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Message
re: Best way to help son get started investing
Posted on 1/29/25 at 12:43 pm to TorchtheFlyingTiger
Posted on 1/29/25 at 12:43 pm to TorchtheFlyingTiger
quote:
My parents and grandparents never dreamed of FIRE.
They didn’t have to
They put in 25 years and they got a pension
quote:
Meanwhile, index funds are consistently outpacing inflation.
Oh boy. This is the American dream. Putting money into a Ponzi scheme in an attempt to overcome the government’s debasement of the currency
quote:
Go ahead, dont invest but dont dissuade this young buck from getting started early
I told him to go buy a pressure washer
I’m sure he’d rather triple his money every weekend over getting 6% in a year
0
Posted on 1/29/25 at 12:55 pm to Bamboozles
quote:
He got the income from a hobby he does in his spare time thankfully.
Is it being claimed come tax time? If not, the Roth isn’t an option
Posted on 1/29/25 at 12:56 pm to Bamboozles
Make sure he reports that income on his tax returns. Should count as earned income as long as the hobby isn’t stock trading or investment related.
Of course, discuss with a tax professional if you are unsure.
Of course, discuss with a tax professional if you are unsure.
Posted on 1/29/25 at 2:02 pm to Bamboozles
quote:
have the money work for him.
Getting a 19 year old to understand consistent saving and compounding interest is....almost impossible.
Mine is in the Guard so he does 15% to Thrift Saving Plan and he did a year in Iraq so he has a nice base,
Set him with a brokerage account and bought him stuff he knows about, a share of Microsoft, a share Amazon, he banks with Chase so a share of JPM. After a year and a half he is up 20% and reinvesting dividends. Starting to see how it works and asking good questions.
The biggest issue: fricking Crypto. Sees the big reward (not the risk).
Posted on 1/29/25 at 2:05 pm to Lakeboy7
quote:
The biggest issue: fricking Crypto. Sees the big reward (not the risk).
I have crypto as part of my portfolio. Took gains years ago. Up 130% on what I still have
Posted on 1/29/25 at 2:10 pm to Lakeboy7
quote:
Getting a 19 year old to understand consistent saving and compounding interest is....almost impossible.
quote:Well done.
Set him with a brokerage account and bought him stuff he knows about, a share of Microsoft, a share Amazon, he banks with Chase so a share of JPM. After a year and a half he is up 20% and reinvesting dividends. Starting to see how it works and asking good questions.
I think kids need some individual stocks to have some fun. Hell, I need them to have some fun. I enjoy volatility the same way I enjoy 8" of snow or a huge thunderstorm. Life is too exciting to invest in VOO for 45 years. If you invest in VOO for 45 years you're likely not the kind of person to ever use the money for enjoyment.
Posted on 1/29/25 at 2:14 pm to Lakeboy7
quote:
The biggest issue: fricking Crypto. Sees the big reward (not the risk).
I mean, perfect time to teach him about it. he has an extremely long investment horizon, so that risk/reward spread is fine. Help him set up a majority of his portfolio as others have said and give him a small portion to play with as he wants. Best way to learn. Ultimately, there is room for both in a portfolio anyways.
Let him put say 10-15% in whatever he wants, but he can only use the gains of those investments for that stuff. The other portion stays where it is so he can see the difference in what you are wanting to show him.
Posted on 1/29/25 at 2:23 pm to Lakeboy7
quote:
The biggest issue: fricking Crypto. Sees the big reward (not the risk).
There is only room for Bitcoin in a portfolio. Everything else is just noise.
Posted on 1/29/25 at 2:32 pm to Bamboozles
If he’s interested in the stock market, go with blue chips and have him banned from this site
Posted on 1/29/25 at 2:36 pm to GoCrazyAuburn
quote:
perfect time to teach him about it.
Agreed. And I think it can be a part of a healthy portfolio.
Crawl, walk, run. We are crawling right now. He gets the concepts and he is seeing how it makes you money. The concept of consistency over time for a 19 year old is hard for them to see. shite I didnt see it at 19.
Posted on 1/29/25 at 3:12 pm to Lakeboy7
quote:
The biggest issue: fricking Crypto
Crypto is a symptom of the loss of faith in our financial system. Eggs are 10x more expensive than 10 years ago, a car is twice as expensive, a house is 3x as much as 10 years ago. Wages are about the same. A teacher/football coach used to be able to own a beach house and his wife didn’t have to work.
Let the boy buy the pressure washer and put up flyers in the neighborhood. He’ll learn work ethic better from working for himself than he will from the other burnouts working at Best Buy.
Posted on 1/29/25 at 3:22 pm to el Gaucho
quote:
A teacher/football coach used to be able to own a beach house and his wife didn’t have to work.
When was that?
Posted on 1/29/25 at 3:28 pm to bayoubengals88
Pre 1971
Posted on 1/29/25 at 8:39 pm to Mingo Was His NameO
Yes, he paid taxes last year for the first time and will be doing same this year. He earned more than 7K so setting up an IRA for 2024 is the first step. His hobby has been a blessing and met with a financial consultant this afternoon to help him set up a portfolio, and to help him get acclimated and get his feet wet. This is beyond what my capabilities ever were when I was 19
Posted on 1/29/25 at 9:03 pm to Bamboozles
Noooo! Not a financial advisor for a few thousand starter IRA. Gonna get him stuck w that guy and cost him perhaps hundreds of thousands over decades.
Read a book and buy index funds. Save the commission and/or management fees.
Read a book and buy index funds. Save the commission and/or management fees.
Posted on 1/29/25 at 9:40 pm to Bamboozles
Man you don’t need a financial consultant to open an IRA and pick some low risk funds. Seems like a waste of money when you’ve gotten all the advice you need in this thread.
Posted on 1/29/25 at 9:44 pm to tiger rag 93
There are no OOP fees associated here, he is a family friend and has been helpful in the past when me and the mrs had to do a backdoor IRA.
Posted on 1/29/25 at 10:40 pm to horsesandbulls
quote:
Have him open a Roth IRA. Look up 3 fund portfolio. Super basic and low effort. At that age he’s got all the time in the world to let it grow.
This is the way
Posted on 1/29/25 at 11:06 pm to Bamboozles
"No OOP", so you arent paying him a fee directly. Is there an AUM % or commissions/loads on the funds he's choosing? Does the guy sell insurance by chance? Or is it truly just a friend offering free help?
I wonder how much help he's providing if you are fortunate enough financially to need backdoor Roth but this friend hasnt passed along basic investing perspective so you could handle a starter Roth without his assistance. Hope my hunch that he is getting paid somehow isnt accurate.
I wonder how much help he's providing if you are fortunate enough financially to need backdoor Roth but this friend hasnt passed along basic investing perspective so you could handle a starter Roth without his assistance. Hope my hunch that he is getting paid somehow isnt accurate.
This post was edited on 1/29/25 at 11:57 pm
Posted on 1/30/25 at 5:03 am to TorchtheFlyingTiger
I appreciate and understand your concern. Will reconfirm what was discussed with him yesterday to be safe.
Yes, from what I understand, I think he gets paid by the funds if his clients select go put money in a particular fund
quote:
Is there an AUM % or commissions/loads on the funds he's choosing?
Yes, from what I understand, I think he gets paid by the funds if his clients select go put money in a particular fund
This post was edited on 1/30/25 at 5:06 am
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