Kids and investing

[JenElio]

So I could still lose everything? 🤦‍♂️

Yeah, it's always a possibility...........so might as well just buy that new Talon and Toyhauler you've been eyeing 😉😂😂😂🤦‍♂️

Follow me for more sound investing advice 👍

 

[Admin]

 

[JenElio]

Technically yes but everyone else will too sooo 🤷🏻‍♂️

Ed Zachary....... I'll see y'all at the soup lines

 

[906UP]

So I could still lose everything? 🤦‍♂️

Yes but you have to think long term, it always comes back. If you're close to retirement then it makes sense to move it into something less volatile.

Technically yes but everyone else will too sooo 🤷🏻‍♂️

Exactly, if it gets to that point..... great depression style it isn't gonna matter, the dollar will be worth less than toilet paper

 

[Scoop]

Yes, Please get it out of the bank. Any mutual fund or index fund would be overwhelmingly better. Ugma or 529 designation on account.

Worst case, at least put it in a HYSA (high yield savings account).

 

[Dirtstiffs-1000]

The two together is a oxymoron

 

[Scoop]

Most company 401K programs offer a variety of investment options ranging from stocks (riskiest but highest potential for return), bonds/mutual funds (low risk but low return), or blended options (some stocks, some bonds, with risk/reward is based on what % is stock and what % bonds/mf). This all depends upon the employer and the company, their choices, and the company managing the 401K program for them. Yes, some 401K offering are chit, so you need to be mindful of that. Don't invest everything (or a large percentage) of your retirement in a single instrument or even your own company.

If your company plan offers a Roth 401K, most definitely check that out. While contributions made to a Roth 401K are made after-tax, all withdrawals (in retirement) are tax-free AND all investment earnings are tax-free as well. With a traditional (tax-deferred) 401K, contributions and investment earnings are taxable. Also, starting in 2024, there are no RMDs (required minimum distributions) in retirement with Roth 401Ks, while traditional (tax deferred) 401Ks are subject to RMDs (the government forces you to take out money so they can get the tax revenue from it).

Very similar rules affect traditional IRAs vs Roth IRAs.

Nobody can predict the future, but the most important parts of retirement investing are (a) compounding interest and (b) diversifying your assets/investments. Invest early, invest as much as you can, and simply forget about it. When you get paid, pay yourself (invest). When you get a raise, give your 401K/IRA contributions a raise. The closer you get to retirement, the more conservative you want to be with your investments. But if you're more than 5-6-7 years out, there's no reason to not be reasonably aggressive, as the market will have plenty of time to rebound by the time you're ready to retire (historically speaking) while the potential for higher returns is greater.

 

[Scoop]

Of course the tax advantages of a 401K/IRA and the employer matches had to be taken advantage of first.

If your employer matches ANY amount of your contributions, you should contribute at LEAST that same amount.

They match 2% dollar for dollar? You contribute at LEAST 2%.
They match 5%? You contribute at LEAST 5%.
They match 20% Yes, you contribute at LEAST 20%.

No matter what the number is, that's 100% return on investment!

As far as tax advantages are concerned, a traditional (tax-deferred) 401K or IRA can be enticing, but you should definitely look into a Roth 401K (if your employer offers it) and a Roth IRA as well. You might not see a tax benefit today, but your tax benefits after you retire could, depending upon your situation, greatly outweigh what your benefits might be today.

 

[DRZRon1]

So I could still lose everything? 🤦‍♂️

yes - there is risk to every investment - CD’s are running at 5% and guaranteed -

there are none that guarantee you will earn and never lose - if someone tells you that - run and run fast


I’m no financial whiz but EVERYONE’s 401K dropped like a hookers panties when u flash 10 Benjamin’s in front of her during Covid - but it has recovered and then some


my parents gave me 1 word of advice when I got an adult job - drop 10% into your 401K - best advice I ever got - did that from day 1 30+ years ago and never missed the money and gradually raised my contribution over time

gave my daughter the same advice when she got a big girl job outta college - she did the same thing plus a Roth …….Smarter than dad 😂

 

[Fatsquatch]

Okay so the consensus seems to be this is a good idea.

UTMA/UGMA/Custodial Brokerage accounts seem to be what I’m looking for according to Nerdwallet/Investopedia/etc

Some of the major “household names” where I could setup these accounts….
Vanguard
Fidelity
Charles Schwab
T Rowe Price
Merrill Lynch/Merrill Edge

Robinhood does not offer custodial accounts

Age of majority varies by state for the accounts. “Most” states have a default age of 21 (10 of them are 18 and 1 is 22) but allowed age of majority vary further.
Ohio has an allowed age of majority range of 18-25.

