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Started By
Message
Roth for 18yo
Posted on 12/17/24 at 7:50 pm
Posted on 12/17/24 at 7:50 pm
My 18yo is starting a Roth. What’s the best fund for him to invest in?
12
Posted on 12/17/24 at 7:57 pm to 7LSU7
QLD
Thank me in 20 years
Thank me in 20 years
Posted on 12/17/24 at 8:06 pm to 7LSU7
Vtsax.
Tell him that if he invests the max each year in vtsax, then he’d almost certainly have several million dollars of tax free gains waiting for him before he turns 60.
That’s early retirement without a penny into 401k, post-tax brokerage accounts, HSA, real estate, etc.
Tell him that if he invests the max each year in vtsax, then he’d almost certainly have several million dollars of tax free gains waiting for him before he turns 60.
That’s early retirement without a penny into 401k, post-tax brokerage accounts, HSA, real estate, etc.
Posted on 12/17/24 at 8:52 pm to 7LSU7
I would suggest a young person open a Roth through Fidelity and invest in FZROX. It’s a total U.S. market index fund with a 0% expense ratio. Keep adding to that fund over the years, and he/she will do very well.
Posted on 12/17/24 at 10:20 pm to DrrTiger
I would not recommend FXROX as it can’t be moved from Fidelity without selling it. Moreover, it includes small and mid caps. Stick with the S&P or something that mirrors it, or better yet get a growth like SCHG for a youngster.
Posted on 12/17/24 at 10:20 pm to 7LSU7
Voo
Posted on 12/17/24 at 11:21 pm to OhioLSUfan
quote:
I would not recommend FXROX as it can’t be moved from Fidelity without selling it
I’d take the zero expense ratio over some hypothetical move from Fidelity that may never happen. Regardless, selling within a Roth is not a taxable event. If I were moving brokerages, I’d just sell FZROX and buy VTI.
quote:
Moreover, it includes small and mid caps
Yes. Why should a young investor avoid small and mid-cap companies?
Posted on 12/18/24 at 4:22 am to 7LSU7
Any broad index fund with low fee. Maybe contribute to one fund this year and another one or two similar funds in future years, within the same Roth account, just to mix it up.
A Roth for a youth has such amazing potential.
I've mentioned before how I put $5,000 in Fidelity Blue Chip Growth (not a Roth, but I wish it were; they were not in effect until 1998) in about 1995 when I first had some savings. I've let it ride untouched ever since. With dividends reinvested and capital gains, that single deposit is worth over $100,000 today. Any broad index fund likely would have produced similar results over that 30 years.
If a young person maxes a Roth in their early years, they are setting themselves up for something sweet if they can keep their hands off of it.
A Roth for a youth has such amazing potential.
I've mentioned before how I put $5,000 in Fidelity Blue Chip Growth (not a Roth, but I wish it were; they were not in effect until 1998) in about 1995 when I first had some savings. I've let it ride untouched ever since. With dividends reinvested and capital gains, that single deposit is worth over $100,000 today. Any broad index fund likely would have produced similar results over that 30 years.
If a young person maxes a Roth in their early years, they are setting themselves up for something sweet if they can keep their hands off of it.
Posted on 12/18/24 at 6:09 am to 7LSU7
quote:I would go with VUG based on age. The dominance of mega caps will accelerate.
My 18yo is starting a Roth. What’s the best fund for him to invest in?
Posted on 12/18/24 at 7:11 am to beaverfever
My biggest financial regret, and I have had many over the years, is that I didn’t start a Roth IRA when I was 18. Even $50-100/month in the late 90s would’ve been huge gains at this point in my life. Still playing catch up now going into my mid 40s.
Posted on 12/18/24 at 7:44 am to 7LSU7
Fidelity
FNILX, FZROX = 0 expenses
FSKAX, FSMDX, FSPGX, FXAIX = low expenses
FNILX, FZROX = 0 expenses
FSKAX, FSMDX, FSPGX, FXAIX = low expenses
Posted on 12/18/24 at 7:53 am to 7LSU7
S&p500. Your kid is savy. Must have a good dad.
Posted on 12/18/24 at 8:49 am to KWL85
Stick with S&P 500 IMO. VTI works too if you think small/mid caps will outperform over the long haul.
This post was edited on 12/18/24 at 9:00 am
Posted on 12/18/24 at 9:22 am to 7LSU7
lots of good, reasonable responses saying some type of S&P 500 fund. That would certainly work out well.
But, at 18, i personally think its worth it to take some "risk" and get into some individual stocks as well. Young people are a good source of info when it comes to companies their generation buy from/support and like to use. Seems worth a try to say hey go do a little research and give me a list of 3-5 companies youd invest in. When i was that age, it was Apple and Google, then Tesla a little later down the line.
i know beating the market is nearly impossible, but at 18, i see no reason not to try, at least with some of the portfolio
ETA: also when i was that age, it was 2009, so had it was really hard to pick something that didnt do well
But, at 18, i personally think its worth it to take some "risk" and get into some individual stocks as well. Young people are a good source of info when it comes to companies their generation buy from/support and like to use. Seems worth a try to say hey go do a little research and give me a list of 3-5 companies youd invest in. When i was that age, it was Apple and Google, then Tesla a little later down the line.
i know beating the market is nearly impossible, but at 18, i see no reason not to try, at least with some of the portfolio
ETA: also when i was that age, it was 2009, so had it was really hard to pick something that didnt do well
This post was edited on 12/18/24 at 9:34 am
Posted on 12/27/24 at 1:08 am to 7LSU7
He went with Fidelity FXAIX. Maxed out his Roth for 2024 and has some money to put in for 2025.
Posted on 12/27/24 at 1:09 am to 7LSU7
Thanks for all of the suggestions
Posted on 12/27/24 at 6:04 am to 7LSU7
Simple 100-18= 82
82% of portfolio should be aggressive or in individual stocks. Rest in ETFs. You’ll beat the market with ease and have millions come retirement
82% of portfolio should be aggressive or in individual stocks. Rest in ETFs. You’ll beat the market with ease and have millions come retirement
Posted on 12/27/24 at 6:09 am to 7LSU7
I have most my Roth and HSA in FXAIX which I have been maxing for damn near 15 years and both are doing extremely well.
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