I was a millionaire at 30. Here's how to get started with just a thousand bucks

My claim to fame was being on the "Oprah Winfrey Show" at the age of 17 because of my investing success. The episode was called "Ordinary People, Extraordinary Wealth." The producers were interested in how a young girl from Canada, me, was remarkably on track to be a millionaire by age 25.

I’d started investing in Canada Savings Bonds with $100 when I was 10 using birthday and Christmas money. I loved the idea of earning interest on my money while I slept, danced and played video games. When I started babysitting and getting odd jobs here and there, I’d sock away that money too — it’s not like I had any expenses.

When I was 14 I got my first job at the library, earning a respectable wage for a teen, and dove into mutual funds with permission from my parents. By 18, I’d learned about the stock market thanks to all the investing books in the library, and built a profitable, growth-oriented stock portfolio. At every opportunity I invested more, and in good-quality investments. Here are the four investing principles I followed that any young investor can apply and see results.

Time is like magic, so make the most of it

Because I started investing super early, there was ample time for my money to benefit from compound interest and reinvested returns. It works like this — your money earns interest and returns that get reinvested (making the total pot of money even bigger), then that money earns interest and returns that get reinvested.

It’s like a snowball rolling down a hill picking up more snow as it goes, expanding its surface area, and settling at the bottom of the hill much bigger in size than the original tiny snowball.

Let’s say your 18-year-old has saved $1,000, and they invest that money plus they add another $100 per month to the pot until the age of 65. They’ll have $450,000 at an annualized rate of return of seven per cent.

If they turn out to be a super saver like I was, that eventual pot of money could be millions.

This principle put into practice is simply to get started pronto. Don’t wait. There is literally no better time than now to begin the investing journey. So, encourage your kids to get started.

Keep it simple

There are more simplified investing options today than ever. And your teen doesn’t have to do nearly the same amount of work as I did when I was starting out — ETFs weren’t even a thing then.

I’m a fan of starting with a managed ETF portfolio that has low fees and standardized market performance. Most major banks offer this option, plus market disrupters like the ETF companies themselves or robo-advisers. The alternative is a mutual or index fund with comparable lower fees.

At first, I’d steer clear of trying to do the direct picking of the ETFs or funds, and rebalancing and so on. It takes time to develop the knowledge on how to do this. You’ll get there if you choose.

This principle put into practice involves your teen investigating a few investment platforms they like. They’ll probably prefer a UX that’s slick and simple, that integrates with their bank account and that speaks to their personal interests. Then, sign up for a basic investing account (a tax-free savings account — TFSA — is a great option for 18+ teens). Age of majority rules apply when opening accounts.

Fund the account on the regular

This is the fun part — adding your first $1,000 into the investment account.

This principle put into practice is simply where you instruct the investment provider to take the money you wish to invest from your banking account. It typically takes a few business days to complete the transaction.

My advice is to go one step further and set up a regular contribution into the account going forward. This can be weekly, biweekly or even monthly in most cases. The rationale for consistent contributions, even if they're small like $25, is that you establish a very powerful financial habit of paying yourself first. When done on the regular, this money gets invested at various points in the market, which allows you to spread out risk and buy investments at different prices. Before you know it, you’ll watch your investments soar.

Grow your money according to your age

When you’re young you have time on your side to recover from any potential losses your investments take as a result of a high-growth strategy. When you’re near retirement, you just can’t take that risk, and have to be more conservative and income-focused. So grow your money while you’re young.

This principle in action looks like a five-point risk scale where one is low risk and five is high risk. Shift down a point every decade and you will protect yourself from unnecessary market risk. In your twenties a five (aggressive growth); thirties a four (growth); forties a three (balanced); fifties a two (moderate), sixties a one (conservative). You’ll find most managed investments have similar names for their portfolios, and similar scoring systems.

In case you’re wondering, I was a few years late in hitting my goal of a million, but I stuck with my strategy (even through the financial crises, a wild job market, economic and personal ups and downs), and I got there by 30. I recently turned 40 and feel grateful that I stuck with my investing. I have priceless peace of mind that my money will give me the freedom to choose — anything.

This article was originally published in The Star. Lesley-Anne Scorgie is a Toronto-based personal finance columnist and a freelance contributing columnist for the Star.