Investing - 20 year old

[jaihawk]

My daughter just texted me and asked if I could help her invest a little bit of her paycheck for the future. She's 20 and in college still, so she doesn't work a ton, but I was encouraged that she's finally listening to Dad about "starting early". I was thinking that the best thing for her might be an Index Fund, so she's not having to worry about watching specific stocks, etc... Anyone have a good recommendation on a platform and a good fund to start her on?

 

[HuskerGarrett]

@Savedatmoney

 

[Pipe Line]

Good for her. The things I wish I gave a shit about a decade ago.

 

[RedSavage]

if she has income, have her open a Roth and just roll with the s&p to get started

 

[2010sarenevercomingback]

Index funds are almost always a good idea. IMO some dollar cost averaging (invest a fixed dollar amount at pre-set, regular intervals) in one of those is going to be her best bet to maximize returns.

Look at expense ratios, and brokerage fees. Most platforms (Fidelity & Schwab are a couple huge ones) you can get in on a plan where you won't pay any fees for low-volume trading like that.

 

[herbsinator]

Just do the Vanguard S&P 500 Index fund ($VOO)

Also try to show her the power of compounding interest and get that in her head early. Show her how much a little bit now can be worth a lot more in 20-30 years if you just don’t touch it.

 

[BingoDingo]

Just do the Vanguard S&P 500
Index fund ($VOO)

 

[JerryBones5]

Just do the Vanguard S&P 500 Index fund ($VOO)

Also try to show her the power of compounding interest and get that in her head early. Show her how much a little bit now can be worth a lot more in 20-30 years if you just don’t touch it.

This

 

[SlumpBuster]

Just do the Vanguard S&P 500 Index fund ($VOO)

Also try to show her the power of compounding interest and get that in her head early. Show her how much a little bit now can be worth a lot more in 20-30 years if you just don’t touch it.

Yep, and you can even just do that through Robinhood and you can automate it. So easy.

(Edit: I'm sure some will complain about Robinhood, but it's a great gateway for newbies to invest)

 

[SoCal_Corn]

Good For Her!!
&
Like teaching friends and family how to play golf, send her to a pro.

 

[Dell Husker]

if she has income, have her open a Roth and just roll with the s&p to get started

This.

Grab $VOO and just set automatic investments every week or so. Sit back and let it grow.

 

[iruletheskool]

Yeah what everyone else said

 

[Jim14510]

My daughter just texted me and asked if I could help her invest a little bit of her paycheck for the future. She's 20 and in college still, so she doesn't work a ton, but I was encouraged that she's finally listening to Dad about "starting early". I was thinking that the best thing for her might be an Index Fund, so she's not having to worry about watching specific stocks, etc... Anyone have a good recommendation on a platform and a good fund to start her on?

100% crypto

 

[Scott Hall]

One thing I’d add is to advise her not to worry about the short term results. There will be days, weeks, months where the investment “loses money” but over a long period of time it’s going to go up

Edit specificity talking about VOO or a SP500 index

 

[skersker]

Just do the Vanguard S&P 500 Index fund ($VOO)

Also try to show her the power of compounding interest and get that in her head early. Show her how much a little bit now can be worth a lot more in 20-30 years if you just don’t touch it.

what happens if you die in 19 years... tsk tsk

 

[skersker]

 

[Huskersballz]

Index funds are almost always a good idea. IMO some dollar cost averaging (invest a fixed dollar amount at pre-set, regular intervals) in one of those is going to be her best bet to maximize returns.

DCA is terrible advice for a 20 year. Should be fully invested at all times at that age. Even for our older clients we typically lump sum invest unless they are particularly skittish.

 

[KidsSeeGhosts]

Consider something like betterment or wealthfront. ETF on Robinhood also good. Have her just set up monthly transfers (e.g., $100 per month). If she just wants to dip her toes in rn, something like Acorns is usually a pretty good way for people to get started investing.

 

[Red Dog]

Use Schwab or Fidelity, they are no fee platforms for her purposes. Might be worth having her add you as a joint owner so you can access the account if she ever needs assistance with investments. Also, don’t Dollar Cost Average just invest as much as she has available with her budget.

 

[2010sarenevercomingback]

DCA is terrible advice for a 20 year. Should be fully invested at all times at that age. Even for our older clients we typically lump sum invest unless they are particularly skittish.

Use Schwab or Fidelity, they are no fee platforms for her purposes. Might be worth having her add you as a joint owner so you can access the account if she ever needs assistance with investments. Also, don’t Dollar Cost Average just invest as much as she has available with her budget.

Unless your 20 year old is gaining some windfall wealth, DCA is essentially the same thing (after an initial full investment, which I thought was fairly self-evident from context, but apparently not). Budget how much you have & invest it regularly. Setting a regular deposit of a fixed amount will - for 99%+ of people - result in them investing more than telling them to keep putting in as much as they can spare.