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My 11 year old son has so far has been able to save $2,000 in a youth savings account. Aside from the savings account what is a better way for him to save or invest the money? Any additional money added to the account would come from money he may get as gifts for the holidays, or for good grades.
It all depends on your risk tolerance...are you going to get sick if you look at the account and it's down 20, 30, 40%..if so, throw it in a high interest bearing CD for now.
If not, I was going to say a Mutual Fund of some sort.
I dont think an 11 yr old can do a Roth. Doesnt it have to be "earned income"?
If there is no college savings I would suggest start out with a prepaid 2yr plan.
If not that I would agree with the mutual funds. Just make sure it isnt in a retirement fund. That way if he wants to use it for school, house down payment, or a car later he can.
that is fantastic he has saved that much!!!!!!!!! My DH wants to start my daughter with individual stocks when she reaches 2k. He plans on her picking out what she likes and teaching her about them.
When my son was 12 I opened a stock account for him and let him pick some stock based on things he liked . I showed him how to research them on line to see how they are doing and gave him a basic understanding of how the stock market worked. I also explained how mutual funds worked (because I think that is usually the more practical way to go then individual stocks for a neophyte). It got him very interested in saving more. By the time he got an after-school job at 16 he was funding a Roth, and when he joined the military he had them hold 25% of his pay in a thrift savings program.
Congrats on starting your child out on the road to financial independence at such a young age. The habits you teach him now will serve him well for years to come.
Location: When the people find that they can vote themselves money, that will herald the end of the republic
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Procter & Gamble, Verizon or ExxonMobil stock would be your best bet.
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