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Message
Investing advice for 16 yr old
Posted on 5/27/25 at 9:42 pm
Posted on 5/27/25 at 9:42 pm
My 16 yr old son has saved around $4k in a fidelity youth account. What advice should I give him to get his feet wet in investing? How much of his account should he keep in investments, vs in SPAXX savings?
I've posted about him on here before, in that he does odd-jobs around town for people (yards, etc.) He also has a part-time job, so will officially have earned income. Should I have him open up a Roth, and if so with who?
I've posted about him on here before, in that he does odd-jobs around town for people (yards, etc.) He also has a part-time job, so will officially have earned income. Should I have him open up a Roth, and if so with who?
10
Posted on 5/27/25 at 10:04 pm to meeple
Opening a Roth would be perfect, suggest Fidelity or vanguard.
At his age just dump it all in a low cost broad index funds like VOO.
Just invest and forget it his time in the market is the real winner
At his age just dump it all in a low cost broad index funds like VOO.
Just invest and forget it his time in the market is the real winner
Posted on 5/28/25 at 2:51 am to meeple
VOO and QQQM. Some overlap but his time in the market will be his best asset.
Posted on 5/28/25 at 4:23 am to meeple
A Roth IRA would be a great vehicle to save/invest for college expenses if he is going that route. He may want to have a good bit in fairly conservative investments (like SPAXX) if indeed he will be spending it in the next few years. E*trade, fidelity, vanguard, schwab and others would work well. If the purpose is really more to learn about investing he might allocate a percentage to individual stocks that are of interest to him so that he can follow them for a while and see the ups and downs. Long term I like VTI/VOO /QQQ. Good job Dad!
Posted on 5/28/25 at 4:34 am to meeple
Have him look up “3 fund portfolio” and let him choose the funds. Would be a good education for him and you.
And then open in a Roth IRA and contribute every year. Set and forget. He’ll be able to retire before any of his friends if he sticks with it now.
And then open in a Roth IRA and contribute every year. Set and forget. He’ll be able to retire before any of his friends if he sticks with it now.
Posted on 5/28/25 at 4:56 am to horsesandbulls
Someone posted a link or graphic on here once that showed a comparison of time in the market, as someone that starts contributing early vs someone that contributes more but starts later, and is never able to catch up. Does anyone have this? There are lots of similar examples but this particular one was better and I can’t recall why.
Posted on 5/28/25 at 5:51 am to meeple
This is the way
Posted on 5/28/25 at 8:02 am to meeple
My son got a job. Starts next week. I have agreed with him that if he saves 33%, I will match and set him up a checking account and take the set aside and open a little Fidelity account. That should give him a grand or so to deposit at end of summer. Hoping it sparks an interest.
I look back on my early days of not utilizing 401k or other options and just shake my head.
I look back on my early days of not utilizing 401k or other options and just shake my head.
Posted on 5/28/25 at 8:19 am to tigerfoot
quote:
have agreed with him that if he saves 33%, I will match and set him up a checking account and take the set aside and open a little Fidelity account. That should give him a grand or so to deposit at end of summer.
My son has a child debit acct under our Capital One acct that his pay gets direct deposited into. In your example, if he transfers at least 1/3 of what he earns to his Fidelity acct, I’d also match what he puts into the Fidelity account? Would it make sense for this to be a Fidelity Roth IRA that were both contributing to?
This post was edited on 5/28/25 at 8:20 am
Posted on 5/28/25 at 8:27 am to meeple
I would think so. There’s annual contribution limits to the Roth each year. You might have to deposit your match into his account and then transfer to the Roth in order for it to count.
Catch here is he will only be able to contribute if he has earned income (receives a paycheck or has self employment income) and he’ll likely need to file a tax return each year starting with the 2025 tax year. The return will likely be simple enough that the two of you can work through it on your own with TurboTax/ freetaxusa/ tax act, etc without needing to pay a tax professional.
Having him learn about investments and how to prepare a basic tax return will be invaluable.
Catch here is he will only be able to contribute if he has earned income (receives a paycheck or has self employment income) and he’ll likely need to file a tax return each year starting with the 2025 tax year. The return will likely be simple enough that the two of you can work through it on your own with TurboTax/ freetaxusa/ tax act, etc without needing to pay a tax professional.
Having him learn about investments and how to prepare a basic tax return will be invaluable.
Posted on 5/28/25 at 8:31 am to meeple
He should invest in equipment, trailers, trucks, etc and have a couple of crews doing odd jobs etc for him by the time he’s 21.
Posted on 5/28/25 at 1:13 pm to meeple
My very limited knowledge says yes, as a custodial account. The one caveat is that they must have enough documented earned income to cover the deposited amts. Again, I may be ignorant but a cash based job would not meet that requirement possibly.
Posted on 5/28/25 at 2:43 pm to meeple
quote:
Investing advice for 16 yr old
Make sure you show him this
Posted on 5/28/25 at 8:22 pm to tigerfoot
quote:
they must have enough documented earned income to cover the deposited amts
So maybe whatever 1/3 is… if his deposit plus mine would exceed his earned income from his part time job, I match it into the fidelity youth account instead.
This post was edited on 5/28/25 at 8:23 pm
Posted on 5/28/25 at 9:11 pm to meeple
The max you’ll be able to contribute to the Roth is 7k for 2025. So if he makes more than 10500 in earned income you’ll have to figure out how to handle the overage.
Posted on 5/28/25 at 9:30 pm to horsesandbulls
Trying to wrap my head around what you’re talking about 
Posted on 5/28/25 at 9:56 pm to meeple
Federal guidelines will not allow anyone under 50 to contribute more than 7k to a Roth IRA if they have earned income.
You’ve stated that you’ll match him if he saves 1/3 of his income and invests. Said another way, you will match him 1:1 for what he invests as long as he’s at that savings rate.
So if he contributes 3,500 and you match him, he will be at the max contribution limit for 2025. As his part is 1/3 of his income based on your rules, that will mean he earned 10,500 (3500x3)
If he earns more than 10,500 and you stick with the matching guidelines, you’ll need to have him put it in the custodial account or brokerage account or some other investment account.
You’ve stated that you’ll match him if he saves 1/3 of his income and invests. Said another way, you will match him 1:1 for what he invests as long as he’s at that savings rate.
So if he contributes 3,500 and you match him, he will be at the max contribution limit for 2025. As his part is 1/3 of his income based on your rules, that will mean he earned 10,500 (3500x3)
If he earns more than 10,500 and you stick with the matching guidelines, you’ll need to have him put it in the custodial account or brokerage account or some other investment account.
Posted on 5/28/25 at 9:58 pm to horsesandbulls
Thank you for spelling (and mathing) that out for me. Makes sense.
Posted on 5/28/25 at 10:05 pm to meeple
Have you explored a UTMA account? You can avoid a lot of the headache of a Roth without the contribution limits or earned income requirement. Also has some tax benefits too.
Posted on 5/29/25 at 7:56 am to meeple
I thought 66% would stay well within his threshold. And it still gives him the satisfaction of making and spending his earnings on something big for his vehicle, or sports gear.
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