GF son wants to start investing

[COZICAN]

My girlfriends son wants to start investing and asked me for advice. He turns 18 in a few months. I have a FIDO account but i'm not his legal guardian and can not open him an account. Where would you direct someone just starting out? I helped him set up his 401K already, he has savings but no investing option at his credit union. I started with ING many years ago and was hoping to find something similar and simple.

Coz

 

[pacergal]

Good for you to help and great that he is starting so young!
Has he read any books on investing?
The pdf from William Bernstein "If you Can: How Millennials can get rich slowly" is short and good (and free).

Can you sit next to him and guide him through opening a Fidelity account or is a brick and mortar Fidelity place nearby?

 

[OldShooter]

... The pdf from William Bernstein "If you Can: How Millennials can get rich slowly" is short and good (and free). ...

+1 Here's the link: "If You Can" by William Bernstein https://www.etf.com/docs/IfYouCan.pdf (free 16 page download)

Also suggest "The Simple Path to Wealth" by JL Collins: https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926

and

"The Coffee House Investor" by Bill Schultheis https://www.amazon.com/Coffeehouse-Investor-Wealth-Ignore-Street/dp/159184584X (This is Bill's first book; read it before reading his second one.)

 

[pb4uski]

I would help him set up a taxable brokerage account at Schwab or Fidelity, especially if they have an office nearby. Then he can fund it and decide whether he wants to invest in a broad based stock ETF or slices of some of his favorite companies or perhaps a money market fund, CDs or UST if he will need the money soon.

 

[target2019]

I went to Schwab with my daughter, and she received a mini-introduction to allocation, etc. The materials were pretty good as I recall. She signed the necessary papers and took over after that. Every year we look at things and re-evaluate.

Teach them to fish for themselves...

 

[Sojourner]

I would help him set up a taxable brokerage account at Schwab or Fidelity, especially if they have an office nearby. Then he can fund it and decide whether he wants to invest in a broad based stock ETF or slices of some of his favorite companies or perhaps a money market fund, CDs or UST if he will need the money soon.

+1

Once he turns 18, I would think he could simply open a new brokerage account at Fidelity or Schwab online all by himself. No real help needed with that, right? What he needs more than just opening an account is guidance on how to invest wisely. In addition to the other books mentioned, I would recommend this excellent, easy read:

The-Bogleheads-Guide-To-Investing

 

[Koolau]

We started all our kids on STAR FUND at Vanguard for Roth IRAs. I liked it because it only required a grand to open. We've been funding a grand or two per year for several years. Spoiler Alert: Only one kid has added to the fund on his/her own - only a couple grand of their own. A bit disappointed, but I keep thinking they'll notice how big the fund has grown and want to participate. Hope springs eternal, I guess. It sounds like GF's son is ready to start so you will likely see much better participation than we've seen with our kids but YMMV.

Good luck. Let us know how it goes.

 

[jldavid47]

I went to Schwab with my daughter, and she received a mini-introduction to allocation, etc. The materials were pretty good as I recall. She signed the necessary papers and took over after that. Every year we look at things and re-evaluate.

Teach them to fish for themselves...

I generally agree with this. I got our son started last year (age 33). He opened an account at Schwab and we discussed what to invest in. Given his time frame (30+ years) we chose 2 no-load mutual funds (one small cap and one value large cap). I gave him some seed money for his birthday and he contributes $50 every month splitting evenly into each fund. Nothing fancy. I told him to not look at what the market is doing, just keep investing every month. He's developing a long-term discipline that will eventually pay off.

 

[2HOTinPHX]

I would share some YouTube videos with them. Can be much more interesting for some. The Money Guys are pretty entertaining. This video shows how important starting early can be.
https://youtu.be/nVl5i4heLi8
Here is the longer more detailed version of one of there videos.
https://youtu.be/qfMu8h_kz6g

 

[target2019]

I generally agree with this. I got our son started last year (age 33). He opened an account at Schwab and we discussed what to invest in. Given his time frame (30+ years) we chose 2 no-load mutual funds (one small cap and one value large cap). I gave him some seed money for his birthday and he contributes $50 every month splitting evenly into each fund. Nothing fancy. I told him to not look at what the market is doing, just keep investing every month. He's developing a long-term discipline that will eventually pay off.

Lucky Dad and Lucky Son keeping it simple. Makes sense!

 

[jldavid47]

Lucky Dad and Lucky Son keeping it simple. Makes sense!

Thanks. In this case it was absolutely necessary to keep it simple because he has no interest in the markets. He doesn't want to analyze, he doesn't want to spend a lot of time managing investments, he just wants to put some money somewhere where it will grow in the long term. He's willing to spend the 15-20 minutes every month to make the purchases and that's about it.

 

[Koolau]

Thanks. In this case it was absolutely necessary to keep it simple because he has no interest in the markets. He doesn't want to analyze, he doesn't want to spend a lot of time managing investments, he just wants to put some money somewhere where it will grow in the long term. He's willing to spend the 15-20 minutes every month to make the purchases and that's about it.

Heh, heh, that's more time than I want to spend on investing. Set and (pretty much) forget has been my motto. Full disclosure: I used to run after the latest thing and had a couple of sales people lead me down rabbit holes, switching investments, buying weird stuff, etc. Once I'd lost enough money, I finally decided to diversify in MFs and just let it ride - tweaking if things got too lopsided. Seems to have w*rked. Save, diversify, rinse, repeat.

Maybe have him look at Scott Burns Couch Potato portfolio.

 

[swakyaby]

Fidelity has 4 zero cost index funds: Large cap, total stock market, extended market, and international market. They are widely diversified and require no minimum. If his income is steady, he could set his accounts to auto-invest. Then he could spend less than 5 minutes a month to simply review his investments.

 

[DrRoy]

I always recommend "Your Money and Your Brain" by Jason Zweig.

 

[matjung]

You could ask, what he expects from you?
Does he want to become his own money manager - or delegate investment decision making to someone else.
Is he interested in dividends - spending them on Barbecues, Drinks, etc.
Not everyone wants to reinvest dividends/capital gains.

An account with Fidelity, Etrade, Ameritrade or similar sounds like a good starting point.
If he is brave, he could give some robo advisors a chance.