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Message
re: Beginner investors. My 2 teen kids.
Posted on 4/5/23 at 10:05 am to lsugorilla
Posted on 4/5/23 at 10:05 am to lsugorilla
529 now has more flexibility and can be rolled to a Roth IRA without penalty as of this year. So they can contribute (age?) and take the deductions and then roll it to a Roth later.
Plus you/they can put in more than the $6000 a year limit. Then roll it over.
Plus you/they can put in more than the $6000 a year limit. Then roll it over.
This post was edited on 4/5/23 at 10:08 am
0
Posted on 4/5/23 at 10:06 am to lsugorilla
quote:There's nothing you can't do with Fidelity.
Can I do that with fidelity?
Indexing or buying index funds is one of the simplest ways to invest.
SPY is an index exchange traded fund (ETF) that tracks the performance of the S&P500 (the five hundred largest companies in the US).
So, whatever the S&P does, SPY does.
The S&P has historically averaged about 10% per year.
Posted on 4/5/23 at 10:11 am to lsugorilla
quote:I'll just send you the slides this way: LINK
lsugorilla
Posted on 4/5/23 at 12:30 pm to lsugorilla
There are sites like Marketwatch where you can get a virtual trading account with $100k in pretend money. Use that for practice.
If they start using real money, buy dividend stonks with low debt to asset ratios.
If they start using real money, buy dividend stonks with low debt to asset ratios.
Posted on 4/5/23 at 1:17 pm to bayoubengals88
quote:
I'll just send you the slides this way: LINK
Thank you
Posted on 4/5/23 at 1:21 pm to TorchtheFlyingTiger
quote:
Roth contributions can be withdrawn anytime no tax or penalty they just wont be able to touch the growth until retirement age
Can you do Roth IRA with fidelity.
I was thinking not only for their retirement. But have the ability to help as down payment on home when/if they decide to settle down and start a family
Posted on 4/5/23 at 1:30 pm to lsugorilla
Yes, all of the major (and probably most minor) firms offer Roth IRAs.
Posted on 4/5/23 at 4:05 pm to lsugorilla
Roth contributions cam be withdrawn penalty free so possible to use for home downpayment. But probably best to let it ride and grow tax free 8f possible (a decision for years from now).
529 may not be best move for child. They could t against financial aid if owned by kid (double check me on that). And while could be used to find Roth later you would miss out on amnual Roth contribution in meantime and the future Roth transfer counts against Roth in those years. So after college your kids can't fund Roth IRA and roll 529 to Roth.
529 may not be best move for child. They could t against financial aid if owned by kid (double check me on that). And while could be used to find Roth later you would miss out on amnual Roth contribution in meantime and the future Roth transfer counts against Roth in those years. So after college your kids can't fund Roth IRA and roll 529 to Roth.
Posted on 4/5/23 at 4:07 pm to Twenty 49
quote:
If I had a kid or youth I cared about, I would open a Roth IRA for them and make the contribution up to their max allowable each year. Put it in mainly an S&P 500 index fund, but let them pick a few individual stocks to make it interesting.
this is what i do along with my company 401k.
Posted on 4/5/23 at 4:10 pm to Bestbank Tiger
quote:
buy dividend stonks with low debt to asset ratios
Dividends generate taxable events whether desired or not. Picking individual dividend stocks is riskier than index investing and diversifying across hundreds or more companies. Dividends just reduce underlying value of stock by distributing to stock holders. I'd rather choose when to sell and invest in companies that use profits to grow my investment. Please dont teach your kids to chase dividend yield its a short sighted approach for those that think it's better to never sell shares.
This post was edited on 4/5/23 at 5:58 pm
Posted on 4/5/23 at 4:19 pm to TorchtheFlyingTiger
quote:
buy dividend stonks with low debt to asset ratios
I was fixing to ask what this means
Posted on 4/5/23 at 7:29 pm to TorchtheFlyingTiger
quote:
Dividends generate taxable events whether desired or not. Picking individual dividend stocks is riskier than index investing and diversifying across hundreds or more companies. Dividends just reduce underlying value of stock by distributing to stock holders. I'd rather choose when to sell and invest in companies that use profits to grow my investment. Please dont teach your kids to chase dividend yield its a short sighted approach for those that think it's better to never sell shares.
