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Old 08-13-2010, 06:38 PM
 
10,103 posts, read 19,314,150 times
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My ds, 13, has been playing the stock market. I had no idea he was doing so, but he found a website that you can play real stocks with play money. I looked at what he was doing, he's doing pretty good! He really understands the market, the difference between a common and preferred stock, what a mutual fund is, can explain the various types of bonds, etc.

He started with a hypothetical investment of $1000, now worth ~$5000. He's following all real stocks, and the "real" market.

I'm impressed. I'd like to somehow set him up with a real brokerage account and let him go for it, but am a little afraid to give him so much free reign on the internet with a real account. Are there some sort of accounts set up for kids, with parental safeguards, say, the parent is notified of any transaction and must approve first?

At this rate, I should let him manage my portfolio!
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Old 08-13-2010, 09:06 PM
 
Location: Great State of Texas
86,052 posts, read 84,169,407 times
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You can open a custodial account at Fidelity, deposit some money and he can trade online.
Once he turns 18 then the account becomes his.

https://www.fidelity.com/
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Old 08-13-2010, 11:54 PM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
34,605 posts, read 57,568,971 times
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My kids opened self managed (custodial) ROTHs @ age 12 (farm income / working for neighbors doing hay, painting / working for my LLC doing rental cleanup and repair + their own business income)

We read the "wealthy Barber together, and one went to 'fool's school via internet. I matched all their wages 100% into ROTHs. They made all their own investment choices and education. One chose stocks, one did vanguard no-load mutuals. Both had a few hard knocks. Each had over $20k by college, and the NICE thing was it was not counted as available funds when filing FAFSA.

It's a good idea to paper trade, you can do that with an account at ThinkorSwim (ToS), and probably several other discount brokers.
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Old 08-14-2010, 09:01 AM
 
Location: Las Flores, Orange County, CA
26,338 posts, read 93,474,008 times
Reputation: 17827
Quote:
Originally Posted by StealthRabbit View Post
I matched all their wages 100% into ROTHs.

the NICE thing was it was not counted as available funds when filing FAFSA.

What do you mean you matched their funds? You were able to put money into their Roths over and beyond the amount of their earned income? I don't think that is kosher. Or, did you do what my dad did with me? In college I had beer and gas money jobs (courier, electronics assembly) and my dad let me keep the money and he put (as gifts) the equivalent amount of money into IRAs for me.

Also, sort of related, both Education Savings Accounts and 529 plans are considered assets of the parents and are not weighed too heavily when the student applies for financial aid.

I think I'll do the same thing (Custodial Roths) when my kids start earning income, my oldest is only 11.
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Old 08-14-2010, 09:53 AM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
34,605 posts, read 57,568,971 times
Reputation: 46028
Quote:
Originally Posted by StealthRabbit View Post
I matched all their wages 100% into ROTHs. ...
thus for every dime they earned (and reported), I contributed an equal dime to their ROTH. Thus they 'collected' 2x earnings, but only saw their actual wages - taxes. Their 'ROTH matching $' went into their IRA'S via transfers from me.

I supplied no beer / spending / basic needs money to my kids. My theory is... "when you are 18, you are an adult". No more 'subsidy'.

Each of my kids (2 boys) had to build a home from scratch while in 9th and 10 grade for 'home-school projects'. Designed by them on computer and permitted by them, (through federal gov, as homes were in a National Scenic Area) and built by them, including all electrical, plumbing, and heating... They dug the hole and trenched in utilities, and got their 'septic installers license' so they could design and build septic system. They had about $70k equity in their homes when they went to college. (Home equity was also excluded from their FAFSA). Thus each had ~ $100k in assets by age 18, all but $10k was invisible to FAFSA They still chose to get loans for the 2 remaining yrs of college needed at age 18. They worked and paid for their own keep, as well as 100% of car / insurance needs (as they had done since day 1 driving). One lived at a fire station as the only resident volunteer staffing a rural fire house during college (very cheap, but very disruptive ~ 700 calls / yr). The other was 'social' butterfly, and roomed with several others and worked 3 jobs + school. They each graduated Summa *** Laude with those 'tassle doo-dads' around their necks, so I'd say they 'managed' to work and go to school OK. Each was '4yr educated' and working a career by age 20.

They are quite displeased with me for not 'providing' college $$. I'm crushed (not ). Life is tough all over
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