17 year old daughter has a vintage passbook savings account with money I enticed her to save a part of from birthday money, Christmas money and so on over the years. I would like to see her park it in a Roth for the next 50 years. Yes it not much only about $3500 but she could also contribute some from her part time job too. Maybe monthly? Problem being the local financial planner doesn't seen to have the time or interest to work with her on such a small amount. Now after me telling her how this would be such as great thing and them poo pooing her shes discouraged. Says she'll just leave in the savings account and spend it for college. I don't see the need to save it for college as the amount won't move the needle that much but compound interest over the next 50 years will. What do you guys think? That savings account is only making her a fraction of a percent....
Read this:
https://www.cbsnews.com/news/kid-roth-how-parents-can-raise-a-millionaire/Your daughter should read it too.
Then fire the financial planner. He doesn't want to manage her account because it's not big enough for him to make much money on, like he's probably making on your account. Financial planners make money by convincing you that investing has to be complicated. Then they put your money into a basket of their own company's high-fee funds that pay them a commission, and then generally under-perform, compared to a simple low-expense index fund, over time.
My mother used to be a financial planner. God bless her heart, but to this day she still knows zip about investing. It was just a job for her. She never understood why I wouldn't let her put me into one of those hideous funds, even after I explained it to her.
Open a Roth IRA for your kid at Schwab (Schwab will gladly help you do this), and have her buy as many shares of ticker symbol SCHX as her money will buy, and set it to reinvest dividends automatically. Then tell her to forget about it for the next 50 years or so. * (See exception below)
Note: she will be limited in how much she can put into a Roth based on her earned income, so she might have to dribble it in over a year or two. If she's going to earn $3,500 or more this year, she can and should plop the whole amount in right away. When she turns 18, different contribution rules take effect, so take advantage of the rules that apply to her age right now.
SCHX is an S&P 500 index fund equivalent. Low expenses, and no fees to buy or sell. You become instantly diversified across the 500 largest US companies. When you buy this one ticker symbol, you own a piece of them all.
Your daughter's future self will thank you for it.
*During the early part of that 50 years, encourage her to learn about the basics of asset allocation and other fundamentals of investing. This forum would be an excellent place to start. Then she can learn more nuanced ways to rearrange her IRA using other no fee, low expense index funds, so as to to construct a portfolio suited to her specific risk tolerance and goals.
Investing can be as simple or as complicated as she wants to make it. Even if she does nothing else, SCHX should treat her quite well over that period of time.