Dividends provide an income stream. You can't benefit from a non dividend stock unless you sell it. Which isn't a bad move but now it's gone.
Posted on 4/5/23 at 8:51 pm to Bestbank Tiger
quote:
Dividends provide an income stream.
True. And also, dividends have made up approximately 32% of the returns of the S&P 500 since 1926. Especially as one advances through the different stages of life, shifting the asset allocation more toward income production (without chasing yield) is probably a wise move.
Posted on 4/6/23 at 8:51 pm to lsugorilla
Posted on 4/6/23 at 9:04 pm to lsugorilla
The big lesson, in my opinion, for young folks to learn is the value of time value of money. And the return (1 + k)^n, as in “k”, is less important than time “n”.
In balance of enjoying life, nature of the accuracy of predictive value of financial markets, and realization that time is most precious resource, it is less important to take precious life and spend it maximizing return and, instead, just making regular investments into index funds over time.
Less “fun”, yes. More effective, “yes”.
Teach them to live below their means, invest the difference, explore index funds with broad risk (see Boglehead approach), and make it automatic.
The end.
In balance of enjoying life, nature of the accuracy of predictive value of financial markets, and realization that time is most precious resource, it is less important to take precious life and spend it maximizing return and, instead, just making regular investments into index funds over time.
Less “fun”, yes. More effective, “yes”.
Teach them to live below their means, invest the difference, explore index funds with broad risk (see Boglehead approach), and make it automatic.
The end.
This post was edited on 4/6/23 at 9:09 pm
Posted on 4/7/23 at 5:46 pm to lsugorilla
Can't speak to others re "youth plans", but Fidelity has a pretty good web site and trading tool - Market Pro. But, I would look at what Schwab has to offer before making a decision. Both offer fractional share trading which allows them to invest small amounts to learn. I'd give the edge to Fidelity on that, but the edge to Schwab overall.
Also, buy them a book each year for birthday... something like "A Random Walk Down Wall Street" ... and then one with a different view point so they can learn and decide on their own over time.
... Glad they are interested early.
Also, buy them a book each year for birthday... something like "A Random Walk Down Wall Street" ... and then one with a different view point so they can learn and decide on their own over time.
... Glad they are interested early.
This post was edited on 4/7/23 at 5:47 pm
Posted on 4/10/23 at 9:15 am to bayoubengals88
quote:
I preach time in the market > timing the market
I emphasize the differences between investing and trading, while encouraging both.
And I recommend QQQ and SPY or VTI as Roth IRA repeating buys.
And if they are interested with trading. I would recommend starting with a Paper (fake $) account on ThinkorSwim. Though I think you may need a TDAmeritrade account to set that up.
I think WeBull also offers paper trading, but something about that company has always sketched me out.
Posted on 1/30/24 at 7:47 pm to bayoubengals88
I would like to thank you for the slides.
My wife and kids both reviewed them and went over them with kids.
Thank you everyone for your encouraging words.
Good news.
My daughter has been working her butt off. While also volunteering at hospital. And still in high school.
My boy is old enough to legally work and has already started applying.
Both opened fidelity accounts and got the free $50.
My bit already has his in an index fund with his retirement date or something.
Also I am in a better position financially (still have a ton of dept) but am putting in a lot more into retirement. Works matches 8%!
It’s been a rough several years but finally starting to see some progress.
Question. Is it a bad idea to have all my retirement going into retirement the retirement company at my work?
My wife and kids both reviewed them and went over them with kids.
Thank you everyone for your encouraging words.
Good news.
My daughter has been working her butt off. While also volunteering at hospital. And still in high school.
My boy is old enough to legally work and has already started applying.
Both opened fidelity accounts and got the free $50.
My bit already has his in an index fund with his retirement date or something.
Also I am in a better position financially (still have a ton of dept) but am putting in a lot more into retirement. Works matches 8%!
It’s been a rough several years but finally starting to see some progress.
Question. Is it a bad idea to have all my retirement going into retirement the retirement company at my work?
Posted on 1/30/24 at 10:32 pm to lsugorilla
quote:Do you mean going into the stock of the company you work for? If so, please don’t do that.
Question. Is it a bad idea to have all my retirement going into retirement the retirement company at my work?
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