My son has amassed some money and likes the idea of learning how to invest so that when he is older, have the security of wealth.

Wondering what the best venue for this would be? He has a few thousand dollars. He wants to learn. And I want to help him learn along the way. I told him I would invest also and we would do this together. Vast majority of my money is tied in real estate, business and then retirement accounts that have been hands-off for too long. So, although I know the basics, actually putting things into action here is a different story.

when i began 30+ years ago i subscribed to Money managazine. not sure if its still a thing. but if not, there are a lot more sources on the internet. i would suggest just understanding the different investment vehicles and when to use them. tax deferred ira, roth ira, 401k, mutual funds, bonds, stocks, municipal bonds, etc. its really not that hard nor time consuming. for a young person starting out, its easy to make money just using stock index funds. some years you win big, others you lose big, but dollar cost averaging always comes out ahead.

Respectfully, be very leery of internet investing advice, and advertising. I would suggest that you prioritize self-education, buy him a copy of Andrew Hallam’s “Millionaire Teacher,” is an excellent primer for anyone; then read anything, and everything by Bernstein, Bogle, Ferri, and Solin that you can get your hands on. I wish I had that information in my 20’s.

Have him read Rich Dad, Poor Dad. Stock investing isn’t a bad thing to understand, but I don’t really view it as a way to make serious generational wealth. Investing in businesses is. Of course, there are numerous exceptions and some knucklehead will probably want to tell me how I’m wrong. I’m ok with that.

I was too far down the road of “working for the man” for the book to change anything for me. But hopefully, I can find ways for my kids to be more exposed to the author’s ideas than I was.

I believe I have a grasp of the content of rich dad, poor dad. That is somewhat how we operate in this household. So my son has that basic foundation.

I will look into getting the book and try to get him to read it. That is a challenge in and of itself.

About thirty years ago, Wife and I had some savings but it was all in CDs and similar interest bearing accounts. An investment advisor that worked for one of the bigger investment firms cold called me. He was helping some of my colleagues. Long story short, he convinced to give him a try. I gave him I believe $25,000. He made recommendations on 3-4 places to put that money. I’ve given him every extra dollar I have since and the account is in eight figures now. I did put in a lot along the way, but he has put us in lots investments that made good money, and a few have lost money. We meet once or twice a year to rebalance and he calls occasionally if he has an investment opportunity that he think fits us a or thinks we should exit some investments. What do we pay him? I have no idea! What I’m concerned with is “our net”. Wife and I are more than happy with what he makes us.
In my view, unless you have a lot of time almost daily to study the market, and understand lots of economic variables, you’re better off hiring a professional that fits your risk tolerance.

I am very good with that.

But I see this as a teachable moment where my son who is typically, got a dollar, gotta spend it kind of kid, wants to learn. I want him to learn the basics so he has an understanding of the entire process and ultimately, yes hire a person to manage the investments.

I have a couple friends who are truly high-net-worth individuals who have very good investment advisors. Would love to get into one of those myself. That is where I am ultimately looking to go with any excess money the wife and I have over the next 10 years.

Read "What I learned losing a million dollars"

He should donate his money to BLM.... then he could be "woke" and your whole family could pat themselves on the back and feel superior..... you already have a good foundation for that....

If you can find a good investment advisor , they are worth their money. By the time you find out they are no good , you have lost a lot of money and will never see it again. With small amounts , like starting with $2,000 like your son has, and at his age, you are better off just getting an account at a discount broker. These brokers are down right cheap . No load fee and very little expense ratio. The Fidelity 500 index fund ( FXAIX) ticker charges just $15 per year per $100,000 . You will likely never beat an S&P 500 index fund. I have read for thousands of hours on how to invest, when and where. I study stocks into the night on weekends , weekdays ETC. An S&P 500 Index fund is almost impossible to beat. Those who say they beat it have not been in it for long or got lucky on Tech stocks . The way an index stock works is like a hot water heater. The hot stocks rise to the top like hot water . ( Amazon, Google Facebook ETC. ) They rise cause they are hot. When the day comes , they get over priced, people sell those individual stocks and likely buy the bottom stocks in the S&P 500, ( energy, Exxon Mobil, Cheveron ETC. When individual stock buyers buy the bottom stocks , it is like the top of the water in the hot water heater sinks cause it's cooling off, just to have the bottom water get hot and rises. This is a perfect and efficient form of rebalancing and it happens instantly. Then , better yet, the individual stock pickers do the rebalancing for you at the perfect time, so the index actually times the market perfectly, and you do nothing without even picking next years winners cause it rebalances by itself. You dont even have to study stocks. Had I known this 5 yrs ago when I started investing by myself instead of using 3 different " investors" and paying load fees sets you up to never really come close to the index fund. I now have 46 securities. I have ETF's, and like them, I also have tax free muni ETF's , sector ETF's and individual stocks.. Of my 46 securities, I have 2 that are beating my S&P 500 fund that are long term investments. That is the Fidelity and Vanguard healthcare ETF. I dont expect my bonds to beat the market however. I do have some short term stocks that are beating the S&P but over time, I wonder if enough of them will do better to offset the losers. This is why you cant beat the S&P 500 fund. You can also go with the Fidelity FZROX. There is no load and NO expense ratio ! ! ! ! It is the total American market with 3000 companies , so it includes mid and some small caps. Hope I didn't confuse you .