 

[Fatsquatch]

My current thoughts on how I want to handle this….

I’m not intending on making my kids a nest egg with this. It is strictly intended to be a learning and habit forming process for them. I think I will open each kiddos account with $100 and I’m going to make deposits on the first of every month. My thought on the amount is similar to a lot of “allowance” advice out there. I think I will deposit a dollar per their age on a monthly basis. So, 4 year old gets $4/month, 7 year old gets $7/month, etc. It also builds in the concept of an annual raise.

I think I will make a rule that any birthday/Christmas/etc money will be required to have 10% deposited into their account. When we get to the first jobs time of their life the 10% rule will apply to that as well.

Their investment choices have to be companies they understand/know/recognize. They have to tell me why they picked it. They’re not financial savants sooo…I like the toys they make or I like their cereal will be a perfectly valid reason. In the teen years, I expect to change these conversations to Price to Earnings (P/E) ratios or historical dividend rates for the rationale behind their choices.

Any other advice/ideas on how I could/should go about this?

 

[Todd627]

Okay so the consensus seems to be this is a good idea.

UTMA/UGMA/Custodial Brokerage accounts seem to be what I’m looking for according to Nerdwallet/Investopedia/etc

Some of the major “household names” where I could setup these accounts….
Vanguard
Fidelity
Charles Schwab
T Rowe Price
Merrill Lynch/Merrill Edge

Robinhood does not offer custodial accounts

Age of majority varies by state for the accounts. “Most” states have a default age of 21 (10 of them are 18 and 1 is 22) but allowed age of majority vary further.
Ohio has an allowed age of majority range of 18-25.

I would avoid Vanguard. They are far left libtards like Blackrock.

I have used Fidelity and T Rowe Price in the past but have been with Edward Jones for over 20 years now and am happy with them.

 

[Todd627]

My current thoughts on how I want to handle this….

I’m not intending on making my kids a nest egg with this. It is strictly intended to be a learning and habit forming process for them. I think I will open each kiddos account with $100 and I’m going to make deposits on the first of every month. My thought on the amount is similar to a lot of “allowance” advice out there. I think I will deposit a dollar per their age on a monthly basis. So, 4 year old gets $4/month, 7 year old gets $7/month, etc. It also builds in the concept of an annual raise.

I think I will make a rule that any birthday/Christmas/etc money will be required to have 10% deposited into their account. When we get to the first jobs time of their life the 10% rule will apply to that as well.

Their investment choices have to be companies they understand/know/recognize. They have to tell me why they picked it. They’re not financial savants sooo…I like the toys they make or I like their cereal will be a perfectly valid reason. In the teen years, I expect to change these conversations to Price to Earnings (P/E) ratios or historical dividend rates for the rationale behind their choices.

Any other advice/ideas on how I could/should go about this?

Sounds like a solid plan Poobah. I think they will voluntarily put more money into their accounts as they see it grow.

 

[Fatsquatch]

Sounds like a solid plan Poobah. I think they will voluntarily put more money into their accounts as they see it grow.

That’s ultimately the hope! 🤣🤣🤣

 

[ChadD]

Yeah, it's always a possibility...........so might as well just buy that new Talon and Toyhauler you've been eyeing 😉😂😂😂🤦‍♂️

Follow me for more sound investing advice 👍

Best advice I've read so far! You’re a very smart investor 😉. Can't go wrong with old Hondas 🤘😎🤣.

 

[ChadD]

@Fatsquatch you should buy each kid a new Honda as an investment. It will teach them to enjoy stress free life and become awesome adults 😉. The value of old hondas far exceed old yamaha's and they won't hang out at truck stops 🤞. You probably should have started this sooner as @Sparky500 is already part of the Subaru crowd 🦩🤦‍♂️🤣🤣🤣🖕🤣🤣🤣



#NTC

 

[Scoop]

My current thoughts on how I want to handle this….

I’m not intending on making my kids a nest egg with this. It is strictly intended to be a learning and habit forming process for them. I think I will open each kiddos account with $100 and I’m going to make deposits on the first of every month. My thought on the amount is similar to a lot of “allowance” advice out there. I think I will deposit a dollar per their age on a monthly basis. So, 4 year old gets $4/month, 7 year old gets $7/month, etc. It also builds in the concept of an annual raise.

I think I will make a rule that any birthday/Christmas/etc money will be required to have 10% deposited into their account. When we get to the first jobs time of their life the 10% rule will apply to that as well.

