Advice to my non-financial son

[CaliKid]

The kid's doing great IMO & see no reason for you to denigrate him as "non-financial". Stay out of his way unless asked. Independence is good.

This is what I was thinking. Give him a few suggestions but don't micromanage. It's the problem with our society today that many adults can't function without parents doing things for them. He needs to fail a couple times to learn. My first job I ran up a credit card bill quick which I couldn't afford to pay off at the end of the month... and I then realized I couldn't spend so much. It's a lesson. It's valuable.

To me the whole CD ladder thing sounds way overly complicated which I assume is not a huge sum of money. Sure if he's making $500k a year then do all that but assuming he is making a modest sum I wouldn't get all complicated.

Roth with etfs and forget about it for 40 years.

Also, I send the idea about Millionaire Next Door. Go big and buy a copy for ten bucks. I also like Andrew Tobias' book which covers a wide range of financial topics. That's another ten bucks.

 

[Rothman]

I like the Roth advice of course, 100% in equities at his age. Later he'll want to put some traditional tax deferred money away as well since a mix at retirement provides flexibility in withdrawal strategy, but getting some tax free forever compound growth in early years is a great way to start.


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[Taxman59]

Thanks for the advice, I guess I was thinking more conservatively than I should. The thinking behind the CD ladder was to maintain a 6 month emergency fund, but if he has a diversified portfolio, that and the Bank of Dad can help cover any emergency. He has a Roth IRA which I agree he should contribute the max to. I refer to him as my non-financial son as he has shown little interest in investing vs his older brother who spends way too much time looking at investing strategies. He is smart, but investments is not an area in which he has much interest. We sit down once or twice a year and go over the long range plan.
I will suggest that he move $6500 to his Roth this month for 2016, and within the Roth set up a monthly dollar cost average contribution to an index fund (SPX probably). Then, later in the year, when he has rebuilt his savings account, suggest he move another chunk into the Roth for his 2017 contribution.

 

[2HOTinPHX]

Suggest they watch this......

John Oliver sums it up pretty well..... If they can't get thru the whole thing then start at 18:15 for a quick summery.