Investing For/By Kids

[yakers]

My 10 year old grandson called and asked how to invest, what stocks to buy. Offhand I do not know any way to set up an account at Vanguard or Wells Fargo (my usual agents), I don't know how much he has but it may be under $1K.

Anyone aware of brokerages who set up accounts for children to use? He described something like this that BOA has but not clear on the details.

I told him, if he can buy a stock to by the FTF VT, he seemed to follow my explanation of an EFT.

Actually, just getting the call was priceless.

 

[Red Badger]

Maybe start with a discussion on strategy? Why fees matter so much, buy and hold? Maybe steer him toward Vanguard? The higher risk of individual stocks, etc?

Enjoy the discussions!

 

[JoeWras]

One of the best gifts my parents ever gave me was stock ownership through a UGMA registration around age 10. They gifted me part, and had me take some of my savings too. I had skin in the game!

I used to graph the DJIA. It was the 70's. It was an ugly graph.

Although I didn't trade, I watched, and eventually things went up and I learned the value of investing. What a great gift.

So, to answer your question: call Vanguard (or any brokerage) or google "accounts for minors." Then do it. It is in the registration process. There is also a UTMA account.

 

[bingybear]

I did UTMA accounts at Fido when for my kids when they were a little older than your grandson. Kind of mixed results. I found out later that some brokerages will wave minimum deposits for child accounts based on family holdings.

If you do this, make sure your grandson's parents know what is going on. If income exceeds the limit, it could be taxed at the parent's rate. It could also come into play when looking at college funding.

As I said I had mixed results. But my kids did not ask about it. I wanted them to experience and understand it as I learned by hard knocks. One did well and one paid no attention to it.

good luck