Their investment choices have to be companies they understand/know/recognize. They have to tell me why they picked it. They’re not financial savants sooo…I like the toys they make or I like their cereal will be a perfectly valid reason. In the teen years, I expect to change these conversations to Price to Earnings (P/E) ratios or historical dividend rates for the rationale behind their choices.

Any other advice/ideas on how I could/should go about this?

You're doing far more than 98% of parents out there relative to educating them and sending them down a solid financial path. I commend you for that.

The only thing I would suggest is that, if you can swing it, make it more than $1 per month per years of child age, and for Christmas/birthday monies, make it 50% saved and 50% disposable. I know you're priority is teaching habits and not necessarily building thier nest eggs, but nothing helps teach habits more than seeing compounding interest!

 

[Fatsquatch]

@Fatsquatch you should buy each kid a new Honda as an investment. It will teach them to enjoy stress free life and become awesome adults 😉. The value of old hondas far exceed old yamaha's and they won't hang out at truck stops 🤞. You probably should have started this sooner as @Sparky500 is already part of the Subaru crowd 🦩🤦‍♂️🤣🤣🤣🖕🤣🤣🤣



#NTC

He had a dirtbike from age 2 until his mid-teens. None of which were ever a Yami. You can lead them to water but ya can’t make them drink…..and drowning them is highly frowned upon. 🤣🤣🤣

The family was discussing options for a big spend this year. Various vacation spots vs buying various toys. Ms November voted strongly for a four wheeler. Behind the scenes parental discussions about the potential of a TRX250X are happening. 😈😈😈 I’m advocating but the Mrs isn’t currently entertaining the idea. 🤷🏻‍♂️

 

[Dirtstiffs-1000]

Kidding aside..

Spend a little money and hire a reputable Investment management company, that is a Federally Certified Feduciary, which means they are legally bound to manage in your best interest.
And are accountable.

Best thing we have done.

Professionals at every level.
Global Investment savvy.
Tailored investment plans to fit our retirement goals, including tax considerations, long term spending and income planning.
As well as Estate - Will planning.
And we also started investments plans for both boys (now men).

Our Invest Co modeled what our retirement will be like, to a t.

The fee structure is fixed; they win when we win. No trading or sell off fees.

Now I can concentrate on other things.

They keep us informed daily with email and phone conferences, along with face to face communication every month.

Before we consolidated with this company, many of our investments were just loosing by trade structured, fees.

JMO

 

[DRZRon1]

I

Okay so the consensus seems to be this is a good idea.

UTMA/UGMA/Custodial Brokerage accounts seem to be what I’m looking for according to Nerdwallet/Investopedia/etc

Some of the major “household names” where I could setup these accounts….
Vanguard
Fidelity
Charles Schwab
T Rowe Price
Merrill Lynch/Merrill Edge

Robinhood does not offer custodial accounts

Age of majority varies by state for the accounts. “Most” states have a default age of 21 (10 of them are 18 and 1 is 22) but allowed age of majority vary further.
Ohio has an allowed age of majority range of 18-25.

Also - IMO - let em be kids - I’d have no issue if there was $1500 in the bank and the kid went and blew it on all a dirt bike/quad/etc….. they need to learn

I worked multiple jobs starting at 10 slinging papers and didn’t save much except for dirt bikes - my 1st TS125 and then a ‘80 maico 250 all by the age of 15 - nobody gave me a dime - I was all excited about getting the TS and my dad was super excited as well when I said it was $300 - and words I’ll never forgot -“Let me know when you have it saved up - I’ll take you to go get it - no free rides in life” and he walked away giving me the lesson of you want it - work for it.

Lastly, for my only golden child daughter - once the driving started - car/ payments/registration were due every summer for like 4 months - so you wanna drive / pay up - lotsa pissing and moaning but first time a payment was missed I pulled the keys - more pissing and moaning - but she knew she had to work summers - when she graduated college I gave her an envelope with about $7800 bucks cash - every dime she ever gave to me for that stuff/repairs/etc. I put in an envelope - not invested - lol -

 

[ChadD]

He had a dirtbike from age 2 until his mid-teens. None of which were ever a Yami. You can lead them to water but ya can’t make them drink…..and drowning them is highly frowned upon. 🤣🤣🤣

The family was discussing options for a big spend this year. Various vacation spots vs buying various toys. Ms November voted strongly for a four wheeler. Behind the scenes parental discussions about the potential of a TRX250X are happening. 😈😈😈 I’m advocating but the Mrs isn’t currently entertaining the idea. 🤷🏻‍♂️

If you get them into motorcycles,atvs,sxs they won't be able to afford drugs. Follow me for parenting advice 😉😎🤣🤣🤣

#NOKIDS
😁