My friend had a guy like that investing for him and he wasn't sure what he paid them either until he tried to get his money out. The guy took him for everything. My friend couldn't believe it because he got statements every month showing his balance as it went up. He showed me a statement and it looked like something I could have done in 5 minutes on excell.

I couldn't understand how he let that happen until i went looking for a financial advisor and was referred to some local guys. I wasn't comfortable just writing them a check and letting them invest it as they saw fit like a few of them wanted to do.

Bb

First thing is make sure he has a cash emergency fund that will cover 6 months of living expenses. And zero debt.

Never ever buy anything on credit other than a home.

If one is looking at municipal bonds, only look at G O (general obligation) bonds. Revenue bonds IMO are seriously bad risks.

Be DAMNED leary of investment advisors. There’s some good ones and some poor ones and some outright criminals who will take everything you give them in the end. Unless you’re using a big well-known house you don’t know which type you have until its too late! Having no idea how someone is getting paid investing YOUR money is scary and dangerous! Don’t pick individual stocks unless you really know what you are doing.

Best advise for your son is to have him participate in his company sponsored 401k up to the point where the company will no longer match his contributions. After that, a Roth IRA is the best retirement vehicle. Contribute to that until he reaches the maximum contribution amount. He should be savoat least 10% of his gross income for retirement. As far as investment choices in these funds, your son is young so look at the long-term performance of the funds he can choose from and pick a few with the highest average rate of return. Lastly, don’t look at the investments every day. Longer term performance is what matters. There will be ups and downs In the market. Don’t panic and ride them out. Do this and he’ll be a multi-millionaire when he retires.

The best advice I can offer given the information you offered is to avoid the advice of Jews. Watch them, learn from what they do as they are good at money getting, but don't as a goy solicit their advice. They will lie to you for their own gain. They cannot help themselves so it is your responsibility to act in your own self interest against them.

There’s a difference between buying on a credit card and building debt and paying interest on one. I’ve had one or two credit cards since 1973. And I purchase almost everything on them, unless there’s a discount for cash. And I’ve never paid a penny in interest. Pay it off monthly and they are a good device.

Fundamentally, if you are going to invest, you need to understand investing. Up to 30 years of your life’s income depends on it. It’s worth understanding, pretty thoroughly, for that reason alone. Almost as much of your life time income will come from your investments as from your career. Education is needed, and justified.

In today’s environment, stocks are really the only game for a young man with modest savings. Mutual funds, to be exact. S&p is fine, but I would go much more aggressive. Some would say risky, but they confuse volatility with risk. A young man can stand a lot of volatility, he’s got nothing but time. S&p, Nasdaq, aggressive stocks in an overseas fund would be a pretty good combo for a youngster.

Once you have some money, real estate can be very good, if you like messing with it and (again) thoroughly understand it. I don’t own ANY, and I’m just fine with that. I do realize that especially for high income earners who have reached the maximum of tax deferred investing, real estate offers excellent tax deferred returns. I don’t like messing with it.

Final point: advisor, broker, or d-y-I: you have to understand it, or you’ll lose your shirt.

Get on Fidelity's website and look around. I put some $ in a couple of their funds when the market tanked. One is a healthcare fund the other tracks the markets. Up about 20% in 2 months. Don't get too crazy with super aggressive stocks or funds and watch it grow.

I read Money magazine for years but its out of business. Subscribe to Kiplingers for about $20 a year.

I suggest funding your 401 K if your employer offers it or opening a self directed 401k if he is self employed. Both defer taxes.

Also a Roth which is after tax dollars but not taxed when funds are drawn out after retirement.

Also a regular brokerage account which is a taxable account. You can buy stocks, bonds,CDs,mutual funds and ETFs.
I would suggest broad ETFs, such as technology and health care starting out and I prefer Schwab as I think their site is easier to use and view than Fidelity and I have both.

Vanguard Target Retirement Fund in whatever year he thinks he may want to retire. It automatically rebalances, min investment is 1,000, and as time goes on it transfers more of your money into bonds where there is less risk. The funds its made up from are some of the best Vanguard has to offer. A person won't do much better than that (risk wise) and without having to ever touch it.

Read Bogglehead forums to learn more on investing.

I’ve been dissatisfied with several advisors, so now I like to buy index mutual funds at Fidelity.
I am sure other online investment companies are just as good.

Dollar cost averaging is also a good strategy. Buy x amount each month regardless of price.

A ROTH IRA is a good idea for money you don’t need until retirement. Every dollar in these accounts are yours tax free at age 59 1/2. The catch is that you invest after tax dollars. If you need tax savings now, a traditional IRA might work better. You invest pre tax money in these, put pay taxes as you withdraw.

Always take advantage of any match your employer might offer. Invest any other money elsewhere.

You can study, learn, and get as sophisticated as you please with investing, but these simple things work great for me.

On another note, a ROTH IRA is a great "emergency fund." You can get anything that you put into it, back out (before 59.5 age) without penalty, except for your earnings/growth on that money.

So if you put 6 grand into your ROTH IRA this year, you can get it back out if you needed it, without any taxes/penalty......however, you cannot put that 6K back into it for the year 2020.