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Yes, to the extent that someone is willing to learn about all this market and investing stuff, it needs to be communicated. I know some people, and all of the jargon and ins-and-outs of it just make their heads explode. They won't go near any kind of digging or learning or investigating about how best to invest, or what choices to make.
An ideal mutual fund to open for a minor child? I know I'm late to this party:
(PRWCX is still closed.) DODGX. It's Dodge & Cox Stock. (Large-cap Value tilt.). 15-year performance is +13.15% annualized, in the top 8 percent of its category.
Don't forget to open and match fund a Roth, as soon as minor has earned income
(IRA is not considered in student contribution to FAFSA, as will be any savings or investments)
We started our kids at age 12, and it was adequate to fund college (which they wisely took zero interest loans, and stayed fully invested during college)
Since they were selling eggs at age 6, and helping to operate our farm, I should have started the Roths at age 6, and contributed always (past age 18, when I stopped).
One kid active traded his Roth since age 12, others did MF
The active trader went into finance, and has a business managing high wealth clients. I will guess he's financially better off than other kids. But all are far ahead of me. That's great. A good start was educating them and giving them much responsibility early.
Most minors don’t have earned income so the initial point is off base for the overwhelming majority of people
What zero interest college loans were available to all of your kids?
Did you file tax returns for the kids for 6 and on? Did they pay taxes fed/fica all along the way?
Your stories tend to sound like pipe dreams and highly unlikely to come through
No to PRWCX with a 0.71% expense ratio
No to DODGX with 0.51%
Don't tell me, let me guess: a Boglehead. Dyed in the wool...
Nevertheless, it's awfully hard to argue AGAINST a 15-year track record like DODGX can claim. And the fund is much older, actually. The life of the fund goes back to 1965. It's total performance = +47,325.82 percent. That's no typo.
$10k would have become $4,732,582.33 today. Still want to quibble about the Expense Ratio being too high?
Last edited by sitonmywhat; 12-09-2023 at 09:12 PM..
Don't tell me, let me guess: a Boglehead. Dyed in the wool...
Nevertheless, it's awfully hard to argue AGAINST a 15-year track record like DODGX can claim. And the fund is much older, actually. The life of the fund goes back to 1965. It's total performance = +47,325.82 percent. That's no typo.
$10k would have become $4,732,582.33 today. Still want to quibble about the Expense Ratio being too high?
sure would quibble
both lost the edge 2 decades ago and has lagged compared to a simple s&p fund both left free money on the table
plus prwcx has a higher beta with greater volatility
i posted the results above and below for the last two decades for both funds you listed and both. couldn’t beat an S&p fund spy
Last edited by mathjak107; 12-10-2023 at 02:23 AM..
on the other hand let’s look at a good aggressive growth fund over the same years like fidelity fbgrx blue chip growth which has been one of my favorite as a portfolio component
so let’s see how 100k did .
2004 to date
prwcx 616k
fbgrx 915k
2010
prwcx 438k
fbgrx. 785k
2015
prwcx 232k
fbgrx 357k
2020
prwcx 140k
fbgrx. 180k
ytd
prwcx 114k
fbgrx. 147k.
Last edited by mathjak107; 12-10-2023 at 02:24 AM..
A dependent child who has earned more than $13,850 of earned income (tax year 2023) typically needs to file a personal income tax form
Or >$400 of dividends and interest.
Homeschooled kids learn life skills, like budgeting and loans, doing taxes, and analyzing company financial reports.
They have a lot of spare time for learning, since they are not sequestered with like-kind / aged clones in a school room or on a bus for 30+ hrs / week.
Lots of kids have significant income. Most of our home school group had home businesses and / or farms.
Thousands of 4H kids sell livestock at fair auctions. $5000 -$8000 is pretty common (from age 8). Some over $100k, IIRC the record steer brought $250k
Interest free, or deferred interest loans (including Stafford / Direct Loans) are the most common student loans.
Farmer's assets and student IRAs (and personal residence) are not lumped into expected contributions (FAFSA).
Our kids had designed and built their own homes (~$100k) before heading to college at age 16. (Free for HS age students in our state since 1993). Free college reduced the need for loans.
Of course, our kids could have just remained overseas, and received free college.
None of our family have low expectations. It's not our nature. But it's fine that others choose to pursue life at their desired pace and contributions. Just don't throttle everyone into YOUR mold. Poof, we're gone, off on our own path. Including investing as a minor. It's normal for many, and not a bad idea for most.
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