should on restaurants because the food is as good as you’ve heard.
