Author Topic: Question Re: Getting Teen Son to Start Investing  (Read 2337 times)

ltt

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Question Re: Getting Teen Son to Start Investing
« on: July 11, 2015, 05:57:56 PM »
Our son currently started working a part-time job.  He will be a senior in high school, so basically making minimum wage.  What I asked him to do was to let me take 50% of his net pay and invest it for him.  He was very willing to let me do that.  We have an account for him for college, which I've been adding this money to for him.  But am really thinking that we should start a Vanguard account for him.

If we go with Vanguard (and we already have accounts at Vanguard), does anyone know if there are any funds that have a fairly low minimum fee to start that might be good for him at this young age?  And, being that he is a minor, can we just go ahead and put it in his name (since it is basically his money that he is earning)?

fb132

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Re: Question Re: Getting Teen Son to Start Investing
« Reply #1 on: July 11, 2015, 06:03:23 PM »
Which country are you from?

Zaga

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Re: Question Re: Getting Teen Son to Start Investing
« Reply #2 on: July 11, 2015, 06:58:34 PM »
If you're in the US then an adult name will have to be on the account in addition to his.

The Vanguard STAR fund has a minimum of $1,000 last time I checked.

johnny847

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Re: Question Re: Getting Teen Son to Start Investing
« Reply #3 on: July 11, 2015, 09:19:57 PM »
If I recall correctly you will need $1k to start an IRA at Vanguard (he should open a Roth). The STAR fund (as Zaga said) or a target date fund.

Even babies can have IRAs. Him being a minor doesn't preclude him from one.

lostamonkey

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Re: Question Re: Getting Teen Son to Start Investing
« Reply #4 on: July 11, 2015, 09:31:04 PM »
Are you planning on covering your son's tuition and living expenses while he is in college? If not, his investment time frame is fairly short and you probably shouldn't be investing his funds in the stock market.

ltt

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Re: Question Re: Getting Teen Son to Start Investing
« Reply #5 on: July 11, 2015, 10:02:02 PM »
Are you planning on covering your son's tuition and living expenses while he is in college? If not, his investment time frame is fairly short and you probably shouldn't be investing his funds in the stock market.

We are in the U.S.

This money would be separate from his college fund (we will only be covering part of his college costs) and money that we would like him to get in the habit of adding additional money to on a regular basis and build it up.  He could use it toward college expenses and continue to build it up toward a downpayment on a home, etc.  If the money goes into a Roth account, could it be withdrawn for a downpayment on a house.  I'm assuming if I put it in a Roth, he wouldn't be able to withdraw for college costs??

 

lostamonkey

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Re: Question Re: Getting Teen Son to Start Investing
« Reply #6 on: July 11, 2015, 10:38:27 PM »
Are you planning on covering your son's tuition and living expenses while he is in college? If not, his investment time frame is fairly short and you probably shouldn't be investing his funds in the stock market.

We are in the U.S.

This money would be separate from his college fund (we will only be covering part of his college costs) and money that we would like him to get in the habit of adding additional money to on a regular basis and build it up.  He could use it toward college expenses and continue to build it up toward a downpayment on a home, etc.  If the money goes into a Roth account, could it be withdrawn for a downpayment on a house.  I'm assuming if I put it in a Roth, he wouldn't be able to withdraw for college costs??

What I meant is that given your investment time frame it may be better to just put his excess savings in a high interest savings account as opposed to buying index funds. I would have a similar suggestion if he was looking to save up a downpayment for a home in the immediate future. I cannot help you with your tax questions because I am Canadian and I don't know much about American tax advantaged account rules.

Trifele

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Re: Question Re: Getting Teen Son to Start Investing
« Reply #7 on: July 12, 2015, 09:18:21 AM »
Vanguard has a $1000 minimum for their Target funds.  Schwab has lower minimums for custodial accounts -- $100.