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Recommendations re: a place for kids (under 18 and after 18) to start tossing money into investments? I want to keep supporting my kids and bills and etc and I don’t need them to pay me back, but in lieu of that I would like them to contribute some equivalent amounts into the market. Where to have a kid deposit $250/month and learn about how this stuff works?
Schwab/TD if you want them to learnQuote:
Originally Posted by Mustonen
Robinhood and a link to r/wallstreetbets if you want them to learn the hard way
https://www.schwab.com/custodial-account
BTC;)
Like which brokerage company to use or a fund recommendation? I use schwab, but just because of over the years who I had prior got bought up. They seem fine. Funds, I would just tell them buy VOO and never sell.Quote:
Originally Posted by Mustonen
For the learning side, I'd have them buy a few shares of a few stocks. It's a good way to learn about being a shareholder, voting, proxies, etc. When I was a kid I even went to the annual shareholder's meeting at my hometown Coors since I had a few shares. Stick the rest in VTI or some other similar low cost index fund.
That's awesome!Quote:
Originally Posted by goldenboy
I've bought my nieces one share of one company each of their birthdays. Figure I'd teach them something about boring stuff like compound interest as they get older and interested.
In Canada - wealthsimple. Mainly due to low fees
I bought all of my nieces and nephews one share of Disney. I went through my dad's old stockbroker and made sure I got an actual paper stock certificate, which had Mickey Mouse and Snow White and all the other characters on it, so it was frameable for a kid's room.Quote:
Originally Posted by LeeLau
In addition to what everyone else has said, make it so the kids are depositing money into a Roth IRA or 529 plan so that it is tax advantaged.Quote:
Originally Posted by Mustonen
My understanding is that there is an earned income requirement for the Roth IRA, so you may need to put a kid on some kind of payroll or said kid needs to have an income from somewhere else to qualify.
Good on you musty. They've got all the time in the world. If they get that discipline of putting a bit away each month they'll be golden.
For the minors a 529 plan is a no brainer, VTI or other well diversified low cost index fund of choice. Recent change allows conversion to a Roth IRA up to 35k tax/penalty free if they don't end up using it and/or needing it for education.Quote:
Originally Posted by Mustonen
I couldn't figure out why a minor would want a 529, so did some research on kids tax brackets. Had no idea... so a kid could have $100k of VOO and pay no tax on the 1.3% dividend payment each year.
"
Unearned income from interest, dividends, and capital gains are taxed in tiers defined by the IRS.
For a child with no earned income, the amount of unearned income up to $1,300 is not taxed in 2024.
The next $1,300 is taxed at the child's rate.
Any amount above $2,600 is taxed at the parents' rate.
These rules cover children under the age of 18, and also those up to the age of 24 who are full-time students.
"
There are some stipulations with the money in the 529 account though - you don’t really want to over contribute because non qualified withdrawals get hit with a penalty tax of 10+%.Quote:
Originally Posted by 406
That said there are some new options I haven’t looked into since I opened them for my kids, like I hear you can contribute any leftover money to a Roth in the kids name now.
^^^right, my point was I still don't understand why a minor would open their own 529 as Jaytemoney suggested. But reading more about it:
"When used for qualified education expenses, distributions are federally tax free.".
Ahh, I just reread your post and now I get it.Quote:
Originally Posted by 406
Every single parent/grandparent should be doing this.Quote:
Originally Posted by 406
My dad started an account for my daughter’s college fund when she was born. Put in $2k a year till she turned 18. It’s made some decent dividends over those years. And now she is using it tax free for expenses at the U.
^^^that would be nice, my kids grandparents seem to just spend on themselves.
I guess I had written off 529 because I didn't like all the rules and was focused on investing so I can retiring in my 40's. But seeing 2024 rule that can be rolled into a ira if kid doesn't go to university, has me reconsidering. Glad the post got me to do research.
Youngest should be out of daycare soon, so that will free up some money.
Any opinions on Pershing vs. Schwab as account custodian?
REKT
So we a lock for rate cut by Sept. now?
Unless Aug PCE print is on the high sideQuote:
Originally Posted by stalefish3169
Zero differenceQuote:
Originally Posted by yeahman
10y rate ticking higher on 2% sell off. Look out below.
2% daily selloff in bigger picture is nothing.
TSLA will have an island top if it gaps lower tomorrow.
NVDA has a gap 10% lower.
bloody
I would look though at their websites to see who had better info, reports, trading, etcQuote:
Originally Posted by 4matic
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Custody has nothing to with trading.Quote:
Originally Posted by rod9301