Dear Dave,
Our son is 13, and he has been doing some part-time work for a friend of the family. He makes $40 to $60 a week, and he would like to begin investing the majority of what he earns. Do you have a suggestion for a good place he could put his money?
Lindsay
Dear Lindsay,
Well, here�s the thing. At this point in his life, the goal of this investment isn�t wealth. Number one, it�s not a lot of money. Number two, well, it�s not a lot of money. The goal is to create knowledge, reward his interest in the subject and teach him how to handle his finances when he�s an adult.
I�ve got no problem with you helping him open checking or savings accounts at a local bank or credit union. There are lots of good lessons to be learned in reconciling a bank statement, and the value of spending, saving and giving. Then, you could get with a good financial pro, one with the heart of a teacher, and let him open a mutual fund for $50 a month with you as the custodian. He could learn about compound interest, how to calculate the value of his shares and other things, and all that would be a good learning exercise, too.
We did these things with our kids. But keep in mind that over the course of a year�and when you�re 13, that�s an eternity�there�s not going to be a lot of action on the investing side of things. It could be kind of boring for him at times. But he�s better off to learn now that good things don�t always come with flashing lights and whistles.
When it comes to wealth building, things aren�t sexy. Slow and steady wins the race!
� Dave
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