Where to put kid's money

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I advised the benefits of monthly cost basis averaging as opposed to putting a lump sum in and getting that sour stomach feeling when an irrelevant dip hits.

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At his age, I'd advise 100% all in. A gut punch will harden him. He'll be unstoppable.

In all seriousness, throw the whole 15k in QQQ.
Kid is going to be well set up.
Good stuff!

Brokerage doesn't matter. Robinhood, Schwab, they all get the job done.

Courtesy of Omada, why wait? No need to DCA.

I thought about 50% deposit off of savings and start 50% from paycheck (he still needs money for monthly car insurance). Good advice. It will warrant a discussion.

Any pros or cons on Robinhood or schwab?

If he just wants to save for something in the immediate future, put it in something like SGOV instead of a saving account for the higher yield.

Roth IRA contributions can be withdrawn tax and penalty free any time. Just cant touch the growth.

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Maybe I'm thinking about this wrong, but if you put it in a Roth, then it can't be used for anything but retirement without penalties, right? Not college, trade school, down payment for a house, etc?

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401k is eligible for first time homebuyer down-payment. It can also qualify as a source for medical bills.

I presume that Roth is the same, but I need to confirm. Down-payment on a home is huge.

This kid is on a career path and isn't looking to be distracted with youth (wanderlust). He has 2 dual enrollment courses at GT this year and he is hoping to be there in the fall as a freshman.

I have another child who is a college dropout who is taking your advice. She is getting her motorcycle license, sleeping on friends' sofas, and plans to do trips with her grandparents (retired but still healthy enough to travel). She is taking advantage of no responsibilities (other than insurance and maintenance for the dodge challenger that she bought for herself) for a bit.

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Robinhood is good for the 3% IRA contribution match.
I dont think they allow custodial IRAs though so may need to wait until 18.

Also, beware they push prediction markets including sports. So, I'd be wary of putting a young beginner investor on a platform that.conflates investing and gambling. Especially with their gamified interface

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Thanks for the heads up. He isn't into sports. His sports are academic bowl and robotics team. He doesn't cheer for any teams (a great candidate for GT, we hope).

My brother is a financial planner and suggested him picking 5 stocks. At his age, I dont think he would be into that. My hope is that he realizes the power of DJIA and S&P500 (and maybe a Russell2000) as the only long term planning that he needs at this stage. Beat the experts by riding the indexes.

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Courtesy of Steve Ellison

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All I did was link it here

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15k saved. The money is for a car (probably $8k to 10k) with a few $1000 for unforseen repairs and maintenance. He will be paying the car insurance. The money is also to help with school next fall.

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Sounds like most if not all of the $15k is already allocated to neccessary expenses in the next 12 months. If so, investing it in the stock market isnt appropriate. Rather, I'd set it aside in a HYSA to get a little interest. Then, I'd have him start a Roth IRA to invest a little of his future earnings for long term growth. If feasible for you financially, consider incentivizing that with a match of some sort.

While Roth contributions CAN be tapped it isn't a great behavior to instill and may backfire if he falls into the all too common practice of raiding retirement funds for consumption. Likewise, the advice to have him pick a few stocks is a bad way to start. Either A) he gets lucky and thinks he can always beat the market despite his lack of knowledge/expertise which will eventally bite him B) he will most likely underperform and get discouraged from investing

Teach him to buy low expense ratio index funds and leave them untouched for the long term and not to mix long term assets with short term cash for neccessities.

Put the cash needed for the car into Vanguard Money Market asap.

Everything else gets split between VOO and VGT. All of it.