Originally Posted by aim-high
My son turned 18 three days ago. Today I explained the difference between taxable, tax deferred, and tax free accounts. We setup a brokerage account for him and a Roth IRA account. No need for an IRA at this point.
He's been working and saving money. To help him get started I matched what he moved into his brokerage account from his checking and would contribute the same amount to get his Roth IRA started.
He now has $3,000 in a brokerage account and $1,500 in a Roth IRA.
You are a great parent. We need more parents to do this. You got to get the kids involved early so they get a feel for this.
My dad set my sister and I up with a stock at age 10! It was part mom and dad's money, part mine that I saved. I remember the total was $300 in stock. I used to graph the price along with the DJIA. Sadly, my graph was distressing. (I remember graphing 600 on the DJIA.) Never the less, dad said I should stick with it and eventually it went up, along with the stock. I learned A LOT through this.
Secondly, during my late teens, the IRA just started. Mom and Dad also had me set up an IRA, believe it or not. Put $250 of my savings in a long term CD during those go-go rate periods. Another wise move, which of course I slowly started adding to after I got a real job. (My primary savings at my real job was a 401k.)
The IRA seemed crazy at the time, but it kept me thinking about long term horizons. I hope your son gains the same insight.