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» JenL_2 - Re: 15 yr old investing :)

In response to message posted by Singlengle:

Hi Singlengle - Welcome to the group! You didn't say whether this money is to be used for your son's college, or for starting a retirement fund.

This is what I did. My kids started working part-time jobs at 15 and 14, and they earned over $2K per year so I started funding Roth IRAs for them. A Roth grows tax free and there is no tax on the withdrawals after retirement. And if they need the money in their Roth they can withdraw the principal for any reason tax-free and penalty-free, and leave the gains in the account. Now at age 18 and 20 they each have 5 years fully funded Roth IRAs under their belt. Since all our family accounts are with Schwab I put their Roth IRAs mostly in the Schwab 1000 fund (SNXFX) which has similar performance to the S&P500, but with Schwab you can choose from a number of funds.

You can invest in Vanguard funds through Schwab but you have to pay an extra fee, so if you want to invest in Vanguard funds you should open an account directly with Vanguard.....Jen

-- posted by JenL_2

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» Rande - Re: 15 yr old investing :)

In response to message posted by Singlengle:

Singlengle,

Looks like you got some good responses so far. I'd be inclined to agree on the Total Stock Market (Wilshire 5000) fund as a core holding that can be built upon over time. You can buy the Vanguard fund in the form of a stock through a discount broker such as Schwab -- ticker symbol VTI, or choose from one of the Total Stock Market funds out there (Schwab even has one, though Vanguard's expenses are a little lower). The important thing is to convince him that this is a long-term prospect, something that might be difficult to practice since most teenagers and young adults have all kinds of immediate spending needs and can switch from "investor" to "spender" on a whim when they know the money is available. In any event, the process should provide some valuable learning experience. Good luck.

-- posted by Rande

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» Rande - Re: Re: 15 yr old investing :)

In response to message posted by JenL_2:

The flip side of using part-time income to qualify for a Roth is the income should be reported. Even though there would likely be no income tax for such a small amount, there would be self-employment tax if the income was from odd jobs.

-- posted by Rande

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