🚀💰 #Investing #LongTermInvesting #TeenInvesting
Hey everyone! 👋 I need some advice for my super responsible 16-year-old son. He’s managed to save up $12k from his pocket money and part-time job and wants to invest it long-term (smart cookie, right?). I couldn’t be prouder, but I want to make sure he’s making the best decision for his future. Any suggestions on where to start? Here are a few options I’m considering:
- Stock Market: Investing in individual stocks or ETFs for potential growth over the long term.
- Real Estate: Consider investing in real estate, either by purchasing property or through Real Estate Investment Trusts (REITs).
- Mutual Funds: Diversified investment options managed by professionals to help spread out the risk.
- Retirement Accounts: Setting up a Roth IRA or other retirement account for tax advantages and long-term growth potential.
What do you think? Any other ideas or tips for my son’s investment journey? Let’s help him make the most of his hard-earned savings! 🌟💸
From what I’ve been reading on another sub, a Turbo BA Falcon seems to be the wise investment.
Have him consider investing in his quality of life. Experiences have better dividends that financial gains.
EFTs like VAS or VGS
Toyota Camry and VDHG
That’s great that the little dude wants to invest his cash, but isn’t he going to want a car the day he gets his P-Plates? Or go to schoolies at the end of year 12?
I would tell him to invest 25-50% of it in ETFs, the gains will be marginal but great lesson in the actual mechanics and fundamentals.
Keep the rest liquid in high yield savings… surely as a young guy he’ll need the liquidity before the 10-20 year mark.
Vanguard Index Fund.
There’s absolutely no rush he’s got ages of life ahead of him for investments to accumulate so just park it in a high interest savings account and think about it for a long time.
Take your time investing don’t rush.
Interest rates on bank accounts are high atm, if he can make sure his rate is around 5% then he is still making money off his savings.
He should spend $17 to buy and read The Barefoot Investor.
As he’s under 18 if he wants to invest in shares/ETFs you’ll need to open a minor trust account for him with a broker, then he will be able to transfer it fully to his own name when he turns 18. There won’t be any CGT to pay as long as you put his TFN on the account and he declares any dividends/distributions on his tax returns.
Alternatively, putting $1000 a year into super as a non concessional contribution is a pretty good bang for buck as you get an extra $500 from the government as a co-contribution.
Others have flagged that his spending priorities might shift in the next ten years. However, I don’t see a huge issue with “locking away” this money for 10 years or so especially if he’s a worker and saver so can always earn more money to fund things like clothes, going out or holidays when he’s a bit older.
Possibly good advice would be to invest $10k in an ASX Index ETF (Vanguard or BetaShares) then have $2k in a high interest savings account. Any money that comes in for saving / investing could be allocated 80% to shares and 20% to the high interest savings account.
That would slowly build up his liquid cash for when he’s 18/19/20 and he might want to buy items like a laptop or car etc.
My 16 year old has $11k and we’re just putting it in a high interest account.
When I was growing up, my grandparents put $3k in a term deposit. We weren’t allowed to use it until we turned 18.
Maybe something like that? My son will buy a car with his so thats why we’re not locking it away.
Maybe put a small amount aside to invest.
After that, he should buy a car and bang chicks in the back of it.
I’d put it in an index fund that is fairly high risk, with a good exposure to anything to do with AI and some exposure to quantum computing software developers and hardware research.
How to talk to girls.
High interest bank account. 5.1% is about the highest nowadays.
ASX: DRR is a pure royalty play, has no debt but has exposure to iron ore (mostly), Lithium and Gold, so benefits from the price movement of these commodity’s but has nothing to do with production etc, pays FF dividends and over time will/should move up with inflation as that flows thru to the royalty streams, a somewhat low risk alternative to the usual mix of ETF’s that will get recommended here and currently trading at the lower end of its price cycle so looks good value.
$2k to spend money for fun
$10k into an index like VDHG or DHHF or VAS/VGS with a 50/50 split. Set it and forget it.
$10k invested at 16 into VDHG at 9%/yr will become $79,000 at 40 or $443,000 at 60.
All in DHHF until he needs it for a house deposit.
S&P500 etf….will be the best move ever.
Honestly I would just get him to put it in a high interest savings account so he can keep adding to it, he will want to buy a car in a couple of years time and it would be best to be able to have the cash easily on hand incase a bargain comes up!
Be mindful that interest (from savings account) is taxed at a high rate for persons under 18.
However for $12K the tax implications are not tremendous.
Minors cannot invest in shares, but you could set up a CommSec Minor trust account that allows the adult to purchase the shares and then transfer to the child when they turn 18.
If he can hold off owning a car for 4 years he will save at least $20k. Borrow mum and dads.
4 years
– 8k rego insurance maintenance
– 8k car depreciates to zero value
– 4k random fixes eg tyres clutch etc.
If he’s into business / selling stuff. Buying importing and selling online will give him control and side business to quickly double his money.
+1 contributing $1k per year to super for the $500. Awesome return.
Sitting in a high growth or balance fund. In a short time he’ll need thst cash for something it would suck having it in a share that’s tanked and not wanting to sell.
OP listen. The only thing that should happen with this money is for it to go into super. Some funds allow children to set up funds. This will by far be the best investment he can do. Tell him to forget 10-20 years. When he’s 60+ he’ll be very glad he did it.
Education.
The most important thing at that age is to invest in yourself and your career
You gotta be kidding me.. 12k at 16yo? (Job & “pocket money” …
AMD shares! I work in the tech field. AI is booming and will only get bigger demand. AMD shares will be 10x return. It’s a matter of when, not if.
Buy $10k of Lego. Lego outperforms most safe investments (stock market etc). Usually 10-11% per year. Plus no taxes when he sells.
Spend $2k on freezing some sperm and get a vasectomy. Accidentally knocking someone up is a bad investment. If he’s gay and won’t accidentally have kids, buy more Lego.
The fact nobody is questioning a 16 year old with 12k says it all about this sub